Agenda 42209

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Agenda 4/22/09

• Mintzbergs The Structuring of Organizations
• YMCA case questions
• Project questions?
• Al Dunlap case

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Mintzberg - The Structuring of Organizations
Main point
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Mintzberg - The Structuring of Organizations
Organizational configurations naturally
occurring structures, resulting from clusters of
organization-related components that tend to
occur together. Strategic implication
organizational variables (external as well
as internal) are interdependent and thus, must
be appropriately combined.
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Elements of configuration ?a massive contingency
theory

• 6 Basic organizational parts
• 6 Coordinating mechanisms 7
• configurations
• 4 Essential parameters of design
• 4 Situational factors

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The Froelich Model
Environment ? External strategic
fit Strategy ? Structure
? Systems Internal strategic fit
? Processes ? Leadership style
. . .
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• Environment
• ?
• Strategy
• ?
• Configuration
• ?
• (Key part of organization)
• ?
• (Prime coordination mechanism)

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6 Basic Organizational Parts(see Figure 1)

• 1. Strategic apex
• 2. Technostructure
• 3. Support staff
• 4. Middle line
• 5. Operating core
• 6. Culture/ideology

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6 Coordinating Mechanisms(see Figure 2)

• 1. Mutual adjustment
• 2. Direct supervision
• 3. Standardization of work
• 4. Standardization of outputs
• 5. Standardization of skills
• 6. Standardization of norms

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4 Essential Parameters of Design

• 1. Design of individual positions
• - job specialization (horizontal vertical)
• - behavior formalization
• - training
• - indoctrination
• 2. Design of superstructure
• - unit grouping (functional, divisional)
• - unit size

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4 Essential Parameters of Design (continued)

• 3. Design of linkages
• - planning and control systems
• - liaison devices
• 4. Design of decision-making system
• - centralization vs.
• - decentralization (horizontal vertical)

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4 Situational Factors

• 1. Age and size
• - age ? ? formalization
• - size ? ? formalization, ? specialization
• 2. Technical system
• - mass production ? ? specialization,
• ? formalization
• - complexity ? ? professional support,
• ?autonomy, ? liaison devices

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4 Situation Factors (continued)

• 3. Environment
• - rapid ? ? organic structures
• - complexity/diversity ? ?decentralization
• - hostility, crisis ? ? centralization
• 4. Power
• - external power ? ? centralization,
• ? formalization
• - conflict ? ? organizational politics

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Summary . . .

• Situational factors are more like existing
  structural determinants
• Organizational parts, coordinating mechanisms,
  and design parameters are more like structural
  variables where managers exercise choices in
  their structuring of organizations.

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7 Configurations (see Table 1)

• 1. Entrepreneurial
• 2. Machine
• 3. Diversified
• 4. Professional
• 5. Innovative
• 6. Missionary
• 7. Political

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The Entrepreneurial Configuration

• Basic structural attributes
• Key part
• Other basic parts are quite undeveloped, except
  operating core
• Simple, flat structure
• Primary coordinating mechanism
• High level of centralization
• Low levels of specialization, formalization

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Entrepreneurial Organizations
Significance/Advantages
Disadvantages
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Process of strategy formulation in an
entrepreneurial organization

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Mintzbergs perspective . . .

• The conception of a new strategy is an
• exercise in synthesis, which is typically best
• carried out in a single, informed brain.
• The entrepreneurial approach is at the center of
  the most glorious corporate successes.

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Strategic change in entrepreneurial
organizations

• CONTROLLED BOLDNESS - simultaneous
  formulation/implementation in early strategy
  development stages
• INFREQUENT BOLDNESS - unfreezing/changing/refree
  zing
• FOLLOWED BY OBSESSION

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Beware of . . .

• assuming that all management prescriptions are
  appropriate for entrepreneurial firms (which far
  outnumber large firms).
• eroding key advantages (low administrative
  overhead, innovation, new visions, rapid
  response, task variety, more personalized work
  environment, organizational commitment, strong
  culture, strategic intent) of the entrepreneurial
  firm with trappings of the machine
  configuration.

