Question

Alfred Chandler conducted research on multiple U.S firms and determined that there was a relationship between the performance of the firm strategy and the organizational structure. From his research, he determined that the structure should be changed prior to the implementation of the strategy to ensure optimal strategic success.

A. True
B. False

Answer 1

B. False

Explanation:

The design of the organization through which strategy is administered is known as structure.

Alfred Chandler believed that strategy is given and therefore, even before coming up

with a structure, there is a strategy at the back of the mind.

That is exactly why, after coming up with functional structures, market strategists employ the already existing strategy.

Alfred Chandler showed how firms developed over time in three steps:

1. Acquisition of resources such as employees and raw materials and the buildup of marketing and

distribution channels

2. Establishment of functional structures to increase efficiency;

3. Adoption of growth and diversification strategy: diversification into new markets and products to

overcome limits of home market.