Idea 1 - Adhocraey (50 Management ideas you really need to know)

Idea 1 - Adhocraey

As organizational structures go, adhocracy is the direct opposite of bureaucracy unstructured, decentralized and, at least in theory, responsive. In a bureaucracy, the structure is more important than the people. An adhocracy, on the other hand, is designed to bring out the best in them.

A bureaucracy is 'a hierarchical administrative system designed to deal with large quantities of work in a routine manner, largely by adhering to a set of strict and impersonal rules', according to the Oxford Dictionary of Business and Management. 'It is characterized by its permanence and stability, its body of experience and precedent, and its absence of a reliance on individuals.' Which more or less sums up what an adhocracy is not.
The idea first surfaced in the work of US leadership theorist Warren G. Bennis. Writing about the company of the future in The Temporary Society (with Philip Slater in 1968), he predicted that it would rely on nimble and flexible project teams within a structure he called 'adhocracy'. The Latin phrase ad hoc means 'for this particular purpose only', though today it also conveys a sense of improvisation.

The idea of adhocracies received a more dramatic boost from Alvin Toffler in his 1970 bestseller Future Shock. In it, he saw them as 'a new, free-form world of kinetic organizations', predicting that firms would need flatter structures, faster information flows and disposable project teams in order to survive. Next it was Henry Mintzberg's turn to seize on the term. Mintzberg, who made his name studying how managers really spend their time, also thought about organizational structures. In his 1979 book The Structuring of Organizations (among others), he identified four fundamental types. These were determined using a two-by-two matrix that plotted the nature of their work environment (simple or complex) against their pace of change (stable or dynamic). The resulting classifications were the machine bureaucracy, the professional bureaucracy, the entrepreneurial startup and the adhocracy. Mintzberg argues that each uses fundamentally different mechanisms to coordinate its activities, adding that power resides among different groups within each type.

Mintzberg's organizations (and coordination mechanisms)

	Simple	Complex
Stable	Machine Bureaucracy	Professional Bureaucracy
	Standardized work	Standardized skills and
	processes and outputs	norms
Dynamic	Entrepreneurial Startup	Adhocracy
	Direct supervision	Mutual adjustment

The machine bureaucracy This has highly specialized but routine operating tasks, formal procedures, lots of self-generated rules and regulations, formalized communication, large operating units and relatively centralized decision-making. It also has a lot of what Mintzberg calls 'technostructure' - platoons of managers, planners and accountants. The coordination mechanism is the standardization of procedures and outputs - and that is the responsibility of the technocrats. So they wield considerable power. Think General Motors.

The most influential people in a professional bureaucracy are the highly trained professionals at its operating core. They work relatively independently. Like the machine bureaucracy, they are rule-bound, but whereas the former sets its own rules, the professionals' standards - the
coordination mechanism - come from an outside body. Think hospitals or a large accounting firm.

The entrepreneurial startup This is low on technostructure but high in centralized power, invariably in the hands of the founder or chief executive. So the coordination mechanism takes the form of direct supervision and control, and the boss and senior managers wield most influence. This type of organization tends to be flexible and informal, inspiring loyalty while not doing much in the way of planning. Most firms pass through this stage in their early years.

The ad hoc racy has nothing in common with the machine bureaucracy. Instead, it shares the informality of the startup with the devolved responsibility of the professional bureaucracy, though often to a greater extent than either. As Bennis suggested, their specialists have considerable autonomy and are deployed in small, market-based project teams. Since innovation and creativity are central to the business, the level of standardization and rule-making is low. Coordination depends on the mutual adjustment of ad hoc teams, so no particular unit is disproportionately powerful. Much of the latter-day IT industry is organized onadhocratic lines, as are advertising agencies and new media companies.

Mintzberg distinguished between two kinds of adhocracy. The operating adhocracy innovates and solves problems for its clients - like the aforementioned software houses and ad agencies. The administrative adhocracy has the same project team structure but operates to serve itself-
Mintzberg offers the National Aeronautics and Space Administration (NASA) as an example. In an administrative adhocracy, low-level operations may be automated or contracted out.
Adhocracy is alive and well. Robert Waterman, co-author of In Search of Excellence, published another book simply called Adhocracy in 1990. He defined adhocracy as 'any form of organization that cuts across normal bureaucratic lines to capture opportunities, solve problems and get results'. And he argued that, in an age of accelerating change, organizations such as these, with their ability to adapt and adjust, were the most likely to succeed.

Reference: 50 Management Ideas You Really Need to Know

Book by Edward Russell-Walling