adhocracy - a closer look
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Adhocracy: A Closer Look
Prof Jitendra MohantySchool of ManagementKIIT UniversityBhubaneswar
As organizations take on increasingly demanding, innovative, and complex activities, they will very likely turn to adhocracy
Pure adhocracy an abstraction No pure adhocracy – only variants of
adhocracy are seen Number of design configurations of
adhocracy available
The Matrix Specialists from specific functional departments
work in one or more interdisciplinary teams led by project leaders
Adds flexibility dimension to bureaucracy’s economies of specialization
Matrix proposes two bosses: functional and project (dual command) – goes against bureaucracy’s unity of command
Legitimates lateral channels of influence
When to use Matrix Matrix seen in ad agencies, aerospace firms, R
& D labs, hospitals, universities, management consultancies, entertainment companies
Essential conditions:
(1) environmental pressure from two or three critical sectors ( Ad agency to maintain its technical focus and respond to client’s needs)
(2) interdependence between departments
(3) economies of scale in use of internal resources
Two types of matrix structure Temporary Matrix (Aerospace example):
Projects or products undergoing change continuously
Permanent Matrix (Large colleges of business): Projects or products relatively enduring
Strengths of matrix: facilitates better coordination, better
communication and more flexibility reduces bureaupathologies – prevents
displacement of goals due to departmental members tendency to protect their “little worlds”
Facilitates efficient allocation of specialists Creates increased ability to respond
rapidly to change in the environment Ensures timely project completion Cost control for economic efficiency Development of technical capability for
future Increased motivation for professionals
through a platform of democratic and scientific norms
Weaknesses of matrix Creates confusion, propensity to foster power
struggles, stress it places on individuals Absence of unity of command leads to ambiguity
– increased ambiguity leads to conflict Project managers fight to get best of specialists
– power struggle ensues High stress experienced by individuals who seek
security and certainty Multiple reporting results in role conflict –
unclear expectations produce role ambiguity
Theory Z William Ouchi: American
version of the Japanese model ( IBM, HP, P & G etc)
Theory Y : Adapted to handle high rates of employee turnover – creates mechanistic bureaucracy
Theory J: To handle low turnover – mirrors adhocracy
Theory A Theory J
ST employment Life-time employment
Specialized career paths
Non-specialized career paths
Individual decision making
Consensual decision making
Individual responsibility
Collective responsibility
Frequent appraisal Infrequent appraisal
Explicit, formalized appraisal
Implicit, informal appraisal
Rapid promotion Slow promotion
Segmented concern for people
Comprehensive concern for people
Theory Z: Japanese model adapted to fit into American culture
Essentially adhocratic Complexity low –
excessive layers unnecessary
LT loyalty and team works stressed
Theory Z Organizations
LT Employment
Moderately specialized career paths
Consensual decision making
Individual responsibility
Infrequent appraisal
Implicit, informal appraisal with explicit, formalized measures
Slow promotion
Comprehensive concern for people
The Collateral Form Allows intrapreneurship – creates spirit and rewards of
entrepreneurship within or alongside a large bureaucracy Small teams or separate business units with
independence and resources to experiment Has flexibility to solve ill-structured problems This is creating adhocracy within bureaucracy The weakness is disorder at times due to meshing
bureaucratic structure with organic units – often clash of culture results
Needs unique type of top management to blend rules, checks and balances and intolerance for failure with risk taking and making mistakes,
The Network Structure A small central organization that relies on other
organizations to perform manufacturing, distribution, marketing and other crucial functions on a central basis
Nike : an organization of relationships – billions of dollars in sales without own manufacturing facilities
Allow flexibility to focus on what it does best Managers spend most of their time coordinating
and controlling external relations
Good for certain firms requiring high flexibility to respond quickly to fashion changes (toys and apparels firms)
Suits firms whose manufacturing needs low-cost labour (outsourcing)
Weaknesses: Loss of close control – supply less predictable – innovations under the direction of another organization can not be guarded
Other Examples of AdhocracyTask Force: Temporary structure formed to
accomplish a specific, well-defined and complex task that involves a number of organizational subunits
The Committee Form: This form arises when A decision requires broad range of experience
and backgrounds All affected by decision need to be represented Desirable to spread the workload During management transition when no single
individual is ready to lead organization
Committees may be temporary or permanent
Temporary committee same as task force Permanent committees combine diverse
inputs of task force plus stability and consistency of matrix
Plural executives: committees established at top level of organization – helps handle homogeneity of top executive’s task
The Collegial Form Form of adhocracy fashionable in universities, research
labs, highly professional organizations Full democracy in making all important decisions ( vs.
representative decision making in task force or committee)
Represents the utmost in decentralization (faculty work with minimal guidelines) – great deal of leeway for departmental discretion
Bell Labs, Eastman Kodak: extremely high employee autonomy – minimum formalization – collegial decision making
Allows highly skilled professionals to adapt rapidly to changing needs of work
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