Organisation bac merc-mintzberg

Structure in Fives
Designing effective organizations
Henry Mintzberg
Fag: Organisation • Bac. Merc.
Institut for Ledelse og Virksomhedsstrategi • SDU Campus Slagelse
Efterår • 2009

Introduction
 For every organized human activity,
two fundamental requirements:
1. Division of labor into various tasks
2. Coordination of the tasks to accomplish the activities
2 Organisation - 1. semester

Introduction
Structure of Organization

Introduction
Structure of Organization = total ways in which its
labor is divided into tasks
+ coordination

How Structure should be Designed?
a) A best way?
~ classic: good structure = based on rules & rigid hierarchy of
authority with spans of control ≤ 6

a) A best way?
b) Various elements chosen?
~ more recently: mix long-range planning, job enrichment, and
matrix structure.

a) A best way?
b) Various elements chosen?
~ more recently: mix long-range planning, job enrichment, and
matrix structure.
c) Structure should be selected to achieve consistency:
• internal (harmony) + • organization’s situation

Configurations
Design parameters
+
Situational factors
Organisation - 1. semester8
Configurations

Configurations
Design parameters
+
Situational factors
• Different configurations
can can be designed, but
small number of them
are effective
Configurations
Design of an effective
organizational
structure involves few
basic configurations

Coordinating Mechanisms
basic elements of structure
o Coordination concerns control and communication
1) Mutual adjustment
2) Direct supervision
3) Standardization of work processes
4) Standardization of outputs
5) Standardization of workers skills (knowledge)

5) Standardization of workers skills

level
of
complexity

Historic Perspective
Schools…
1) Direct Supervision
2) Standardization
3) ’Human Relations’

Schools…
2) Standardization
 unity of command
 scalar chain
 span of control
[H. Fayol]

Schools…
2) Standardization
 scalar chain
 span of control
o ’scientific management’
o bureaucratic structures
[H. Fayol]
[F. Taylor]
[M. Weber]

Schools…
2) Standardization
 scalar chain
 span of control
[H. Fayol]
[F. Taylor]
[M. Weber]
 1939: Roethlisberger and Dickson observation about informal structure
trust on formal structure can be misguided or
dangerous to psychological health of the worker

Schools…
2) Standardization
 scalar chain
 span of control
[H. Fayol]
[F. Taylor]
[M. Weber]
 1939: Roethlisberger and Dickson observation about informal structure
trust on formal structure can be misguided or
dangerous to psychological health of the worker
Now: Formal and informal structures are indistinguishable.

The Organization in Five
Parts
Henry Mintzberg – Structure in Fives
Efterår • 2009

Introduction
Organizations are structured to:
 Capture and direct systems of flows
 Define interrelationships among different parts
 Flows and interrelationships are not in a linear
form
2 Organisation 1. semester

A Basic Diagram

Operating Core
• those who perform basic form of producing
products and rendering services

Operating Core
• those who perform basic form of producing
products and rendering services
Strategic Apex
• full time managers who supervise and ensure that
the organization serves its mission in an effective
way

Middle Line
Organisation 1. semester6
• delegated formal authority between
Operating Core & Strategic Apex.

Middle Line
• delegated formal authority between
Operating Core & Strategic Apex.
Technostructure
• are analysts in charge of standardization.
 outside the hierarchy of line authority.

Support Staff
• specialized units who provide support
to the organisation.
 outside the operating work flow.

an example of a manufactoring firm

The Basic Mechanisms of Coordination

The Functioning of the
Organization
theories of how the organization functions

The Functioning
of the
Organization
The flow of…:
• formal authority
• regulated activity
• informal
communication
• (the set of) work
constellations
• ad hoc decision
process
Copyright © 2006 Accenture.

Five Basic Configurations
 Simple Structure
based on direct supervision
strategic apex

Five Basic Configurations
 Simple Structure
based on direct supervision
 Machine Bureaucracy
depends on standardization
strategic apex
technostructure

 Professional Bureaucracy
relies on coordination
operating core

 Divisionalized Form
composed of semi-autonomous units
operating core
middle line

 Divisionalized Form
composed of semi-autonomous units
 Adhocracy
highly organic structure based on
mutual adjustment
operating core
middle line
support staff &
operating core

spørgsmål ?

