LEAD 707

1. © Julie Hodges and Roger Gill

2. Chapter 9
Changing Organizational Structures
© Julie Hodges and Roger Gill

3. Learning outcomes
• Identify the characteristics of different types of organizational structures
• Compare and contrast the different types of structures in organizations
• Examine the key components for designing organizational structures
• Identify why structures are resistant to change
• Apply key approaches to managing mergers and acquisitions
• Appreciate how organizational structure relates to sustaining change in
organizations
© Julie Hodges and Roger Gill

4. Definition
‘The structure of an organization is a formal way of
identifying who is to take responsibility for what; who is
to exercise authority over whom; and who is to be
answerable to whom. The structure is a hierarchy of
managers and is the source of authority, as well as the
legitimacy of decisions and actions’.
(Bartol and Martin, Stacey, 2007: 62)
© Julie Hodges and Roger Gill

5. Conventional types of structures
• Functional
• Divisional
• Matrix
• Flat
© Julie Hodges and Roger Gill

6. Emerging organizational structures
• Network
• Virtual
• Skunks works
© Julie Hodges and Roger Gill

7. Organizational Design
• Burns & Stalker (1961)
– Mechanistic
– Organic
• Lawrence and Lorsch (1986)
– Organization and environment approach
© Julie Hodges and Roger Gill

8. Design Tests (Goold & Campbell, 2003)
Design Principles Design Tests
Specialization Specialist culture test: do any units have or need a specialist
culture? And do these units have enough protection from the
dominant culture?
Coordination Difficult links test: does the organization need any coordination
that is difficult to achieve on a networking basis?
Knowledge and competence Redundant hierarchy test: do all levels in the organization’s
workforce hierarchy add value?
Control and commitment Accountability test: does the design enable economical and
motivating control processes?
Innovation and adaptation Flexibility test: will the design help the development of new
strategies and be flexible enough to adapt to future changes?
© Julie Hodges and Roger Gill

9. Summary
• Each form of organizational structure possesses unique
strengths and weaknesses that make it appropriate for
some situations and not for others.
• Reorganizing or restructuring is a common change
intervention in organizations.
• Structuring an organization involves making well-
considered choices among the various alternatives
available. Organization design is the process of making
these choices.
© Julie Hodges and Roger Gill

10. References
• Burns, T. and Stalker, G.M. (1961) The Management of
Innovation. London: Tavistock.
• Goold, M. and Campbell, A. (2003) ‘Structured
networks: Towards the well-designed matrix’, Long
Range Planning, 36(5): 427–39.
• Lawrence, P.R. and Lorsch, J.W. (1986) Organisation
and Environment: Managing Differentiation and
Integration. Boston, MA: Harvard Business Press.
© Julie Hodges and Roger Gill