adkar-model

What Is The ADKAR Model And Why It Matters

  • The ADKAR model helps businesses institute successful change through motivated employee buy-in.
  • The ADKAR model consists of five core principles: awareness, desire, knowledge, ability, and reinforcement.
  • To drive change, the ADKAR model focuses on empowering and supporting employees throughout the transition. In theory, this makes employees more resilient to future change and ensures that they do not fall back into old habits.
ADKAR Model ElementDescriptionImplicationsKey CharacteristicsExamplesApplications
AwarenessAwareness is the first step and involves understanding the need for change at both individual and organizational levels.– Recognizing the reasons and necessity for change. – Acknowledging potential benefits and impacts.– Creating a sense of urgency and relevance for change.– Communicating the need for adopting new software systems. – Recognizing the importance of sustainability initiatives.– Change Management: Communicate the rationale and goals of a change initiative to employees and stakeholders. – Marketing Campaigns: Raise awareness about new products or services and their benefits.
DesireDesire relates to the motivation and willingness to actively participate in the change process.– Developing a personal commitment to change. – Aligning individual and organizational goals with the change.– Cultivating enthusiasm and buy-in for the change.– Encouraging employees to embrace new leadership practices. – Motivating team members to support a corporate rebranding.– Human Resources: Foster employee engagement and commitment to organizational changes. – Leadership Development: Cultivate a desire for leadership skills and behaviors among potential leaders.
KnowledgeKnowledge entails providing individuals with the information and skills required to navigate the change.– Educating and training individuals on the necessary knowledge and competencies for change.– Providing learning resources and opportunities.– Offering training programs on new software tools and procedures. – Providing workshops on diversity and inclusion practices.– Employee Training: Equip staff with the skills and knowledge needed to perform new job roles or tasks. – Educational Institutions: Facilitate learning and skill development among students.
AbilityAbility focuses on the practical application of knowledge and skills in the context of the change.– Ensuring individuals can effectively apply what they have learned to their roles or responsibilities.– Offering opportunities for practice and skill development.– Conducting simulations for emergency response teams. – Providing coaching for managers to apply new leadership methods.– Skill Development: Enable employees to gain proficiency in using new technologies or tools. – Leadership Coaching: Support leaders in applying new leadership approaches effectively.
ReinforcementReinforcement involves sustaining and reinforcing the change to ensure it becomes a part of the organizational culture.– Establishing mechanisms to encourage and reward desired behaviors. – Recognizing and celebrating successful change adoption.– Creating a culture that supports and reinforces the change.– Recognizing and rewarding employees for demonstrating inclusive behaviors. – Celebrating milestones in sustainability initiatives.– Organizational Culture Change: Embed the change into the organization’s values, norms, and practices. – Diversity and Inclusion: Maintain a culture of inclusion by reinforcing inclusive behaviors and policies.

The ADKAR model is a management tool designed to assist employees and businesses in transitioning through organizational change. To maximize the chances of employees embracing change, the ADKAR model was developed by author and engineer Jeff Hiatt in 2003. The model seeks to guide people through the change process and importantly, ensure that people do not revert to habitual ways of operating after some time has passed.

Understanding the ADKAR model

Within a business, change is usually met with resistance from employees. This means that the main determinant of successful change comes down to the acceptance of the employees concerned.

The five principles of the ADKAR model

ADKAR is an acronym of five principles that must be achieved to institute successful change. Let’s discuss these in more detail.

1. Awareness

Awareness entails informing employees of the need for change by providing context.

Context is important because many are simply afraid to step out of their comfort zone and need a concrete reason to do so.

To create awareness, some difficult conversations may be required.

Some uncomfortable facts may need to be shared so that people understand the problem and become more motivated to act.

Ultimately, employees need to be told that the status quo is not the most viable option moving forward.

2. Desire

Understanding the reasons for change is one thing, but wanting to change is another.

To increase desire among employees, they must understand the benefits.

For example, the automation of a production line may mean that certain employees have to learn new skills.

However, they are more likely to be open to learning if automation leads to increased output and a subsequent pay rise.

3. Knowledge

This principle of the ADKAR model involves training and education. Employees will be more open to change if they have a clear understanding of how their responsibilities, skills, and processes will be impacted.

