1. MSc in EFM – Management Week 2
The Structure of Organisations – Mintzberg’s Contingency Theory

2. Mintzberg’s Approach Described as an ‘extended contingency approach’
Wide-ranging use of theory
Synthesis of many other theories and writers
Need to read ‘Structure in Fives’, or ‘The Structuring of Organisations’

3. Mintzberg’s Model 5 co-ordination methods
5 basic parts to an organisation
Design Parameters
Contingency Factors
5 Pulls or forces
5 structural configurations
The Concluding Pentagon

4. 5 Basic Co-ordination Mechanisms
Mutual adjustment – person-to-person
Direct supervision – an individual directly responsible for the work of others
Standardisation of work processes – how the job is actually to be done
Standardisation of Outputs – the outputs of the process (goods or services)
Standardisation of Skills – Input levels are controlled rather than outputs

5. 5 Basic Parts to an Organisation
Operating core – staff who carry out the main operations of the organisation
Strategic Apex – group that decides overall strategy, chooses other managers and manages interface with environment
Middle-line – link between operating core and strategic apex
Technostructure – staff who determine the way in which work is carried out, but do not directly manage the processes
Support Staff – all other staff who support the work of the other four parts

6. 5 Parts of the Organisation

7. Design Parameters
Choices made by senior management as they design the structure of the organisation
9 parameters in 4 sets
Design of Positions
Design of Superstructure
Design of lateral linkages
Design of decision-making system

8. A - Design of Positions See Handout of Terminology
1. Job specialisation
Horizontal and Vertical, and Job enlargement
Behaviour formalisation
Formalisation by job
Formalisation by work-flow
Formalisation by rules
3. Training and Indoctrination

9. B - Design of Superstructure The formal structure of the organisation
Unit grouping on many different bases:
Knowledge or skill, function, output, time, place
Two major bases are by: Function or Market
Unit Size – large literature – see Textbook
“How many individuals can rep0rt to one manager?” – ‘span of control
“Tall v Flat” structures

10. 2 Hypotheses re Unit size
The greater the use of standardisation for coordination, the larger the size of the work unit
The greater the reliance on mutual adjustment (due to interdependencies in complex tasks), the smaller the work unit

11. C – Design of Lateral Linkages
Many structures are mainly vertical, but this will not suffice. There needs to be lateral communication links.
i Planning and Control Systems.
“Performance control aims ‘to regulate the overall results of a given unit’”
Budgetary control
Setting financial/operational targets

12. ii Liaison Devices – to improve lateral communication and decision making
Liaison positions
Task forces
Standing committees
Integrating managers
Matrix structures

13. D – Design of Decision Making System
Degree of Decentralisation
Reasons for decentralisation:
Information processing
Timeliness
Closeness to decision situation
Training for managers
Vertical and Horizontal decentralisation

14. CONTINGENCY FACTORS
Is there a relationship between Structure and effective performance of the organisation?
If so, What determines this relationship?
This leads to the quest for ‘contingency factors that help to explain how structure and effective performance are related
‘Contingency Factors’ are organisational states or conditions that are associated with the use of certain design parameters, and thus with organisational structure’

15. Two hypotheses re |Contingency Factors
Congruence Hypothesis – effective structuring requires a close fit between contingency factors and design parameters, I.e.to be effective, design must match the situation
Configuration Hypothesis – Effective structuring requires an internal consistency among the design parameters, u.e.design must be on a logical basis

16. Contingency Factors 4 Sets of Contingency factors
Expressed as 16 Hypotheses
Hypotheses are based on substantial empirical evidence – this is one of the key strengths of Mintzberg’s approach
See handout for full version of the hypotheses

17. A – Age and Size Older  More formalised
Structure reflects age of founding of industry
Larger unit  more elaborate structure; more differentiated, and more administrative
Larger the unit  larger size of average unit
Larger the organisation  more formalised behaviour

18. B – Technical System
More regulating technical system  more formalised operations  more bureaucratic structure in operating core
More sophisticated technical system  more elaborate administrative structure
Automation of operating core  organic structure (not bureaucratic)

19. C - Environment More dynamic environment  organic structure
More complex environment  decentralised structure
More diversified markets  market-based units (divisionalised)
Extreme hostility  centralisation, temporarily
Disparities in environment  decentralisation, probably as divisions

20. D – Power and Other
Greater external control  more centralised and formalised
Power needs of managers  excessive centralisation
Fashion favours the structure of the day, even when inappropriate

21. Conclusion Design parameters represent choices, but not free choice.
Congruence hypothesis says that the choices must be appropriate to contingency factors
Congruence hypothesis says choices must be internally consistent.