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Why Industry Matters

The design of an organization is also affected by the firm’s environment. Firms finding themselves in a competitive environment may have to compete for key resources, including employees, with other firms, which may affect the way they recruit, but it may also have repercussions for the type of employees, or other resources, the firm can acquire. Similarly, if firms strive to continuously innovate and seek out new market opportunities, they have to be designed in a way to support this goal. Thus, a firm’s strategy, its competitive environment and its organization design have to be aligned to help a firm achieve its objective.

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