THE ADHOCRACY

Presented by J. B. Nangpuhan II (MPA Student) for the class (Organizational Design) of Dr. S. K. Kim at Chonnam National University, South Korea. 2010

 

SUMMARY

 

KEY TERMS:

·         Operating adhocracy –운영 adhocracy

·         Administrative adhocracy – 행정 adhocracy

·         Innovation – 혁신

·         Problem-solving – 문제 해결

·         Sophisticated – 복잡한

INTRODUCTION 

Prime Coordinating Mechanism:	Mutual Adjustment
Key Part of Organization:	Support staff (in the Administrative Adhocracy; together with the operating core in the Operating Adhocracy)
Main Design Parameters:	Liaison devices, organic structure, selective decentralization, horizontal job specialization, training, functional and market grouping concurrently
Situational Factors:	Complex, dynamic, (sometimes disparate) environment; young (especially Operating Adhocracy); sophisticated and often automated technical system (in the Administrative Adhocracy); fashionable

Adhocracy is capable of sophisticated innovation in which the other configurations have the limited capability to become. This kind of structure can be found in a space agency, avant-garde film company, factory manufacturing complex prototypes, and integrated petro-chemicals company. Adhocracy is a problem-solving structure, to invent new ones. On the other hand, Simple Structure can innovate but on a certain limited and simple level. Machine and Professional Bureaucracies are performance structures, designed to perfect standard programs. Divisionalized Form resolves inflexibility in the Machine Bureaucracy, focusing on control by standardizing outputs.

Adhocracy (a term from Alvin Toffler’s Future Shock) is an ideal structure for sophisticated innovation, one that is able to fuse experts drawn from different disciplines into smoothly functioning ad hoc project teams. Adhocracy structure is the most complex structure among the five, yet it is not highly ordered unlike Machine Bureaucracy, Professional Bureaucracy, and Divisionalized Form. It is the newest of the five.

 

I.        DESCRIPTION OF THE BASIC STRUCTURE

A.      The Design Parameters

Adhocracy is a highly organic structure with little formalization of behavior. It has 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. It relies on the liaison devices to encourage mutual adjustment – the key coordinating mechanism within and between these teams. There is selective decentralization to and within these teams which are located in 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. It avoids all the trappings of bureaucratic structure such as sharp divisions of labor, extensive unit differentiation, highly formalized behaviors, and emphasis on planning and control systems. It is also flexible allowing the organization to change its structure as many times as possible to serve any useful purposes. Of all the configurations, adhocracy shows the least reverence for the classical principles of management, especially unity of command. The adhocracy must hire and give power to experts – professionals whose knowledge and skills have been highly developed in training programs. However, it does not rely on the standardized skills of these experts to achieve coordination; rather it must treat existing knowledge and skills merely as bases on which to build new ones.

The basis for grouping experts in this structure is based on specific project of innovation. This can be done by using the functional and market bases for grouping concurrently in a matrix structure. The experts are grouped in functional units for housekeeping purposes – for hiring, professional communication, and the like – but then are deployed in project teams to carry out their basic work of innovation. Integrating managers and liaison positions are established to coordinate the efforts among and between the functional units and project teams; the teams themselves are established as task forces. Thus, managers abound in the Adhocracy – functional managers, integrating managers, project managers. Project managers are numerous since the project teams must be small to encourage mutual adjustment among the members. Each team designates a leader (or manager) but not to manage or control the team; instead to do liaison and negotiating jobs, coordinating the work laterally among the different teams and between them and the functional units.

The decentralization of the Adhocracy is what we labeled as selective in Chapter 5, in both horizontal and vertical dimensions. Decision-making power is distributed among managers and nonmangers at all the levels of the hierarchy, according to the nature of the different decisions to be made. No one on the Adhocracy monopolizes the power to innovate.

 

Two Types of Adhocracy

1.       The Operating Adhocracy

This type of 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 manufacturing of engineering prototypes. In some cases, there is no contract like the film-making agency or theater company.

For every Operating Adhocracy, there is a corresponding Professional Bureaucracy, one that does similar work but with a narrower orientation. Faced with a client problem, the Operating Adhocracy engages in creative efforts to find a novel solution; the Professional Bureaucracy  pigeonholes it into a known contingency thinking to which it can apply a standard program. The Operating Adhocracy engages in divergent thinking aimed at innovation while Professional Bureaucracy engages in convergent thinking aimed at perfection.

A key feature of the Operating Adhocracy is that their administrative and operating works tend to blend into a single effort. That is, in ad hoc project work, it is difficult to differentiate the planning and design of the work from its execution. Both require the same specialized skills, on a project-by-project basis. Figure 12-1 on page 258 of our reference book shows a typical organigram for a classic Operating Adhocracy taken from the National Film Board of Canada.