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The Machine Organization

• Key part
• Main coordinating mechanism

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Roles of some basic parts of the machine . . .

• Operating core
• Technostructure
• Middle line
• Strategic apex

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Examples of machines Impressions of the
machine. . . . Advantages Disadvantages

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Machine organizations . . .

• Obsessed with control of its processes, and
  even environment as related to its processes ?
  closed system tendencies
• Major vulnerability lack of major ?
• (High efficiency requires a very tight internal
  strategic fit!)
• Question Is the machine mentality taking
  over?
• Globalization ? mega-machines!

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The Diversified Configuration

• Major differences compared to machine?
• Advantages? Disadvantages?
• Key part
• Main coordinating mechanism

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Strategy-making in diversified organizations

• Roles of HQ
• - performance control coordination via
• standardized output control (financial
• measures)
• - corporate strategy development
• - resource allocation
• - appointment of division managers
• - support services

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Strategy-making in diversified organizations

• Roles of division managers
• (implied/relative decentralization)
• - business-level strategy
• - fully develop the division
• - tell and sell to HQ
• - fit in to the corporate strategy
• - drives organization toward machine

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How does the innovative configuration differ
from machine-type?

• Key part
• Primary coordinating mechanism
• Distinguishing characteristics

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How does operating adhocracy differ from
administrative adhocracy?

• Operating
• adhocracy
• blending operating
• administrative work
• directly serves clients
• design firms, creators
• of entertainment

• Administrative
• adhocracy
• split between
• operating
• administrative work
• latter is the adhocracy
• serves own operations
• pharmaceutical firms

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Evaluating the adhocracy form . .

• Advantages
• The 6 Fs -
• flat, flexible, fluid, fresh,
• fashionable, fulfilling . . .

• Disadvantages

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Strategy-making in an adhocracy

• emergent strategies strategies as patterns
  umbrella strategies
• thought and action are closely linked
• continuously evolving
• project decisions often strategic decisions
• key role for teams of experts
• MUST AVOID TRAPPINGS OF THE MACHINE TO BE
  SUCCESSFUL

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Role of strategists in adhocracies

• maintain an opportunity orientation
• recognize and articulate patterns (that provide
  good strategic fit)
• encourage/guide/package the weeds in the garden
• provide adequate structure and continuity
• like trying to drive a car without controlling
  the steering wheel

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The Professional Configuration

• Examples
• Key part WHY?
• Primary coordinating mechanism
• WHY?

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Evaluating the professional configuration . . .

• Advantages

• Disadvantages

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Strategy-making in professional organizations

• broadly stable, yet minutely dynamic
• professional judgement influences the mission as
  it is elaborated and implemented
• important roles for professional standards and
  professional autonomy, facilitated by the
  marketplace for professionals
• collective choice decision-making processes

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Sources of administrator power in professional
organizations?

• boundary spanning roles
• information power
• political power
• resource power
• control outcomes by controlling the process
• an overlay of administrative influence and
  administrative fiat

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Issues of control in professional organizations

• Outsiders try to control professionals by
  direct supervision . . . or by standardizing the
  work. All these types of controls do is destroy
  the effectiveness of the work.
• DANGER-intrusions of the machine!

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The Missionary Configuration

• Key part
• Primary coordinating mechanism
• Types/attributes of these organizations

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The Political Configuration

• Inference

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Overall conclusion/value of Mintzbergs
configurations?

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Team projects

• 20 minutes presentation, QA
• ADVANCE outlines/slides, clear bibliography (by
  noon 5/6)
• INTERESTING and INFORMATIVE
• INSIGHTFULLY INTERPRETIVE not merely descriptive
• Reflecting your TEAMS collective and
  increasingly sophisticated understanding of
  strategic management
• Solid supportable conclusion
• Upbeat and professional delivery