The Moderating Effect Of Decision-Maker On The Relationship Between Strategy And Organizational Structure

Studies in organization design have been ongoing in the field of management for many decades. All this while, there has been very little change in the structural contingency theory underpinning these studies (Burton & Obel, 2004). The interest in these studies is sustained by the significant contribution that organization structures make to organizational performance. The organization structure influences amongst other functions how power, roles and responsibilities are distributed, controlled, goals are achieved and how information flows throughout the organization. Thus, an appropriate organization structure is that which facilitates while an inappropriate one imbeds the attainment of the desired results (Robbin & DeCenzo, 2005). Since strategic planning involves determination of goals and objectives, it is easy to perceive why organization structure is often conceived after the strategy has been selected and the motivation behind sustained studies in strategy-structure relationship. The role of the decision-maker in the process of structuring organizations has been presumed by the proponents of the structural-contingency framework. Contingency variables such as strategy are all the important determinants of organization structure (Oliveira & Takahasi, 2012; Greenberg, 2011; Cole, 2004; Donaldson, 2001). Thus, the structural contingency framework assumes that the organization structure directly and logically responds to the demands of the strategy as one of the contingency factors thereby failing to take into account the role of the decision makers. But factors do not by themselves choose organization Abstract: The purpose of this study was to establish the influence of the decision maker on the relationship between strategy and organization structure. The study was informed by the apparent dearth of empirical evidence about the said relationships. Whereas the relationship between strategy and structure is rich in empirical data, the role of the decisionmaker in the process of structuring organizations has largely been underscored in theory that the process is neither necessarily logical nor objective. The main objective of the study was to establish the influence of the decision-maker on the relationship between strategy and organizational structure. The study was based on the cross-sectional survey targeting all manufacturing firms in Nairobi and its surrounding. Data was initially analysed by exploratory and confirmatory factor analysis tests, however, the final analysis was done using structural equation modelling. The findings established significant influence of strategy on organization structure. Further, the findings provided evidence that the decision maker has significant moderating effect on the relationship between strategy and organization structure in the manufacturing firms in Kenya. The study has thus yielded a high empirical validity for its theoretical model that was to establish; the moderating effect of the decision-maker in the relationship between strategy and organization structures. Accordingly, the assumption held within the structure-contingency model that the linkage between strategy and structure is logical and direct is no longer tenable.