Organizational strategic direction plays a key role in shaping organizational design. Strategic direction includes defining the organizational purpose through its mission and strategic intent, identifying competitive advantages and openings in the market, and determining competitive strategies like low-cost leadership or differentiation. The chosen strategy then influences the type of organizational design, whether more mechanistic for efficiency or organic for flexibility. Additionally, other contingency factors like environment, size, technology, and culture also affect organizational design. Strategic direction provides guidance for an organization's goals and direction in the marketplace to best structure its design.