An organisation with a differentiation strategy should:
A) Adopt an organic structure and make extensive use of informal communication to coordinate work
B) Centralise and formalise its organisational structure
C) Coordinate employees by writing up formal rules and procedures
D) Switch to a cost leadership strategy as quickly as possible

Question

Quizplus · Accepted Answer

An organisation with a differentiation strategy aims to stand out from competitors by offering unique and desirable products or services. To achieve this, they should adopt an organic structure that allows for flexibility, creativity, and informal communication to coordinate work. This structure fosters innovation and enables employees to explore new ways of improving products or services, which is crucial for differentiation. Centralisation and formalisation, as well as writing up formal rules and procedures, are contrary to an organic structure and hinder the organisation's ability to be innovative and differentiated. Switching to a cost leadership strategy would mean abandoning differentiation altogether, which is not an option if the organisation pursues this strategy.

An Organisation with a Differentiation Strategy Should