10.7 Conclusion

This chapter explains elements of organizational design that are vital for executing strategy. Leaders of firms, ranging from the smallest sole proprietorship to the largest global corporation, must make decisions about the delegation of authority and responsibility when organizing activities within their firms. Deciding how to best divide labor to increase efficiency and effectiveness is often the starting point for more complex decisions that lead to the creation of formal organizational charts. While small businesses rarely create organization charts, firms that embrace functional, multidivisional, matrix, and boundaryless structures often have reporting relationships with considerable complexity. To execute strategy effectively, managers also depend on the skillful use of organizational control systems that involve output, behavioral, and clan controls. Although introducing more efficient business practices to improve organizational functioning is desirable, executives need to avoid letting their firms become “out of control” by being skeptical of management fads. Finally, the legal form a business takes is an important decision with implications for a firm’s organizational structure.

Organizational structure. 'The Constitution' is at the top. Beneath it: The Legislative Branch (GAO, GPO, Library of Congress, Technology Assessment, Congressional Budget Office), Judicial Branch (U.S. Supreme Court, U.S. Court of Appeals, U.S. Court of International Trade, U.S. Tax court, Court of Military Appeals, Federal Judicial Center, Sentencing Commission), Executive Branch (The President, Executive Office of the President, OMB, The White House, Trade Repreentative, Environmental Quality, Science & Technology, Drug Control Policy). Underneath the Executive Branch is 15 Departments: State, Interior, Agriculture, Commerce, Defense, Labor, Education, Energy, Transportation, Treasury, Housing & Urban Development, Homeland Security, Health & Human Services, Justice, Veterans Affairs.
Figure 10.19: Three Government Branches



  1. The preceding chart is an organizational chart for the US federal government. What type of the four structures mentioned in this chapter best fits what you see in this chart?
  2. How does this structure explain why the government seems to move at an incredibly slow pace?
  3. What changes could be made to speed up the government? Would they be beneficial?

Image Credits

Figure 10.19: Kindred Grey (2020). “Three Government Branches.” CC BY NC SA 3.0 Adaptation of Figure 9.6 from Mastering Strategic Management (2015) (CC BY NC SA 3.0). Retrieved from https://open.lib.umn.edu/app/uploads/sites/11/2015/04/ea8dfc0653c92ca873e0d4602037591a.jpg.


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