If a company has just implemented a low-cost strategy, what type of organizational design should it move toward?

When a company adopts a low-cost strategy, it typically aims to achieve efficiency and cost-effectiveness in its operations to offer products or services at competitive prices. Moving toward a formal organizational design supports this strategy by establishing clear structures, standardized procedures, and well-defined roles within the organization. This kind of design helps minimize waste, streamline processes, and optimize resource utilization, which are critical for maintaining low costs.

In a formal design, decision-making processes are clearly outlined, and there are established policies that guide employee behavior and organizational activities. This structure allows for better coordination and ensures that all employees are aligned with the company's cost-reduction goals. It reduces ambiguity and enables the organization to respond efficiently to operational challenges, a vital aspect of sustaining a low-cost competitive advantage.

Other designs, like informal or adaptive, may introduce flexibility and innovation but can also lead to inconsistencies and higher operational costs, which are not conducive to a low-cost strategy.