Andrews' Law

In his book “The Concept of Corporate Strategy” Kenneth Andrews describes a concept:

Strategy follows structure

By this he means the structure of an organisation determines its strategy. For example if you have a company that has lots of designers, it follows the company strategy will use lots of designers.

The question then is how purposeful is the structure of the organisation. Is the tail wagging the dog? Or did the company define its strategy and then determine the structure of the organisation?

As companies grow functional specialists are required, and these then grow into departments of their own at a certain scale. All of this affects the company strategy from many angles - not least of which that a company can only respond to opportunities it has the resource to fully execute.

This law states to think carefully about the structure of your organisation, as it will pull the strategy of the company towards it. IF you want to be a low cost provider you need to structure your company to accommodate that, and that structure will always determine your strategy to be low cost.

This is very similar to Conway’s Law - but in a strategic context.