Strategy- structure and organizational performance at Old Mutual Kenya

Abstract

Many researchers and executives have viewed fit as a key to organizational survival and high performance. Economic challenges, especially in times of globalization, force companies to adapt and react to market influences and changes; they have to optimize their procedures, and strategies to maintain their competitive advantage. Typically, the term fit refers to the ability to maintain strong connections between organizational strategy, structure and process. However, in the strategic management literature, the term itself has been used to refer to the fit of strategy to resources and capabilities, the fit of strategy with structure, the fit of strategy or structure to environment, and/or the fit of the firm to corporate strategy or structure. The study examined the fit between strategy and structure at Old Mutual Kenya and the effect of that relationship on organizational performance over a period of time. Data was collected through guided face to face interviews with selected top managers. The findings indicated that a relationship between strategy and structure did exist and that the alignment of both variables affected organizational performance. There were some lags cost of implementation, technological challenges and risk analysis on business impact. However, the study revealed that structures alone without emphasis on correct qualifications and experience are not enough to implement strategy. Organizational design therefore plays an important role in the strategy structure relationship and organizational performance. Organizations which are able to achieve a fit between strategy and structure will then have improved organizational performance hence achieving their overall objectives, while those that do not have a fit are vulnerable to competition and internal inefficiencies.