To meet their strategic goals, Emerson must properly match their strategies with the correct organizational structure. If the structure of an organization and its corporate strategy are not properly matched then the management will not be as effective as it should be in the organization. Having an organizational structure is a very vital part of implementing a strategy. Purpose of Organization Structure The organizational structure determines the company’s procedures, controls, decision making process and reporting relationships. Structure is a very significant part of implementing a strategy effectively.
When the company’s strategies are determined, the structure of the organization will then determine the work that needs to be accomplished and how it is performed. The manager’s task and the decisions that were made from the tasks are influenced by the structure of the organization. Structures are there to give stability. The company needs the stability to be able to implement the strategies successfully. They also need structure to keep the competitive advantage that they currently possess while forming new advantages for future needs.
As a company grows there will eventually be a need for the strategy to change in order to continue their success in the industry. As a result of the new strategy, the organizational structure may have to be adjusted to supports the changes made in the company strategies. Emerson Structure Options Emerson has three options of organizational structures to choose when implementing their strategy. The different structures include simple structure, functional structure and multidivisional structure.
The simple structure is a structure where the staff serves under the manager’s authority while the manager makes all the major decisions for the company. The functional structure has the functional line managers in the areas of the organization where it is dominant (HR, production, accounting). This structure includes a CEO and limited corporate staff. Multidivisional Structure is used when the company is seeking more diversification. It includes operating divisions and a corporate office. Is structure is mainly used as an organization structure since diversification is used in the global economy as a dominant corporate-level strategy.
For the Emerson Company, the functional structure can be used to implement their strategy. To continue achieving the lowest cost with the highest quality and performance, they will need to implement the integrated cost leadership and differentiation strategy. To achieve this, part of the decision making in the company will need to be decentralized and also centralized. The tasks will need to be partially specialized. This will ensure that the combine strategies work together properly without offsetting one another. The multidivisional structure used to implement strategy for the Emerson Company is SBU.
The strategic business unit form of multidivisional structure includes a corporate headquarters, many strategic units and divisions for those units. In this structure, the headquarters office controls and observes all of the SBU which are each profit centers. This structure will help the businesses that related work together to focus on more specific customer needs. This also helps the headquarters keep better control of the finances, strategies and performances. The option of a simple structure would not serve to implement Emerson’s strategies. This is because Emerson is a diversified organization with over 50 divisions.
It would not be possible for on person to be able to oversee every operation alone. This would be completely contrary to the importance of using a multidivisional structure to implement Emerson’s strategy. Without the proper organizational structure, there is a chance of not achieving the strategic goals for the company. The many options of structures to chose have their beneficial characteristics when properly utilized when implementing a strategic plan. This could actually determine the fate of an organization if management is not careful enough.