1. Basic environment
The conditions of the environment are the most important ones for this configuration; specifically, the Adhocracy is clearly positioned in an en- vironment that is both dynamic and complex. According to Hypotheses 9 and 10, a dynamic environment calls for organic structure and a complex one calls for decentralized structure. And Adhocracy is the only configura- tion that is both organic and relatively decentralized. In effect, innovative work, being unpredictable, is associated with a dynamic environment; and the fact that the innovation must be sophisticated means that it is difficult to comprehend—in other words, associated with a complex environment. Thus, we find Adhocracies wherever the conditions of dynamism and complexity together prevail, in organizations ranging from guerrilla units to space agencies. There is no other way to fight a war in the jungle or put the first man on the moon.
As we have noted for all the configurations, organizations that prefer particular structures also try to “choose” environments appropriate to them. This is especially clear in the case of the Operating Adhocracy. As noted earlier, advertising agencies and consulting firms that prefer to structure themselves as Professional Bureaucracies seek out stable environ- ments; those that prefer Adhocracy find environments that are dynamic, where the client needs are unpredictable.
Research-based organizations—whether laboratories that do nothing else, or corporations in high-technology industries that are heavily influ- enced 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, described in Chapter 10 as closest to Professional Bureaucracy for their routine clinical and teaching work, are drawn to Adhocracy when they do truly innovative research. Their orientation to convergent, deductive thinking in their routine work precludes real innovation. So even though their professionals are often able to work alone when they apply their standard knowledge and skills, they must often join in organic multidisciplinary teams to create new knowledge and skills.
2. 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 Administra- tive 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. For years these firms have been predisposed to using the Divisionalized Form, grouping their major divisions either by region or by product line.3 But recent changes in their environments have resulted in a near balance of the pressures to adopt each of these two bases of group- ing, making the choice of one over the other an agonizing one. The choice of divisionalization by region denied the interdependencies that arose from marketing the same products in different places, resulting, for example, in the duplication of manufacturing faculties in each region. On the other hand, the choice of divisionalization by product line ignored the interde- pendences across product lines, requiring, for example, many different marketing units in the same region. Intent on maintaining the Division- alized Form, these firms traded off one interdependence against the other. Or else they found themselves acting schizophrenically, changing their basis of grouping back and forth in a kind of perpetual game of Ping-Pong. With the emergence of matrix structure, however, these firms were presented with a logical solution to their dilemma. They could establish regional and product divisions at the same level of the hierarchy, in a permanent matrix structure—as long, of course, as they were prepared to dispense with the principle of unity of command. A product manager in a given region could report to both an all-product regional division manager and an all-region (worldwide) product division manager. A hybrid struc- ture could emerge, which we can call the divisionalized adhocracy, with char- acteristics of both the configurations from which it derives its name. Its markets are diversified, like all organizations that use the Divisionalized Form, but parts of its environment are more complex and dynamic (in essence, disparate) than others. There is evidence that some multinational firms have moved in this direction, but no evidence yet of a general trend. Nevertheless, 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 division- alized adhocracy hybrid. For them at least, Adhocracy becomes a natural fourth stage of structural development, after Simple Structure, Machine
Bureaucracy, and Divisionalized Form.
The divisionalized adhocracy may also have some relevance for non- commercial organizations that face similar conditions. In a thought- provoking study for UNICEF, the Scandinavian Institutes for Administra- tive Research (SIAR, 1975) propose such a structure for that United Nations agency. They describe the UNICEF structure at the time of their study as a regional Divisionalized Form but with a tendency toward too much head- quarters control. That leads to the vicious circle of one-way communica- tion: The headquarters staff tries to control the regional divisions, which ignore their policies because they are out of touch with the local needs, which leads to further efforts by headquarters to control the divisions, until it comes to dominate the communication channels. In the opinion of the SIAR group, UNICEF required a different structure because “the need for learning and adaptation throughout the organization is so extremely high” (p. 17). Essentially, UNICEF faced the same dilemma as the multinational corporations we just discussed: the concurrent needs to respect regional knowledge and to achieve interregional coordination. That can be resolved in the divisionalized organization not by more standardization and direct supervision from headquarters, which involves a shift of the entire struc-ture toward Machine Bureaucracy, but by more mutual adjustment among divisions, which involves a shift toward Adhocracy. Thus, SIAR proposes what amounts to a divisionalized adhocracy for UNICEF: Considerable power should be delegated to the regions, according to their expertise; the headquarters staff should advise rather than supervise; and an interactive or team structure should be used in the field. The result would be a more organic structure, built around flexible projects carried out by work constellations.
