Strategic Management Journal

Strat. Mgmt. J., 30: 1234–1243 (2009)

Published online EarlyView in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/smj.782
Received 23 January 2006; Final revision received 14 April 2009

RESEARCH NOTES AND COMMENTARIES

THE CONTINUING VALIDITY OF THE

STRATEGY-STRUCTURE NEXUS: NEW FINDINGS,
1993–2003
JOSE I. GALAN* and MARIA J. SANCHEZ-BUENO
University of Salamanca, Facultad de Economia y Empresa, Campus Miguel de
Unamuno, Salamanca, Spain

This study analyzes whether a diversification strategy facilitates subsequent divisionalization

(and hence that ‘structure follows strategy’), and/or whether the multidivisional structure leads
to a diversification strategy (and hence that ‘strategy follows structure’). In theoretical terms, this
study is original in that it institutes a debate between the Chandler thesis and other perspectives
that challenge the generalizability of the strategy-structure nexus. Interestingly, this new study
with contemporaneous data for the period 1993–2003 sheds light on this contested issue and
postulates that despite the criticism of Chandler’s contribution, it still works. Our results
show that strategic diversification affects structural divisionalization, and in turn, structural
divisionalization affects strategic diversification. Copyright  2009 John Wiley & Sons, Ltd.

INTRODUCTION United States (Amburgey and Dacin, 1994; Ansoff,

The sequence between corporate strategy and orga-
nizational structure is a very important topic in
strategic management (Donaldson, 1987, 2001;
Harris and Ruefli, 2000). Alfred D. Chandler’s
(1962) pioneering analysis indicated that strategy
precedes structure because an increase in diversifi-
cation requires a new and more decentralized struc-
ture, called the multidivisional form. This argu-
ment whereby ‘structure follows strategy’ has also
been corroborated in many studies, not only in the
Keywords: corporate strategy; organizational structure;
diversification; multidivisional
*Correspondence to: Jose I. Galan, University of Salamanca,
Facultad de Economı́a y Empresa, Campus Miguel de Unamuno,
E-37007 Salamanca, Spain. E-mail: jigalan@usal.es
1965), but also in other countries (Channon, 1973;
Dyas and Thanheiser, 1976; Pavan, 1976). How-
ever, other theoretical perspectives exist that chal-
lenge the generalizability of this thesis and have
suggested different types of linkage between both
variables (Bower, 1970; Fredrickson, 1986; Hall
and Saias, 1980). This sequence is, therefore,
unclear.
Considering the above notions, the purpose of
this work is to examine the sequence between
diversification and divisionalization in large Span-
ish firms in a new time period. As with Harvard
studies, the time frame selected was 10 years, in
this case between 1993 and 2003. We are inter-
ested in providing new empirical evidence on
the issues researched in a time interval hitherto

Copyright  2009 John Wiley & Sons, Ltd.


