Organizations With Good Fit Are More Effective Than Those With Poor Fit Nadler and Tushman argue that effective organizations have excellent “fit” or “congruence” between components. Further, they argue that the strategy needs to flow from an accurate assessment of the environment and respond to, or take advantage of, changes occurring in that environment. Similarly, the strategy needs to fit the organization’s capabilities and competencies, or the organization needs to develop capabilities and competencies that are aligned with the strategy. If all of these are not aligned reasonably well with the strategy, the organization will be less effective than it could have been. Inside the organization, the four components (tasks, people, designed structure and systems, and culture) must fit each other. For example, if an organization hires motivated, highly skilled individuals and assigns them routine tasks without challenge or decision-making opportunities, those individuals will likely be bored. There will be a lack of fit and productivity will suffer. Or, if the strategy demands the adoption of new technology and employees are not provided with the necessary training, fit is lacking. Within categories, elements might not fit. For example, an organization might decide to “empower” its employees to improve performance. If it fails to adjust the supervisory approach and reward system to reinforce the desired behaviors, or if the culture of the organization is one of mistrust, this lack of fit could easily lead to a failure of the empowerment strategy.
Overall, lack of fit leads to a less effective organization. Good fit means that components are aligned with the strategy and the strategy is effectively aligned with what is going on in the environment.
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