Strategic Management: Formulation and Implementation

Mintzberg's Model

A strategically oriented structure should take into account the impact of several organizational and organizational related variables. A model that ties the shape of the organization to these variables was provided by Henry Mintzberg.

Structure is defined by Henry Mintzberg as "the sum total of the ways in which it (an organization) divides its labor into distinct tasks and then achieves coordination among them". He believed that any size organization has five major parts: strategic apex (top management), middle line (middle management), support staff (clerical, maintenance, and mailroom employees), and operating core (all workers).

Minztberg further suggested that, depending on several contingencies (e.g., age, size, strategy, and goals). these five parts assume different degrees of importance in different organizations. Therefore, he has described five structural configuration, each of which is suitable for organization at certain stages of development and in particular environmental circumstances.

Organizational design requires the fitting together of three of elements: first the responsibility of managers to coordinate the work of the organization; second situational elements the age and size of the organization, the technical system (which structure jobs and activities, the environment, and the power of managers: third, structural elements specialization of jobs, formalization of behaviour (bureaucratic or organic) grouping, unit size, and decentralization.

Managers fit the three elements together to form an organization: the results is one of five different configuration or ideal types of structures:

Simple Structure (coordination by direct supervision)
The Simple Structure... has little or no technostructure, few support staffers, a loose division of labor, minimal differentiation among its units, and a small managerial hierarchy. Little of its behavior is formalized, and it makes minimal use of planning, training, and the liaison devices. ... Coordination in the Simple Structure is effected largely by direct supervision...
Thus, the strategic apex emerges as the key part of the structure; indeed, the structure often consists of little more than a oneman strategic apex and an organic operating core.
Machine Bureaucracy (coordination by standardization of work)
...highly specialized, routine operating tasks, very formalized procedures in the operating core, a proliferation of rules, regulations, and formalized communication throughout the organization, largesized units at the operating level, reliance on the functional basis of grouping tasks, relatively centralized power for decision making, and an elaborate administrative structure with a sharp distinction between line and staff.
Professional Bureaucracy (coordination by standardization of skills)
... The Professional Bureaucracy relies for coordination on the standardization of skills and its associated design parameter, training and indoctrination. It hires duly trained indoctrinated specialists professionals for the operating core, and then gives them considerable control over their own work. ...Control over his own work means that the professional works relatively independently of his colleagues, but closely with the clients he serves.
Divisionalized Form (coordination by standardization of outputs)
... The Divisional Form relies on the market basis for grouping units at the top of the middle line. Divisions are created according to markets served and are then given control over the operating functions required to serve these markets. .... so that each can operate as a quasiautonomous entity, free of the need to coordinate with the others.
Adhocracy (coordination through mutual adjustment)
In adhocracy, we have a fifth distinct structural configuration: highly organic structure, with little formalization of behavior; high horizontal job specialization based on formal training; a tendency to group the specialists in functional units for housekeeping purposes but to deploy them in small marketbased project teams to do their work; a reliance on the liaison devices to encourage mutual adjustment the key coordinating mechanism within and between these teams; and selective decentralization to and within these teams, which are located at various places in the organization and involve various mixtures of line managers and staff and operating experts. To innovate means to break away from established patterns. So the innovative organization cannot rely on any form of standardization for coordination.

The point of the five configurations is that top management should design an organization to achieve harmony and fit among key elements. Specific organizational characteristics associated with the appropriate configuration for strategy implementation are summarized in Exhibit 32. Managers can implement strategy by designing the correct structural configuration.

An additional idea proposed by Mintzberg is that, for an organization to be effective, it must manage the interplay of seven basic forces:

Direction
which is the sense of vision and mission for the organization.
Efficiency
which is the need to minimize costs and increase benefits.
Proficiency
means carrying certain out tasks with a high level of knowledge and skill.
Innovation
the organization's need to develop new products and services to adopt to the external environment.
Cooperation / culture
which is the result of common culture values and reflects the need for harmony and cooperation among a diverse set of people.
Competition
which can cause politics and a splitting apart of individuals and departments because of the need for individual success and recognition.

An important purpose of organizational form is to enable an organization to achieve the right balance among the seven forces.