JBR-09064; No of Pages 6

Journal of Business Research xxx (2016) xxx–xxx

Contents lists available at ScienceDirect

Journal of Business Research

Approaches to changing organizational structure: The effect of drivers

and communication☆
Pavel Král ⁎, Věra Králová
University of Economics, Prague, Faculty of Management, Jarošovská 1117/II, Jindřichův Hradec, 377 01, Czech Republic

a r t i c l e i n f o a b s t r a c t

Article history: A changing organizational structure is probably the most apparent indicator and clear evidence of organizational
Received 1 February 2016 change. The purpose of this study is to examine the relationship between the steps of the process of changing or-
Received in revised form 1 March 2016 ganizational structure, with special focus on drivers, components, communication, and outcomes. To study a
Accepted 1 April 2016
change in organizational structure, the analysis employs a multiple case study research design, focusing on
Available online xxxx
four organizations. The results derive approaches to changing organizational structure. Those approaches' char-
Keywords:
acteristics are a) an emphasis on external or internal drivers of the change, and b) the prevalence of formal or
Changing organizational structure non-formal communication on the change. A mutual combination of these characteristics leads to four possible
Organizational change model outcomes, pictured in a 2 × 2 matrix as approaches to changing organizational structure. The matrix helps to
Driver of change understand how changing the content or form of communication facilitates changes in different components
Change communication of organizational change.
Leading component © 2016 Elsevier Inc. All rights reserved.

1. Introduction (International Institute of Business Analysis, 2009) concur in four elemen-

tary themes or steps common to all change efforts: a) contextual issues
Adaptation and change are necessary for an organization's survival. that deal with drivers, b) content issues that focus on substance or
Organizations have to adjust both their operations according to the components of the change, c) process issues and their determinants,
changing environment, and their organizational structures according and d) assessed outcomes. Recent studies see high priority in examining
to new operational models. Although the literature recently treats orga- such relations, and they recommend to study, for example, interactions
nizational change as a continuous process (Burnes, 2004), a change of between externally and internally-driven structure changes (Argyres &
organizational structure is an apparent indicator and clear evidence of Zenger, 2013), or links of formal and non-formal communication and
discrete organizational change. Researchers, consultancy companies, structure (McEvily, Soda, & Tortoriello, 2014).
or individual consultants in academic and professional journals, and Thus, the purpose of this study is to explore relationships among the
professional websites discuss a change in organizational structure. steps within the process of changing organizational structure. Two com-
Many theoretical frameworks of organizational change, organizational plex research questions lead the research: 1) What are the relations be-
design, or organizational development apply to changing organizational tween the components of organizational change? 2) What are the
structure (Table 1). However, managers responsible for changing orga- relationships between drivers, components, communication, and out-
nizational structure often solve a problem just by changing a single comes of change? The analysis employs a case study approach, and
component without thinking about its connection to other components studies a change in organizational structure in four companies.
and the broad consequences of the change. In the field of organizational change, development, and design, some
This process of change contrasts with Damanpour's (1991) con- respected authors reject the typical direction of theory and research of
clusions, stating that successful change effort may depend more on practice, and admit developing their models from practice, not from
the congruency or fit between content, contextual, and process con- extensive theory or research. Among these models are the Causal
ditions than on the nature of a change. Examining relationships be- Model of Organizational Performance and Change (Burke & Litwin,
tween other factors is key to minimizing resistance to change 1992), McKinsey's 7S framework (Waterman, Peters, & Phillips, 1980),
(Armenakis & Bedeian, 1999). Both academic literature on organizational and the Congruence Model for Organizational Analysis (Nadler &
change (Armenakis & Bedeian, 1999) and professional frameworks Tushman, 1980), all of which count with the acknowledgment of
scholars. Recently, empirical methods in organizational design studies
have become topical again, with Puranam (2012) predicting that
☆ The authors thank Steve Riley, University of Economics, Prague, and Jiří Novák, Charles
University, for their careful reading and suggestions.
scholars can expect a revolution in empirical methods. Empirical devel-
⁎ Corresponding author. opment helps to overcome the chasm between practitioners and re-
E-mail addresses: kralpa@fm.vse.cz (P. Král), vera.kralova@fm.vse.cz (V. Králová). searchers, while providing frameworks that practitioners can use

http://dx.doi.org/10.1016/j.jbusres.2016.04.099
0148-2963/© 2016 Elsevier Inc. All rights reserved.