2. Designing Individual
Positions
Efterår • 2009

Design Parameters
basic components of organizational structure
Design of: • Positions
• Superstructure
• Lateral linkages
• Decision-making systems

Design Parameters
• Design of individual positions
1) Job specialization
2) Behavior formalization
3) Training & Indoctrination

Job Specialization
• scope → quality of tasks
• depth → control over the work

Job Specialization
Horizontal | Vertical

Job Specialization
Horizontal | Vertical
specialization ↔ enlargement
enrichment

Horizontal job Specialization
 parallel activities and repetition of work
 related to division of labor and standardization
 increases productivity

Horizontal job Specialization
Vertical job Specialization
separates the performance from the administration
 increases perspective
 parallel activities & repetition of work
 related to division of labor & standardization
 increases productivity

Problems with Specialization
9
 ineffective communication and control
 unbalance in the working
 lack of initiative and motivation
Organisation - 1. semester

Horizontal job Enlargement
 worker engages in a wide variety of tasks associated
with the production
 increases motivation, but reduces optimal technical
specialization

Horizontal job Enlargement
 worker engages in a wide variety of tasks associated
with the production
 increases motivation, but reduces optimal technical
specialization
Vertical job Enrichment
 worker gains more control over the tasks

Job Enlargement
and Enrichment
overcome some problems with
job Specialization
B U T : t h e y a r e n o t g o o d p e r s e

Job Specialization by part of the
organization

Behavior Formalization
 vertical specialization of jobs
 serves to predict and control
the organization

 by the position → specification attached
to the job
 by the work flow → specification attached
to the work
 by rules → specifications in general
(policy manuals)

 coordination of activities,
 efficient procedures of production,
 fairness to the clients
Pros - Behavior formailization increases:

Bureaucratic organizations rely on formalization of
behavior to achieve coordination
[M.Weber]: Bureaucratic organizations are ‘ideal-type’
because its behavior is standardized.
↕
Organic structure: absence of standardization.

 psychological fatigue,
 less innovation, impersonalization
 more absenteeism, turnovers, strikes...
Cons - Behavior formailization causes:

Design in parts of the organization
 Operating Core: behavior formalization is most common,
should be most bureaucratic, but not always
 Middle Line: can be formalized or not, depending on the
work supervised
 Strategic Apex: presents highly organic conditions
 Support Staff,Technostructure: same as the middle line

Training and Indoctrination
Requirements for holding a position
positions determine behaviors

Training = stadardization of skills
→ key for professional jobs
Knowledge

Training = stadardization of skills
→ key for professional jobs
Knowledge
Indoctrination = internationalization of patterns
of behavior in the worker
→ related to the ‘culture’
Norms

3. Designing the
Superstructure
Efterår • 2009

• positions designed in terms of
specialization, formalization, and
training & indoctrination

 how they can be grouped into units?

 how they can be grouped into units?
Design of the superstructure of the
organization with authority and hierarchy

Unit Grouping
•Unit grouping serves to coordinate
the work in the organization
•Stimulates direct superivision and
mutual adjustment
•Basis for standardization of outputs

Bases for Grouping
 by Knowledge and Skills e.g. hospitals
 by Work Process and Functions e.g. manufacturing firm
 by Time, when the work is done e.g. supply chains
 by Output, can be products or purposes e.g. factory divisions
 by Client, individual / groups; private / public e.g. hospitals
 by Place, typically at higher-levels e.g.investor company divisions

Interdependences
 Work-flow between tasks, e.g. product line
 Process related to specialization, can be at
different work flow
 Scale group sizes that function more efficient
 Social social factors to facilitate e.g. mutual
support in a danger situation
( some criteria for grouping )

Functional Structure
 more emphasis on process and scale
 encourages specialization
but…
 lacks mechanisms for coordination the work-flow
 tend to be bureaucratic for unskilled operators
( grouping by function )

Market Structure
 more work-flow coordination across specialties
 less process specialization duplicate resources
 more organic, less mechanic
 can be hard to standardize
( grouping by market )

Two types of grouping:
• First-order: Individual positions into
their own units
 operators, analysts, and support staff
• Higher-order: Units into larger units
 market-based grouping at higher levels
of the middle line

UNIT SIZE
apropos Scale…

unit size + coordination mechanism
unit size is driven up…
 larger size of work unit
 more use of standardization for coordination
 technostructure
 less time for direct supervision
 but not free from control
 training + indoctrination

unit size + coordination mechanism
unit size is driven down…
 smaller size of work unit
 more reliance on mutual adjustment and
vertical coordination
 with complex tasks, supervision is difficult
 narrower span of control from managers

Two kinds of professional work:
• Independent cooperation
more mutual adjustment
e.g. think-tanks, laboratories, etc.
• Interdependent standardization of skills
less mutual adjustment
e.g. accounting firms, educational systems, etc.

unit size + parts of the organization
 the operating core is typically the largest unit
with flat structure
 the technocratic and support staff units shape
the middle line
 higher in the managerial hierarchy smaller
size and more mutual adjustment (cone shape)

Efterår • 2009
3. Fleshing out the
Superstructure

Design of Lateral Linkages
more lateral than vertical
 Planning and Control Systems
 Liaison Devices

Planning and Control Systems
Plan and control regulates outputs and
(indirectly) behavior
• Plan: to standardize outputs
• Control: to assess whether or not the
standard has been achieved

Plan
 Plan specifies e.g.:
 Cost of outputs budgets
 Time frames for outputs schedules
 Outputs quantities for a period of time objectives
 Plans specifies also standards like quantity/quality and
cost of outputs operating plans
 Plans can specify outputs characteristics as well.

