Because firms need to respond quickly to environmental opportunities and threats, the implementation of the differentiation strategy is positively affected when a firm is centralised and formalised.

Question

Quizplus · Accepted Answer

The implementation of the differentiation strategy is actually negatively affected by a centralised and formalised organisational structure, as it can slow down decision-making in response to opportunities and threats in the environment. A more decentralized and flexible structure is better suited for implementing a differentiation strategy.

Because Firms Need to Respond Quickly to Environmental Opportunities and Threats