STRUCTURAL DYNAMICS AND

CONTROL STRATEGIES
GROUP 8
JEAMOUS DUMLAO
ARIANE ALCANTARA
CLAIRE GANIGAN
NICHAEL MARTINEZ
 STRUCTURAL ALIGNMENT OF
ORGANIZATION

Corporate strategies are implemented within an

organizational structure, which provides a framework for
effective control and implementation. Top executives must
ensure the alignment of strategies with the structure,
ensuring a strong relationship between strategies and the
organization. The structure's complexity and simplicity are
crucial for effective implementation. It also provides
stability and flexibility for the firm to manage activities and
explore opportunities. As the firm expands, it must adapt
its structure and strategies to maintain its competitive
advantage.
 THE IMPORTANCE OF
ORGANIZATIONAL CONTROL
Organizational controls guide strategy and
performance standards, ensuring competitive
advantage. They provide insights into behavioral
strategies and support strategies. Strategic controls
verify appropriate strategies against external and
internal environment. Effective controls require
communication between operating managers and
administrative staff.
 CHARACTERISTICS OF STRATEGIC
CONTROL

1. It helps firm understand what it intends to do

2. They are subjective criteria

3. It examines what fits to be done

4. It demands effective communication

5. It verifies the sharing of appropriate strategies

 CHARACTERISTICS OF EFFECTIVE
FINANCIAL CONTROLS
1. Financial controls are effective indicators of performance

2. They are objective criterial that measure performance

3. It evaluates present performance against previous record

4. It is the indicator in safeguarding the corporate assets

5. It ensures that transactions are properly authorized

6. It provides reliable information in the use of financial

resources.

Both are crucial for organizational structure effectiveness, with

diverse corporate organizations using more financial controls
and small organizations using more strategic controls.
 THE INTERDEPENDENCE OF STRUCTURE
AND STRATEGY

The relationship between strategy and structure

is reciprocal, with strategic implementation
influencing the firm's operations and strategies.
Firms must be proactive in ensuring structure
aligns with strategy, ensuring stability and
flexibility for current competitive advantage and
future operational advantages.
 PATTERNS OF RELATIONSHIPS BETWEEN
STRATEGY AND STRUCTURE
Most firms started in simple structure as operation starts
small especially when it starts sole proprietorship. As the
business operation expands so is the organizational
structure and in turn develops new strategies to cope
with the expanding business activities. Firms tended to
grow in predicable manner. The following patterns are:

A. Increase in Sales Volume

As firms increase sales volume, they require new
personnel for marketing and distribution, and develop
advertising agencies for promotional activities, creating
new departments and units that develop new
competitive advantages
B. Geographical Distribution
New managers and executives are needed to manage
provincial and regional activities in product and service
distribution to meet market demand. Regional
managers develop strategies aligned with target goals,
and as global expansion increases, strategies must be
developed to meet organizational demands.

C. Vertical and Horizontal Integration

The growth factor fosters higher-caliber executives
trusted by management for corporate growth. As new
assignments are given, they must develop consistent
strategies for their positions within the organizational
structure, creating new departments and developing
strategies aligned with the new structure's goals.
D.Product Diversification
New product manufacturing requires new structure
and strategies to survive in market competition.
Product diversification requires new talent and
strategies for exporting to other countries. Research
and development strategies may be needed in the
organization's structural system.

E. Business Diversification
A new business organization, aligned with corporate
expansion programs, requires a more elaborate
structure to deliver desired profit and return on
investments. It must develop a diversified strategy,
distinct from the mother corporation, analyzing internal
and external environments to identify new opportunities
for sustained operation and growth.
 BASE ON THE ABOVE GROWTH PATTERNS THREE MAJOR
ORGANIZATIONAL STRUCTURES WERE USED TO IMPLEMENT
STRATEGIES.
1. Simple Structures
The simple structure of a business involves the owner-manager making
major decisions and supervising operations, with employees acting as
extensions. As the firm grows, new employees are added, and new
strategies are developed to meet market demands. This structure
requires structural re-alignment and adaptability to meet wider needs
for competitive advantage.

a. The line organizational structure

Advantages of Line Organization
• Ease of operation and control as few layers in decision making.
• Few lines in the structure that facilitate communication.
• Direct authority of executive that guides the work completed in
cost leadership form.
• Responsibilities can be pinpointed immediately that increase
efficiency.
• Strong focus on process improvement with highly formalized rules
and procedure.
• The structure contributes to low-cost operational dynamics.
Disadvantages of Line Organization
• Lacks system of specialization
• Limited opportunities for learning and growth.

As business expands, owners focus on strategic

planning and industry leaders, requiring staff assistants
and managers for daily operations, leading to the
emergence of line and staff organization.

b. The line and staff organizational structure

Advantages of Line and Staff Structure
• Services of staff assistant that develop better research
and development strategies.
• Greater horizontal and vertical communication.
• Specialized functional areas that characterized
differentiation form.
• Delegation of authority and responsibility that takes
action-based information.
Disadvantages of Line and Staff Structure
• More executives to pay.
• Jealousy among executive may exist.
• Over confidence creates lesser control of operation.

2.Functional Structure
Corporate growth and expansion are investable through
market expansion, product differentiation, or other business
operations. The board of directors determines corporate
strategies, with functional managers coordinating operational
strategies.

a. Divisional Functional Structure

b. Divisional Product or Regional Structure
Corporate expansion involves product or new business divisions
within the mother corporation, monitored by the board of directors.
The CEO develops strategies, coordinates operations, and
supports the implementation of business and corporate strategies.
Advantages:
• Effective communication and coordination.
• Effective sharing of knowledge and information.
• Allows functional specialization that allows innovation.
• Career path for executives and managers.
Disadvantages:
• May have negative effect on communication.
• Needs close coordination among units.
• Few formal rules and regulation
• Need strong linkages of control mechanism

3. The Growth of Multi-Divisional Structure

Diversified corporations thrive both locally and internationally,
requiring extensive data analysis and managing high levels of
diversification through functional structures, posing control and
consideration problems.

Multi-national structures consist of divisions representing separate

firms, each with profit centers, delegated responsibilities, and
independent, self-contained units with their own functional
hierarchy.
Advantages:
• Accurate monitoring of business performance.
• Simplified operational and problem control.
• Each unit operates as a separate center.
• Improved performance of executives and managers.
• Active performance monitoring.
• Dominant structure for multi-level corporation.
Disadvantages:
• Over expansion may create vacuum in the organizational ladder.
• Needs trusted and committed executives.
• Higher caliber of top executives often is difficult to find.
• Over diversification may deplete important financial and human
resources.

Organizational structure should involve strategic cooperation

between top executives and line executives, as it grows complex
and expands operations. Strategy and structure influence each
other, with strategy influencing structure changes. Matching
strategy with operational needs is crucial for successful
management. Strategic structural reforms should be based on
strategic actions for a competitive advantage.