Structural Change: what is the cause?

Structural changes are changes made to the organisation’s structure that might stem from internal or external factors and typically affect how the company is run. Structural changes include major shifts in the management hierarchy, team organisation, the responsibilities attributed to different departments, the chain of command, job structure, and administrative procedures. 

What Causes Structural Change Within an Organisation?

Structural change within an organisation might stem from internal or external factors. Efficient change management requires the ability to identify what causes structural change within an organisation. The ability to identify the signs of oncoming organisational change can help you better prepare for the change and implement policies that will keep your company on a growth path.

According to organisational change management, acquiring or merging with another company has a profound effect on organisational structure. The deletion of duplicate departments manages cost, yet talent from both companies can be utilised in the resulting corporate structure. However, job functions will be altered to fit the business model of the company, and management positions may be eliminated as well.

Job Duplication

Multiple managers or executives within an organisation may create the need for change. Employees can either become frustrated with trying to please more than one manager, or employees may find ways to use opposing views by multiple managers to get what the employee needs. When employees encounter duplicate management positions, the structure of the organisation needs to be altered to eliminate the excess positions and bring departments into line with the proper individual manager.

Marketplace Changes

As the marketplace changes, so do the structural needs of your organisation. For example, as fuel prices rise, customers may begin to demand more fuel-efficient vehicles. If you own a car dealership known for selling large SUV's and vans, you may have to shift your focus to smaller and more fuel efficient cars. This requires bringing in sales people and service technicians accustomed to selling and working on these vehicles. Marketing then needs to change to target the car-buying public, and the old methods should be eliminated.

Process Changes

Changes to the way the company does business can cause structural changes. If your company was used to allowing departments to be autonomous, then a change to a centralised way of doing business will create changes in company structure. If a new department has been created to address a company demand, the company structure must change to accommodate the new group. For example, if the backlog of archived files becomes so large that an archiving department needs to be created, that can change the flow of information in your company and have a significant effect on corporate structure.

Mergers and Acquisitions Structural Change

Mergers and acquisitions are the most common cause of structural change. For example, let’s say MTN decided to acquire Telkom. As a part of that acquisition, duplicate departments are eliminated, employees from both companies are reassigned to new positions, some employees are terminated, new policies and procedures are created, and job functions are realigned to fit the new company structure.

Eliminating role redundancies, redefining goals, clearly defining new roles and responsibilities, and training on technology are all important parts of managing change during mergers and acquisitions. Lewin’s Change Management Model works well for mergers and acquisitions because it focuses on creating a new status quo. It has three steps: unfreeze, change, and refreeze.

​After you unfreeze the current processes, you move on to change. This step should be gradual. This is when the strategy is so crucial. Difficult changes, such as eliminating redundancies, require continuous and open communication. Encourage feedback and listen as much as you talk. Once the changes are in place, you “refreeze” or solidify the change as the new status quo.
​

• The creation of new teams or departments:

Structural change can also apply to smaller adjustments, such as creating a new team. If you notice that a group of employees have a knack for analytics, you might decide to create a separate team dedicated to reporting. 

However, the necessary shifting of personnel and duties could create some tension. To streamline the process, justify the change with clear reasoning, explain the benefits, and highlight the positives. It’s not about taking away responsibilities – it’s about playing to each individual’s strengths.

• Changes to the company organisational chart:

Promotions and new roles call for updates to the organisational chart. When moving people around, be sure to celebrate wins, like promotions, and explain adjustments such as merged departments.

Structural changes influence how your company functions as a whole. It’s never an easy transition, but solidifying the change as soon as possible can help you avoid major issues down the line.

Turn and face the change

Ignoring change doesn’t make it go away. It only makes it harder for employees to adapt. Remove employees’ fear of change by providing a framework for employees to reference during the change process. Gestaldt’s Change Management Initiatives offer a simple framework worth exploring at your organisation. 

Find out more about guiding change, specifically with the goal of transforming your organisation.

Contact Us