The Effective Organization: Forces and Forms

WHAT MAKES an organization effective? For a long time we thought we had the answer. Frederick Taylor told us about the “one best way” at the turn of the century, and organizations long pursued this holy grail. First it was Taylor’s time and motion studies, later the participative management of the human relations people, in more recent years the wonders of strategic planning. It was as if every manager had to see the world through the same pair of glasses, although the fashion for lenses changed from time to time.

Then along came the so-called “contingency theorists,” who argued that “it all depends.” Effective organizations designed themselves to match their conditions. They used those time and motion studies for mass production, they used strategic planning under conditions of relative stability, and so forth. Trouble was, all this advice never came together: managers were made to feel like diners at a buffet table, urged to take a little bit of this and a little bit of that.

In a way, these two approaches to organizational effectiveness are reflected in the most popular management writings of today. I like to call them “Peterian” and “Porterian.” Tom Peters and Robert Waterman implore managers to “stick to their knitting” and to design their structures with “simultaneous loose-tight properties,” among other best ways, while Michael Porter insists that they use competitive analysis to choose strategic positions that best match the characteristics of their industries.1 To Porter, effectiveness resides in strategy, while to Peters it is the operations that count— executing any strategy with excellence.

While I agree that being effective depends on doing the right thing as well as doing things right, as Peter Drucker put it years ago, I believe we have to probe more deeply to find out what really makes an organization effective. We need to understand what gets it to a viable strategy in the first place, what makes it excellent once it’s there, and how some organizations are able to sustain viability and excellence in the face of change.

Some years ago I thought I had another answer. I argued that effective organizations “got it all together.” By choosing “configuration,” they brought their various characteristics of structure, strategy, and context into natural co-alignment.2 For example, some achieved integration as efficient machines, while others coalesced around product innovation. In a sense, these organizations played jigsaw puzzle, fitting all the pieces of their operations into one neat image.

Recently, however, I have begun to wonder about configuration. There are certainly many effective organizations that seem to fit one image or another—IBM as that “big blue” machine, 3M as the product innovator. But some rather effective organizations do not, and even those that do sometimes confound things. How does that big blue machine come up with critical adaptations when it has to, and why does 3M have those tight financial controls? Thus I have begun to consider another view of organizational effectiveness, in which organizations do not slot themselves into established images so much as build their own unique solutions to problems. “Do your own thing” is its motto, LEGO its metaphor.

This article builds a framework around these two approaches. It proposes that the effective organization plays LEGO as well as jigsaw puzzle. The pieces of the game are the forces that organizations experience; the integrating images are the forms that organizations take. Together, they constitute a powerful framework by which to diagnose and deal with the problems organizations face. Below I introduce the forces, as the basic building blocks of all organizations. Then I shall outline the framework that is to follow.

A System of Forces

Much of what happens in organizations can, in my experience, be captured by the interplay of seven basic forces. I array five of these around the outside of a pentagon and put two in the middle, as shown in Figure 1. They are described below.

  • First is the force for direction; this gives a sense of where the organization must go as an integrated entity. Without such direction—which today is apt to be called strategic vision, years ago grand strategy—the various activities of an organization cannot easily mesh to achieve common purpose.
  • Next is the force for efficiency, which attempts to ensure a viable ratio of benefits gained to costs incurred. Without some concern for efficiency, all but the most protected of organizations must eventually falter. Efficiency generally means standardization and formalization; often it reduces to economy. In current practice, it focuses on rationalization and restructuring, among other things.
  • Across from the force for efficiency is that for proficiency—for carrying out certain tasks with high levels of knowledge and skill. Without proficiency, the difficult work of organizations—whether surgery in the hospital or engineering in the corporation—just could not get done.
  • Below efficiency is the force for concentration— for particular units to concentrate their efforts on serving particular markets. Without such concentration, it becomes difficult to manage an organization that is diversified.
  • At the bottom right is the force for innovation. Organizations need central direction and focused concentration, and they need efficiency and proficiency. But they also need to discover new things for their customers and themselves—to adapt and to learn.
  • Finally, inside the pentagon are two forces I call catalytic: cooperation and competition. One describes the pulling together of ideology, the other the pulling apart of politics. By ideology, I mean more than just the culture of an organization, I mean the rich culture of norms, beliefs, and values that knit a disparate set of people into a harmonious, cooperative entity. By politics I mean behaviour that is technically not sanctioned or legitimate. It acts outside the bounds of legal authority and acknowledged expertise and therefore tends to be conflictive in nature. No serious organization is ever entirely free of politics, few perhaps of at least some vestiges of ideology.