 

2.       The Administrative Adhocracy

This type also functions with project teams, but towards a different end. In Operating Adhocracy, it undertakes projects to serve its clients; in Administrative Adhocracy, it undertakes projects to serve itself. In here, there is sharp distinction between its administrative component and operating core. The operating core is truncated – cut right off the rest of the organization – so that the administrative component that remains can be structured as an Adhocracy.

This truncation may take place in a number of ways: First, when an intense organization has a special need to be innovative, perhaps because of intense product competition or a very dynamic technology, however, its operating core must be machine bureaucratic, the operating core may be established as a separate organization; Second, the operating core may be done away with altogether – in effect, contracted out to other organizations; Third, when the operating core becomes automated, enabling the operating core to run itself, free from direct supervision or other control mechanisms from the administrative component. The third one can structure itself as an Adhocracy, concerned with change and innovation, with projects to bring new operating facilities on line.

Figure 12-2 on page 260 shows a typical organigram of an Administrative Adhocracy, from one oil company.

 

B.      The Administrative Component of the Adhocracies

In both types of Adhocracy, the relationship of both is different to any other configuration. In the Administrative Adhocracy, the operating core is truncated and becomes unimportant part of the organization; in the Operating Adhocracy, the two merge into a single entity. In both types, the managers become functioning members of the project teams, with special responsibility to effect coordination between them. Also, the distinction between line and staff blurs. The support staff plays a key role in the Adhocracy; in fact, it is the key part of the Administrative Adhocracy, where this configuration houses most of the experts on which it is so dependent.

The administrative component of the Adhocracy emerges as an organic mass of line managers and staff experts (with operators in the Operating Adhocracy), working together in ever-shifting relationships on ad hoc projects. Figure 12-3 shows the symbolic illustration of Adhocracy.

 

C.      Strategy Formation in the Adhocracy

Control of the strategy formulation process in the Adhocracy is not clearly placed, at the strategic apex or elsewhere. The process is best thought of as strategy formation, because strategy in these structures is not so much formulated consciously by individuals as formed implicitly by the decisions they make, one at a time.

Since Adhocracy’s central purpose is to innovate, the results of its efforts can never be predetermined. But when its strategy stabilizes, the structure ceases to be Adhocracy. In the case of Operating Adhocracy, the structure never quite sure what it will do next, that depends on the conditions of the project. In the case of Administrative Adhocracy, the structural system of work constellations can be most possible, each located at the level of the hierarchy commensurate with the kinds of functional decisions it must make.

 

D.      The Roles of the Strategic Apex

The top managers of the strategic apex of the Adhocracy may not spend much time formulating explicit strategies, but they must spend a good deal of their time in the battles that ensue over strategic choices, and in handling the many other disturbances that arise all over these fluid structures. It combines organic working arrangements instead of bureaucratic ones, with expert power instead of formal authority. Thus, the top managers as well as those in its middle line must be masters of human relations, able to use persuasion, negotiation, coalition, reputation, rapport, or whatever to fuse the individualistic experts into smoothly functioning multidisciplinary teams.

The top managers must also devote a good deal of time to monitoring the projects. Perhaps the most important single role of the top management of Adhocracy (especially Operating Adhocracy) is that of liaison with the external environment.

 

II.      CONDITIONS OF THE ADHOCRACY

A.      Basic Environment

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. We find Adhocracies wherever the conditions of dynamism and complexity together prevail, in organization ranging from guerilla units to space agencies.

Research-based organizations – whether laboratories that do nothing else, or corporations in high-technology industries that are heavily influenced by their research efforts – are drawn to the Adhocracy configuration because their work is by its very nature complex, unpredictable, and often competitive. Even hospitals and universities are drawn to Adhocracy when they do truly innovative research so as to create new knowledge and skills.

 

B.      Disparate Forces in the Environment

Hypothesis 13 of Chapter 6 indicated that disparities in an organization’s environment encourage it to decentralize selectively to differentiated work constellations – in other words, to structure itself as an Administrative Adhocracy. The organization must create different work constellations to deal with different aspects of its environment and then integrate all their efforts. This seems to have happened recently in the case of a number of multinational firms having problems on interdependences across product lines. Those multinational firms with interdependencies among their different product lines, and facing increasing complexity as well as dynamism in their environment, will feel drawn toward the divisionalized adhocracy hybrid, which is called divisionalized adhocracy. This is also possible to non-commercial organizations, an example is UNICEF as it requires more mutual adjustment among divisions rather than direct supervision or control.

 

C.      Frequent Product Change

A number of organizations are drawn toward Adhocracy because of the dynamic conditions that result from very frequent product change.  This condition is prevalent in the case of a unit producer and other small high-technology firms. Thus, the structure emerges as a hybrid between Operating Adhocracy and Simple Structure, which we call the entrepreneurial adhocracy. When the market is so competitive, like in the case of manufacturers of consumer goods, we call it competitive adhocracy.

