Flevy Management Insights Q&A
What role does organizational structure play in facilitating or hindering change management efforts?
     Joseph Robinson    |    Change Resistance


This article provides a detailed response to: What role does organizational structure play in facilitating or hindering change management efforts? For a comprehensive understanding of Change Resistance, we also include relevant case studies for further reading and links to Change Resistance best practice resources.

TLDR Organizational structure significantly influences Change Management by affecting information flow, decision-making, and resource allocation, thereby impacting an organization's agility and adaptability.

Reading time: 5 minutes

Before we begin, let's review some important management concepts, as they related to this question.

What does Organizational Structure mean?
What does Change Management mean?
What does Agility in Organizations mean?
What does Cross-Functional Teams mean?


Organizational structure plays a pivotal role in either facilitating or hindering Change Management efforts. The structure of an organization determines the pathways through which information flows, how decisions are made, and the manner in which resources are allocated. It sets the stage for how well an organization can respond to internal and external pressures for change. Understanding the interplay between organizational structure and Change Management is crucial for C-level executives aiming to steer their organizations through the tumultuous waters of market shifts, technological advancements, and evolving customer expectations.

The Impact of Organizational Structure on Change Management

Organizational structures range from traditional hierarchies to more fluid and dynamic models such as matrix, flat, or networked structures. Each of these structures affects Change Management in distinct ways. Hierarchical structures, for instance, may provide clear lines of authority but can also create bottlenecks in communication and slow decision-making processes. On the other hand, flat structures might enhance agility and speed up decision-making but can lead to conflicts due to ambiguous authority lines. The choice of organizational structure should align with the organization's strategy, culture, and the specific Change Management initiatives it undertakes.

Research by McKinsey & Company highlights that organizations with agile structures report a 70% success rate in their Change Management efforts compared to those with traditional structures. Agile organizations are characterized by their ability to quickly adapt to changes, foster collaboration across departments, and empower employees at all levels. This agility is facilitated by a structure that supports rapid information flow, decentralized decision-making, and a high degree of autonomy.

Effective Change Management requires a framework that allows for flexibility, rapid iteration, and the involvement of stakeholders across the organization. Structures that support cross-functional teams and provide channels for open communication enhance the organization's capacity to manage change effectively. Conversely, rigid structures that silo information and decision-making can significantly impede Change Management efforts, leading to resistance, delays, and failure to achieve desired outcomes.

Are you familiar with Flevy? We are you shortcut to immediate value.
Flevy provides business best practices—the same as those produced by top-tier consulting firms and used by Fortune 100 companies. Our best practice business frameworks, financial models, and templates are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience.

Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
AT&T GE Cisco Intel IBM Coke Dell Toyota HP Nike Samsung Microsoft Astrazeneca JP Morgan KPMG Walgreens Walmart 3M Kaiser Oracle SAP Google E&Y Volvo Bosch Merck Fedex Shell Amgen Eli Lilly Roche AIG Abbott Amazon PwC T-Mobile Broadcom Bayer Pearson Titleist ConEd Pfizer NTT Data Schwab

Strategies for Leveraging Organizational Structure in Change Management

To leverage organizational structure effectively in Change Management, leaders must first conduct a thorough assessment of their current structure to identify potential barriers to change. This involves analyzing the flow of information, decision-making processes, and the alignment between the structure and the organization's strategic objectives. Consulting firms like Boston Consulting Group (BCG) offer frameworks and templates to guide this assessment, helping organizations to pinpoint structural misalignments and areas for improvement.

Once potential barriers are identified, the next step is to design a Change Management strategy that takes into account the organization's structural strengths and weaknesses. This strategy should include plans for enhancing communication, streamlining decision-making processes, and ensuring that the structure supports the agility required for effective change. For example, introducing cross-functional teams or adopting a more matrix-like structure can help to break down silos and foster a more collaborative environment conducive to change.

Implementing structural changes requires careful planning and communication. Leaders must be transparent about the reasons for the changes, the expected benefits, and how the changes will affect employees at all levels. Training and support should be provided to help employees adapt to new roles, responsibilities, and ways of working. Regular feedback mechanisms should also be established to monitor the impact of structural changes on Change Management efforts and to make adjustments as needed.

Real-World Examples of Organizational Structure Impacting Change Management

One notable example of organizational structure facilitating successful Change Management is Spotify. The company's adoption of a "squad" model, which organizes employees into small, cross-functional teams with a high degree of autonomy, has been instrumental in its ability to innovate and adapt quickly to changes in the music streaming industry. This structure supports rapid decision-making, fosters a culture of collaboration, and enables Spotify to respond swiftly to market trends and customer feedback.