Please cite this article as: Král, P., & Králová, V., Approaches to changing organizational structure: The effect of drivers and communication, Journal
of Business Research (2016), http://dx.doi.org/10.1016/j.jbusres.2016.04.099
2 P. Král, V. Králová / Journal of Business Research xxx (2016) xxx–xxx

Table 1
The synthesis of the organizational model frameworks.

Model Components Relationship between

components

The Star Model (Galbraith, 1974) Structure, strategy, processes, people, rewards. Interdependence
McKinsey's 7S framework (Waterman et al., 1980) Structure, strategy, systems (process), style (culture), skills, Interdependence
staff (people), subordinate goals.
The Adaptive Cycle (Miles, Snow, Meyer, & Coleman, 1978) The entrepreneurial problem (strategy), the engineering problem Process
(technology), the administrative problem (structure, process).
The Leavitt's Diamond (Leavitt, 1970) Structure, task (process), people, technology. Interdependence
The Role of Strategic Choice in a Theory of Organization (Child, 1972) Environment, strategy, scale of operation (process), technology, Process
structure, human resources (people).
Factors affecting organizational structure (Jones, 2012) Structure, strategy, people, technology, organizational environment. Factors
Interacting Structural Dimensions of Design and Structural dimensions (structure), contingency factors Factors
Contingency Factors (Daft, 2012) (strategy, environment, size, culture, technology).
The Congruence Model for Organizational Analysis Environment, resources, strategy, history, task (process), Process
(Nadler & Tushman, 1980) individuals (people), formal organizational arrangements
(structure, processes, methods, procedures), informal organization (culture).
The Causal Model of Organizational Performance and Environment, leadership, mission and strategy, culture, performance, Causality
Change (Burke & Litwin, 1992) structure, climate, systems (policies and procedures, rewards,
management information systems), management practices,
task and individual skills, motivation, individual needs and values.
The Components of Institutional Architecture (Churchill, 1997) Human resource development, organizational structure, institutional culture. Interdependence
Organizational consultant: Contingencies–Design Relations Design parameter; structure. contingency factors; size, technology, Factors
(Baligh, Burton, & Obel, 1996) strategy, environment, ownership, management preferences.
The Six-Box Organizational Model (Weisbord, 1976) Purpose, structure, relationships, rewards, leadership, helpful mechanisms. Interdependence
Strategic task for the successful management of Managerial areas; technical system, political system, cultural system. Interdependence
your organization (Tichy, 1982) managerial tools; mission and strategy, organization structure,
human resource management (people).
Reframing leadership (Bolman & Deal, 1991) Structural frame, human resource frame (people), political frame, Frame
symbolic frame (culture).
Comprehensive Model for diagnosing organizational Input; environment, design components; strategy, technology, Interdependence
systems (Cummings & Worley, 2015) structure, climate, human resource management,
management processes. Output.
The determinants of organizational structure Structure, environment, strategy, technology, size, culture, Factors
(Senior & Swailes, 2010) creativity, politics, leadership.

Note: relationship between components “factors” means that the components are the factors influencing organizational structure.

