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Economics and Organsations
Week 6
Mintzberg’s Contingency Approach
– Structural Configurations
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5 Basic ‘Pulls’ within an Organisation
See H6b
Fig IV-1
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5 Basic ‘Pulls’ within an Organisation
Strategic Apex
Operating Core
Middle Line
-
Technostructure
Support Staff
-
Centralise
Professionalise
Balkanise (divide and
rule)
Standardise
Collaborate
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Structural Configurations
• Combinations of the ‘building blocks’ to form
the actual structural forms organisations
• 5 structural forms
• Each structural form has:
– A dominant part of the organisation
– A key coordinating mechanism
– One of the 5 basic pulls is dominant
• Each structure is a logical configuration
• Not all organisations fit exactly into one of the 5
• There is a strong ‘systems’ approach
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The Simple Structure
Diagrams on H7
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Simple Structure
• Prime coordinating
mechanism
• Key Part
• Main Design
Parameters
• Contingency factors
• Direct supervision
• Strategic Apex
• Centralisation, organic
structure
• Young, small, nonsophisticated technical
system
Simple dynamic
environment
Possibly extreme hostility
Not fashionable
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Features of simple structure
• Risky - depends on single person
• Strong sense of mission/purpose
• Can be seen as restrictive, undemocratic
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Machine Bureaucracy
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Machine Bureaucracy
• Prime coordinating
mechanism
• Key Part
• Main Design
Parameters
• Contingency factors
• Standardisation of processes
• Technostructure
• Behaviour formalisation, job
specialisation, functional
grouping,large units
• Old, large, regulating nonautomated technical system,
simple stable environment
external control
not fashionable
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Features of Machine Bureaucracy
• Obsession with control
• Highly efficient for repetitive tasks in conditions
of certainty
• Serious ‘people problems’ – nature of work –
conflict between engineering efficiency and
individual satisfaction
• Does not react well to change – may need to
revert to simple structure to accomplish major
change
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Professional Bureaucracy
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Professional Bureaucracy
• Prime coordinating
mechanism
• Key Part
• Main Design
Parameters
• Contingency factors
• Standardisation of skills
• Operating Core
• Training, Horizontal job
specialisation,
decentralisation
• Complex, stable environment
Non-regulating, nonsophisticated technical
system
Fashionable
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Features of Professional Bureaucracy
• Frequently seen as a repertoire of standard
programmes, resulting in ‘pigeon-holing’
• High levels of decentralisation, little control of
output or processes, SO recruitment is vital
• Large expenditure on training and development
• Democratic and gives staff autonomy and
empowerment
• Not good at innovation
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Divisionalised Structure
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Divisionalised Structure
• Prime coordinating
mechanism
• Key Part
• Main Design
Parameters
• Contingency factors
• Standardisation of outputs
• Middle line
• Market grouping,
Performance control, limited
vert. Decentralisation
• Diversified markets
(products), old and large,
high power needs of middlemanagers, fashionable
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Structure of Divisionalised firm
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Development of divisionalised firm
Integrated form
By-product form
Related product form
Conglomerate form
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Features of Divisionalised Structure
• Divisions as ‘quasi-autonomous units’
• Each division can take an appropriate structural
form – most common id machine bureaucracy
• Contrast divisionalised with decentralised
• Sharp distinction between HQ and divisional
staff – Strategy and Operations
• Divisionalised structure solves many of the
problems of the large machine bureaucracy
• Divisions can be seen as portfolio of
operations, or an integrated set of units
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The Adhocracy
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• Prime coordinating
mechanism
• Key Part
• Main Design
Parameters
• Contingency factors
• Mutual adjustment
• Support staff (operating core
in Operating adhocracy)
• Liaison devices, organic
structure,selective
decentralisation, horizontal
job specialisation, market and
function together
• Complex, dynamic
environment, often young,
sophisticated operating
system - automated
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Two types of Adhocracy
OPERATING ADHOCRACY –
Innovates and solves problems directly on behalf
of its clients. Admin work and operating work
are blended together
e.g. consultancy firm, advertising agency
ADMINISTRATIVE ADHOCRACY
Undertakes projects to serve itself, so it has its
own operating core
e.g. Research department, Hi-tech companies
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Features of Adhocracy
• Strategy formation is widespread
• Semi-independent and ever-changing work
constellations
• Youth is a condition of adhocracy – so is there
a limit to size?
• Ad has more democracy and less bureaucracy
• There will be ambiguity, interdependence, everchanging relations, few procedures, demanding
personal relationships
• Poor at routine tasks – inefficient – mutual adj
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Concluding pentagon
• Configurations as a set of pulls on any
organisation
• Configurations as ‘pure types’
• Configurations as basis for structural hybrids
• Configurations as basis for structural transition
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Mintzberg’s
Concluding
Pentagon
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Some important Hybrids
• Professional Adhocracy – reaction to growth
and age in adhocracy – this may undermine its
strongest feature, innovation
• Administrative Bureaucracy may even move
toward machine bureaucracy to cope with
routine – and isolate creative sections from
routine – e.g. University Research Centre
• White collar machine bureaucracy – has
elements of professional bureaucracy
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Beyond Five!
A sixth configuration
Mission Configuration
• Prime coordinating mechanism – Socialisation
or Standardisation of Norms
• Key Part – Ideology or organisation culture
• Main Design Parameters - indoctrination
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Strengths of Contingency Approach
• Highlights interrelation of organisation,
environment, and technology
• Management can improve organisation
effectiveness by understanding these relationships
and designing appropriate structure
• Gives a useful typology of specie or types of
organisation
• Stresses value of organic forms in innovation
• Modern ecological view stresses interorganisational relations
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Weaknesses of Contingency Approach
• Unrealistic and oversimplified model of managerial
activity
• Causal link between contingency factors and
structure not proven – correlation exists but is
causal?
• Causality may reverse – large org and environment
• Plays down importance of power and choice – very
deterministic
• Simplified versions put too much emphasis on
environment
• Weak at dealing with multiple contingency factors
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• Few tests have taken links as far as
effectiveness
• Lack of precision in defining variables
• The concept of ‘an organisation’ is too concrete
– reflects its functionalist paradigm
• High emphasis on functional interdependence –
but organisations demonstrate schism and
conflict
• Theory originally intended as positive, but
frequently used as normative – ‘one best way’
for a specific organisation?
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Comments on Case Study Approach
• Usually involve insights from more than one
theory
• Require thought, insight and lateral thinking
• No simple ‘correct’ answer – assumptions
• Require more thought and less writing
• Theory to be used not repeated
• Usually improved answers if discussed with
other(s) before writing
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The Symphony case – real company
but disguised
SRI
• Develops new seeds and initial basic seed
• Largest UK see breeder
• 95% of income from royalties from SSS
• 10 years to bring new seed to market –
• Bio-technology has reduced this
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SSS
• Produces mass quantities of seed – who, how?
• Selling company
• Three broad ranges of seeds – cereals, forage
crops and potatoes
• 30+ full-time salesmen – plus large back-up
staff
• Uses agricultural merchants as distributors