Business organisational structure
Reasons for changing your organisational structure
Businesses change for different reasons. These can include new technologies, changing market conditions, or the need to improve quality, productivity or profit.
Businesses also change in different ways. Change can be:
- planned or unplanned
- transformational or incremental
- remedial or developmental
Different external or internal factors can cause or trigger organisational change.
What causes organisational change?
Businesses often restructure to support a new strategy. A strategy is a plan for how a business will use its main resources to meet its goals. When a strategy changes, the business structure often needs to change too, so both continue to work well together. This may happen when a business:
- transitions from a start-up to a scale-up company
- takes on a partner, or changes management
- adds new product lines
- prepares for growth
- expands overseas
Find out more about strategic planning for business growth.
External factors affecting organisational change
External factors can also lead to changes in a business structure. These may include the need to:
- enter new markets
- respond to changes in demand for products or services
- keep up with new technologies or competing products
Other outside events can also trigger a change in your business or in competitors. These may include:
Internal factors affecting organisational change
Internal business needs can also lead to change. These may include the need to:
- raise capital or improve cash flow or profitability
- improve working practices and processes
- eliminate unnecessary job positions and duplicate management roles
- reorganise internal functions, such as sales and marketing, to improve efficiency
Prepare for organisational change
Spotting the signs of organisational change early can help you prepare and put the right policies in place to support growth. If you wait until your business is under pressure, management may become defensive and less effective. It is usually better to act early. This means anticipating changes in the market or economy and responding before they affect the business too much. Read more about change management.
Looking at your strengths and weaknesses can also help you identify possible changes. Tools such as SWOT, PESTLE and other strategic analysis models can support this.