scarcely analyzed in the literature on strategy and
organization. Our aim is to verify whether organi-
zational structure is determined by strategy and/or
whether organizational structure affects strategy.
To achieve this objective, we introduce a the-
oretical debate on the persistence of the Chan-
dler thesis. It is difficult to come by recent evi-
dence in support of the strategy/structure sequence.
Accordingly, some research of the 1990s claims
that because there has been so much change in
the world, the Chandler thesis (structure follows
strategy) is no longer valid. Scholars criticize
the Chandler paradigm, pointing out that Chan-
dler’s core focus, the business world of the late-
nineteenth to the mid-twentieth centuries, is dif-
ferent from the markets of today (e.g., Kogut,
1992; Teece, 1993). Modern enterprises oper-
ate in rapidly changing environments that are
‘hyper-competitive’ (D’Aveni, 1994) and turbu-
lent, and technology is transforming scenarios
(Einsenhardt and Brown, 1999). Likewise, new
organizational forms, such as network organiza-
tions, have appeared in this new era (Bartlett and
Ghoshal, 1993; Hedlund, 1994). Thus, it is pos-
sible that new structures have rendered Chandler
obsolete.
The central finding of our work is twofold in
that strategy affects structure and structure affects
strategy. Furthermore, looking at the results more
closely, we find that the former is stronger than the
latter. Therefore, and contrary to arguments against
the Chandlerian School, it still works.
The value added of this study and its novel con-
tribution to extant literature can be summarized
in the following points. First, it presents results
on corporate strategy and organizational structure
for a new country (Spain), because the sequence
issue in contexts other than the United States has
been less analyzed. Second, we can define the
sequence between corporate strategy and organi-
zational structure in a recent time frame. Chandler
was pre-World War II, Rumelt and others dealt
with the 1950s and 1960s, and the most recent
studies ended in 1993 (Whittington and Mayer,
2000). Our study tests whether these phenom-
ena existed in the 1990s and continue through
into the twenty-first century. Therefore, the present
empirical results uphold this issue within a new
spatial (Spain) and temporal (1993–2003) con-
text. Third, and from a theoretical perspective, we
create a contrast whereby the results we present
are rendered more interesting (Davis, 1971). The
Copyright  2009 John Wiley & Sons, Ltd.
Research Notes and Commentaries 1235
Chandler School has been venerated, but more
recently it has had its detractors. Our contemporary
data from a new study shed light on this contested
issue.
This study has important implications for theory
and practice. As we all know, today’s environ-
ment is much more volatile than the landscape
of the 1960s or 1970s analyzed in prior research,
and consequently the sequence between corpo-
rate diversification and multidivisional organiza-
tion may have changed. Furthermore, this issue
is highly relevant for the managers of today,
when the turbulence of the environment is critical
for defining corporate strategy and organizational
structure.
THEORY AND HYPOTHESES
Theoretical perspectives that challenge the
generalizability of the strategy-structure thesis
There is an important theoretical and empirical
body of literature regarding the link between strat-
egy and structure (e.g., Amburgey and Dacin,
1994; Donaldson, 1982; Hall and Saias, 1980).
Nevertheless, previous research has produced
mixed findings.
On the one hand, Chandler (1962) concluded
that ‘structure follows strategy’ because firms with
a diversification strategy adopt M-form or mul-
tidivisional organization. Many strategy-structure
scholars have encountered the temporal sequence
initially proposed by Chandler (1962), even reveal-
ing the generalizability of his original insight
beyond the United States. Thus, the strategy-leads-
to-structure argument holds true among U.S. firms
(e.g., Amburgey and Dacin, 1994; Andrews, 1971)
and also among companies in other countries such
as the United Kingdom (Channon, 1973), France,
Germany (Dyas and Thanheiser, 1976), and Italy
(Pavan, 1976).
On the other hand, other theoretical perspec-
tives challenge the generalizability of this argu-
ment. Many researchers today think there has
been a considerable change since Chandler’s work
and, therefore, it is possible that the sequential
approach to strategy and structure postulated by
him may no longer be viable in this new envi-
ronment. When Chandler proposed the thesis that
strategy affects structure, the environment was
characterized by stability, with slow and infre-
quent changes. However, the recent economic
