Adhocracy: A Closer Look

Prof Jitendra Mohanty

KIIT School of Management
Bhubaneswar
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 unit of command leads to ambiguity –
increased ambiguity leads t 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 A Theory J
Theory Z
 William Ouchi: American
ST employment Life-time
version of the Japanese employment
model ( IBM, HP, P & G Specialized career Non-specialized
paths career paths
etc)
Individual decision Consensual
 Theory A : Adapted to making decision making
handle high rates of Individual Collective
responsibility responsibility
employee turnover – creates
Frequent appraisal Infrequent appraisal
mechanistic bureaucracy
 Theory J: To handle low Explicit, formalized Implicit, informal
appraisal appraisal
turnover – mirrors adhocracy
Rapid promotion Slow promotion

Segmented concern Comprehensive

for people concern for people
Theory Z: Japanese Theory Z Organizations

model adapted to fit into LT Employment

American culture Moderately specialized career paths

Essentially adhocratic Consensual decision making
Complexity low –
Individual responsibility
excessive layers
Infrequent appraisal
unnecessary
LT loyalty and team Implicit, informal appraisal with
explicit, formalized measures
works stressed
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 Adhocracy
Task 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 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 t adapt rapidly to changing
needs of work