A Critical Analysis of the “fit” Between Strategy and Structure, (Framework) as a Determinant of Economic Performance in the Tourism and Hospitality Industry in Zimbabwe.
Ndoda, Gladys R.
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For a number of years company reports have discussed the issue of economic growth through business practices. Prominent among these articles was the issue of economic performance outcome. This triggered interest in the researcher in terms of how an organisation’s strategy and structure relationship affect economic performance outcome of a firm. The following begged for an answer: 1. Is there a possibility (proposition) that the extent to which strategy is aligned to structure determines the performance outcome of an organisation? 2. If it does, to what extent does it do so? 3. In spite of the fact that it does, what else could influence the performance outcome of organisations in the tourism and hospitality sector? The review of literature revealed that the economic performance outcome of an enterprise is to a large extent influenced by the “fit” or “merge” of strategy and structure. At individual cases construct level, strategy and structure “fit” was found to be positively linked to firm economic performance outcome. Economic performance outcome was also found to be a function of significant other performance drivers in terms of the differential levels of economic performance outcome. The agitation towards “fit” by organisations, whether they are profit or non-profit was seen through the performance measurement tools in use, that is, Balanced Scorecard and the use of Result-Based Management Systems. The significant other performance drivers were inclusive of: 1. Strategic Behaviour (SB) 2. Learning Organization 3. 12 Pillars to Positive EP 4. Socio-Political Forces Since certain issues involving strategy and structure and economic performance (SSEP) cannot be quantified, it became necessary to use qualitative approach with some elements of quantitative approach. Qualitative evidence was combined with quantitative elements in a synergistic way. Survey, case study, participant observation methods were used in this study. Data collection techniques were inclusive of records inspection, interviews and questionnaires were distributed to a sample of 150 respondents from two ministries, two tourism bodies and a profit making organisation. Focus group discussions were held to gather data. The analysis tools used were content and statistical. Economic performance outcome of the Tourism and Hospitality Industry was measured through trends and statistics, tourism economic indicators, financial and non-financial orientations and the use of balanced scorecard or blended measurements. Non-financial measures included the measurement based upon identified key objectives as specified in Balanced Scorecard. Data collected revealed that the cases that agitated towards a “fit” or “merge” between strategy and structure had a positive economic performance outcome than those that did not. The cases that took cognisance of the significant other performance drivers postulated better economic performance outcomes. The respondents structured the order to positive economic performance outcome through the crafting of strategy, the architecture of an implementing structure, the subsequent influence of significant other performance drivers, the shaping of organisational performance through instruments such as the balanced scorecard to the physical structure and symbolic meaning of the African Kitchen-Hut Strategy and Structure Model. Strategy, structure and performance need to be linked in harmony to fulfil the objectives of a company much like what is symbolised by the African Kitchen-Hut Model (AKHSSM). Therefore this concludes that a “fit” of strategy and structure plus the considerable influence of significant other performance drivers reduce the gap of what management would like to achieve and what has been achieved in terms of economic performance outcomes. It also can be concluded that there is a positive incremental change in performance of an organisation due to the “fit” or intimacy of strategy and structure and this is further enhanced by acknowledging significant other performance drivers.