The training must also be specific to the individual. If new software is being installed throughout an organization, this responsibility will fall to IT staff.

Once rolled out, however, the responsibility of learning to use the software falls on staff from other departments.

4. Ability

Knowledge is worthless without the capacity to apply it to the real world.

Ability, then, means that the employee can apply new skills or behaviors competently.

Hands-on training is one of the most effective ways that employees can show demonstrated ability in certain processes.

It also helps them start slowly with small wins to build confidence.

5. Reinforcement

Earlier, we mentioned the potential for employees to revert to old habits.

This can be negated by rewarding the continued practicing of new habits to increase motivation.

The presence of poor habits, on the other hand, should be addressed through private mediation.

As employees continue to settle into their new roles, continue to collect feedback.

There may still be some aspects of the change causing distress which were initially overlooked.

ADKAR model examples

Now that we’ve discussed the five core principles of the ADKAR model, we’ll provide a mixture of real-world and hypothetical examples detailing how this change process can be managed.

1 – Awareness

When McDonald’s introduced self-serve kiosks in its restaurants, it enabled customers to place an order without directly interacting with staff.

To alleviate concerns that some individuals would lose their jobs, the company employed change leaders with superior communication skills and emotional intelligence.

In more specific terms, McDonald’s employees were made aware that customers were increasingly wanting to serve themselves and that contactless payment was the future.

The interactive nature of the technology would also increase the amount of time customers spent in the restaurant and deliver a superior dining experience. 

Staff were also made aware that self-serve kiosks would make them more mobile and free them up to perform other tasks such as cleaning and table service.

In other words, there positions within the restaurant were still warranted.

2 – Desire

For the second principle of the ADKAR model, consider a marketing team that has been using the same CRM software for three years.

They have just been informed by a superior that the company will be investing in a more complex and feature-rich platform to better cater to the expanding business.

While employees can understand that a growing business needs more robust tools, most nevertheless remain adverse to adopting a new status quo.

In this case, creating a desire for change by outlining the benefits is key.

To that end, the company notes that the software will improve efficiency and allow it to charge more for its services.

Both these factors will increase employee salaries and bonuses.

3 – Knowledge

Training and education are critical to any change initiative since most employees fear the unknown.

If a company was switching to agile, for example, it stands to reason that the best results would come from hiring an agile coach.

Ideally, the coach should be able to design agile workflows and help employees learn and become comfortable with them.

They should understand the steep initial learning curve and motivate individuals to stick with agile long enough to understand its usefulness.

4 – Ability

Returning to the previous example, the agile coach and those responsible for managing the change should liaise with employees to determine if the new processes are being understood and implemented correctly. 

In this case, routine meetups and test sprints are a good place to identify common barriers and offer one-on-one support to those who are finding the transition process difficult.

5 – Reinforcement

Reinforcement is a matter of adopting a continuous improvement mindset and maintaining actions introduced under the fourth principle.

This may consist of weekly sessions where employees share positive and negative aspects of the change.

Less frequent sessions can mention time and cost savings or celebrate employee achievements.

Effective reinforcement techniques include new job titles, extra breaks, gift certificates, cake, free lunches, and competitions.

American SaaS company Zendesk introduced the “Champagne Campaign” to introduce a healthy sense of competition among its sales representatives.

Here, the first individual to reach a sales target is awarded a champagne bottle that is placed on their desk by the sales manager.

ADKAR vs. Kotter

kotters-8-step-change-model
Harvard Business School professor Dr. John Kotter has been a thought-leader on organizational change, and he developed Kotter’s 8-step change model, which helps business managers deal with organizational change. Kotter created the 8-step model to drive organizational transformation.

Like the ADKAR model, the Kotter change management model helps organizations drive change, yet it does that through developing a new vision and strategy.

Whereas the ADKAR model does it primarily through motivated employee buy-in.

The Kotter change management model indeed drives change through eight primary steps:

ADKAR vs Prosci

prosci-change-management
According to Prosci founder Jeff Hiatt, the secret to successful change “lies beyond the visible and busy activities that surround change. Successful change, at its core, is rooted in something much simpler: how to facilitate change with one person.”

