How Strategy Shapes Structure

"How Strategy Shapes Structure," by W. Chan Kim and Renée Mauborgne, Harvard Business Review, September, 2009.

This article argues that there are two types of strategy: structuralist strategies that assume that the operating environment is given and reconstructionist strategies that seek to shape the environment. In choosing which of the two is most appropriate for your organization, you need to consider environmental attractiveness, the capabilities and resources you can call on, and whether your organization has a strategic orientation for competing or for innovating. Whichever type of strategy is chosen, success will depend on creating an aligned set of strategy propositions targeted at three different sets of stakeholders: buyers, shareholders, and the people working for or with the organization. Where the approaches diverge is in the nature of their proper alignment. Structuralist strategies require that the three propositions -- the value, the profit, and the people propositions -- focus on delivering either low cost or differentiation. Reconstructionist strategy propositions aim to deliver both.

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