The SIAR report proposes a list of measures to effect the proposed structural change—a list that may, in fact, be practical for any division- alized organization wishing to move toward Adhocracy. Among the rec- ommendations: the elimination of one tier in the divisionalized hierarchy (such as the group vice-president level in the multiple-divisionalized cor- poration) in order to reduce the emphasis on direct supervision; the inte- gration of the planning and programming functions at headquarters, which would work with new knowledge networks; the use of more team- work at headquarters; a reduction in the use of performance control tech- niques; in their place, occasional “extended visits” by a headquarters team, with a broad rather than a functional orientation and led by the chief executive; the institution of matrix structure; the encouragement of profes- sionalism in attitude, type of work, career pattern, and training; the re- orientation of the job of regional director to professional senior rather than administrative supervisor; and the reorientation of internal communication flows to emphasize dialogue, problem solving, and learning rather than reporting, controlling, and explaining.
3. Frequent product change
A number of organizations are drawn toward Adhocracy because of the dynamic conditions that result from very frequent product change. The extreme case is the unit producer, the manufacturing firm that custom- makes each of its products to order, as in the case of the engineering company that produces prototypes. Because each customer order con- stitutes a new project, the organization is encouraged to structure itself as an Operating Adhocracy. Woodward describes such a structure in the unit- production firms she studied—organic and rather decentralized, but with the middle-level development engineers having considerable power.
Similar to the unit producer is the small high-technology firm, such as those surrounding Boston on Route 128. For the most part, these firms do sophisticated project work—design and sometimes manufacturing—under direct contract to the U.S. government or to the larger corporations in industries such as defense, aerospace, and atomic energy. Their work being complex and their environments dynamic, these firms are depen- dent on highly trained experts who work in interdisciplinary project teams.
But these firms are also small and owned by individual entrepreneurs who maintain personal control. (They are able to do so, of course, only because they are as highly trained as their employees.) So the structure emerges as a hybrid between Operating Adhocracy and Simple Structure, which we call the entrepreneurial adhocracy.
Another variant of the unit producer is the newspaper or magazine. From the editorial point of view, every product—that is, every issue—is different. Moreover, the environment is typically very dynamic and often rather complex, especially in the case of daily newspapers and news- magazines, which must report a vast world of fast-breaking news with very short deadlines. Moreover, the efforts of all kinds of reporters, pho- tographers, editors, and others must be integrated into a single product. So Adhocracy is called for in the editorial department. But from the point of view of the printing and distribution functions, there is great repetition— thousands, sometimes millions of copies of the same issue. And their environment is extremely stable—the tasks remain unchanged no matter what the content of the issue. So Machine Bureaucracy is called for in these functions. The need for two different structures is, of course, reconciled by truncation. The different functions are kept well separated, with standard outputs serving as the one interface. The Adhocracy editorial department completes its work and then converts it into standardized format—typed copy, page layouts, clipped photographs—which become the inputs to the bureaucratic production process.
Some manufacturers of consumer goods operate in markets so com- petitive that they must change their products almost continuously. Here again, dynamic conditions, when coupled with some complexity, drive the structure toward the Adhocracy form. An excellent example of what we shall call the competitive adhocracy is the pop recording company discussed earlier. Its dramatically short product life cycle and fluid supply of record- ing talent required extremely fast response based on a great deal of inside knowledge. As the student group that did the study noted, “The product life of a 45 rpm is three months. This is measured from the idea of releasing some song by an artist to the last sale of the single to stores. There is nothing quite so dead as yesterday’s number one hit on the hit parade.”4 Other examples of competitive adhocracies are found in the cosmetics, Pharmaceuticals, and plastics industries.
