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However, when there is a misalignment between strategy and structure, it can lead to problems. For example, if a firm’s strategy is to be innovative and entrepreneurial, but its structure is bureaucratic and hierarchical, it will be difficult for the firm to achieve its goals.

• Why do firms experience evolutionary cycles?

Firms experience evolutionary cycles because the business environment is constantly changing. As the environment changes, so too must the firm’s strategy and structure in order to remain competitive.

This can be a difficult process, as it requires the firm to make changes to its core operating procedures. However, if the firm is unable to adapt to change, it will eventually lose its competitive advantage and be forced to exit the market.

• How are strategy and structure reshaped?

The process of reshaping strategy and structure can be divided into three stages:

1. Reassessment: The firm first reassesses its current strategy and structure to determine if they are still aligned with the changing environment.
2. Redesign: If the firm’s strategy and structure are not aligned, it then redesigns them to better fit the new environment.
3. Realignment: Once the firm has redesigned its strategy and structure, it then realigns them so that they work together effectively.

This process is often iterative, as the firm may need to go back and forth between the three stages several times before it finds a solution that works.

• Examples of global firms that have experienced this pattern:

There are many examples of global firms that have experienced the fight between strategy and structure. Here are a few:

• IBM: In the 1980s, IBM was the dominant player in the mainframe computer market. However, as the market shifted to personal computers, IBM was slow to adapt. This led to a decline in its market share and profits. In the 1990s, IBM underwent a major restructuring to become a more customer-focused and decentralized company. This helped it to regain its competitive edge.
• General Motors: In the 1970s and 1980s, General Motors was the world’s largest automaker. However, the company was slow to adapt to the changing market, which led to a decline in its market share. In the 1990s, GM underwent a major restructuring to become a more efficient and competitive company. However, the company continued to struggle and filed for bankruptcy in 2009.
• Kodak: Kodak was once the world’s leading manufacturer of film cameras and photographic film. However, the company was slow to adapt to the digital photography revolution. This led to a decline in its market share and profits. In 2012, Kodak filed for bankruptcy.

These are just a few examples of global firms that have experienced the fight between strategy and structure. The ability to successfully adapt to change is essential for any firm that wants to remain competitive in the global marketplace.

• Which comes first, strategy or structure?

Theoretically, strategy should come first, followed by structure. This is because the structure should be designed to support the strategy. However, in practice, it is often the case that structure precedes strategy. This is because the structure of a firm can be difficult to change, so it is often easier to change the strategy to fit the existing structure.

The best approach is to have a clear understanding of both the strategy and the structure of the firm. This will help the firm to make better decisions about how to adapt to change.