Plan and Control
Planning system Reporting system
designed by the technostructure
Plan and Control seek to regulate:
• overall performance performance control
• specific actions action planning

Performance Control and
Action Planning

Performance Control
 regulate the overall results of an unit without
reference to specific actions market structure
Performance control establish:
 output standards for each unit basis for grouping
in the organization
 quantity and costs is concerned with the overall
results
 general targets influences decision making

 Performance control is everywhere in the organization,
because the budget affects all
 crucial in market structures, because they have
freedom to act
 measures (as signals) and motivates (as carrots)
 Cautions:
 managers participate in the setting,to control him/herself
 periods long/shorts loose connection/perspective
Performance Control

Action Planning
 when work flow functions sequentially or reciprocally
functional structures
 Two points with action planning :
 can cross unit boundaries (unlike performance control)
 imposes specific directions and actions to be carried out at
specific point time

Action Planning
 Key mechanisms for functional structures:
 direct supervision superstructure
 standardization of work process behavior
formalization
 behavior formalization: the means by which decision actions are to be carried out
 Action Planning is needed because direct supervision and
behavior formalization is not enough to achieve coordination

Planning & Control
and the Parts of the Organization
 Performance control is most applied to units and
managers
 Action planning is most applied to individual
operators
 At higher levels with global responsibilities, control
over performance rather than actions.

LIAISON DEVICES
Design Parameter

Liaison Devices
 In a large organization…
 Individual Position are designed,
 Superstructure is built
 Planning and Control systems are settled,
 direct supervision and standardization is in place.
BUT all these are not enough to achieve coordination
 mutual adjustment for coordination
 that is, liaison contacts between individuals in the formal
structure

 Jay Galbraith (1973) proposed liaison devices:
– direct contact between managers
– liaison roles
– task forces
– teams
– integrating roles
– managerial link roles
– matrix organization
Liaison Devices
level
of
elaboration

1. Liaison Positions:
• direct communication bypassing vertical channels
• no formal authority, but informal status
• e.g. personnel specialists and accountants.
Liaison Devices

1. Liaison Positions:
• direct communication bypassing vertical channels
• no formal authority, but informal status
• e.g. personnel specialists and accountants.
2. Task Forces and Standing Committees:
• ad hoc meetings
• can be part of the formal structure, depending on how
permanent they are
• not necessary full-fledge managers
Liaison Devices

3. Integrating Managers:
• a liaison position with formal authority
• e.g. in transitions periods from old to new structures
• can have power to complete decisions, to start a process,
and to have control over the decisions (budget)
Liaison Devices

3. Integrating Managers:
• a liaison position with formal authority
• e.g. in transitions periods from old to new structures
• can have power to complete decisions, to start a process,
and to have control over the decisions (budget)
4. Matrix Structures:
• companies undergoing continual change, growing-up
companies, e.g. high-tech
Liaison Devices

Matrix Structures
 Sacrifices the principle of unity of command
 Dual authority with different line managers
equally responsible
managers ― product specialists
 Can be Permanent (e.g. city administrations) or
Shifting, based on project teams (with full-fledged
managers)

Liaison Devices and
Other Design Parameters
 Superstructure:
 more use of liaison devices, then less size of the
organization units
 with certain liaison devices, there will be more
managers in the organization, e.g. matrix structure

Liaison Devices and
Other Design Parameters
 Superstructure:
 more use of liaison devices, then less size of the
organization units
 with certain liaison devices, there will be more
managers in the organization, e.g. matrix structure
 Individual Positions:
 liaison devices are used where behavior cannot be
standardized rely on mutual adjustment
 encourages informal relationships

Liaison Devices and
Parts of the Organization
 Liaison devices are the most important design
parameter of the middle line,
 are best suited for middle levels of the structure, like
staff managers
 Matrix structure involves primarily middle-line
managers

Liaison Devices and
Parts of the Organization
 Task force and shifting matrix structure for work
projects can be used in the operating core when is
driven by professionals
 Standing committees can include the strategic apex,
but usually is later replaced by informal
communication

Spørgsmål ?