Strat. Mgmt. J., 30: 1234–1243 (2009)
DOI: 10.1002/smj
1236 J. I. Galan and M. J. Sanchez-Bueno
landscape has been characterized by high envi-
ronmental uncertainty and rapid change (D’Aveni,
1994). International competition in a globalizing
economy is forcing companies to think and act
globally, and technologies have become crucial to
firms today. Thus, researchers defend the argument
that technology transforms scenarios. Eisenhardt
and Brown (1999), for example, report that the
Chandlerian restructuring theory no longer holds
true because organizations in fast-moving environ-
ments improvise rather than restructure.
Likewise, both the technology required in the
new environment and the globalization of busi-
ness have led, for example, to the emergence of
new organizational forms such as network organi-
zations, which are not considered in the pioneering
works (Chandler, 1962; Rumelt, 1974). There has
been a shift toward more flexible forms; in con-
trast to the traditional M-form or multidivisional
structure that emphasizes hierarchies and vertical
processes, aspects such as lateral communication,
cooperation, and integration become very impor-
tant attributes in network organizations (Hedlund,
1994). In this sense, it is possible that the emer-
gence of new structures can threaten the success
of the multidivisional structure and have rendered
Chandler obsolete (Bartlett and Ghoshal, 1993;
Ciborra, 1996; Galunic and Eisenhardt, 1996).
The following sections present the arguments
according to which corporate strategy dictates the
organizational structure, and similarly, the argu-
ments whereby the organizational structure dictates
corporate strategy.
Strategy determines structure
A fundamental question addressed in the literature
on strategy and structure deals with the temporal
sequence of diversification strategy and multidivi-
sional structure (Donaldson, 1982, 1987; Rumelt,
1974). Chandler’s historical analysis (1962)
showed that ‘structure follows strategy.’ Chandler
proposed that a decentralized multidivisional struc-
ture is the solution to the problem of managing
diversity. He concluded that ‘when further expan-
sion into new functions, into new geographical
areas, or into new product lines greatly increased
all types of administrative decisions, then the exec-
utives in the central office became overworked
and their administrative performance less efficient.
These increasing pressures, in turn, created the
Copyright  2009 John Wiley & Sons, Ltd.
need for the building or adoption of the mul-
tidivisional structure with its general office and
autonomous operating divisions.’ (Chandler, 1962:
297).
Other researchers (Amburgey and Dacin, 1994;
Channon, 1973; Dyas and Thanheiser, 1976;
Pavan, 1976) have also confirmed Chandler’s
(1962) thesis in American and European markets.
Ansoff stated that ‘the strategy imposes operating
requirements and, in turn, the administrative
structure must provide the climate for meeting
them’ (Ansoff, 1965: 7). In line with Chandler’s
proposition, Andrews affirmed that ‘corporate
strategy must dominate the design of organization
structure’ (Andrews, 1971: 543). Williamson
(1975) argued the adoption of the diversification
strategy and the subsequent adoption of the
multidivisional structure. Other American studies,
such as Amburgey and Dacin’s work (1994),
have confirmed Chandler’s (1962) pioneering
proposition. These researchers found that strategy
is a more important determinant of structure than
structure is of strategy.
In Europe, several researchers from the Harvard
program (Channon, 1973; Dyas and Thanheiser,
1976; Pavan, 1976) also found that strategy pre-
cedes structure because an effective diversification
strategy requires a new structure, called the multi-
divisional form. Grinyer and Yasai-Ardekani also
stated that ‘structure may well follow strategy’
(Grinyer and Yasai-Ardekani, 1981: 483) in the
case of manufacturing companies in the United
Kingdom.
Considering prior theoretical arguments and
empirical evidence on the temporal order of diver-
sification strategy and multidivisional structure, we
suggest the following hypothesis:
Hypothesis 1. Corporations with more diversi-
fied strategies are more likely to divisionalize in
subsequent periods than those with less diversi-
fied strategies.
Structure determines strategy
In spite of the previous conclusion whereby struc-
ture follows strategy, there are also studies that
have indicated other types of causal relationships
between the two variables (Hall and Saias, 1980).
For example, Bower stated that an appropriate
structure is required for choosing the firm’s strat-
egy: ‘when it is recognized that for administrative
Strat. Mgmt. J., 30: 1234–1243 (2009)
DOI: 10.1002/smj

