There are numerous reasons why managers should care about the structure of their organization. Structure is the way in which work is allocated in an organization. Structure clarifies who is responsible and accountable for tasks within an organization. The accountability derived from structure is an important aspect of control in an organization. For example, the head of a product division is responsible and accountable for the performance of that division. The head office will exercise control by setting goals for the division, monitoring its performance, rewarding divisional managers for attaining or exceeding those goals, and holding the head of the division accountable if the goals are not met. Similarly, the head of a function (such as manufacturing) or a cross-functional team (such as a product development team) is responsible and accountable for the tasks of that subunit, and controls should be linked to how well that unit reaches its goals. Structure, in other words, is more than a way of allocating tasks; it is also an important means through which managers control the organization. Without the right structure, it may be impossible to exercise effective control over the operations of an enterprise.

Moreover, strategy is implemented in part through organization structure. If the structure of the firm does not match its strategy, the result can be poor performance. A diversified firm that operates with a functional structure will probably perform poorly, as will a high-tech firm based in a rapidly changing environment that does not use crossfunctional teams. Structure must match strategy for superior performance. Managers need to get structure right if they are to successfully implement the strategy of their firm and attain competitive advantage. But structure is just one aspect of organization architecture. Structure must be aligned with control systems, incentives, organizational culture, and people for strategy to be successfully implemented. In the next few chapters we look at these other elements of an organization's architecture.