Efterår • 2009
5. Untangling
Decentralization

Centralization – Decentralization
Power over the decisions in the organization
 Centralization: Power rest in a single point (person)
the tightest means of coordinating decision-making
 Decentralization: Power is dispersed among many
people in the organization

Why Decentralize?
division of labor vs. coordination
1. Not all decisions can be understood a one
center (brain) information overload
2. It allows to respond quickly to local conditions
3. Stimulus for motivation more creativity and
innovation

DISCUSSION
Centralization / Decentralization: 6 examples (pp 97-98)

Three Uses of Decentralization
1) Vertical decentralization decision power
down the chain of line authority 
2) Horizontal decentralization nonmanagers
control decision processes 
3) Physical disposal of services not related to
power over decision making 

Two Kinds of Decentralization
When power of decisions are dispersed in different places …
• Selective decentralization: Power of different
kinds of decisions rests in different places
e.g. financial decisions/strategic apex, marketing/support units,
production/middle line
• Parallel decentralization: Dispersal of power for
many kinds of decisions to the same place.

Control over Actions
centralization/decentralization: two ends of a continuum
most
decentralized
decision
process

Vertical Decentralization
decision power down the chain of authority
 Three questions:
1) What decision powers should be delegated?
2) How far the chain?
3) How coordinate (control) the delegation of
power?

Vertical Decentralization
• Selective: - is associated with work constellations
- grouped on functional basis
- coordinate its decision making by mutual
adjustment emphasis on liaison devices
• Parallel: - power of functional decisions is focused
at a single level in the hierarchy
- units grouped on the basis of market
divisionalized structure

… parallel vertical decentralization
 Market-based units function in a quasi-autonomous
manner
 but some decisions remain in the strategic apex
(somewhat selective)
 are regulated primarily by performance control
systems

Horizontal Decentralization
decision power shift from managers to nonmanagers
nonmanagers: staff managers, analysts, support specialists, operators
• Transfer of power out the line structure
o informal power control of information gathering & advice
• Formal power does not necessary rest in the line
structure

 Four stages of power:
1. Rests with a single individual
2. Shifts to few analysts of the technostructure
influence systems of standardization
3. Shifts to experts by virtue of their knowledge
4. Goes to everyone member of the organization

 Power to the Analysts of the technostructure
organization relies on systems of standardization for coordination
work study analysts how
planners what
schedulers when
trainers standardization of skills
power
level

… power to the analysts
• direct supervision most horizontally centralizing
• (standardizations)
• mutual adjustment least horizontally centralizing
 Bureaucracies whether they rely on standardization of
work processes or skills

 Power to the Experts
organization depends on specialized knowledge
Three types of expert power:
1. Informal power on traditional authority structure, e.g. advice
2. Expert power merged with formal authority, e.g. task forces
and standing committees sharing decision-making power
3. Expert power with operators, power rest in the operating core
with nonmanagers
more professional organization more decentralized its structure

 Power to Everyone
organization wants to be more democratic
• a professional organization is meritocratic, but not democratic
• decentralization is complete when power is based on
membership, not on position or knowledge
• in a democratic organization everyone participates equally in
decision making
 Does a democratic organization really exist?

… power to everyone
 ‘industrial democracy’ = when workers participate in the
decision process.
 Studies suggest:
middle line management is bypassed, and staff function is weaken
organization becomes more centralized double bureaucracy,
usual rules of coordination, and special rules for protection
in communication nets hierarchical structures perform better
closer democracy = professional operators, power follows knowledge

Vertical & Horizontal Centralization
• Formal and informal power
concentrates in a single individual
e.g. chief executive officer, who
makes decisions, coordinates,
supervises …
A

Limited Horizontal Decentralization
(Selective)
• Analysts plays a leading role since
formalize behavior of operators
and gain informal power
→ bureaucratic organizations which
relies on standardization of work
processes for coordination
B

LimitedVertical Decentralization
(Parallel)
• Formal power to managers (in
parallel) of market units
→ but the strategic apex retain the
ultimate formal power,
→ and coordinates with the
technostructure the
standardization of outputs C

SelectiveVertical & Horizontal
Decentralization
• Power in various places, but
notably in the support staff
• vertical: diverse constellations at
different levels
• horizontal: constellations
coordinate through mutual
adjustment for advice, in
task forces, etc.
D

Vertical & Horizontal
Decentralization
• Decision power is concentrated in
the operating core, which members
are professionals
→ coordination: standardization of skills
• vertical: power at the bottom
• horizontal: power with large number of
nonmanagers
E

Decentralization &
Design Parameters
Position
 formalization of behavior takes formal power away
from the operators and managers
 centralization in both dimensions A
 training and indoctrination develop expertise
• decentralization in both dimensions C

Decentralization &
Design Parameters
Superstructure
 unit grouping can be:
• market structure: power rest on managers C
• functional structure: bureaucratic, organic, …
 unit size (span of control) can be:
• behavior formalization (B); • close supervision (A);
• training & indoctrination(E); • market-based
grouping (C); • autonomous teams (D)