reasons, corporations cannot pursue any and all
attractive objectives with equal chance of success,
then organizational choices take on strategic sig-
nificance, for they constitute potential future con-
straints on the choice of product-market objectives,
and the commitment of capital resources’ (Bower,
1970: 287). Fredrickson argued that ‘structure’s
pervasive impact offers a reasonable explanation
of why a firm develops a particular way of mak-
ing strategic decisions’ (Fredrickson, 1986: 294).
His argument is based on the notion that strate-
gic decisions may be affected by the centralization
of the structure due to the cognitive limits of the
central decision makers (Fredrickson, 1986: 286).1
Russo also proposed that strategy follows struc-
ture because his results confirmed the idea that
‘firms adopt an M-form in anticipation of diver-
sification activity’ (Russo, 1991: 727).
This idea was proposed by Rumelt in the follow-
ing fragment, where he considers the possibility
that strategy follows structure, ‘in addition to the
effect of strategy on structure, there is the possi-
bility that structure affects strategy. If a Single or
Dominant Business firm adopts a product-division
structure, it might be more likely to diversify fur-
ther than if it had not reorganized’ (Rumelt, 1974:
76).2
Considering prior theoretical arguments and
empirical evidence on the temporal order of diver-
sification strategy and multidivisional structure, we
suggest the following hypothesis:
Hypothesis 2: Corporations with multidivisional
structures are more likely to diversify in subse-
quent periods than those with functional struc-
tures.
METHODS
Sample
Following the Harvard program3 (Channon, 1973;
Dyas and Thanheiser, 1976; Rumelt, 1974), the
1
From the perspective of strategic change, this is the direction
taken in the work by Zajac, Kraatz, and Bresser (2000) and
Kraatz and Zajac (2001).
2
However, it is important to note also that Donaldson (1982)
tested Rumelt’s thesis that structure led to strategy on Rumelt’s
data and found it did not hold.
3
We use the term ‘Harvard program’ to refer to the research
method followed by Chandler (1962) and his followers, which
is based on the consideration of different categorical measures of
corporate strategy and organizational structure. It is appropriate
Copyright  2009 John Wiley & Sons, Ltd.
Research Notes and Commentaries 1237
sample consists of the largest Spanish corporations
in terms of turnover, as listed annually (in this case,
in 2004) by the Spanish publication, Actualidad
Economica. The census of largest corporations in
2004 numbered 847. Nevertheless, applying the
criteria employed by the Harvard program, we
excluded foreign firms (a company is domestic if
its home base is in Spain), public-sector companies
(government owned), and corporations belonging
to sectors such as agriculture, mining, or finance.
The number of corporations satisfying the above
criteria came to 551. We sent the survey to these
551 firms in 2004 and asked the chief executive
officers (CEOs) retrospective questions, and 100
valid replies were returned.
These responding organizations have a similar
size to the population (mean employees: study or
responding organizations 3,902; population 3,170;
difference not significant), and are no different
in terms of industry (no significant difference
between study and population in means for con-
struction, manufacturing, or services). The sample
is therefore representative of Spanish firms.
Data collection
The data were collected from a questionnaire
specifically designed for this research (Appendix
1). The questionnaire was sent to the CEOs of cor-
porations, either for them to complete or to send
on to the pertinent experts. The questionnaire has
two parts. The first part focuses on strategy (rev-
enues in the principal activity, degree and type
of relationship between businesses). The second
part sheds light on the nature of the organiza-
tional structure. Data were obtained for 1993 and
2003. The information provided by the CEOs was
complemented by published data (annual reports,
reports in the press, etc.). We only used this pub-
lished data in seven cases where certain questions
had not been answered; all other surveys were
complete.
Measurements
In line with Rumelt (1974) and previous litera-
ture, strategy was broken down into four cate-
gories: (1) single business: the core business con-
tributes 95 percent or more of total turnover;