It should be noted that it is probably only product competition that leads to this kind of configuration. Competition based on price or market- ing is simpler to understand and deal with, and so often can be handled in the Simple Structure or Machine Bureaucracy. In contrast, product com- petition requires more serious innovation and more complex decision mak-ing, often based on sophisticated research and development activity. So Adhocracy becomes the favored configuration, and of the administrative type. Finance and pricing decisions remain in the more senior work con- stellations, and product design, development, and marketing decisions are delegated to constellations lower down in the hierarchy (as was the case with the pop recording company).
4. Youth as a condition of the adhocracy
A number of nonenvironmental conditions are also associated with Ad- hocracy. One is age—or more exactly, youth—since Adhocracy is not a very stable configuration. It is difficult to keep any structure in that state for long periods of time—to keep behaviors from formalizing and to ensure a steady flow of truly innovative, ad hoc projects. All kinds of forces drive the Adhocracy to bureaucratize itself as it ages. On the other side of the coin, 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. For one thing, it faces a risky market, which can quickly destroy it. Unlike the Professional Bureaucracy or Machine Bureaucracy, with their standardized outputs, the Operating Adhocracy can never be sure where its next project will come from. A downturn in the economy or the loss of a major contract can close it down literally overnight.
But if some Operating Adhocracies have short lives because they fail, others have short lives because they succeed. Success—and aging—en- courage a metamorphosis in the Operating Adhocracy, driving it to more stable conditions and more bureaucratic structure. Over time, the success- ful organization develops a reputation for what it does best. That encour- ages it to repeat certain projects, in effect to focus its attention on specific contingencies and programs. And this tends to suit its employees, who, growing older themselves, welcome more stability in their work. So the Operating Adhocracy is driven over time toward the Professional Bureau- cracy to concentrate on the programs it does best, sometimes even toward the Machine Bureaucracy to exploit a single program or invention. The organization survives, but the configuration dies.
Administrative Adhocracies typically live longer. They, too, feel the pressures to bureaucratize as they age. This leads many to try to stop innovating, or to innovate in stereotyped ways, and thereby to revert to more bureaucratic structure, notably of the machine type. But unlike the Operating Adhocracy, the Administrative Adhocracy typically cannot change its structure while remaining in the same industry. In choosing that industry, it chose a complex, dynamic environment. Stereotyped innova- tion will eventually destroy the organization. Newspapers and plastics and Pharmaceuticals companies—at least those facing severe competition— may have no choice but to structure themselves as Adhocracies.
In recognition of the tendency for organizations to bureaucratize themselves as they age, a variant has emerged—”the organizational equiv- alent of paper dresses or throw-away tissues” (Toffler, 1970:133)—which might be called the temporary adhocracy. It draws together specialists from different organizations to carry out a project, and then it disbands. Tempo- rary adhocracies are becoming common in a great many spheres of modern society: the production group that performs a single play, the election campaign committee that promotes a single candidate, the guerrilla group that overthrows a single government, the Olympic Committee that plans a single Games. 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.
This last variant suggests that size is a less important condition than age for the Adhocracy. Administrative Adhocracies in particular can grow very large indeed. However, Operating Adhocracies tend to be small or middle-sized, constrained by the projects they do, by the number and size of the multidisciplinary teams they can organize, and by their desire to avoid the pressure to bureaucratize that comes from growing large.
5. Technical system as a condition of the adhocracy
Technical system is another important condition in certain cases of this configuration. Although Operating Adhocracies, like their sister Profes- sional Bureaucracies, tend to have simple, nonregulating technical sys- tems, the case for Administrative Adhocracies is frequently quite the op- posite. Many organizations use the Administrative Adhocracy because their technical systems are sophisticated and perhaps automated as well.