Decentralization &
Design Parameters
Lateral Linkages
 planning and control,
• performance control of market units C
• action planning, strategic apex + staff planners B
 liaison devices → coordinating among selectively
decentralized constellations D

Conclusions
 Vertical decentralization only the chain of authority
is involved
 Horizontal decentralization power in the hands of
nonmanagers
 Bureaucratization through formalization of behavior
more power into the technostructure
 Organization is more horizontally decentralized when
power shifts from position to knowledge
 Meritocratic organizations a more close to democracy

Efterår • 2009
6. Design to Situation

Design to Situation
 → How to decide which design parameter use?
Four groups of situational (aka contingency) factors:
1. Ages & Size of the organization
2. Technical System used in the operating core
3. Environment around
4. Power of relationships

Effectiveness
 Two hypotheses about effectiveness:
1. Congruence hypothesis: Effectiveness results from
the relations between structure and performance
→ design parameters to fit situational factors
2. Configuration hypothesis: Effectiveness results from
the consistency among design parameters (Khandwalla)

Effectiveness
But congruence hypothesis and configuration hypothesis
do not need to be contradictory….
 Effective structuring requires consistency among
design parameters and contingency factors
Design to situation…
situational factor → IV, design parameters → DV

Age and Size
Stages concerning the age and size of an organization:
craft → entrepreneurial → bureaucratic → divisionalized → matrix structure
Hypothesis:
 the older and larger the organization
• more elaborated structure, larger size units,
• more formalized its behavior
 the structure is reflected by the age of the industry

Age and Size

Technological System
 technology (complexity) → are the instruments used in the
operating core
 Organization types, 3 basic systems of production (industry):
1. Unit → custom production
2. Mass → many standard items
3. Process → continuous flow of fluids

 Hypotheses:
 More regulated the technological systems,
 more formalized the operating work,
 more bureaucratic structure of the operating core.
 More sophisticated the technological systems,
 larger and more professional support staff,
 more selective decentralization,
 more use of liaison devices.
 More automation of operating core
 bureaucratic structure is transformed to organic one.

Environment
 the milieu to which the designing structure respond
Stability: stable ↔ dynamic in terms of predictability
Complexity: simple ↔ complex related to knowledge
Market diversity: integrated ↔ diversified related to work
diversity
Hostility: munificent (liberal) ↔ hostile influenced by
competition & external relations

Environment

Environment
• more dynamic environment  more organic structure
• more complex environment  more decentralized
structure

Power
To talk about power… personal conditions related to:
A. the presence of external control in the organization
• more external control,more centralized & formalized structure
B. needs of its members:
• strategic apex promote centralization H &V
• middle line promote decentralizationV
• analyst & support staff promote decentralization H
• operators promote V & H decentralization
C. social norms → fashionable structures are applied
even if is inappropriate

Configurations
 Configurations are natural clusters embracing:
 Coordination mechanisms
 Design parameters
 Situational factors
→ Configuration hypothesis: “An effective structure requires
organization’s internal consistency among their design
parameters and situational factors”

Pulls in the Organization

Configurations in the Organization
 The organization is pulled in five different directions
by each of its parts:
1. Strategic apex, pull for centralization
 Simple Structure
2. Technostructure, pull for standardization
 Machine Bureaucracy

Configurations in the Organization
3. Operating core, pull for professionalism
 Professional Bureaucracy
4. Managers, pull to balkanize
 Divisionalized Form
5. Support staff, pull to collaborate
 Adhocracy

Configurations’ Correspondences

Efterår • 2009
8. The Simple Structure

The Simple Structure
 Not elaborated structure
 Little formalized behavior
 Minimal use of planning, training, liaison devices
 No technostructure or Support Staff
 Small managerial hierarchy
 Flexible work flow and decision making
→ The Simple Structure can be typified as organic

The Simple Structure
Typical: strategic apex (CEO) + organic operating core
• CEO is a key part who defines the strategy based
on his/her own beliefs.

Conditions of the Simple Structure
 Simple and dynamic environment, can be hostile
 Materializes in the formative years of most
organizations
 Characterizes many small organizations where
informal communication is convenient / efficient
 Also characterizes the crisis organization in a
hostile environment

Illustrations of the Simple Structure
 Synthetic: emphasis on leadership in a new situation
 Autocratic: CEO has power, design the structure
 Charismatic: CEO’s power is given by the followers
 Entrepreneurial firm: owner-managed organization,
often young, that seeks dynamic and simple
environments
 can be autocratic or charismatic

Issues with the Simple Structure
 The decisions are centralized,
• the strategic responses reflects full knowledge of
the operating core,
• more flexibility, more adaptability, but
• can cause confusion
 Depends on one individual,
• more flexibility, but its chief liability
 High sense of mission,
• can be encouraging for some, but restrictive to
others

