Structural Change in Management: Theory & Definition

Instructor: Ashley Johns

Ashley has taught college business courses and has a master's degree in management.

Every business experiences change. How it is managed determines whether or not it will be a successful change. This lesson covers how to manage structural changes within an organization. It is followed up with a quiz.

What Is a Structural Change?

Change means to make something different. It is said that change is inevitable. As society evolves, businesses must follow. There are small, simple changes and large, complex changes. A structural change is major change within an organization that changes the way authority, capital, information and responsibility flows.

Let's look at an example to help illustrate change and how it can be implemented. Assume you've been working in the admissions department for a higher education institution for the last five years. During that time, representatives worked on a commission basis. Bonuses were provided to representatives that enrolled a certain number of students each month. This was a great incentive to change people's lives through education. However, the government passed a recent bill stating the education industry can no longer offer commission-based compensation packages. The government feels that it is not in the best interest of the student.

For your school, this is a major change. Management will have to figure out how to restructure the way it trains and motivates the team. The management team fears enrollment will go down with the loss of this incentive for the employee. A new compensation package must be presented. The new structure will change from teams of admission reps, to individuals working under one main manager. In addition, each admissions representative will now be paired with a student advisor to help as students transition into classes. These changes must happen. The

Change Management

Management's purpose is to achieve the goals of the business through the organization and coordination of activities. The functions of management include: planning, organizing, leading and controlling. Combining all the activities to manage through a major change is one of the most difficult tasks a management team faces.

There are several models that can be used to help in the process. We will discuss the most common change management models: Lewin's Management Model, McKinsey 7-S Model, and Kotter's 8-Step Change Model.

Lewin's Management Model

This model was created by Kurt Lewin, with a focus on recognizing people's safety zones. He used three stages of change: unfreeze, transition and refreeze. The goal of the unfreeze stage is to use motivation to keep employees from resisting change. Employees are stuck in their old ways, hence the word 'frozen'. Now you motivate them to unfreeze and transition to the new way. The transition stage can take a long time. The goal of this stage is for management to teach the new ways and reassure employees that the change is for the best. When the team has transitioned, it is time to refreeze them. Once the change has been accepted, the team is now stuck in the new format.

Going back to our example, the school could use this model by taking the time to motivate employees to accept a new pay and work structure (unfreeze). Employees would transition the goal from high enrollments to improved placement of students for the programs offered. The management team would continue to train and confirm that the new way has stuck and is successful (refreeze).

McKinsey 7-S Model

This model was created by Robert Waterman, Tom Peters, Richard Pascale, and Anthony Athos, with a holistic viewpoint. Factors involved include shared values, strategy, structure, systems, style, staff, and skills. The goal is to take everything into account when implementing change. Advantages of this approach are that it offers a method to effectively understand the organization, provides guidance, and addresses and includes both rational and emotional parts. Disadvantages are that if one factor changes, you have to change everything, and there's potential for a high rate of failure.

If your school chose this model, all aspects of the school would be taken into account. Management would align the values of employees and students. The strategy would change from a sales focus to an education focus. The structure and systems would take into account any financing and training adjustments of one manager over all admissions rather than one manager per team. The style of recruitment may adjust, and employee feelings would be taken into account. Finally, skill sets would be monitored to confirm everyone is functioning successfully with the new structure.

To unlock this lesson you must be a Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use

Become a member and start learning now.
Become a Member  Back
What teachers are saying about
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account