What Is The Difference Between Strategy Formulation And Strategy Implementation Effective Jethro Differentiation and Optimal Organizational Strategy: Pondering Policy Implications

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Effective Jethro Differentiation and Optimal Organizational Strategy: Pondering Policy Implications

How do organizations determine power and authority? How do organizations define roles and functions? How do organizations allocate resources and staff? What is the correlation between organizational structure and strategy? Does structure determine strategy or does strategy determine structure? The answers to these strategic questions are critical to creating an effective organizational strategy and optimal horizontal and vertical differentiation that enables organizations to create and maintain a competitive advantage in the global marketplace.

In this review, we explore some of the relevant and existing academic literature on effective organizational strategy and optimal organizational differentiation that facilitate and sustain competitive advantage in the global marketplace. As noted in the relevant academic literature, organizational strategy is the plan of the entire enterprise that determines how the organization uses its resources – tangible and intangible – to achieve its stated goals, while organizational structure is the way in which organizational units are integrated. internally. The structure of the organization also describes the relations with its external environment-the public of the company and the intended results. For an organization to implement its plans efficiently and effectively, strategy and structure must be internally consistent and seamlessly integrated.

Additionally, organizational design is a formalized process for integrating people, resources, strategic and operational information, and technology throughout the organization, while organizational structure addresses the questions: Who does what and who reports to whom? Indeed, organizational structure is the formal distribution of power, authority, and roles in an organization designed to achieve goals efficiently and effectively, while organizational behavior studies how people interact in groups. The study of organizational behavior is designed to create more efficient and effective organizations. A central idea in the study of organizational behavior is that a scientific approach can be applied to the management of power, authority, tasks, processes, employees, and responsibility.

In the existing academic literature, differentiation is a series of processes used by an organization to assign power, authority, tangible and intangible resources, and employees to achieve its strategic and operational goals. Differentiation processes determine the relationship between managers and employees. Horizontal differentiation occurs when managers and employees are assigned different tasks, and vertical differentiation describes the allocation of power and authority within an organization.

As first postulated in Exodus, Jethro’s differentiation: vertical differentiation is the process of allocating power and authority, while horizontal differentiation is the process of allocating tasks and functions within an organization. The process of horizontal differentiation begins with the delegation of specific tasks to employees. This form of differentiation prevents an organization from having only one employee or multiple employees assigned to multiple tasks. The process also allows managers and employees of the organization to specialize and stay within the limits of their field-related tasks.

The process of vertical differentiation involves creating a “chain of command” between employees and managers. Vertical differentiation separates management into strategic, executive, and transactional, while horizontal differentiation separates employees into functional areas: operations; research and development; accounting and finance; marketing and sales; and human capital management.

Some guidelines for action

In practice, while organizational structure focuses on the organization as a whole, strategy formulation and implementation involves assigning tasks and schedules to individuals to help the organization achieve its stated goals. A well-thought-out organizational structure can streamline operations, improve decision-making, facilitate employee collaboration, cooperation, and performance. Creating and implementing an effective and efficient strategy requires a good fit between the organization’s strategy and structure.

Differentiation and integration

In general, organizations use the differentiation mechanism to assign employees to different tasks and functions, while the integration mechanism is used to coordinate different units and employees to ensure that all work toward the effective and efficient achievement of the organization’s goals and objectives.

When an organization brings its various units together under a visionary leader or coordinated strategic direction, the organization is said to be well integrated. Integration leads to a single and unified organizational structure. A successful organization chooses between a differentiated and an integrated organizational structure depending on the structure of the industry – the degree of competition, the stage of the industry’s life cycle, its competitive position, management and resources – material and non-material.

There is substantive and empirical evidence in the relevant academic literature to suggest that successful organizations tend to be more differentiated and integrated than less successful organizations. As organizations grow, they develop and differentiate more and more into functional areas: Activities; research and development; accounting and finance; marketing and sales; and human capital management.

Structure and strategy

The organizational structure improves strategic and operational efficiency by providing employees with clarity at all levels of the organization. An effective and efficient organizational structure encourages collaboration and facilitates the functioning of the functional areas of the organization by directing time and energy to productive tasks. In addition, a well-thought-out organizational structure plays an important role in strategy formulation and implementation. Therefore, organizational structure is critical to organizational success by addressing the who, what, when, where, why, and how of achieving desired goals and objectives. In addition, organizational structure determines how power, authority, resources, roles and responsibilities are planned, coordinated, controlled and distributed, and how information flows between different levels of organizational management: strategic, executive and transactional.

Finally, successful organizations implement strategic coordination among their various units to take advantage of the synergistic opportunities inherent in any strategy. Indeed, in order to outperform their competitors, successful organizations must design an appropriate structure and formulate an optimal strategy that maximizes profits or leverages production capacity while minimizing operating costs.

In conclusion, creating and maintaining a competitive advantage in the global market requires a well-thought-out organizational structure that is properly aligned with the organization’s strategy. Whether the organizational strategy is shaped by the industrial structure postulated by the structuralists or the industrial structure reconstructed by the organizational strategy postulated by the reconstructionists, the most critical requirement is the effective alignment of organizational strategy and structure, ceteris paribus.

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