The ADKAR model is one of the two foundational models within the Prosci method.

Indeed, beyond the ADKAR model, the Prosci moves through three key phases:

ADKAR vs. AIDA

aida-model
AIDA stands for attention, interest, desire, and action. That is a model that is used in marketing to describe the potential journey a customer might go through before purchasing a product or service. The AIDA model helps organizations focus their efforts when optimizing their marketing activities based on the customers’ journeys.

Compared to the ADKAR model which is used to drive change within the organization, the AIDA model is a marketing model used to drive action from outside the organization.

In other words, the AIDA model is focused on crafting compelling messages which make potential customers take action through four key steps:

Case Studies

  • Technology Adoption:
    • Awareness: Communicate the need for the new technology, its benefits, and how it will impact employees’ work.
    • Desire: Create a compelling case for why employees should embrace the technology, emphasizing how it will make their tasks easier or more efficient.
    • Knowledge: Provide comprehensive training and resources to equip employees with the skills needed to use the technology effectively.
    • Ability: Offer hands-on practice and support as employees start using the technology in their daily tasks.
    • Reinforcement: Recognize and reward early adopters, and continuously provide support and feedback to encourage long-term adoption.
  • Process Improvement:
    • Awareness: Explain why process improvement is necessary, highlighting the potential benefits and improvements in efficiency or quality.
    • Desire: Involve employees in identifying and solving process problems, increasing their commitment to the changes.
    • Knowledge: Provide training on the new processes and tools required for process improvement.
    • Ability: Encourage employees to practice the new processes, offering guidance and support as they implement changes.
    • Reinforcement: Monitor progress, celebrate successes, and continuously gather feedback to refine and sustain improvements.
  • Cultural Transformation:
    • Awareness: Communicate the need for cultural change, emphasizing its impact on the organization’s success.
    • Desire: Engage employees in discussions about the desired culture, encouraging their commitment to cultural shifts.
    • Knowledge: Educate employees about the behaviors, values, and practices associated with the new culture.
    • Ability: Encourage employees to practice and exhibit the desired cultural behaviors through leadership examples and coaching.
    • Reinforcement: Recognize and reward employees who embody the new culture, reinforcing cultural change over time.
  • Leadership Development:
    • Awareness: Help leaders understand the importance of their development and the benefits it brings to the organization.
    • Desire: Support leaders in identifying their personal development goals and reasons for pursuing leadership growth.
    • Knowledge: Provide leadership development programs and training, covering relevant skills and competencies.
    • Ability: Offer opportunities for leaders to practice their new skills in real-world situations and provide coaching and feedback.
    • Reinforcement: Recognize and reward leadership excellence, and create a culture that values ongoing development.
  • Training and Development:
    • Awareness: Make employees aware of the training program’s objectives, how it benefits them, and why it’s necessary.
    • Desire: Connect the training to employees’ career growth and personal development goals, motivating their participation.
    • Knowledge: Deliver comprehensive training materials and resources, ensuring employees acquire the necessary skills and knowledge.
    • Ability: Allow for practice and application of newly acquired skills, providing support and guidance as needed.
    • Reinforcement: Continuously assess skill retention, provide opportunities for skill use, and offer ongoing development options.
  • Strategic Initiatives:
    • Awareness: Communicate the strategic initiative’s purpose, its alignment with organizational goals, and its potential impact.
    • Desire: Engage employees in discussions about the initiative’s importance and how they can contribute to its success.
    • Knowledge: Provide training and information related to the initiative’s objectives and their role within it.
    • Ability: Support employees in executing their responsibilities within the initiative and offer guidance.
    • Reinforcement: Celebrate milestones, highlight the initiative’s benefits, and ensure alignment with strategic goals.
  • Merger and Acquisition Integration:
    • Awareness: Communicate the reasons for the merger or acquisition, emphasizing potential benefits and what it means for employees.
    • Desire: Engage employees in the integration process, addressing their concerns and involving them in decision-making where possible.
    • Knowledge: Provide information about the integration plan, including changes to roles, structures, and processes.
    • Ability: Offer training and support for employees as they navigate the changes and adapt to the new organization.
    • Reinforcement: Monitor integration progress, celebrate achievements, and ensure a harmonious transition to the integrated entity.

