Strategy, structure and external environment relationship in Parastatals in Kenya

Abstract

The concept of strategy is a multidimensional and has found its application in all fields of study and life. It has been defined variously as, a unifying pattern of decisions-a common thread, defines organizations purpose-goals, objectives and priorities, deals with organizational competitive advantage, positioning of organization in the environment, and defines obligations of the organization to its stakeholders. Johnson and Scholes (2005) define strategy as the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations. Mintzberg’s (1994) defines strategy as a plan, a ploy, a position and a perspective, a guide or course of action into future, and as a pattern, that is consistency in behavior over time. Quinn (1980) defines strategy as a pattern or a plan that integrates an organization’s major goals, policies and action sequences into a cohesive whole. Most state corporations began their strategic planning cycle by updating and revising their business objectives in relation to performance reviews in key areas such as people, standards, business processes and business development so as to achieve better results. According to Porter (1980) a firm must formulate a business strategy that incorporates cost leadership, differentiation or focus in order to achieve a sustainable competitive advantage and long term success in its chosen area of operation. Andrews, 1971; Ansoff, 1971; Miller, 1986 (as cited in Jennings and Seaman, 1994, p. 470) states that managers cope with changes in organization’s external environment through the choice of an appropriate strategy and design of a matching structure. The study of the relationship between strategy, structure and environment variability is an important study for the business firms whether private or public in aligning their internal capabilities and firm’s environment changes.