In contrast, Nokia's failure to adapt to the smartphone revolution can be partly attributed to its rigid, hierarchical organizational structure. This structure slowed down decision-making processes and hindered the flow of information between departments, making it difficult for Nokia to respond effectively to the competitive threats posed by Apple and Android devices. The company's eventual loss of market dominance underscores the critical role that organizational structure plays in Change Management.

In conclusion, the structure of an organization significantly influences its ability to manage and adapt to change. By carefully designing and adapting their organizational structures, leaders can create an environment that supports agility, collaboration, and effective Change Management. This requires a strategic approach that considers the unique characteristics of the organization, the nature of the changes it faces, and the dynamics of the industry in which it operates.

Best Practices in Change Resistance

Here are best practices relevant to Change Resistance from the Flevy Marketplace. View all our Change Resistance materials here.

Did you know?
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.

Explore all of our best practices in: Change Resistance

Change Resistance Case Studies

For a practical understanding of Change Resistance, take a look at these case studies.

Change Resistance Management for a Global Financial Institution

Scenario: A global financial institution has embarked on a transformative digital journey but is encountering significant resistance to change from its employees.

Read Full Case Study

Change Resistance Strategy for Maritime Shipping Leader

Scenario: The organization, a prominent player in the maritime industry, is facing internal resistance to strategic changes aimed at enhancing operational efficiency and environmental sustainability.

Read Full Case Study

Change Management Initiative in Pharmaceutical Logistics

Scenario: The organization, a major player in pharmaceutical logistics, is grappling with significant internal resistance to change.

Read Full Case Study

Change Resistance Strategy for Retailer in North America

Scenario: A North American retail firm is grappling with Change Resistance as it attempts to implement a new omnichannel strategy.

Read Full Case Study

Change Management in a Global Logistics Firm

Scenario: The organization is a global logistics service provider that has recently expanded its operations to new markets.

Read Full Case Study

Change Resistance Overhaul in Agritech Sector

Scenario: The organization is a leading agritech company specializing in innovative farming solutions.

Read Full Case Study




Flevy is the world's largest knowledge base of best practices.


Leverage the Experience of Experts.

Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.

Download Immediately and Use.

Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.

Save Time, Effort, and Money.

Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.




Read Customer Testimonials

  •  
    "As a young consulting firm, requests for input from clients vary and it's sometimes impossible to provide expert solutions across a broad spectrum of requirements. That was before I discovered Flevy.com.

    Through subscription to this invaluable site of a plethora of topics that are key and crucial to consulting, I "

    – Nishi Singh, Strategist and MD at NSP Consultants
  •  
    "Last Sunday morning, I was diligently working on an important presentation for a client and found myself in need of additional content and suitable templates for various types of graphics. Flevy.com proved to be a treasure trove for both content and design at a reasonable price, considering the time I "

    – M. E., Chief Commercial Officer, International Logistics Service Provider
  •  
    "FlevyPro provides business frameworks from many of the global giants in management consulting that allow you to provide best in class solutions for your clients."

    – David Harris, Managing Director at Futures Strategy
  •  
    "If you are looking for great resources to save time with your business presentations, Flevy is truly a value-added resource. Flevy has done all the work for you and we will continue to utilize Flevy as a source to extract up-to-date information and data for our virtual and onsite presentations!"

    – Debbi Saffo, President at The NiKhar Group
  •  
    "My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me "

    – Bill Branson, Founder at Strategic Business Architects
  •  
    "As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value."

    – David Coloma, Consulting Area Manager at Cynertia Consulting
  •  
    "Flevy is our 'go to' resource for management material, at an affordable cost. The Flevy library is comprehensive and the content deep, and typically provides a great foundation for us to further develop and tailor our own service offer."

    – Chris McCann, Founder at Resilient.World
  •  
    "As a consultant requiring up to date and professional material that will be of value and use to my clients, I find Flevy a very reliable resource.

    The variety and quality of material available through Flevy offers a very useful and commanding source for information. Using Flevy saves me time, enhances my expertise and ends up being a good decision."

    – Dennis Gershowitz, Principal at DG Associates



Download our FREE Strategy & Transformation Framework Templates

Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S Strategy Model, Balanced Scorecard, Disruptive Innovation, BCG Experience Curve, and many more.