Examine the relationship of strategic alignment between business Strategy and Organizational Structure with performance (Case Study: Private Banks and Credit Institutions)

Abstract

This study has been conducted to review the alignment relationship of business strategies and structure with organizational performance. Strategic alignment is an essential tool for organizing and standardization of the activities and operations of different parts of organization in order to create a unity and cohesive whole. Review on theories of strategic management determines that the strategic coordination pattern can be classified in three patterns: 1. rational pattern 2. Natural pattern 3.Comprehensive pattern (strategic reference points). Comprehensive pattern deals to typology of strategies based on strategic reference points. Strategic reference points used in this study, control (high / low) and the focus (internal / external of the organization) and business strategies based on the combination model (Miles and Snow and Porter) and organizational structure based on Daft Model and Burns & Stalker theories were classified. Then alignment relationship of business and organizational structure with the performance was evaluated and all hypotheses were confirmed. Study population was selected from a number of banks and private institutions. Based on the results obtained from verification of hypotheses, by choosing aligned structure and business strategies, Banks can obtain the most optimal performance in the banking industry and create competitive advantage. As a result creating the following alignments lead to optimal performance in the Banks: Mechanical structure with prospector strategy , Very organic structure with analyst Strategy, Organic structure with the strategy of differentiated defender and Very mechanical structure with low-cost defender strategy.