Coordination is fundamentally important to strategic implementation. Succesful strategy execution requires different parts of the firm to be pulling in the same direction. Without coordination, enacting the strategy suffers. However, while coordination is important to strategy, strategy can also play a significant role in achieving coordination.
This article explores the inherent interconnections between strategy and coordination.
The importance of coordination to strategy
Consistency is inherently important to strategy – if the firm is pulling in different directions, with different or contradictory decisions made in different locations, then this will quickly undermine the strategic position of the firm.
At a most basic level, if a firm is pursuing a cost-leadership strategy (as opposed to differentiation), then all decisions within the firm need to be based around the premise of achieving a low-cost strategy. If the design, marketing, or other key parts of the business is not aligned with this objective, then the firm’s strategy will quickly be undermined. The firm risks being undercut by a firm with better alignment between the different parts of the business.
How strategy can result in coordination
While coordination is inherently important to strategic implementation, having a strategy also helps achieve coordination. An organization strategy should unify different parts of the firm – a consistent set of decisions that align different parts of the firm.
Having a strategy that is widely shared within the organization can give each separate part of the firm consistent guidance on what is important. An overarching view of how the company is competing can help ensure that decisions made by different parts of the firm are consistent with one another.
It is easy to think that discussions and agreement are the essence of coordination. While communication is certainly important to achieving coordination within an organization, it is not the only aspect that influences coordination – having a shared understanding of how the firm is competing can also help achieve alignment between separate parts of the business. This shared understanding can drive consistencies across the various parts of the firm because everyone is able to refer to a shared understanding of how the firm competes when determining what actions to take.