Structure and strategy in small and medium-size restaurants within the Central Business District In Nairobi County In Kenya

Abstract

Organizations that do not respond to the changing environment demand or do not adapt to keep pace with the change; and even in some situations fail to anticipate change, are likely to suffer and become irrelevant. Whereas structure is the communication and realignment of the internal capabilities that include processes and relationships, strategy is a plan, direction, a guide or a course of action into the future and as a pattern, that is, consistency in behavior overtime (Mintzberg, 1994). The two – strategy and structure must work together to give the organization a competitive edge over its competitors. There is no perfect or ideal organizational design or universally applicable rule for matching strategy and structure and that, all the basic organizational forms have got their strengths and weaknesses. The best organizational structure is that which best fits the situation at the moment. A good match between the structure and strategy is key to building a capable organization. A mismatch between strategy and structure creates strategic problem (Aosa, 1992). Whereas there has been many studies in the area of structure and strategy relationship, structure and strategy is specific to an organization at any particular time due to the unique nature of the organization and its resources as well as the environment in which it operates. This led to the study objective which was to establish structure and strategy relationship in small and medium-size restaurants in the Central Business District in Nairobi-Kenya. Similar studies have been carried out on structure and strategy relationship. Koyio (1999) and Mwangi (2003) whose studies were on manufacturing industries in private sector in Kenya concluded that strategy and structure were reciprocal. The study used cross-sectional survey and the samples were determined through purposive sampling. Data was collected using questionnaires which were administered face to face to the managers and owners of the restaurants. Data was then analyzed using SPSS and descriptive statistics, frequency tables and percentages were obtained and presented. 84.2 % of the respondents had strategy with 78.9% having changed their strategies over the last five years. 89.5% of the restaurants had organization structures with 36.8% having undergone structural changes over the last five years. The changes were as a result of changes in strategy, management actions, and government regulations as well as changes in customer demand and preferences. The study found out that there was a relationship between open systems theory in which the theory was based to the practices of the restaurants in response to their surrounding environments. 78.9% of the respondents agreed that changes in strategy were followed by changes in structure while 21.1% said their choice of strategy was influenced by the organizations structure. The study findings indicated that there was a relationship between structure and strategy and that structure followed strategy. The study had its own limitations of financial and time constraints as well as some respondents who were not willing to give all the information as this touched on very sensitive areas of the organization – structure and strategy and therefore the researcher recommends that the study be done in other counties and other districts of Nairobi County as well as in five star hotels to find out the relationship between structure and strategy.