As described in Hypothesis 7 of Chapter 6, when its technical system is sophisticated, the organization requires an elaborate, highly trained sup- port staff to design or purchase, modify, and maintain it; the organization must give considerable power over its technical decisions to that support staff; and that staff, in turn, must use the liaison devices to coordinate its work. In other words, complex machinery requires specialists who have the knowledge, power, and flexible working arrangements to cope with it. The result is that support staffers emerge as powerful members of the organization, drawing power down from the strategic apex, up from the operating core, and over from the middle line. The organization is drawn to the Administrative Adhocracy configuration.
Automation of a sophisticated technical system evokes even stronger forces in the same direction. As we also saw in Chapter 6, the Machine Bureaucracy that succeeds in automating its operating core undergoes a dramatic metamorphosis. The problem of motivating uninterested opera- tors disappears, and with it goes the control mentality that permeates its structure; the distinction between line and staff blurs (machines being indifferent to who turns their knobs), which leads to another important reduction in conflict; the technostructure loses its influence, since control is built into the machinery itself by its designers rather than imposed on workers by the rules and standards of the analysts. Overall, the admin- istrative structure becomes more decentralized and organic, emerging as the type we call the automated adhocracy.
Automation is common in the process industries, such as petrochemi- cals and cosmetics (another reason why firms in the latter industry would be drawn toward Adhocracy). That is presumably why Joan Woodward’s description of the process producers fits Administrative Adhocracy to a T. But it should be noted that not all process firms use this configuration. Many are, in fact, far from fully automated, and therefore require large operating work forces that draw them toward Machine Bureaucracy. Steel companies, discussed in Chapter 9, are a case in point. Then there are the process producers that, although highly automated in production, exhibit strong Machine Bureaucracy as well as Administrative Adhocracy tenden- cies in some cases because they require large routine work forces for other operating functions (such as marketing in the oil company with many of its own retail outlets). Finally, there are the automated process producers with such simple environments and technical systems—for example, the small manufacturer of one line of hand creams—that the Simple Structure suffices instead of the Administrative Adhocracy.
6. Fashion as a condition of the adhocracy
We come now to the power factors. Power itself is not a major condition of the Adhocracy, except to the extent that the support staff of the Machine Bureaucracy is able to take control of certain technical decisions or the operators of the Professional Bureaucracy care to encourage innovation instead of standardization and thereby drive their structure toward Ad- hocracy. But fashion most decidedly is a condition of Adhocracy. Every characteristic of the Adhocracy is very much in vogue today: emphasis on expertise, organic structure, project teams and task forces, decentralization without a single concentration of power, matrix structure, sophisticated and automated technical systems, youth, and environments that are com- plex and dynamic. Ansoff’s enthusiasm is typical of many of today’s “fu- ture thinkers”:
.. . in the next ten years the concepts of structure and capability are due for a change as revolutionary as the transition from static trenches to mobile war- fare. A vast majority of technology used in design or organizations today is based on a Maginot line concept of “permanent” or at best “semi-perma-nent” structures. If the reasoning in this paper is only half-correct, the trend is toward the concept of flexible task-responsive “mobile warfare” ca- pabilities. (1974:83)
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. This is the structure for a population growing ever better educated and more specialized, yet under constant exhortation to adopt the “systems” approach—to view the world as an integrated whole instead of a collection of loosely coupled parts. It is the structure for environments that are becoming more complex and de- manding of innovation, and for technical systems becoming more sophisti- cated and highly automated. It is the only structure now available to those who believe organizations must become at the same time more democratic yet less bureaucratic.
Yet despite our current infatuation with it, Adhocracy is not the struc- ture for all organizations. Like all the other configurations, it too has its place. And that place, as the examples of this chapter make clear, 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. Stinchcombe’s descen- dants, should they choose sometime during the twenty-first century to verify his conclusion of 1965 that organizational structure reflects the age of founding of the industry, will no doubt identify Adhocracy as the configu- ration of the last half of the twentieth century.
Source: Mintzberg Henry (1992), Structure in Fives: Designing Effective Organizations, Pearson; 1st edition.