We live in a fast changing environment, where sometimes diversity and/or evolution are our only solutions that enable our business to survive. An organization’s structure can make a real difference to the way a company performs. That’s why some firms achieve success through strict controls and systems, but others that try to duplicate that structure may suffer terrible results. It’s also why a start-up company has to evolve its structure over time as it grows, and as its strategy and its environment change.
Successful organizations are those that have figured out the best way to integrate and coordinate key internal and external elements; and they understand the importance of reviewing and redesigning their structures upon external and internal stimulus.
According to renowned management theorist Henry Mintzberg’s book, “The Structuring of Organizations,” an organization’s structure emerges from the interplay of the organization’s strategy, the environmental forces it experiences, and the organizational structure itself. When these fit together well, they combine to create organizations that can perform well. When they don’t fit, then the organization is likely to experience severe problems.
Different structures arise from the different characteristics of these organizations, and from the different forces that shape them also called “basic pulls”. By understanding the organizational types that Mintzberg defines, we can think about whether our company’s structure is well suited to its conditions; If it is not, we should start to think about what has to be changed.
In the following essay I will analyse the five types of organisational structures defined by Henry Mintzberg: Entrepreneurial, Machine bureaucracy, Divisionalised bureaucracy, Professional bureaucracy and Adhocracy, summarise in (Figure 2). General real life examples will be provided in order to understand better the complexity of some structures, together with (Figure IV-1) which explain the origins of this analysis. Particular focus will be on how those structures interact within the environment wheather is dynamic of stable.
Most organizations experience all five of these pulls (Figure IV-1); however, to the extent that conditions favor one over the others, the organization is drawn to structure itself as one of the configurations; therefore the different needs of a firm will eventually arise in a specific strucure that fits the company goals over a period of time.
Each configuration is a pure type a theoretically consistent combination of the contingency and design parameters. Together the five may be thought of as a bounding pentagon within which real structures may be found.
As (figure 2) shows Mintzberg analysis is based upon strict criteria: the type of decentralization, the key part of the organization and the prime coordinating mechanism.
A car dealer, a brand-new government department, a middle-sized retail store, a corporation run by an aggressive entrepreneur, a government headed by an autocratic politician, a school system in a state of crisis. In most ways, these are vastly different organizations. But the evidence suggests that they share a number of basic structural characteristics. We call the configuration of these characteristics the Simple Structure or the Entrepreneurial.
The Simple structure is characterized, above all, by what it is not elaborated. Typically, it has little or no technostructure, few support staff¬ers, a loose division of labor, minimal differentiation among its units, and a small managerial hierarchy. Little of its behavior is formalized, and it makes minimal use of planning, training, and the liaison devices. It is, above all, organic. ln a sense, Simple Structure is nonstructure: it avoids using all the formal devices of structure, and it minimizes its dependence on staff special¬ists. The latter are typically hired on contract when needed, rather than encompassed permanently within the organization.
Coordination in the Simple Structure is effected largely by direct supervision. Specifically, power over all important decisions tends to be centralized in the hands of the chief executive officer. Thus, the strategic apex emerges as the key part of the structure; indeed, the structure often consists of little more than a one-man strategic apex and an organic operating core. The chief executive tends to have a very wide span of control.
In contrast with the flexibility of an Entrepreneurial structure if we think of a national post office, a security agency, a steel company, a custodial prison, an airline, a giant automobile company: all of these organizations appear to have a number of structural characteristics in common. Above all, their operating work is routine, the greatest part of it rather simple and repetitive; as a result, their work processes are highly standardized. These characteristics give rise to the Machine Bureaucracies of our society, the structures fine-tuned to run as integrated, regulated machines.
A clear configuration of the design parameters has held up consistently in the research: highly specialized, routine operating tasks, very formalized procedures in the operating core, a proliferation of rules, regulations, and formalized communication throughout the organization, large-sized units at the operating level, reliance on the functional basis for grouping tasks, relatively centralized power for decision making, and an elaborate administrative structure with a sharp distinction between line and staff. The operating tasks are simple and repetitive, generally requiring a minimum of skill and little training. (Figure 18-2)
Bureaucracy is highly rationalized, its tasks simple and repetitive. Now we can see that such machine bureaucratic work is found, above all, in environments that are simple and stable. For example. the customers of MacDonald’s “want their food simple, served efficiently “without fuss”, at a reasonable restaurant price.
In addition, the Machine Bureaucracy is typically found in the mature organization, large enough to have the volume of operating work needed for repetition and standardization, and old enough to have been able to settle on the standards it wishes to use.
This structure is largely used by companies with mass-produced output. If following procedures and meeting precise specifications are important, then the Machine structure works well.
(Figure 18-2 shows the Machine Bureaucracy symbolically, in terms of logo, with a fully elaborated administrative and support structure¬ both staff parts of the organization being focused on the operating core and large operating units but narrower ones in the middle line to reflect the tall hierarchy of authority.)
Mintzberg analyse a third structure, the structural configuration sometimes called Professional Burocracy, common in universities, general hospitals, school systems, public accounting finns, social work agencies, and craft production firms. All rely on the skills and knowledge of their operating professionals to function; all produce standard products or services.
