Organizational Strategy Structure

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Organizational Strategy, Structure, and Process^
RAYMOND E. MILES University of California, Berkeley CHARLES C. SNOW The Pennsylvania State University ALAN D. MEYER University of Wisconsin, Milwaukee HENRY J. COLEMAN JR. University of California, Berkeley

Organizational adaptation is a topic that has received only limited and fragmented theoretical treatment. Any attempt to examine organiza-^ tional adaptation is difficult, since the process is highly complex and changeable. The proposed theoretical framework deals with alternative ways in which organizations define their product-market domains (strategy) and construct mechanisms (structures and processes) to pursue these strategies. The framework is based on interpretation of existing literature and continuing studies in four industries (college textbook publishing, electronics, food processing, and health care).

Raymond E. Miles (Ph.D. — Stanford University) is Professor of Business Administration and Associate Director of the Institute of Industrial Relations at the University of California, ^^'•''^'^yCharles C. Snow (Ph.D. — University of California, Berkeley) is Associate Professor of Organizational Behavior at The Pennsylvania State University. Received 6/7/77; Revised8/19/77; Accepted 9/15/77; Revised 11/15/77. ., :•• .. ::

Alan D. Meyer (Ph.D. — University of California, Berkeley) n Assistant Professor of Business Administration at the University of Wisconsin, Milwaukee. Henry J. Coleman, Jr., is a Ph.D. Candidate at the University ol California Berkeley ^ i The authors wish to express their appreciation to Dougis* Darran, Robert Pitts, and Max Richards for their helpful comments on an earlier version of this paper. 546 . • •• •" ••

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Academy of Management Review - July 1978

An organization is both an articulated purpose and an established mechanism for achieving it. Most organizations engage in an ongoing process of evaluating their purposes—questioning, verifying, and redefining the manner of interaction with their environments. Effective organizations carve out and maintain a viable market for their goods or services. Ineffective organizations fail this market — alignment task. Organizations also constantly modify and refine the mechanism by which they achieve their purposes—rearranging their structure of roles and relationships and their managerial processes. Efficient organizations establish mechanisms that complement their market strategy, but inefficient organizations struggle with these structural and process mechanisms. For most organizations, the dynamic process of adjusting to environmental change and uncertainty—of maintaining an effective alignment with the environment while managing internal interdependencies—is enormously complex, encompassing myriad decisions and behaviors at several organization levels. But the complexity of the adjustment process can be penetrated: by searching for patterns in the behavior of organizations, one can describe and even predict the process of organizational adaptation. This article presents a theoretical framework that managers and students of managefnent can use to analyze an organization as an integrated and dynamic whole—a model that takes into account the interrelationships among strategy, structure, and process. (For a complete discussion of the theoretical framework and research studies, see (15)). Specifically, the framework has two major elements: (a) a general model of the process of adaptation which specifies the major decisions needed by the organization to maintain an effective alignment with 'ts environment, and (b) an organizational typology which portrays different patterns of adaptive oehavior used by organizations within a given industry or other grouping. But as several theorists nave pointed out, organizations are limited in *hei choices of adaptive behavior to those which

top management believes will allow the effective direction and control of human...
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