Why firms experience evolutionary cycles

The fight between strategy and structure can be resolved in two ways. The first way is to change the strategy to fit the structure. This is often the easiest way to do it, but it can also be the least effective. If the strategy is not aligned with the firm's core competencies or its external environment, it is unlikely to be successful.

The second way to resolve the fight between strategy and structure is to change the structure to fit the strategy. This is often more difficult to do, but it can be more effective in the long run. By changing the structure, the firm can create an environment that is more conducive to achieving its goals.

Some examples of global firms that have experienced this pattern include:

• General Electric: GE was once a highly diversified conglomerate with a complex structure. However, in the 1980s, CEO Jack Welch decided to focus the company on its core businesses and simplify its structure. This allowed GE to become more competitive and profitable.
• IBM: IBM was once a dominant player in the mainframe computer market. However, in the 1990s, the company faced increasing competition from smaller, more agile rivals. IBM was slow to adapt to the changing market, and its structure became a liability. The company eventually split into several smaller businesses, which allowed it to become more competitive.
• Microsoft: Microsoft was once a highly successful software company with a simple structure. However, in the 2000s, the company faced increasing antitrust scrutiny and competition from new rivals. Microsoft was slow to adapt to the changing environment, and its structure became a liability. The company eventually underwent a major restructuring, which allowed it to become more competitive.

These are just a few examples of global firms that have experienced the fight between strategy and structure. The pattern is common among all organizations, and it is important for managers to be aware of it. By understanding the relationship between strategy and structure, managers can make better decisions about how to organize their businesses.

Firms experience evolutionary cycles in which there is a fight between strategy and structure because strategy and structure are interdependent. Strategy determines the goals of the firm and the way it will achieve those goals. Structure determines how the firm is organized and how it will allocate resources.

When strategy and structure are aligned, the firm is able to function effectively. However, when there is a mismatch between strategy and structure, the firm can experience problems. For example, if the firm's strategy is to be innovative and agile, but its structure is bureaucratic and slow-moving, the firm will not be able to achieve its goals.