This article’s view of organizational effectiveness will be developed as follows. Taking these forces as fundamental and their interplay as key to understanding what goes on in organizations, I shall argue first that when one force dominates an organization, it is drawn toward a coherent, established form, described as configuration. That facilitates its management, but also raises the problem of contamination. When no single force dominates, the organization must instead function as a balanced combination of different forces, including periods of conversion from one form to another. But combination raises the problem of cleavage. Both contamination and cleavage require the management of contradiction, and here the catalytic forces, cooperation and competition, come into play. But these two forces are themselves contradictory, and so the effective organization must balance them as well. Put this all together and you get a fascinating game of jigsaw puzzle-cum-LEGO. This may seem complicated, but bear with me; reading about it here will prove a lot easier than managing it in practice. It may even help!

Configuration

Charles Darwin once wrote about “lumpers” as opposed to “splitters—synthesizers who think in broad categories and prefer to slot things into well-established pigeonholes, as opposed to analyzers who tend to split things up finely3 In a way, of course, we are all lumpers: we all like neat envelopes into which we can put our confusing experiences.

It is ironic, therefore, that in the field of management we do not have established categories by which to distinguish different organizations. Imagine biology without some system of species to consider living things. Biologists might well end up, for example, debating the “one best dwelling” for all mammals—bears as well as beavers. Silly as this example may seem, that is what we do in management all the time.

Configuration refers to any form of organization that is consistent and highly integrated. In the spirit of the jigsaw puzzle, a configuration is an image whose pieces all fit neatly together.

A Portfolio of Forms

In principle, all kinds of configurations are possible. In practice, however, only a few seem to occur commonly.

Our pentagon contains seven forces. I believe that configuration occurs when any one of these forces dominates an organization, driving it to a corresponding form. That gives us seven basic forms, described below, five of which are shown at the nodes of the pentagon, in Figure 2.

  • The entrepreneurial form tends to occur when the force for direction dominates an organization, so that the chief executive takes personal control of much of what goes on. This happens especially in startup and turnaround situations, both of which require the imposition of strong vision from the top; it also happens in small, owner-managed companies. As a result, there are few middle management and staff positions, or else they are relatively weak. As a turnaround example, when Jan Carlzon took over the airline SAS in the early 1980s, he established direct links with the operating employees, bypassing much of the established administration and dispensing with many of the standard control systems in order to impose his new vision.
  • The machine form tends to appear when the force for efficiency becomes paramount; this typically occurs in mass production and mass service organizations (automobile companies, retail banks, etc.) and in ones with an overriding need for control (as in nuclear power plants and many government departments). Here, especially in the larger, more mature organization, middle management and staff functions are fully developed; they focus on regulating the work of the operating employees by imposing rules, regulations, and standards of various kinds.
  • The professional form tends to arise when proficiency is the dominant force, as in hospitals, accounting practices, and engineering offices. What matters here is the drive to perfect existing skills and knowledge, rather than to invent new ones. This makes the professional organization a consummate pigeonholer: the hospital, for example, prefers to diagnose entering patients as quickly as possible so that it can get on with administering the most appropriate standardized treatment. This characteristic allows for the considerable autonomy found in these organizations: each professional works remarkably free of his or her colleagues, let alone of the managers ostensibly in charge.
  • The adbocracy form develops in response to an overriding need for innovation. Again we have an organization of skilled experts. But here, because the organization exists to create novelty—such as the unique film or the new engineering prototype—the experts must combine their efforts in multidisciplinary project teams. Doing so requires a good deal of informal communication, with the result that the structure becomes fluid, sometimes called “intrapreneurial.” Some adhocracy organizations, such as advertising agencies and think tank consulting firms, innovate directly on behalf of their clients. Others use project work to innovate for themselves, bringing their own new products or facilities on line—for example, some high-technology and chemical firms.
  • The diversified form tends to arise when the force for concentration, particularly on distinct products and markets, overrides the others. Such organizations first diversify and then divisionalize. Each division is given relative autonomy, subject to the performance controls imposed by a small, central headquarters. The diversified form is, of course, best known in the world of large, conglomerate corporations. But when governments speak of accountability, they have much the same structure in mind.
  • The forces for cooperation and for competition can sometimes dominate, too, giving rise to forms I call the ideological and the political. Examples of both are readily available: the spirited Israeli kibbutz is ideological, and the conflictive regulatory agency in which infighting takes over is political. But I believe these forms are not all that common, at least compared with the others discussed above, and so our discussion will proceed from here mainly on the basis of five forms and seven forces, shown in Figure 2.4