The Professional Bureaucracy relies for coordination on the standardization of skills and its associated design parameter, training and indoctrination. It hires duly trained and indoctrinated specialists-professionals-for the operating core, and then gives them considerable control over their own work. In effect, the work is highly specialized in the horizontal dimension, but enlarged in the vertical one. For example, ‘Teacher autonomy is reflected in the structure of school systems, resulting in what may be called their structural looseness.
The Administrative structure suggests that the Professional Bureaucracy is a highly democratic structure, at least for the professionals of the operating core. In fact, not only do the professionals control their own work, but they also seek collective control of the administrative decisions that affect them, decisions, for example, to hire colleagues, to promote them, and to distribute resources. Controlling these decisions requires control of the middle line of the organization, which professionals do by ensuring that it is staffed with “their own.”
What frequently emerge in the Professional Bureaucracy are parallel administrative hierarchies, one democratic and bottom up for the professionals, and a second machine bureaucratic and top down for the support staff.
Like the Professional Bureaucracy, the Divisionalized Form is not so much an integrated organization as a set of quasi-autonomous entities coupled together by a central administrative structure. But whereas those “loosely coupled” entities in the Professional Bureaucracy are individuals-professionals in the operating core in the Divisionalized Form they are units in the middle line. These units are generally called “divisions”, and the central administration, the “headquarters”. The Divisional form is most widely used in the private sector of the industrialized economy. The existence of divisions also means that there is an inherent duplication of activities, with each division containing essential functions such as sales, human resources and accounting.
The Divisionalized form works best with machine bureaucratic structures in its divisions and, moreover, drives these structures, no matter what their natural inclinations, toward the machine bureaucratic form. Each division has to be treated as a single integrated system with a single, consinstent set of goals. In other words, while the divisions may be loosely coupled with each other, the assumption is that each is tightly coupled within. Therefore the goals must be operational ones, based on quantitative measures of performance control.
Even though the Divisionalized Form does have a preferred environment, which it shares with the Machine Bureaucracy. That is because of another condition prerequisite to the use of the Divisionalized Form-outputs that can be standardized.
Complex environments lead to vague outputs that cannot be measured or standardized. Likewise, in dynamic environments, outputs and performance standards cannot easily be pinned down. So the Divisionalized Form works best in the environmnets that are neither very complex nor very dynamic, in fact the very same environments that favor the Machine Bureaucracy.
Divisionalized Form has the narrowest range of all the structural configurations. It has no real environment of its own; at best it piggybacks on the Machine Bureaucracy in the simple, stable environment, and therefore always feels drawn back to that integrated structural form. The pure Divisionalized Form may prove inherently unstable, in a social context a legitimate tendency but not a legitimate structure. The economic advantages it offers over independent organizations reflect fundamental inefficiencies in capital markets and stockholder control systems that should themselves be corrected another disadvantage is that it creates fundamental social problems.
None of the structural configuations so far discussed is capable of sophisticated innovation though, the kind required of a space agency, an avant-garde film company, a factory manufacturing complex prototypes, an integrated company. The Simple Structure can certainly innovate, but only in a relatively simple way. Both the Machine and Professional Bureaucracies are performance, not problem-solving; They are designed to perfect standard programs, not to invent new ones; and while the Divisionalized Form resolves the problem of strategic inflexibility in the Machine Bureaucracy it is not a true innovator.
A focus on control by standardizing outputs does not encourage innovation. Sophisticated innovation requires a fifth and very different structural configuration, one that is able to fuse experts drawn from dsifferent disciplines into smoothly functioning ad hoc project teams.
In Adhocracy, we have a fifth distinct structural configuration: highly organic structure, with little formalization of behavior; high horizontal job specialization based on formal training; a tendency to group the specialists in functional units for housekeeping purposes but to deploy them in small market-based project teams to do their work; a reliance on the liaison devices to encourage mutual adjustmentthe key coordinating mechanism-within and between these teams; and selective decentralization to and within these teams, which are located at various places in the organization and involve various mixtures of line managers and staff and operating experts. To innovate means to break away from established patterns. So the innovative organization cannot rely on any form of standardization for coordination.
The Operating Adhocracy innovates and solves problems directly on behalf of its clients. Its multidisciplinary teams of experts often work directly under contract, as in the think-tank consulting firm, creative advertising agency, or manufacturer of engineering prototypes. In some cases, however, there is no contract per se, as in the filmmaking agency or theater company.
The conditions of the environment are the most important ones for this configuration; specifically, the Adhocracy is clearly positioned in an environment that is both dynamic and complex.
Overall we can say the”Five Structures Model” helps us understand how organisations change over time, how powers shift and how all this affects their structures.
Minzberg’s classification is based on the assumption that formal and informal structures are intertwined and often indistinguishable from one other.
A disadvantage is that the model does not provide operational guidance for organisational re-design activities since it lacks a normative framework.The model depends on contingency factors that influence structure and contingency theory faces a variety of methodological problems: e.g. how possible it is to single out one factor from the complexities of reality and how these factors influence one another.
To conclude we can say there is no “right” organizational structure, it is important to understand how structure relates to the variety of attributes in a company. Mintzberg gives us a useful description of structures that are appropriate in different circumstances. None of these is necessarily ideal, and they are very simplified versions of what exists in real life. In fact, it is common for a company to have a combination of elements of each structural type. The model provides a framework to analyse organisational structures in relation to the ideal types. It hands the consultant tools to design organisations, but the configurations should not be used as a blue print as he suggested in the original book (The Structoring of Oranizations, 1979).