to follow this methodology in our study, as it is rigorous and
permits generability and replicability.
Strat. Mgmt. J., 30: 1234–1243 (2009)
DOI: 10.1002/smj
1238 J. I. Galan and M. J. Sanchez-Bueno
(2) dominant business: one business contributes
at least 70 percent but less than 95 percent of
turnover; (3) related diversification: the core busi-
ness does not contribute as much as 70 percent
of total turnover, and diversification has involved
areas related to its core skills; and (4) unrelated
diversification: the core business does not con-
tribute as much as 70 percent of total turnover,
and there are no links between the businesses.
The measurement of a firm’s structure followed
the Rumelt (1974) approach, in line with prior
literature: (1) functional: units deal with business
functions such as sales, marketing, or manufactur-
ing; (2) functional-with-subsidiaries: an organiza-
tion that is basically functional but also has one or
more separate product divisions (not necessarily
true subsidiaries) reporting to top management or,
in some instances, to one of the functional man-
agers; (3) holding: an association of firms (or divi-
sions) commonly owned by a parent—its distin-
guishing characteristic is the almost complete lack
of management at the top; and (4) multidivisional:
organizations are split into a number of quasi-
autonomous divisions, and the head office is solely
responsible for strategic decisions.
The use of the same approach as in other pre-
vious studies (Donaldson, 1982, 1987) provides
a good grounding for comparison with trends in
other contexts.
Analysis
We tested Hypothesis 1 by calculating the prob-
ability that functionally structured firms in 1993
subsequently divisionalized (i.e., between 1993
and 2003). We have calculated this separately for
nondiversified (single business and dominant busi-
ness) and diversified firms (related business and
unrelated business) in 1993. Therefore, in Hypoth-
esis 1, the denominator is non-divisionalized in
1993 for the nondiversified and, alternatively, non-
divisionalized in 1993 for the diversified. Fur-
thermore, the denominator does not include firms
that are already divisionalized. Clearly, only those
firms not yet divisionalized can do so in the ensu-
ing decade.
By functional, we mean primarily those firms
with that structure, including firms that are
‘functional-with-subsidiaries.’ This work does not
include the holding structure in non-divisionalized
firms. This is not the functional structure at all,
which is centralized. The holding structure is more
Copyright  2009 John Wiley & Sons, Ltd.
divisionalized than functional. The holding struc-
ture is akin to divisional, albeit more so, with
highly autonomous, separate businesses and high
reliance upon profit as the key management vari-
able.
We tested Hypothesis 2 by calculating the prob-
ability that divisionalized firms in 1993 subse-
quently diversified (i.e., between 1993 and 2003).
We have calculated this separately for non-
divisionalized (functional and functional-with-
subsidiaries) and divisionalized firms (holding and
multidivisional) in 1993. Therefore, in Hypothe-
sis 2, the denominator is nondiversified in 1993
for non-divisionalized firms and, separately, non-
diversified in 1993 for firms that are divisionalized.
Furthermore, the denominator does not include
already diversified firms. Likewise, only the as yet
nondiversified firms have the chance of diversify-
ing in the ensuing decade.
RESULTS
Table 1 presents the proportion of companies mov-
ing in the direction of increased divisionalization
and diversification during 1993–2003.
The results reveal that Hypothesis 1 is validated
by using statistically significant data to show that
the probability of divisionalization is higher for
diversified (0.67) than for nondiversified (0.36)
firms. This result is in line with the expectations
Table 1. The sequence between corporate strategy and
organizational structure in Spain
Strategy at start Proportion of companies
of decade (1993) divisionalizing
in this
decade (1993–2003)
Non-divisionalized 0.36
non-diversified (56)
Non-divisionalized 0.67∗
diversified (3)
Structure at start of Proportion of companies
decade (1993) diversifying in this
decade (1993–2003)
Nondiversified and 0.23
non-divisionalized (56)
Nondiversified and 0.31∗
divisionalized (32)
N for each subcategory in parentheses.
∗
p < 0.05.
Strat. Mgmt. J., 30: 1234–1243 (2009)
DOI: 10.1002/smj

