Mintzberg's practical application of structural contingency research

Exploring the factors that contribute to building effective organizations, Mintzberg (1981) found that problems in organizational design come from two mistaken assumptions: 1) that organizations are alike, and 2) that effective organizations have coherent component parts. Instead, organizational characteristics fall into natural configurations, which are simple structure, machine bureaucracy, professional bureaucracy, divisionalized form, and adhocracy. Mintzberg explores the natural configurations of organizations that result from elements of structure and situation to discover that consistency, coherence, and fit are the keys to successful organizational design. Mismatched characteristics within these configurations will prevent an organization from achieving a natural harmony, hindering performance.

Configurations and fit

Consolidating structural contingency research, Mintzberg provides a practical tool for helping managers determine the proper fit for environmental contingencies.  Following is a summary of Mintzberg's configurations, with a discussion of the ideal fit for each.

Simple structure.

In a simple structure, a few top managers direct the activities of a core group of employees. Commonly seen in entrepreneurial companies, the simple structure has minimal staff or middle line workers, little standardization, and makes limited use of planning, training, or liaison devices. This lean and flexible structure can foster fundamental creativity while allowing the organization to outmaneuver bureaucracies in a dynamic environment. However, strict centralization threatens the long-term viability of the simple structure. Nearly all organizations start as simple structures with chief executives exercising considerable power. Simple structures abhor standardization, yet age and growth compel an organization to bureaucratize or remain dependent on the founder's survival. Highly autocratic, the simple structure is out of fashion, but is a fit for startup organizations, for organizations in dynamic and straightforward environments, and for organizations that face extreme and hostile pressures.

Machine bureaucracy.

A machine bureaucracy emerges as situational factors like age, growth, stable environment, and external controls drive an organization to coordinate work through standardization. Franchises like McDonald's, In-and-Out, and Starbucks serve as classic examples of machine bureaucracies because they have achieved success through meticulous standardization that produces cheap and efficient products. Despite being the most prevalent of the five configurations, the machine bureaucracy produces monotonous work, isolates employees, becomes obsessed with controlling markets and workers, and produces inflexible organizations.

Professional bureaucracy.

The professional bureaucracy coordinates activities by standardizing the skills of employees rather than processes. This design uses an operating core of highly trained professionals with a substantial operating staff. Used in hospitals, universities, legal firms, and other organizations operating in stable but complex environments, the professional bureaucracy decentralizes authority, putting power in the professionals and in the associations and institutions that train the professionals. The support staff handles the routine tasks that the professionals delegate. A parallel autocratic hierarchy emerges to control the staff. Standardization allows professionals to perfect skills and to develop autonomy. However, the professional bureaucracy restricts the organization's ability to adapt if the environment becomes unstable, does not produce integrated entities, and has difficulty quantifying goals.

Divisionalized form.

The divisionalized form emerges when an organization needs to coordinate the activities of parallel operating units, which are led by autonomous middle-line managers. An organization divisionalizes to create semi-autonomous market-based units for diversified products while retaining centralized power. External controls from headquarters tend to push the divisionalized form toward machine bureaucracy, which discourages risk-taking and innovation while spreading consequences among divisions. As the organization grows, power tends to be gathered into a few hands, encouraging irresponsible practices. The divisionalized structure is fashionable, used throughout the Fortune 500 and in European companies. Hospital systems, unions, and government entities have also adopted the divisionalized structure. However, the divisionalized structure seems unsuited for professional environments because

• successful divisionalization requires measurable goals and
• the professionals in these organizations resist the resulting technocratic controls and top-down decision making that result from divisionalization.

Adhocracy.

The opposite of bureaucracy, adhocracy, is a structure in which power and control dynamically shift by mutual adjustment among competent professionals. While the experts in a professional bureaucracy work autonomously to perfect their skills, the experts in an adhocracy work as teams to create things. The adhocracy distributes power unevenly into the hands of the experts needed for a particular decision. Abundant managers have a narrow span of control, serving as experts who not only work with the teams but who also link the teams. The power base in adhocracy is in proficiency rather than authority, which erases the distinction between line and staff while engaging everyone in strategic management.

Adhocracies are a fit for organizations operating in complex and dynamic environments, which require sophisticated innovation and cooperative efforts from functionally diverse experts. While adhocracy can be extraordinary at innovation, the structure has difficulty accomplishing the ordinary because it requires inefficiency to be effective, is flooded with managers, requires resource-intensive communication and relationship systems, seemingly takes forever to accomplish simple tasks so that everyone can contribute, and is rife with the ambiguity that causes conflict and political behavior.

Most organizations have characteristics from each configuration, but one likely dominates.

Configurations as diagnostic tools

Mintzberg points out that virtually all organizations experience the pulls that underlie the five configurations, as follows: top management pulls to centralize power, the technostructure pulls to formalize, the operators pull to professionalize, the middle management pulls to break the organization into hostile units, and the support staff pulls to collaborate. The organization tends to organize close to one of these configurations; if one pull fails to dominate, organizational designers may need to balance two. To improve the organizational design, managers should consider the pulls of their organizations to discover the configuration that serves as the best fit among component parts.

To design an effective organization, Mintzberg says that managers must find the proper fit among the parts, elements, and structure of the organization, which all should be in harmony with the situational factors that affect the organization. Managers should be less concerned about which configuration to use and more concerned about achieving configuration. In other words, managers should design organizations by fit, not fashion, pick the structure that fits the organization or create a new configuration.