BUS 387: Organizational Structure & Change

Organizational structure

How work is formally divided, grouped, and coordinated within an organization.

Formalization

The extent to which policies, procedures, and rules are written and explicitly articulated.

Centralization

The degree to which decision-making authority is concentrated at higher levels of the organization.

Decentralization

Decision authority is pushed downward so employees closest to the problem can make decisions.

Levels of hierarchy

The number of layers between frontline employees and top management.

Tall structure

Many hierarchical levels; offers close supervision but reduces autonomy and slows communication.

Flat structure

Few hierarchical levels; increases autonomy but provides less supervision and fewer advancement opportunities.

Span of control

The number of employees reporting to one manager.

Departmentalization

How jobs are grouped into units within an organization.

Functional structure

Jobs grouped by similar functions (e.g., marketing, finance); efficient for fewer products.

Divisional structure

Jobs grouped by product, customer, or geographic area; improves adaptability to different markets.

Matrix organization

A hybrid structure combining functional and divisional forms; employees report to two managers.

Boundaryless organization

An organization with minimal structural barriers that encourages collaboration across teams, departments, or external partners.

Learning organization

An organization that actively encourages knowledge sharing, experimentation, and continuous improvement.

Mechanistic structure

Highly formalized, centralized, rigid structure; emphasizes efficiency, control, and standardized procedures.

Organic structure

Flexible, decentralized, and less formal structure; emphasizes adaptability, creativity, and collaboration.

External forces for change

Workforce demographics, technology, globalization, major events, market conditions, and organizational growth.

Organizational change

The movement from one state of affairs to another in areas such as structure, strategy, or culture.

Reactions to change

Active resistance, passive resistance, compliance, and commitment.

Active resistance

Vocal opposition or sabotage toward the proposed change.

Passive resistance

Subtle avoidance, disengagement, or withholding support for the change.

Compliance

Going along with the change with little enthusiasm.

Commitment

Believing in and supporting the change; willing to champion it.

Lewin’s three-stage model

The classic model of organizational change: unfreeze, change, refreeze.

Unfreeze stage

Preparing the organization to accept change by reducing resistance and increasing readiness.

Change stage

Executing the intended modifications to processes, structures, or behaviors.

Refreeze stage

Reinforcing and institutionalizing the new changes so they become standard practice.