Alignment between organizational structure and strategy and its impact on organization’s performance

The study aimed to measure the alignment between organizational structure and strategy in Yemeni business organizations, and study its impact on organizational performance. The study used a descriptive quantitative methodology, using a questionnaire for data collection. Statistical analysis was conducted using SPSS version (26) and Smart PLS version (4) for data analysis through Structural Equation Modeling (SEM). The study population included all large industrial and service business organizations that have been operating for over (15) years. A stratified random sample of (43) industrial and service organizations was selected, followed by the purposive selection of (305) managers from these organizations. The study reached several key findings, most notably that the mechanistic organizational structure and prospector strategy were predominant in Yemeni industrial and service business organizations. The level of alignment between the form of organizational structure and the corresponding strategy was almost non-existent. The findings indicated that only one organization achieved alignment between its "Defender" strategy and the mechanistic structure, while three organizations achieved alignment between their "Analyzer" strategy and the mixed structure. On the other hand, (39) organizations did not achieve any alignment between their structure and strategy. Furthermore, the results showed that aligning a mechanistic structure with the "Analyzer" strategy leads to improved overall organizational performance, compared to aligning the mixed structure with the prospector strategy. No significant impact was found for aligning the mechanistic structure with the prospector strategy on organizational performance. The study presented several recommendations, the most significant of which include enhancing the level of managerial knowledge regarding the alignment between organizational structure and strategy, and the ways to achieve such alignment and conducting periodic studies and analyses to measure the alignment between strategy and organizational structure and implementing necessary measures to achieve it.