(Worren, Moore, & Elliott, 2002), and helping practitioners to transform drivers of change vary in type of perspective and also in number of
their tacit knowledge into theories (Nadler & Tushman, 1997). The liter- drivers, which go from three (Argyres & Zenger, 2013) or four
ature also expresses a demand for new empirical models (e.g. Erwin & (Puranam et al., 2014), to over 30 (Sutevski, 2013). Thus, the first part
Garman, 2010; Puranam, 2012; Puranam, Alexy, & Reitzig, 2014; of the framework covers drivers of change. Due to divergence in catego-
Worley & Mohrman, 2014; Worren, 2012). This article responds to the rizations of drivers, the framework retains elementary classification of
demand and brings an empirical model of changing organizational internal and external drivers.
structure. Content issues focus on the substances of the change, and from the
Although this research aims to develop theory from practice, an organizational theory perspective, these substances are the components
initial definition of terms, scope, and focus of the study is important of organizational models or frameworks. The study conducts an analysis
(Eisenhardt, 1989). Thus, this research first develops the theoretical of 16 generally acknowledged frameworks of organizational design, or-
framework. Consequently, the study discusses research design, selec- ganizational change, and organizational development, and this article
tion of organizations, data collection, and data analysis. The results' sec- synthesizes the results in Table 1. The frameworks overlap in elementa-
tion starts with a brief description of individual case studies, and then a ry components describing their content, causing the diversity of these
cross-case analysis concludes the section, developing the model of ap- models. Some models describe the components as interdependent var-
proaches to changing organizational structure. Finally, the conclusion iables, some provide statements of cause and effect, and others project
section discusses theoretical and practical implications. components into a process or a recommended order.
Organizational structure is a key component of the analyzed frame-
2. Literature review works because all 16 available frameworks include this structure; in ad-
dition, some models treat organizational structure as a central or an
This article bases the research framework upon a synthesis of prac- ultimate component of organizational design. Daft (2012) describes or-
tices of business analysts, a review of professional frameworks, and ac- ganizational structure as a result of numerous contingencies, such as
ademic literature on organizational design, change, and development. strategy, culture, environment, technology, and size. Cummings and
According to the steps stated above, the framework's structure is: con- Worley (2015) adopt an identical approach, as does Jones (2012),
text (drivers), content (components), process determinants, and out- who just swaps culture for human relations. Senior and Swailes
comes. Fig. 1 represents the framework's structure. (2010) use a slightly different framework: their model supports compo-
Contextual issues focus on forces or conditions existing in an nents that have direct (environment, strategy, technology, and size) and
organization's external and internal environments, and these conditions mediating (culture and leadership) effect on organizational structure.
present drivers of the organizational change. Organizations typically For this reason, this study treats organizational structure as a central
present a need, a problem, or a dysfunctionality, which are sometimes phenomenon. Despite its central role within the models, organizational
only symptoms of other underlying problems (Cummings & Worley, structure requires people, meanings, actions, and other contingencies
2015). Thus, business analysis commences any organizational change (Bate, Khan, & Pye, 2000). Without alignment with other components,
project with an analysis of organizational needs (International organizational design does not bring a competitive advantage
Institute of Business Analysis, 2009). Attempts to categorize possible (Hernaus, Aleksić, & Klindzic, 2013). The same principle applies to the

Please cite this article as: Král, P., & Králová, V., Approaches to changing organizational structure: The effect of drivers and communication, Journal
of Business Research (2016), http://dx.doi.org/10.1016/j.jbusres.2016.04.099
 P. Král, V. Králová / Journal of Business Research xxx (2016) xxx–xxx 3

Fig. 1. The framework used for assessment of organizational structure change.

change of organizational structure: only changing organizational struc- organizational structure. Two organizations were from the IT develop-
ture is a formal step, and other components can activate the effects of ment branch, and two were from manufacturing. The study included
the change. For this reason, organizational structure is the center of all sizes of organizations (small, medium and large) according to
attention. OECD classification (OECD, 2010).
Apart from organizational structure, the frameworks' analysis shows The analysis combined multiple sources of data from interviews
six other components included at least in half of the frameworks: with the managers responsible for the change. The study also gathered
strategy (12); people, culture, and technology (9); and processes and follow-up interviews with employees, and organizational documents
environment (8). The role of environment is ambiguous because envi- (including presentations, e-mails, minutes from meeting, etc.). The
ronment presents drivers of change as a contextual issue. However, process of organizational change as described in the previous chapter
the study assesses all the components, consequently extracting the shaped the content of data collection, guided semi-structured
most important factors. interviews with change managers, and served as the focus of the organi-
Issues of the change process focus on determinants of change. These zational documents' analysis. Researchers recommend this process of
determinants can catalyze or inhibit the process, and influence the re- data collection for studying change in organizations (Langley,
sult of the change. Generally, people are resistant to any change, and Smallman, Tsoukas, & Van de Ven, 2013; Van de Ven & Poole, 2005).
hence, anything that helps to overcome the resistance can be a catalyst, During the process of data collection, participant observation was also
and anything that supports the resistance can be an inhibitor. Studies possible, which provided another point of view and helped to triangu-
identify that some factors might overcome resistance to change: climate late the data. The study also recorded and transcribed key interviews
for modernity, empowering leaders, and supportive coworkers (Hon, with change managers for further analysis, while registering follow-up
Bloom, & Crant, 2014); high past performance, firm ownership or leader interviews and observations as field notes.
charisma (Zhou, Tse, & Li, 2006); and leadership (Erwin & Garman, The study first conducted a within-case analysis, using thematic
2010; Raineri, 2011). Nevertheless, the most prevalent determinant of analysis (Grbich, 2013) to cope with the amount of data acquired, in-
the change process is communication (Johansson & Heide, 2008; cluding transcripts and field notes. Consequently, the study searched
Miller, Johnson, & Grau, 1994; Nelissen & van Selm, 2008; Raineri, for cross-case patterns, categorizing themes to reveal possible cross-
2011; Rogiest, Segers, & van Witteloostuijn, 2015). This article's frame- case differences or relations.
work divides the determinants into inhibitors and catalysts, paying spe-
cial attention to communication. 4. Results and discussion
The final step in the process of organizational change is an assess-
ment of planned and real results of the change. Again, this step complies The results start with a description of the individual case studies.
with common practice, and limiting the outcomes would be counter- Consequently, the section analyzes cross-case patterns and discusses
productive (e.g., only financial performance). the proposed findings comparing them to the literature.