Examples of Simple Structure

Efterår • 2009
9. The Machine
Bureaucracy

The Machine Bureaucracy
 Were first described by Max Weber
 Requires standardized responsibilities, qualifications,
communication channels, work rules.
 Has a defined hierarchy of authority,
 and a sharp division of labor.
→ Machine Bureaucracy is a structure ridden with conflict

 Operating Core:
• tightly regulated
• emphasis on formalization of behavior
• highly rationalized work flow
• no place for mutual adjustment
• simple and repetitive tasks
 Highly elaborated administrative component

 Managers → are grouped on functional bases
1) Handle disturbances, although standardization
take care of the workers dependences
2) Incorporate standards in the operating core
a liaison role with the technostructure
3) Provide feedback information up the hierarchy

 Technostructure, key part of the structure
because Machine Bureaucracy depends on
standardization of work process for coordination
gains informal power
 Support Staff proliferate to establish control
mechanisms from top to bottom
• to eliminate uncertainty and to contain conflict

 Strategic Apex → tries to improve the
performance in the organization
o but has to resolve problems first, and keep the
structure together
o It has a considerable formal and informal power

→ the strategy is a top-down affair with emphasis on
action planning.
Two characteristics:
1. all decisions are tied to an integrated systems
2. sharp dichotomy between the formulation
(strategic apex) and the implementation (middle
line & operating core)

Conditions of the Machine Bureaucracy
 The environment has to be simple and stable
 Typically materializes in the mature phase of the
organization
 Organizations have to be large and old enough to
settle standardization of work processes
 Characterizes mass-production firms with
integrated

A typical Mass Production Firm

Conditions of the Machine Bureaucracy
 Machine Bureaucracies can also be:
• small manufacturers with simple and repetitive
operating work
• service firms even without integrated chains for
operators
• firms that regulate its operations to satisfy customers
• organizations using elaborated administrative
hierarchy

Illustrations of the Machine Bureaucracy
 Simple bureaucracy: centralized and bureaucratic
organizations without an elaborated administration
 Public machine bureaucracy: are accountable to the
public for their actions
 Control bureaucracy: whose business is control
 Safety bureaucracy: special need for safety
 Contingency bureaucracy: routinized procedures for
nonroutine events

Issues of the Machine Bureaucracy
 Machine Bureaucracies, manifestations of society’s:
• high degree of specialization, and
• mass consumption
 Like machines, MB are efficient, precise, reliable,
and easy to control
 But when the conditions change, they are difficult
to adjust
 are designed for specific purposes, not for
general ones

Issues of the Machine Bureaucracy
 The coordination problems are tackled through
standardization, but for nonroutine problems it is
needed direct supervision
Human Problems
in the
Operating Core

Coordination Problems
in the
Administrative Center

Adaptation Problems
at the
Strategic Apex

Adaptation Problems with the MB
 When the environment changes, nonroutine
problems are generated, and managers become
overloaded
MIS for feedback to the strategic apex
 But the information provided by MIS is not always
reliable, can be too late, inadequate, too abstract

Conflicts in the Machine Bureaucracy
Engineering
Efficiency ↔ Individual
Satisfaction
Human problems: workers are ‘means’ rather than
individuals, no much meaning with the work itself
• more educational levels more aspirations need for
self-actualization
• welfare provides the worker with other options
• a natural resistance to control mentality.
(Bureaupathologies)
 democratization does not eliminate the conflict

Strategy
 There is a dichotomy between formulation and
implementation of the strategy
• a solution is to formulate in the road… (SS)
• or implementers should also formulate (Ad)
 A realistic strategy should be formulated outside
the Machine Bureaucracy
 With unpredictable change, this dichotomy is not
longer relevant

Conclusions
 Machine Bureaucracies are fundamentally
nonadaptive structures with an inflexible
configuration
 Are the dominant configuration in specialized
societies with mass consumption

Efterår • 2009
10. The Professional
Bureaucracy

The Professional Bureaucracy
 To function, rely on skills and knowledge of operator
professionals who produce standard outputs
standardization of skills and knowledge are used to
achieve coordination
 Professionals work closely with the clients, and
relatively independent of colleagues
MB generates its own standards with the technostructure
→ Authority of hierarchical nature
PB gets its standards largely from the outside
→ Authority from expertise

 Standard of work processes is not possible, and
outputs cannot easily be measured
 Direct supervision and mutual adjustment impide
close relation with clients
 PB functions:  categorizing the clients’ needs in
terms of predetermined situation,  applying a
standard program
Structure become functional & market-based