Key takeaways

  • Purpose: The ADKAR model is a management tool designed to guide employees and businesses through successful organizational change by addressing resistance and ensuring employee acceptance.
  • Five Principles: The model consists of five core principles represented by the acronym ADKAR:
    • Awareness: Informing employees about the need for change by providing context and rationale.
    • Desire: Creating a desire for change by communicating the benefits and positive outcomes.
    • Knowledge: Providing training and education to ensure employees understand how the change will impact their roles.
    • Ability: Enabling employees to apply new skills and behaviors practically and with confidence.
    • Reinforcement: Rewarding and supporting employees to sustain new behaviors and overcome challenges.
  • Employee Buy-In: The ADKAR model focuses on motivated employee buy-in, which is crucial for successful change implementation and sustained acceptance.
  • Real-World Examples: The model is applicable in various scenarios, such as introducing new technology (e.g., self-serve kiosks), implementing software changes (e.g., CRM transition), adopting new methodologies (e.g., agile), and reinforcing positive behaviors (e.g., sales achievements).
  • Comparisons: The model can be compared to other change management approaches like Kotter’s 8-step model, Prosci’s approach, and AIDA marketing model. Each approach has its focus and application.
  • Continuous Improvement: The ADKAR model promotes a continuous improvement mindset by encouraging feedback collection, addressing challenges, and sustaining positive behaviors over time.
  • Employee Resilience: By following the ADKAR model, organizations can enhance employee resilience to future changes and prevent a return to old habits.
  • Transition Phases: The model emphasizes the importance of guiding employees through each phase of the change process, from creating awareness to reinforcing new behaviors.
  • Customization: The ADKAR model recognizes that employees have different roles and needs, advocating for customized training and support to ensure successful change adoption.
  • Long-Term Impact: Successfully implementing the ADKAR model can lead to sustained changes in an organization’s culture, processes, and behaviors over the long term.