Do these forms really exist in practice? In one sense, they do not. After all, they are just words on pieces of paper, caricatures that simplify a complex reality. No serious organization can be labeled a pure machine or a pure adhocracy. On the other hand, we can’t carry reality around in our heads; we think in terms of simplifications, called theories or models, of which these forms are examples. We must, therefore, turn to a second question: whether the forms are useful. And again I shall answer, yes and no.

While no configuration ever matches a real organization perfectly, some do come remarkably close; examples include the highly regulated Swiss hotel and the free-wheeling Silicon Valley innovator. Just as species exist in nature in response to distinct ecological niches, so too do configurations evolve in human society. The hotel guest does not want surprises—no jack-in-the-box popping up when the pillow is lifted, thank you—just the predictability of that wake-up call at 8:00, not 8:07. But in that niche called advertising, the client that gets no surprises may well take its business else where.

My basic point about configuration is simple: when the form fits, the organization may be well advised to wear it, at least for a time. With configuration, an organization achieves a sense of order, of integration. There is internal consistency, synergy among processes, fit with the external context. It is the organization without configuration, much like the individual without personality, that tends to suffer the identity crises.

Outsiders also appreciate configuration; it helps them to understand an organization. We walk into a McDonald’s and know immediately what drives it, likewise a 3M. But more important is what configuration does for the managers: it makes the organization more manageable. With the course set, it is easier to steer, and also to deflect pressures that are peripheral. No configuration is perfect— the professional one, for example, tends to belittle its clients, while the machine one often alienates its workers—but there is something to be said for consistency. Closely controlled workers may not be happier than the autonomous ones of the professional organization, but they are certainly better off than ones confused by quality circles in the morning and time studies in the afternoon. Better to have the definition and discipline of configuration than to dissipate one’s energies trying to be all things to all people.

Moreover, much of what we know about organizations in practice applies to specific configurations. There may not be any one best way, but. there are certainly preferred ways in particular contexts—for example, time studies in machine organizations and matrix structures in adhocracies.

Thus, configuration seems to be effective for classification, for comprehension, for diagnosis, and for design. But only so long as everything holds still. Introduce the dynamics of evolutionary change and, sooner or later, configuration becomes in effective.

Contamination by Configuration

In harmony, consistency, and fit lies configuration’s great strength—and also its debilitating weakness. Experience shows that the dominant force sometimes dominates to the point of undermining all the others. For example, the quest for efficiency in a machine organization can almost totally suppress the capacity for innovation, while in an adhocracy the need for some modicum of efficiency often gets suppressed. I call this phenomenon contamination, although we might just as easily rephrase Lord Acton’s dictum: among the forces of organizations, too, power tends to corrupt and absolute power corrupts absolutely. For example, the story of medical care in the United States could well be described as the contamination of efficiency by proficiency. No one can deny the primacy of proficiency—who would go to a hospital that favors efficiency?—but few people would defend the extent to which it has been allowed to dominate.

