Relationship between Organizational Structure and Cost Leadership Strategy in the Scope of Resource Based View: A Research in Turkey’s Top 1000 Industrial Enterprises

The purpose of this research is to investigate the relationship between organizational structure and cost leadership strategy in the scope of resource based view. In the framework of this purpose, structural equation modelling used in the research. When the literature related to the scientific discipline of management and organization is examined, it is seen there are researches that investigates strategy-structure relation as: “structure follows strategy” and “strategy follows structure”. Furthermore, one of the strategic management approach which is called as resource based view indicates that strategy follows structure. The concept of structure takes place in many scientific disciplines. The concept of organizational structure within the scientific discipline of management and organization is one of them. Organizational structure includes many elements such as division of labor within the organization, authority and decision-making mechanisms, hierarchical levels, roles and positions, rules and procedures and degree of specialization. However, the three main organizational structure sub-dimensions that draw attention in the related literature are expressed as centralization, formalization and specialization. The strategies implemented by an organization at the business unit level are defined as competitive strategies, and cost leadership strategy is one of them. Cost-leadership strategy means that the organization is efficient and effective in all business processes in order to compete with its competitors.In the light of all this information, the research has been conducted with top 1000 industrial enterprises of Turkey (ISO Top 500 and ISO Second Top 500). These 1000 firms are determined as research population. All firms were reached with full counting method and successful return was received from 213 firms. The Organizational Structure Scale (OS-S) is used for measuring the organizational structure and the Cost Leadership Strategy Scale (CLS-S) has been utilized in measuring cost leadership strategy. Validity and reliability analyses have been performed for the scales. Exploratory factor analysis, confirmatory factor analysis and Cronbach’s alpha values have been performed in this context. The fit indices for the structural model that have been implemented after measurement models, tested in accordance with the structural equation modeling analysis, have been detected to be acceptable (X2/df = 1.403; RMSEA = .044; GFI = .922; CFI = .952; NFI = .854; TLI = .942; IFI =.953). Research findings show that centralization sub-dimension of the organizational structure is a positive predictor of the cost leadership strategy.