Related ConceptsDescriptionWhen to Apply
ADKAR ModelThe ADKAR Model is a change management framework designed to guide individuals and organizations through the stages of change. It consists of five sequential elements: Awareness, Desire, Knowledge, Ability, and Reinforcement. The ADKAR Model helps identify the key areas where individuals may encounter resistance or barriers during change initiatives and provides a structured approach to addressing them. Awareness involves understanding the need for change and its implications. Desire focuses on creating the motivation and commitment to change. Knowledge ensures individuals possess the necessary information and skills to enact change. Ability involves the application of knowledge and skills to implement change effectively. Reinforcement reinforces new behaviors and sustains change over time. Organizations can apply the ADKAR Model to manage change effectively, improve adoption rates, and achieve desired outcomes by addressing individual and organizational barriers to change.– When implementing organizational change initiatives, such as technology implementations, process improvements, or cultural transformations, to guide individuals and teams through the change process.
Change ManagementChange Management is the process of planning, implementing, and monitoring changes within an organization to achieve desired outcomes while minimizing resistance and disruptions. It encompasses various strategies, methodologies, and tools to facilitate successful change initiatives. Change management aims to engage stakeholders, communicate effectively, address resistance, and build capabilities to adapt to new ways of working. The ADKAR Model is a popular framework used within change management practices to support individuals through the change process by addressing their awareness, motivations, skills, and reinforcement needs.– When undertaking organizational changes, transformations, or initiatives that require managing resistance, fostering adoption, and ensuring successful implementation by addressing individual and organizational change impacts.
Individual ChangeIndividual Change refers to the changes in attitudes, behaviors, and capabilities of individuals within an organization in response to external or internal factors. Individuals may experience resistance, uncertainty, or challenges when confronted with change, making it essential to address their needs and concerns to facilitate successful change adoption. The ADKAR Model provides a structured framework for understanding and addressing individual change by focusing on awareness, motivation, knowledge, skills, and reinforcement throughout the change process.– When managing individual transitions, skill development, or behavior changes during organizational transformations, technology implementations, or process changes to support successful change adoption and mitigate resistance.
Organizational ChangeOrganizational Change involves making significant alterations to an organization’s structure, processes, culture, or strategies to adapt to internal or external pressures and achieve desired business objectives. Successful organizational change requires effective leadership, communication, engagement, and alignment of stakeholders throughout the change journey. The ADKAR Model can be applied within organizational change management efforts to address individual and collective change impacts by focusing on building awareness, commitment, capabilities, and reinforcement mechanisms.– When leading organizational transformations, restructurings, mergers, or strategic initiatives that require managing complex change dynamics, stakeholder engagement, and cultural shifts to achieve desired business outcomes and sustain long-term success.
Training and DevelopmentTraining and Development initiatives aim to enhance the knowledge, skills, and capabilities of individuals within an organization to improve performance, productivity, and effectiveness. The ADKAR Model can inform training and development programs by identifying the specific knowledge and skill gaps that individuals may have during change initiatives. By addressing the knowledge and ability elements of the ADKAR Model, organizations can ensure that employees are adequately equipped to adapt to new processes, technologies, or ways of working effectively.– When designing and implementing training programs, workshops, or learning interventions to support individuals in acquiring the knowledge and skills needed to navigate change initiatives, improve performance, and achieve organizational goals.
Communication StrategiesCommunication Strategies play a vital role in change management by informing, engaging, and aligning stakeholders throughout the change journey. Effective communication helps build awareness, create buy-in, and reduce resistance to change by providing clarity, context, and rationale for the proposed changes. The ADKAR Model can inform communication strategies by identifying the key messages and information needs at each stage of the change process. By tailoring communication efforts to address awareness, desire, knowledge, ability, and reinforcement, organizations can enhance stakeholder engagement and facilitate successful change adoption.– When developing communication plans, messaging frameworks, or engagement strategies to support change initiatives, build awareness, and foster commitment among stakeholders by addressing their information needs and concerns effectively.
Leadership DevelopmentLeadership Development programs aim to cultivate the capabilities, competencies, and behaviors of leaders to drive organizational change, inspire others, and achieve strategic objectives. Leaders play a critical role in change management by setting direction, modeling behaviors, and championing change efforts across the organization. The ADKAR Model can inform leadership development initiatives by emphasizing the importance of building awareness, fostering desire, and empowering leaders with the knowledge and skills to lead change effectively. By equipping leaders with the tools and frameworks to address individual and organizational change impacts, organizations can enhance their capacity to navigate change successfully.– When designing leadership development programs, coaching interventions, or succession planning initiatives to build the change leadership capabilities of leaders at all levels of the organization, enabling them to drive change initiatives and inspire others effectively.
Employee EngagementEmployee Engagement refers to the emotional commitment and connection that employees have towards their work, colleagues, and organization. Engaged employees are more likely to embrace change, contribute positively, and adapt to new challenges. The ADKAR Model can inform employee engagement strategies by focusing on building awareness, fostering desire, and providing the knowledge and support needed to enable employees to succeed in change initiatives. By involving employees in the change process, soliciting feedback, and recognizing their contributions, organizations can enhance employee engagement and promote a culture of continuous improvement and resilience.– When designing employee engagement initiatives, recognition programs, or feedback mechanisms to foster a positive organizational culture, promote resilience, and encourage active participation in change initiatives to drive organizational success.
Performance ManagementPerformance Management encompasses processes, systems, and practices used to set goals, assess performance, provide feedback, and develop employees to achieve individual and organizational objectives. During times of change, effective performance management becomes critical in aligning employee efforts with strategic priorities, tracking progress, and addressing performance gaps. The ADKAR Model can inform performance management practices by emphasizing the importance of providing employees with the knowledge, skills, and support needed to adapt to change and perform effectively in new roles or responsibilities. By integrating change management principles into performance management processes, organizations can enhance employee engagement, productivity, and overall performance during change initiatives.– When reviewing and refining performance management systems, goal-setting processes, or feedback mechanisms to align employee performance with organizational objectives, support change initiatives, and drive continuous improvement and growth.
Cultural TransformationCultural Transformation involves reshaping the beliefs, values, norms, and behaviors that define an organization’s culture to align with its strategic goals and objectives. Culture plays a significant role in determining how individuals perceive and respond to change, making it essential to address cultural factors during change initiatives. The ADKAR Model can inform cultural transformation efforts by focusing on building awareness of the need for change, fostering desire for new ways of working, providing the knowledge and skills to enact change, and reinforcing desired behaviors over time. By embedding change management principles into cultural transformation initiatives, organizations can create a supportive environment that enables individuals to embrace change, innovate, and thrive in dynamic business environments.– When undertaking cultural transformation initiatives, diversity and inclusion efforts, or organizational restructuring to evolve the organizational culture, align values with strategic objectives, and create an environment conducive to change, innovation, and growth.

