The Role of Strategic Choice

Organizational Structure, Environment, and Performance

The article “Organization Structure, Environment, and Performance: the Role of Strategic Choice” explains how organizations are affected by a small group of people at the top, these people include, CEOs and top management.  Understanding top management leadership researchers conducted a critical review on their experiences, skills, values, social connection, and aspirations.  This article suggests that this information about top management affects the outcomes of an organization.  A firm’s performance is linked to strategic choices made by the top management are based on their own circumstances and inspiration.

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To understand what exactly top management do in a organization researchers use the Fayol’s segregation of activities which include planning, organization, coordination, command, and control.  They also may use Mintzberg’s three categories of managerial roles which are interpersonal, informational, and decisional.

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This article has three different points regarding how important top management is to their organizations.  Some say that they are very important while other argue the opposite.  The third idea is discretion or managerial discretion.  Discretion is the freedom to decide what should be done in a particular situation and managerial discretion is the freedom managers have to pursue their own objectives rather than shareholders.  Organizational variables such as size, age, organizational culture and capital intensity limit the actions of CEO.

References:

Child, J. (1972).  Organization structure, environment and performance: The role of strategic choice.

 

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Daniel Fortune

Daniel Fortune is a successful business professional, entrepreneur, father, and lover of travel.

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