1. Economics and Organsations
Week 6
Mintzberg’s Contingency Approach – Structural Configurations

2. 5 Basic ‘Pulls’ within an Organisation
See H6b
Fig IV-1

3. 5 Basic ‘Pulls’ within an Organisation
Strategic Apex - Centralise
Operating Core - Professionalise
Middle Line - Balkanise (divide and rule)
Technostructure - Standardise
Support Staff - Collaborate

4. 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

5. The Simple Structure Diagrams on H7

6. Simple Structure Prime coordinating mechanism Key Part
Main Design Parameters
Contingency factors
Direct supervision
Strategic Apex
Centralisation, organic structure
Young, small, non-sophisticated technical system
Simple dynamic environment
Possibly extreme hostility
Not fashionable

7. Features of simple structure
Risky - depends on single person
Strong sense of mission/purpose
Can be seen as restrictive, undemocratic

8. Machine Bureaucracy

9. 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 non-automated technical system, simple stable environment
external control
not fashionable

10. 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

11. Professional Bureaucracy

12. 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, non-sophisticated technical system
Fashionable

13. 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

14. Divisionalised Structure

15. 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 middle-managers, fashionable

16. Structure of Divisionalised firm

17. Development of divisionalised firm
Integrated form
By-product form
Related product form
Conglomerate form

18. 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

19. The Adhocracy

20. 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

21. 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

22. 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, ever-changing relations, few procedures, demanding personal relationships
Poor at routine tasks – inefficient – mutual adj

23. 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

24. Mintzberg’s Concluding Pentagon

25. 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

26. 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

27. 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 inter-organisational relations

28. 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

29. 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?

30. 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

31. 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

32. 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