What are the five principles of the ADKAR model?

The five principles of the ADKAR model are:

Connected Business Frameworks

Portfolio Management

project-portfolio-matrix
Project portfolio management (PPM) is a systematic approach to selecting and managing a collection of projects aligned with organizational objectives. That is a business process of managing multiple projects which can be identified, prioritized, and managed within the organization. PPM helps organizations optimize their investments by allocating resources efficiently across all initiatives.

Kotter’s 8-Step Change Model

kotters-8-step-change-model
Harvard Business School professor Dr. John Kotter has been a thought-leader on organizational change, and he developed Kotter’s 8-step change model, which helps business managers deal with organizational change. Kotter created the 8-step model to drive organizational transformation.

Nadler-Tushman Congruence Model

nadler-tushman-congruence-model
The Nadler-Tushman Congruence Model was created by David Nadler and Michael Tushman at Columbia University. The Nadler-Tushman Congruence Model is a diagnostic tool that identifies problem areas within a company. In the context of business, congruence occurs when the goals of different people or interest groups coincide.

McKinsey’s Seven Degrees of Freedom

mckinseys-seven-degrees
McKinsey’s Seven Degrees of Freedom for Growth is a strategy tool. Developed by partners at McKinsey and Company, the tool helps businesses understand which opportunities will contribute to expansion, and therefore it helps to prioritize those initiatives.

Mintzberg’s 5Ps

5ps-of-strategy
Mintzberg’s 5Ps of Strategy is a strategy development model that examines five different perspectives (plan, ploy, pattern, position, perspective) to develop a successful business strategy. A sixth perspective has been developed over the years, called Practice, which was created to help businesses execute their strategies.

COSO Framework

coso-framework
The COSO framework is a means of designing, implementing, and evaluating control within an organization. The COSO framework’s five components are control environment, risk assessment, control activities, information and communication, and monitoring activities. As a fraud risk management tool, businesses can design, implement, and evaluate internal control procedures.

TOWS Matrix

tows-matrix
The TOWS Matrix is an acronym for Threats, Opportunities, Weaknesses, and Strengths. The matrix is a variation on the SWOT Analysis, and it seeks to address criticisms of the SWOT Analysis regarding its inability to show relationships between the various categories.

Lewin’s Change Management

lewins-change-management-model
Lewin’s change management model helps businesses manage the uncertainty and resistance associated with change. Kurt Lewin, one of the first academics to focus his research on group dynamics, developed a three-stage model. He proposed that the behavior of individuals happened as a function of group behavior.

Organizational Structure Case Studies

Airbnb Organizational Structure

airbnb-organizational-structure
Airbnb follows a holacracy model, or a sort of flat organizational structure, where teams are organized for projects, to move quickly and iterate fast, thus keeping a lean and flexible approach. Airbnb also moved to a hybrid model where employees can work from anywhere and meet on a quarterly basis to plan ahead, and connect to each other.

eBay Organizational Structure

ebay-organizational-structure
eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.

IBM Organizational Structure

ibm-organizational-structure
IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.

Sony Organizational Structure

sony-organizational-structure
Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.

Facebook Organizational Structure

facebook-organizational-structure
Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams based on the main corporate functions (like HR, product management, investor relations, and so on).

Google Organizational Structure

google-organizational-structure
Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.

Tesla Organizational Structure

tesla-organizational-structure
Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.

McDonald’s Organizational Structure

mcdonald-organizational-structure
McDonald’s has a divisional organizational structure where each division – based on geographical location – is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.

Walmart Organizational Structure

walmart-organizational-structure
Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.

Microsoft Organizational Structure

microsoft-organizational-structure
Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.

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