 The Operating Core is a key part, and the Support
Staff is focused in serve the operating core
 The Technostructure and the Middle Line are not
elaborated → little need for planning & formalizing work
 PB is highly decentralized, Vertical & Horizontal
- power at the bottom with professional work that cannot
be supervised by managers or standardized by analysts
 Informal coordination with the administrative
component → mutual adjustment, liaisons

 There are MB constellations within the PB
 Professionals administrators • handle disturbances,
coordination problems, etc. • perform roles at the
boundary of the organization → representative roles,
negotiations, public relations
 Professionals administrators serve the interests of
the professionals operators → gain power

Strategy
 Collective strategy has not much meaning since
outputs are difficult to measure
 Strategy formulation
• Outside-in = professionals associated outside the
structure
• Bottom-top = professionals in the operating core
and administrators
 Not top-down, controlled by the strategic apex

Conditions of the Professional Bureaucracy
 The operating core has to be dominated by skilled
workers → professionals
 The chef situational factor is a complex and stable
situation, age and size is less important
 Professional Bureaucracies start as Simple Structures
 Autonomy of professionals is depended against
rationalization of skills → technical system not
regulated, sophisticated, or automated.
 But technology (complexity) is sophisticated

Conditions of the Professional Bureaucracy
 Professional Bureaucracies can be:
•Dispersed: diversified geographically
•Hybrid: - professional bureau/adhocracy
- simple bureaucracy with autocratic leader
 Professional Bureaucracy is a fashionable structure
because is closely to democracy

Issues with the Professional Bureaucracy
 Professionals are attached to an organization, but
free to serve its clients in his/her own way
→ motivated to perfect their skills freely, but with no
control tend to overlook their problems
 Standardization of skills is necessary for coordination
in the operating core
→ mutual adjustment and direct supervision are resisted
 Standardization of work process / outputs are not
effective

Issues with the Professional Bureaucracy
 Professional Bureaucracies are not integrated entities
unlike MB → collection of individuals with common
resources & support services that want to be left alone
 Loyalty to profession, and organization? → may not
consider themselves part of a team
 PB encounters no problem with stable environments,
but are inflexible to adapt to new outputs → since
innovation requires cooperation
 Innovation requires also inductive reasoning that can
break away from standards the PB are designed to do

Efterår • 2009
11. The Divisionalized
Form

The Divisionalized Form
(A Superimposed Structure on Others)
 A set of quasi-autonomous entities with a
central administrative structure.
Entities: Units in the middle line, called divisions
 each has its own structure drawn
toward the MB configuration
Central Administration: are the headquarters
 Power is top-down, between the strategic apex
and the top of the middle line

ATypical Divisionalized Organization

Basic Structure

Basic Structure
 The Divisionalized Form relies on market basis for
grouping units at the top of the middle line
 The duplication of operating functions permits that
each division operate as a quasi-autonomous entity
 Span of control of the strategic apex is now the
number of divisions
 Divisionalized Form is an integrated MB with
operations divided on a market-basis

The Divisionalized Form
 A primarily coordination mechanism is the
standardization of outputs, but not work
processes since interfere autonomy
 The middle-line managers are the key part, and
whose skills have been standardized
 Although performance control is a key design
parameter, direct supervision is applied in case
of trouble

Structure of Divisions
 The control of divisions is via performance
control, management training, indoctrination,
and direct supervision
 Divisionalized Form work best with Machine
Bureaucracy structures since require no
fundamental change in structure
 It can be superimposed however to PB or Ad

Decentralization?
 Yes, parallel, but limited vertical dimension
 In fact, divisionalized structures can be rather
centralized
 Headquarters delegates all its power to the division
managers to make their own decisions
 Control is through a performance control system
that monitor the results of these decisions
 profits, sales growth, return on investment

Decentralization?
 Is the Divisionalized Form ‘decentralized’ or rather
fully autonomous organizations are consolidated
into a single ‘federation’.
 Alfred Sloan ‘decentralized’ GM in the 1920s
instituting central controls and reducing the power
of unit managers

Headquarters & Divisions
 There is a sharp division of labor between the
Headquarters and the Divisions.
Performance
Standards
Headquarters
Performance
Results 
Divisions

Headquarters & Divisions
 Formation of the overall product-market strategy
 Allocation of financial resources
 Design of the Performance Control System
 Appointment (replacement) of division managers
 Monitoring of divisional behavior
 Providing common support

Conditions of the Divisionalized Form
 Market diversity drives to the use of DF
 Technological system segmented into the divisions
 Complex environments do not make easy the
standardization of outputs stable & simple
 Large and old organizations tend to divisionalize
 Power of the Division managers encourage
growth and diversification/divisionalization

Stages of the Divisionalized Form

Stages of the Divisionalized Form
a) integrated: only the final output is sold to
costumers → typically a single product line
b) by-product: breaks in the processing chain,
intermediate products are offered
c) related-product: further breaking down the
processing chain → divisions supply to each other
d) conglomerated: no important dependencies
among divisions → but financial performance is
regulated

Issues with the Divisionalized Form
 Divisional economic advantages over functional:
• efficient allocation of resources,
• better training for general managers and
more autonomy,
• spreading of risks,
• strategically responsive
 Strategic decisions can be socially irresponsibly
 Concentration of power can corrupt.

