Strategic renewal: how an organization realigned structure with strategy

Purpose – This disguised case of a unit of a Fortune 500 firm aims to consider two core questions when considering the decision of whether it's time to renew a corporate strategy. They are: Does the strategy truly fit the current business environment? and Is a change in the organizational structure required to fit the intended strategy? Design/methodology/approach – The paper uses “Wyler Company,” a business that was lulled into complacency by prospects of seemingly steady growth, to examine whether the firm's current structure is aligned with leadership's intended strategy. Findings – A self‐directed study process revealed that the intended strategy had been gradually subverted as the organization grew in complexity and specialization. Management quickly developed a consensus that favored a dramatic change in the organization's structure. Research limitations/implications – The author was a consultant to an oil exploration and production unit of a Fortune 500 company during a period when many of the critical decisions studied by this disguised case were made. Practical implications – Management needs to continually monitor the gap between implemented and intended strategy, which often increases as the organization evolves a specialized structure to primarily pursue near‐term gains. Originality/value – Top management's need to analyze whether the operating structure is aligned with its intended strategy for a dynamic business environment is not an unusual problem. When competition increases, many firms change their structure to concentrate on a few profitable activities. This response, though, can inadvertently subvert their intended strategy.