Table 2. The sequence between strategy-structure: anal-
ysis by strategy categories
Strategy at Proportion of companies
start of divisionalizing
decade (1993) in this
decade (1993–2003)
Non-divisionalized and with 0.32
a single business (34)
Non-divisionalized and with 0.41
a dominant business (22)
N for each subcategory in parentheses.
of Chandler and others that: ‘structure follows
strategy.’
Given the importance of this hypothesis within
this line of research, we provide itemized data for
several strategic categories (Table 2) to reveal the
specific nature of the changes.
Thus, the results in Table 2 show that the prob-
ability of divisionalization increases by levels
of diversification, whereby greater diversification
leads to more divisionalization for dominant busi-
ness (0.41) than for single business (0.32). These
results are fully consistent with those expected by
Chandler.
The results in Table 1 also use statistically sig-
nificant data to reveal a relationship between divi-
sionalization and subsequent diversification in the
period 1993 to 2003. Thus, these results are con-
sistent with Hypothesis 2, and show therefore that
‘strategy follows structure.’ This latter result is in
line with other previous studies, such as Hall and
Saias (1980).
Therefore, the results in our study, within the
spatial context of a new country (Spain) and for
a recent time frame (1993–2003), show that both
sequences have emerged from data. The central
finding is both that strategy affects structure and
that structure affects strategy. Furthermore, we
observe that the former is stronger than the latter.
DISCUSSION AND CONCLUSIONS
This study, in a new context (Spain) and in a
recent time frame (1993–2003), has been car-
ried out with a view to shedding light on the
temporal sequence of strategy/structure. Certain
researchers (Amburgey and Dacin, 1994; Hall and
Saias, 1980; Miller, 1986) have examined the
Copyright  2009 John Wiley & Sons, Ltd.
Research Notes and Commentaries 1239
issue of strategy/structure precedence and have
arrived at conflicting conclusions. In spite of the
widespread acceptance of Chandler’s proposition
whereby structure follows strategy (Ansoff, 1965;
Channon, 1973; Dyas and Thanheiser, 1976), some
researchers have indicated that this pioneering the-
sis may no longer be valid (Eisenhardt and Brown,
1999; Teece, 1993).
The value added and novelty of this study with
respect to prior literature stem from both a the-
oretical and empirical perspective. Theoretically,
we address doubts about the continuing valid-
ity of the Chandler School with reference to the
strategy/structure sequence. We have presented an
interesting debate between scholars who confirm
the Chandler paradigm and those who challenge
the generalizability of this pioneering research.
Empirically, we contribute by analyzing a new spa-
tial and temporal context, providing results that
shed light on whether, and contrary to some expec-
tations, Chandler’s argument still holds true. In
short, we have tried to take a step toward clearer
conclusions on the hierarchical order between both
important variables for strategic management.
Overall, our study shows that strategy leads to
structure and structure leads to strategy. Likewise,
looking at the results more closely, they show that
the former is stronger than the latter. Its effects
reflect this difference in strength. Thus, the first
effect (diversification raises the probability of divi-
sionalization) is about threefold greater than the
second (divisionalization raises the probability of
diversification). This is consistent with Amburgey
and Dacin (1994).
Therefore, in spite of doubts about the contin-
uing validity of the Chandler School, this study
indicates that these phenomena exist in the 1990s
and into the twenty-first century. Recent expec-
tations suggest that many things have changed
since Chandler’s time; for example, globalization
and technological change have led to the emer-
gence of new structures, such as network orga-
nizations (Bartlett and Ghoshal, 1993; Hedlund,
1994). In this respect, it is possible that these
present-day forms of organization can challenge
the classic multidivisional structure. Nevertheless,
literature also posits that the characteristics of
these new organizational forms can coexist with
those of traditional forms (Galan, Sanchez, and
Zuñiga-Vicente, 2005; Whittington and Mayer,
2000). There may not be a fundamental break in
Strat. Mgmt. J., 30: 1234–1243 (2009)
DOI: 10.1002/smj
1240 J. I. Galan and M. J. Sanchez-Bueno
organizing principles between traditional and inno-
vative structures, whereby Chandler’s thesis is not
obsolete; instead, it is possible that it broadens in
order to consider current circumstances. Likewise,
the relationship between diversification strategy
and multidivisional structure postulated by Chan-
dler (1962) focusing upon administrative efficiency
remains applicable to today’s markets. The M-
form meets the administrative needs that appear
when firms adopt a greater diversity, and there-
fore technological economies, and such could be
exploited.
The following points should be made with
respect to the limitations of the study and possible
lines of future research. First, our data provided
information on the sequence of A over B and/or
of B over A, but this may be an iterative process as
shown by Mintzberg (1990). Second, future studies
should broaden the Harvard program by incorpo-
rating new strategies and new structures.
ACKNOWLEDGEMENTS
This paper has benefited from the helpful com-
ments and suggestions made by two anonymous
reviewers and Editor Edward Zajac. We express
our gratitude for the comments made by partici-
pants at the 2006 Strategic Management Society
Conference. We also thank the Spanish Commis-
sion for Science and Technology-FEDER (Project
SEJ2007-63879 and Project SEJ2007-67496), the
Castilla y Leon regional government (Project ref.
SA102A7), the Ibero-American Chair in Manage-
ment and Corporate Social Responsibility, and the
Santander Bank for their financial support for this
research.
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1242 J. I. Galan and M. J. Sanchez-Bueno