Efterår • 2009
12. The Adhocracy

The Adhocracy
 Term coined by A. Toffler (1970)
 Adhocracy is capable of sophisticated innovation
→ SS san also innovate, but in a simple way
 MB and PB are performance structures, designed
to improve standard programs
 Adhocracy is a problem solving structure, designed
to invent new programs
 DF is flexible, but does not innovate

Basic structure of the Adhocracy
 Highly organic structure
 Little formalization of behavior, but a lot of formal
training
 High horizontal job specialization
 Grouping of specialist in functional units for market-
based projects
 Reliance on liaison devices for mutual adjustment
 Selective decentralization → mixture of line
managers, staff and operating experts

Description of the Adhocracy
 Standardization for coordination does not encourage
innovation no division of labor, unit differentiation,
formalization of behavior, planning & control systems
 If there are divisions, they have to be very flexible
 Unit of command is irrelevant → power to the experts,
but unlike PB it cannot rely on standardization of skills to
achieve coordination
 Knowledge and skills are bases to build new ones

Description of the Adhocracy
 No specialization and differentiation: different
specialists join forces around a specific project of
innovation
 But a structure is needed to maintain ties → matrix
structure, groups formed on functional & market basis,
and mutual adjustment as coordination mechanism
 Decision making is distributed among managers and
non-managers at all levels
= selective decentralization in both dimensions

Decision Making
 There are two adhocracies:
1. Operating adhocracy: innovates and solves
problems directly for its clients
• planning, design & execution are mixed into a single
project
2. Administration adhocracy: undertakes its projects
to serve itself
• distinction between administrative component and
operating core

Administrative adhocracy
 Administrative component is structured as adhocracy
 Operating Core is truncated:
- as MB, separate organization
- contracted out of the organization
- become automated
 Administrative component = managers + support staff
 Technocracy is not needed

The Adhocracy

Strategy
 The strategy is not deliberately formulated by the
individuals, and the formulation process is not clearly
placed
 The dichotomy formulation / implementation has not
much meaning because the results cannot be
predetermined
 Action planning impedes flexibility to respond
creatively

Strategy
• The Strategic Apex does not formulate explicit
strategies but make strategic choices
• The managers monitors projects and serve as liaison
with the external environment, and are responsible
of the projects facing the clients

Conditions of the Adhocracy
 Dynamic and complex environments organic &
decentralized structure
 Adhocracies are not stable configurations, they
bureaucratize with time
 Technological system is sophisticated and perhaps
automated
 Often driven by fashion → Adhocracies are
tomorrow’s structure

Conditions of the Adhocracy
• Divisionalized adhocracy: Matrix structure where diff.
types of divisions works at the same level
• Entrepreneurial adhocracy: Firms with custom-making
orders → Unit producers
• Competitive adhocracy: Firms in a highly competitive
market that changes all the time
• Temporary adhocracy: Project teams that disband
once the work is done

Issues with the Adhocracy
 There is not too much exploration since it is a
relatively new configuration
 Ambiguities can produce inefficiencies, confusion,
and even conflict
 Not every structure can become Adhocracy, it can be
unnatural to force it
 It is not competent at doing ordinary things, but
extraordinary things

Issues with the Adhocracy
 Involve a big amount of communication, has
unbalanced workloads, it is expensive to maintain
 In order to be more efficient, it has to change the
structure
transition to bureaucracy
 Administrative adhocracy typically become MB
rather than PB → destroy its ability to innovate

13. Beyond Five

Beyond Five
 There is no best structure
 The design parameters have to be internally
consistent with the situational factors to form a
coherent configuration
• Do any of these configurations really exist?

Beyond Five
 The question is not between reality and theory, but
between theories based on experience
 Three applications of theories:
1) A set of five pulls acting on the organization
2) A set of five pure types reflecting structures /
situations of many organizations
3) Basis for describing hybrid structures

Beyond Five
Fig 13-1

Six and Beyond…
 The Missionary configuration:
• Pull to ‘evangelize’
• Standardization of norms as a coordinating
mechanism
• Indoctrination is the main design parameter
• Ideology is the key part of the organization
→ a post-adhocratic age toward ideology

Beyond Five - Conclusion
 Organizations effectiveness requires sometimes the
creation of a new configuration

Organisation bac merc-mintzberg

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