3. Method 4.1. Case 1: strategy driven change

The study employed a multiple case study research to examine the The first organization is a middle-size company that provides ser-
process of organizational change. The process of the research respects vices in developing IT systems. Three changes of organizational struc-
Eisenhardt's (1989) process of building theory from case study research, ture occur between 2012 and 2014: The first change has little impact,
which other authors have validated over time (Ravenswood, 2011). consisting in adding a single business unit; the second change substan-
Such research can overcome the chasm between survey and single tially changes a divisional organizational structure to a process struc-
case study research (Woodside, 2010). Researchers especially recom- ture; and the third change reorganizes organizational units at all levels
mend case study research for investigations on organizational settings of the structure, and leads to a substantial increase in the span of control.
(Pettigrew, 2013; Pettigrew, Woodman, & Cameron, 2001). Further- The primary drivers of change are changes in the external environment,
more, studies of organizational change overuse survey design, which specifically a change in customers' requirements and in the market. In
might suggest a bias toward traditional designs (Erwin & Garman, all cases, the strategy changes before the structure. The company an-
2010). nounces the change of the strategy in the annual report and in their in-
The study selected and studied four organizations changing organi- ternal magazine. Thus, employees are aware of the new strategy and
zational structure. The analysis purposely selected organizations with accept the organizational structure change. However, the change does
a different form of leadership and style of change, and thus, these orga- not have the expected outcomes in, for example, a unified corporate cul-
nizations represent critical cases of different approaches to changing ture: neither hard indicators (such as fluctuation), nor soft indicators

Please cite this article as: Král, P., & Králová, V., Approaches to changing organizational structure: The effect of drivers and communication, Journal
of Business Research (2016), http://dx.doi.org/10.1016/j.jbusres.2016.04.099
4 P. Král, V. Králová / Journal of Business Research xxx (2016) xxx–xxx

Table 2
Matrix of approaches to changing organizational structure.

Prevalence of communication channel

Formal Non-formal

Emphasized drivers of structure change Internal Procedural approach Human approach

