In the world of business, it has long been believed that organizational structure is a solid pillar that guarantees success. The principle of “structure follows strategy” introduced by Alfred Chandler has been used as a guideline by many leaders for years. Once a strategy is established, organizations typically reorganize departments, clarify lines of responsibility, and adjust hierarchies to ensure that everything runs smoothly.
However, the reality in many companies today is beginning to show a different and worrying pattern: organizational structures are no longer aligned with strategy, and often do not even support its achievement. In some situations, the formal organizational structure is almost irrelevant to the day-to-day execution of strategy.
This issue is more than just a matter of team arrangement. It is a sign of fundamental changes in the way of working, value creation, and coordination in today’s business environment.
The Speed Gap Between Strategy and Organizational Structure
The main reason for the declining relevance of organizational structures is the difference in tempo. Business strategies now change very quickly, while formal structural adjustments tend to be slow and bureaucratic.
The driving forces of digital transformation, platform-based competition, regulatory changes, and geopolitical turmoil has forced companies to constantly update their priorities. Strategies are no longer designed for the next five years; in various sectors and companies, adjustments can occur every quarter, even every month.
On the other hand, organizational structure are still built with long-term logic and stability in mind. The process of restructuring involves evaluating positions, clarifying roles, adjusting levels, ensuring regulatory compliance, and navigating internal political dynamics. Often, by the time a new structure is finally agreed upon, the strategic focus has already shifted again.
As a result, strategy execution relies heavily on informal channels. Leaders form task forces, project teams, or cross-functional forums that operate outside the official organizational chart. Work hardly follows the chain of command outlined in the chart anymore.
The Reality of Work Beyond Formal Lines
For many employees, organizational structure now function more as symbols than operational maps. They realize that success is not solely determined by vertical reporting lines, but by informal networks, individual credibility, and proximity to key decision makers. Influence moves horizontally and diagonally, contrary to the vertical flow depicted in the structure.
This situation creates a paradox: the structure remains, but strategy implementation avoids it. When this continues, the structure loses its strategic meaning. It becomes an administrative tool—for payroll, grading, and compliance—but is disconnected from the actual value creation process. This situation is risky. If the gap between the formal system and informal practices widens, confusion, redundant work, and organizational fatigue emerge.
The Transition from Linear Value Chains to Collaborative Networks
Conventional organizational structure are designed based on the concept of value chains—linear flows where work moves sequentially between functions. Marketing hands off to sales, sales to operations, and then operations to customer service.
However, today’s strategies are often built on value networks, not sequential chains. Digital products, business ecosystems, customer experience-based strategies, and platform models require collaboration across functions. Value is generated collectively, not transferred from one party to another. Feedback is real-time, and decisions must be made close to the customer. Hierarchical and siloed structures based on function often fail to address this reality. Hierarchy slows down decision-making, obscures accountability, and focuses more on departmental efficiency than overall impact.
In this context, strategy requires flexible coordination, while structure creates rigidity. Gradually, people find ways to work around the structure rather than through it.
Only on the Surface
Many organizations respond to strategic changes with structural reorganization: merging units, changing departments, or creating new roles such as “Chief Digital Officer” or “Office of Transformation.”
Although this organizational structure redesign may seem responsive, such changes often fail to address the root of the problem. Decision-making authority remains opaque. Incentive systems are still oriented toward functional performance. Real power remains with the old units. As a result, day-to-day operations remain unchanged.
This is a common pitfall in organizational transformation. Leaders feel they have “aligned structure with strategy,” but implementation issues remain because the real obstacles lie in mindsets, reward systems, and leadership behaviors that have not changed.
When Structure Becomes an Obstacle
Sometimes, organizational structure is not just inappropriate—it actually hinders the strategy itself. Imagine a strategy that prioritizes agility, innovation, or customer focus. All of these require ample room for experimentation, quick feedback, and teams that truly have authority. Unfortunately, the reality in many places is one of convoluted approval processes, rigid task divisions, and centralized decision-making.
When structure conflicts with strategy, people tend to choose the path of least resistance: following the rules rather than improvising to achieve strategic goals. Gradually, strategic ideals become mere slogans, with no real manifestation in everyday life.
So, are Organizational Structure No Longer Necessary?
Of course not—but their function has changed fundamentally.
Structure alone is no longer capable of executing strategy. What is more crucial is the operational model: how decisions are made, resources are allocated, teams work together, and performance is evaluated.
Today’s leading organizations are shifting to principles such as: clarity of decision-making authority, instead of just hierarchy; achievement of common goals, instead of just performance indicators for each division; and the role of leaders as motivators and balancers, instead of full controllers. Within these organizations, structure functions as a light support framework, rather than a strict regulatory mechanism. The structure provides basic clarity, while allowing room for flexibility in implementation.
The fundamental question is no longer, “What kind of organizational structure fits our strategy?” but rather: “What coordination mechanisms are needed to support the strategy?” “Where should decisions be made so that they are quick and accurate?” “What kind of behavior do leaders need to demonstrate to realize the strategy?”
This also means refraining from immediately relying on restructuring as the main solution. Often, the problem lies not in the structure, but in how the organization understands and implements it.
The focus of organizational development work now needs to be more directed towards collective understanding, leadership alignment, and system integrity, rather than simply rearranging the organizational chart.
Looking Beyond Structure
Organizational structure is not useless. However, it is no longer the main lever for strategy execution as it once was. In a world of complexity, rapid change, and high interdependence, the power of structure to drive organizations is limited.
When structure is no longer aligned with strategy, organizations do not simply stop moving. They will look for other ways—often through informal channels that consume significant resources and energy.
The biggest challenge is recognizing when structures are no longer relevant, then shifting to strengthen the mechanisms that truly drive performance. Today’s strategies are realized not through charts and titles, but through relationships, daily decisions, and shared understanding.
The most important alignment is not between structure and strategy—but between the organization’s way of thinking, decision-making, and acting, and the values it wants to embody.
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