Strategic decisions are future oriented, concerned with long-term direction (Chandler, 1962; Mintzberg, 1994). Across sectors, a major task of organizational leadership is “the determination of long-range goals and objectives of an enterprise, and the adoption of courses of action and allocation of resources necessary for carrying out these goals” (Chandler, 1962, p. 13).
A variety of goals are embedded in strategy. In business firms, goals such as profitability, growth, and market share are relatively specific and easy to measure. Goals of educational or human services organizations are typically much more diffuse: “producing educated men and women” or “improving individual well-being.” This is another reason Harvard adopts a more decentralized, loosely integrated system of roles and relationships.
Historically, McDonald’s had fewer, more easily quantifiable, and less controversial goals than those of Harvard. This aligned well with the McDonald’s centralized, top-down structure. But that structure has become more complex as the company’s size and global reach have fostered levels of decentralization that allowed outlets in India to offer vegetarian cuisine and those in France to run ads attacking Americans and American beef (Tagliabue, 1999; Stires, 2002; Arndt, 2007).
To complicate matters still further, stated goals are not the only ones an organization pursues. Westerlund and Sjostrand (1979) suggest various others:
• Honorific: Fictitious goals with desirable qualities.
• Taboo: Goals pursued but not talked about.
• Stereotypical: Goals any reputable organization should have.
• Existing: Goals quietly pursued even though inconsistent with stated values and self-image.
Understanding linkages among goals, structure, and strategy requires a look beyond formal statements of purpose. Schools, for example, are often criticized if structure does not coincide with the official goal of scholastic achievement. But schools have other, less visible goals. One is character development, often espoused with little follow-through. Another is the taboo goal of certification and selection, as schools channel students into tracks and sort them into careers. Still a third goal is custody and control—keeping kids off the streets and out from underfoot. Finally, schools often herald honorific goals such as excellence. Strategy and goals shape structure, but the process is often complex and subtle (Dornbusch and Scott, 1975).
New technologies continue to revolutionize the amount of information available and the speed at which it travels. Once accessible exclusively to top-level or middle managers, information is now easy to get and widely shared. E-mail has made communication immediate and far reaching. With the press of a key, anyone can reach another person—or an entire network. All this makes it possible to move decisions closer to the action.
In the 2003 invasion of Iraq, for example, U.S. and British forces had an obvious advantage in military hardware. They also had a powerful structural advantage because their superior information technology let them develop a much more flexible and decentralized command structure. Commanders in the field could change their plans immediately in response to new developments. Iraqi forces, meanwhile, had a much slower, more vertical structure that relied on decisions from the top. A major reason that Iraqi resistance was lighter than expected in early weeks was that commanders had no idea what to do when they were cut off from their chain of command (Broder and Schmitt, 2003).
Later, however, the structure and technology so effective against Iraq’s military had much more difficulty with the rising resistance movement, which evolved a loosely connected structure of entrepreneurial local units that could adapt quickly to U.S. tactics. New technologies like the Internet and cell phones enabled the resistance to structure itself as a network, or “complex adaptive system” (Waldrop, 1992, p. 145)—a set of loosely connected units, each pursuing its own agenda in response to local conditions. The absence of strong central control in such networks can be a virtue because local units can adapt very fast to new developments and because the loss of any one outpost does little damage to the whole.
By increasing the flow of information, improved technology reduces uncertainty. Galbraith (1973) defines uncertainty as the difference between the information an organization has and the information it needs. One way that organizations reduce this gap is by increasing their ability to process information (with information systems, for example). A second alternative is to reduce the need for information by creating self-contained units (which can work on their own using information at hand) or by adding slack resources (extra copying machines or support staff, for example, so that people don’t have to fight over access).
Information technology has made flatter structures both possible and inevitable because “the information-based organization needs far fewer levels of management than the traditional command-and-control model” (Drucker, 1989, p. 20). As technology spread in the late twentieth century, organizations around the world made deep cuts in both management levels and support staff, a process that still continues.