APPENDIX 1: QUESTIONNAIRE 3. (Continued )

FIRM NAME: . . .. 1993 2003

2- Functional with subsidiaries (If you

1. Specify the corporate strategy in your company
each year (from 1 to 3) (only one for each year):
1993 2003
1- Single business (If you choose


this option, go on to question 3)
The core business contributes 95% or
more of total revenues
2- Dominant business


One business contributes at least 70%
but less than 95% of turnover
3- Diversification


The core business does not contribute
as much as 70% of total turnover
Related diversification


The core business does not contribute
as much as 70% of total turnover,
and diversification has involved
areas related to its core skills
Unrelated diversification


The core business does not contribute
as much as 70% of total turnover,
and there are no links between the
businesses
choose this option, you have finished)
An organization that is basically functional
but also has one or more separate
divisions reporting to top management or,
in some instances, to one of the
functional managers
3- Holding


An association of firms (or divisions)
commonly owned by a parent. Its
distinguishing characteristic is the almost
complete lack of management at the top
4- Product divisional


An organization that consists of a central
office and a group of operating divisions,
each having the responsibility to produce,
market, etc a product or set of products.
The head office is responsible solely for
strategic decisions
5- Geographic divisional


An organization that consists of a central
office and a group of operating divisions,
each having the responsibility to produce,
market, etc a product or set of products
in a different geographic area. The head
office is responsible solely for strategic
decisions

2. Specify the business or businesses your company

pursues with its corresponding SIC and CNAE codes
in 1993 and 2003:
4. Indicate how far you agree with the following
statements in each one of the years provided (1: Not
1993 2003 at all in agreement; 5: Fully in agreement):
Businesses SIC CNAE Businesses SIC CNAE
1993 2003
Core Core
1 2 3 4 5 1 2 3 4 5
business business
Other Other
Integrating










businesses businesses
mechanisms
between divisions
are important
3. Indicate your company’s organizational structure Incentive system










in each one of the two years provided (only one for emphasizes
each year): corporation
performance rather
1993 2003 than the
performance of
1- Functional (If you choose this option,

each division
you have finished) Incentive scheme is










Units deal with business functions such as based on divisional
sales, marketing, or manufacturing performance

Copyright  2009 John Wiley & Sons, Ltd. Strat. Mgmt. J., 30: 1234–1243 (2009)
DOI: 10.1002/smj
 Research Notes and Commentaries 1243

5. Rate the following features of your company’s 5. (Continued )

organizational structure in 1993 and 2003 (1: Not at
all important; 5: Very important): 1993 2003

1993 2003 1 2 3 4 5 1 2 3 4 5

1 2 3 4 5 1 2 3 4 5 Temporary work










forces
Large head office









Permanent work










Horizontal









teams
communication Employee turnover

Copyright  2009 John Wiley & Sons, Ltd. Strat. Mgmt. J., 30: 1234–1243 (2009)
DOI: 10.1002/smj