 

D.      Youth as a Condition of the Adhocracy

A number of nonenvironmental conditions are also associated with Adhocracy. One is age – or more exactly, youth – since Adhocracy is not a very stable configuration. All kinds of forces drive the Adhocracy to bureaucratize itself as it ages. Also, according to Hypothesis 1, young organizations tend to be structured organically, since they are still finding their way and also since they are typically eager for innovative, ad hoc projects on which to test themselves. So we can conclude that the Adhocracy form tends to be associated with youth, with early stages in the development of organizational structures.

The Operating Adhocracy is particularly prone to a short life. Some Operating Adhocracies have short lives either because they fail or succeed. Administrative Adhocracies typically live longer, but as they age, they feel the pressure to bureaucratize leading many to try to stop innovating or to innovate in stereotyped ways. There are also instances of forming temporary adhocracy, drawing together specialists from different organizations to carry out a project and then it disbands. A related variant is the mammoth project adhocracy, a giant temporary adhocracy that draws on thousands of experts for anywhere from a year to a decade to carry out a single task.

 

E.       Technical System as a Condition of the Adhocracy

Technical system is another important condition in certain cases of this configuration. Many organizations use the Administrative Adhocracy because their technical systems are sophisticated and perhaps automated as well. This was emphasized in Hypothesis 7 of Chapter 6 requiring specialists who have the knowledge, power, and flexible working arrangements to cope with it. Automation of a sophisticated technical system evokes even stronger forces in the same direction, we call it the automated adhocracy. Automation is common in process industries, such as petrochemicals and cosmetics.

 

F.       Fashion as a Condition of the Adhocracy

Power itself is not a major condition of the Adhocracy. But fashion is a condition of Adhocracy. If Simple Structure and Machine Bureaucracy were yesterday’s structures, and Professional Bureaucracy and the Divisionalized Form are today’s, then Adhocracy is clearly tomorrow’s. Yet despite this, Adhocracy seems to be in the new industries of our age – aerospace, electronics, think-tank consulting, research, advertising, filmmaking, petrochemicals – virtually all the industries that grew up since World War II.

 

III.    SOME ISSUES ASSOCIATED WITH AHOCRACY

A.      Human Reactions to Ambiguity

Adhocracy is the only configuration for those who believe in more democracy with less bureaucracy.

However, according to Reeser (1969), human problems arise specifically on structural ambiguities. Ambiguities such as anxiety related to the eventual phaseout of the projects; confusion of members as to who their boss is, whom to impress to get promoted; low sense of member loyalty owing to frequent transfers between project organizations; lack of clarity in job definitions, authority relationships, and lines of communication; random and unplanned personal development because of the short time under any one manager; and intense competition for resources, recognition, and rewards. The last point results to another problem of ambiguity, Adhocracy emerges as the most politicized of the five configurations.

Conflict and aggressiveness are necessary elements in the Adhocracy; management’s job is to channel them toward productive ends.

 

B.      Problems of Efficiency

No structure is better suited to solving problems, ill-structured problems than that of Adhocracy. None can match it for sophisticated innovation.

Unfortunately, it is not an efficient structure. It is not competent at doing ordinary things; rather it is designed for the extraordinary. The root of its inefficiency is the Adhocracy’s high cost of communication. People talk a lot in these structures; that is how they combine their knowledge to develop new ideas. A further source of inefficiency is the unbalanced workloads. There are times that they are so busy, there are also times they’re not.

 

C.      The Dangers of Inappropriate Transition

One solution to the problems of ambiguity and inefficiency is to change the structure. The employees no longer able to tolerate the ambiguity and customers fed up with the inefficiency so they try to drive the structure to a more stable, bureaucratic form.

That is relatively easily done in the Operating Adhocracy. But the transition into bureaucracy is not always appropriate. The organization came into being to solve problems imaginatively, not to apply standards indiscriminately. The Administrative Adhocracy runs into more serious difficulties when it succumbs to the pressures to bureaucratize. It exists to innovate for itself, in its own industry. The Administrative Adhocracy cannot often select new clients yet remain in the same industry.

 

CONCLUSION

To reiterate a central theme of our discussion throughout our reference book: in general, there is no one best structure; in particular, there may be as long as the design parameters are internally consistent and together with the situational factors form a coherent configuration. We have delineated five such configurations in the last section of the book; their dimensions are summarized in Table 12-1 on pages 280 to 281.

 

Reference: Mintzberg, H. (1993). Structure in Fives: Designing Effective Organizations. Upper Saddle River, NJ: Prentice-Hall, Inc. 253-282