External Strategic approach Cultural approach

(such as shared values or communication) show changes in corporate meeting, describing the change's reasons, process, and outcomes.
culture. From the managerial point of view, the outcome meets the plans: The
processes are effective, annual turnover is rising, and production is
4.2. Case 2: decentralization of processes meeting market requirements. Employees give positive feedback and
the change results in minimal fluctuation.
The second organization is a small company that provides IT system
solutions. During the 11 years of its history, the company's growth is
slow but steady. The owner of the company intends to decentralize be- 4.5. Across-case analysis: approaches to the changing of organizational
cause he feels overburdened, and because of his vision of an ideal struc- structure
ture. Therefore, the company divides the core business unit into three
subunits, adopting a structural design project. The departmentalization The across-cases analysis reveals patterns in the process of changing
and the decentralization create a new level of management, and the organizational structure and answers to the research questions. The first
company informs employees through meetings. The definite structure finding shows the links between the components of organizational
only provokes a perceived change in the processes, as this change change. In every case, a change of some component precedes the change
does not affect neither the strategy (which is rather implicit), nor cul- in organizational structure. This component initiates the change, ratio-
ture (which is generally quite weak). The acceptance of change is am- nalizes the change of organizational structure, and is the primary
biguous. The improvements in the supporting processes, as opposed focus of the organizational change agent. Organizational change has
to the competencies of project managers, satisfy the company. The com- one initiating component, even if the change encompasses more com-
pany suffers from turnover of key employees. ponents. Such component is the leading component. The key role of
the leading component is influencing other components and providing
4.3. Case 3: optimization of processes the ground for their subsequent change. Positive acceptance of changing
the leading component facilitates a consequent change of further com-
The third organization is a large manufacturing company in the au- ponents. For example, in case study 4, a change of people influences the
tomotive industry with steady growth over the past 10 years, currently culture and procedures, ultimately fulfilling the new strategy. These
having over 700 employees. The main organizational change simplifies subsequent changes result from changing channels and content of com-
the structure by decreasing the span of control and merging subunits at munication. The research identifies four possible leading components:
upper levels of management. Drivers of the change are 1) improving the strategy, processes, people, and culture. On the other hand, previous re-
effectiveness of production, 2) eliminating rivalry between subunits, search (Heckmann, Steger, & Dowling, 2016) excludes environment and
and 3) leadership issues (“to have the right people in the right places”). technology as leading components, because they affect the change
Thus, the company designs the new structure to achieve effective pro- mostly as drivers or as determinants of successful change.
cesses, and informs employees through meetings. Managers evaluate The second finding connects drivers of change, communication of
the change positively because they solve all dysfunctions and the pro- change, and the leading component. A matrix comprising two dimen-
cess is more effective. Employees accept and see the benefits of the sions depicts the findings: the first dimension deals with drivers of
change over time. change and differentiates between emphasis on external and internal
drivers; prevalent communication channels characterize the second
4.4. Case 4: survival through collaboration dimension. Written or recorded formal communication uses channels
such as e-mails, newsletters, staff meetings, blanks, etc., and the message
The fourth organization is a large toy manufacturing company. Sub- has a clear direction. Non-formal communication is non-systematic, uses
stantial organizational change is a consequence of a long-lasting crisis. any channel (mostly face-to-face), and stretches in all directions
The organization intends to simplify its organizational structure by re- (Johnson, Donohue, Atkin, & Johnson, 1994; McEvily et al., 2014). A com-
ducing levels of management from eight to six. The drivers of change bination of the two dimensions of the matrix leads to four possible ap-
are: (1) long and slow communication, (2) low flexibility of production, proaches to changing organizational structure (Table 2). The leading
(3) inability to react to market requirements, and (4) an overly complex component of the change originates the terms of the approaches. For ex-
portfolio. The change of the structure interconnects with a change of ample, external drivers of change in combination with a prevalence of
strategy, defining new processes and adjusting the culture. However, formal communication support strategy as the leading component. An
the focus is on people, communication, and leadership. The aim is “man- organization reacts to environment changes by changing its strategy,
aging at eye level,” which means being able to talk to people at the com- and consequently, the change in strategy results in a change in the orga-
pany; thus, the change supports open and non-formal communication. nizational structure. The first case study is an example of the “strategic
The official presentation of the change takes place at an all-hands approach.”

Table 3
Categorization of selected dimensions for individual cases.

Approach to change Communication perception by employees Acceptance of the change by employees Outcome — congruence with expectations

Case 01 Strategic Concealing Vague Partly met

Case 02 Procedural Vague Ambiguous Partly met
Case 03 Procedural Open Good Fully met
Case 04 Human Open Good Fully met

Please cite this article as: Král, P., & Králová, V., Approaches to changing organizational structure: The effect of drivers and communication, Journal
of Business Research (2016), http://dx.doi.org/10.1016/j.jbusres.2016.04.099
 P. Král, V. Králová / Journal of Business Research xxx (2016) xxx–xxx 5

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