Prof Jitendra MohantyKIIT School of Management

Bhubaneswar

Adhocracy: A Closer Look

As organizations take on increasingly demanding, innovative, and complex activities, they will very likely turn to adhocracy

Pure adhocracy an abstractionNo pure adhocracy – only variants of

adhocracy are seenNumber of design configurations of adhocracy

available

The MatrixSpecialists 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 MatrixMatrix 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 specialistsCreates increased ability to respond rapidly to

change in the environment Ensures timely project completionCost control for economic efficiencyDevelopment of technical capability for future Increased motivation for professionals through

a platform of democratic and scientific norms

Weaknesses of matrixCreates confusion, propensity to foster power

struggles, stress it places on individualsAbsence of unit of command leads to ambiguity

– increased ambiguity leads t conflictProject managers fight to get best of specialists

– power struggle ensuesHigh stress experienced by individuals who

seek security and certaintyMultiple reporting results in role conflict –

unclear expectations produce role ambiguity

Theory ZWilliam Ouchi:

American version of the Japanese model ( IBM, HP, P & G etc)

Theory A : 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 OrganizationsLT 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 FormAllows 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 problemsThis is creating adhocracy within bureaucracyThe 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 StructureA 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 bestManagers 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 f organizational subunits

The Committee Form: This form arises whenA decision requires broad range of

experience and backgroundsAll affected by decision need to be

representedDesirable to spread the workloadDuring management transition when no

single individual is ready to lead organization

Committees may be temporary or permanentTemporary committee same as task forcePermanent 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 FormForm of adhocracy fashionable in universities,

research labs, highly professional organizationsFull 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 t adapt rapidly to changing needs of work