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The Alignment of Strategy and Structure and Its Effect on Financial Performance

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posted on 01.11.2017 by Sara Al-Asmakh

The Alignment of Strategy and Structure and Its Effect on Financial Performance


ABSTRACT


Both personal observation and extensive research show that some companies maintain consistent strategies and senior management while others see a revolving door of CEOs and strategies. Many of these companies also produce wide variations in their financial performance. This raises critical questions about how these differences may be connected to each other. There is a substantial body of research that shows alignment between strategy, structure and people improves organization performance. This research demonstrates that organizations who effectively align their employees, leadership, culture, structure and systems with their strategic direction deliver better financial performance. To further test these conclusions with a new research design, data was collected and analyzed on four large real estate development companies in Qatar. This included a validated employee engagement survey with global benchmark data, seven years of financial statements, interviews with employees, and review of changes in strategies and CEO's over time. The study confirmed existing research that better aligned organizations outperformed organizations that were not as well aligned. This study calls out for further research with companies in multiple industries and additional alignment measurement tools to explore more hypothesis about strategic alignment. Several recommendations to improve company performance came out of this study. 1) Employees need to be involved in strategy formation. 2) When the strategy changes, so should alignment. 3) New CEO's shouldn't always change the strategy. 4) Strategies must be clear and focused. 5) Better leadership at all levels improves implementation. 6) CEO's can have an excessive impact on results.

Keyword(s)

Real EstateValidated SurveySurveyDecisionWiseFinancial DataAlignmentMisalignmentStrategyStrategy FormationStrategy ImplementationStructureStrategy and StructureDefinition of StrategyClear and focused strategiesClear strategiesFocused StrategiesDefinition of StructureStrategy and Structure ConnectionStrategy Formulation and ImplementationDefinition of Strategy Formulation and ImplementationStrategy Formulation and Implementation ConnectionStrategy Implementation FailuresRole of Leadership in Strategy ImplementationEmployee Involvement in Strategy Formulation and ImplementationRelationship between Strategy and StructureAlignment between Strategy and StructureMisalignment between Strategy and StructureAlignment between Strategy and Structure and Its effect on PerformanceAligned OrganizationsAligned CompaniesDefinition of AlignmentImportance of AlignmentAlignment and CultureAlignment of Strategy and StructureAlignment of strategy and financial performanceAlignment of strategy, structure and financial performanceCEOs and StrategyCEOs Real EstateEmployee EngagementEmployee Attraction and RetentionEngage EmployeesEmployee AttitudesDefinitions of Employee EngagementBenefits of Employee EngagementLeadership Role in Employee EngagementAchieving Employee EngagementLeadershipDistributed LeadershipLeadership DevelopmentCharacteristics of LeadersExamples of Leaders who supported Distributed LeadershipCheryl BachelderJack WelchFinancial PerformanceLiterature ReviewStatistical AnalysisQatarQatar 2030 VisionQatar National Vision 2030Top Management ExerciseResearch in QatarStructure Re-alignedStudy the Alignment of Structure and StrategyHow people and structure influence the implementation of strategyComparing the alignment of strategy and structure with financial performanceEffect on Qatar 2030 VisionEmployee Involvement and StrategyWhen the strategy changes, so should the alignmentAwareness of the importance of alignment, employee engagement, culture and leadershipCEO changesBetter leadershipThe Impact CEOs have on performanceDon ShapiroHEC Paris- Qatar CampusReal Estate Development CompaniesSara Al-AsmakhStrategic AlignmentImplementationOrganization DevelopmentOrganization PerformanceOrganizational PerformanceExecutionSalesProfits

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Keyword(s)

Real EstateValidated SurveySurveyDecisionWiseFinancial DataAlignmentMisalignmentStrategyStrategy FormationStrategy ImplementationStructureStrategy and StructureDefinition of StrategyClear and focused strategiesClear strategiesFocused StrategiesDefinition of StructureStrategy and Structure ConnectionStrategy Formulation and ImplementationDefinition of Strategy Formulation and ImplementationStrategy Formulation and Implementation ConnectionStrategy Implementation FailuresRole of Leadership in Strategy ImplementationEmployee Involvement in Strategy Formulation and ImplementationRelationship between Strategy and StructureAlignment between Strategy and StructureMisalignment between Strategy and StructureAlignment between Strategy and Structure and Its effect on PerformanceAligned OrganizationsAligned CompaniesDefinition of AlignmentImportance of AlignmentAlignment and CultureAlignment of Strategy and StructureAlignment of strategy and financial performanceAlignment of strategy, structure and financial performanceCEOs and StrategyCEOs Real EstateEmployee EngagementEmployee Attraction and RetentionEngage EmployeesEmployee AttitudesDefinitions of Employee EngagementBenefits of Employee EngagementLeadership Role in Employee EngagementAchieving Employee EngagementLeadershipDistributed LeadershipLeadership DevelopmentCharacteristics of LeadersExamples of Leaders who supported Distributed LeadershipCheryl BachelderJack WelchFinancial PerformanceLiterature ReviewStatistical AnalysisQatarQatar 2030 VisionQatar National Vision 2030Top Management ExerciseResearch in QatarStructure Re-alignedStudy the Alignment of Structure and StrategyHow people and structure influence the implementation of strategyComparing the alignment of strategy and structure with financial performanceEffect on Qatar 2030 VisionEmployee Involvement and StrategyWhen the strategy changes, so should the alignmentAwareness of the importance of alignment, employee engagement, culture and leadershipCEO changesBetter leadershipThe Impact CEOs have on performanceDon ShapiroHEC Paris- Qatar CampusReal Estate Development CompaniesSara Al-AsmakhStrategic AlignmentImplementationOrganization DevelopmentOrganization PerformanceOrganizational PerformanceExecutionSalesProfits

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Exports