Machine organizations recognize this problem when they locate their research and development facilities far from the head office so that their capacity for innovation will not be contaminated by the technocratic staff. Unfortunately, while lead may block X-rays, there is no known medium to shield the effects of a dominant culture. (The controller drops by, just to have a look: “What, no shoes? Can’t they be creative dressed properly?”) Of course, the opposite case is also well known. Just ask its members, “Who’s the most miserable person in an adhocracy?” as I do in workshops with them. The inevitable reply is a brief silence followed by a few smiles, then growing laughter as everyone turns to some poor person cowering in the corner. Of course, it’s the controller. Controllers may wear shoes, but that hardly helps them keep the lid on all the madness.

“Contamination” is another way of saying that a configuration is not merely a structure, not even merely a power system: each is a culture in its own right. Of course, contamination may seem like a small price to pay for being coherently organized. True enough. Until things go out of control.

Configuration out of Control

A configuration is geared not only to a general context but also to specific conditions—for example, a particular leader in an entrepreneurial organization, or a particular product and market in a machine one. Thus, when the need arises for change, the dominating force may act to hold the organization in place. Then other forces must come into play. But because of contamination, the other forces may well be too weak. And so the organization goes out of control. For example, a machine organization in need of a new strategy may find neither the direction of an entrepreneurial leader nor the innovation of intrapreneurial subordinates. And so its internal consistency is perpetuated while it falls increasingly out of touch with its context.

In addition, each configuration is capable of driving itself out of control. That is to say, each contains the seeds of its own destruction. These reside in its dominating force and come into play through the effects of contamination. With too much proficiency in a professional organization, unconstrained by efficiency and direction, the professionals become overindulged (as in many of today’s universities, not to mention medicine); with too much technocratic regulation in a machine organization, free of the force for innovation, an obsession with control arises (as in far too much contemporary industry and government).

My colleagues, Danny Miller and Manfred Kets de Vries, have published an interesting book about The Neurotic Organization.5 They discuss organizations that become dramatic, paranoid, schizoid, compulsive, and depressive. In each case, a system that may once have been healthy has run out of control. Very roughly, I believe these five organizational neuroses correspond to what tends to happen to each of the five forms. The entrepreneurial organization tends to go out of control by becoming dramatic, as its leader, free of the other forces, takes the system off on a personal ego trip. The machine organization seems predisposed to compulsion once its analysts and their technocratic controls take over. Those who have worked in universities and hospitals understand the collective paranoid tendencies of professionals, especially when free of the constraining forces of administration and innovation. I need not dwell on the depressive effects of obsession with the “bottom line” in the diversified organization; the impact on morale and innovation are now widely appreciated. As for the adhocracy organization, its problem is that, while it must continually innovate, it must also exploit the benefits of that innovation. One requires divergent thinking, the other convergent. Other forces help balance that tension; without them, the organization can easily become schizoid.

In effect, each form goes over the edge in its own particular way, so that behaviours that were once functional become dysfunctional when pursued to excess. Alongside excellence go the “perils of excellence.”6 This is easily seen on our pentagon. Remove all the arrows but one at any node, and the organization, no longer anchored, flies off in that direction.

Containment of Configuration

Thus I conclude that truly effective organizations do not exist in pure form. What keeps a configuration effective is not only the dominance of a single force but also the constraining effects of other forces. I call this containment. For example, people inclined to break the rules may feel hard pressed in the machine organization. But without some of them, the organization may be unable to deal with unexpected problems. Similarly, administration may not be powerful in the professional organization, but if it is allowed to atrophy, anarchy inevitably results. Thus, to manage configuration effectively is to exploit one form but also to reconcile different forces. But how does the effective organization deal with this contradiction?

Combination

Configuration is a good thing when you can have it. Unfortunately, some organizations all of the time, and all organizations some of the time, cannot. They must instead balance competing forces.

Consider the symphony orchestra. Proficiency is clearly a critical force, but so too is direction: such an organization is not conceivable without highly skilled players as well as leadership from a strong conductor. The Russians apparently tried a leaderless orchestra shortly after the revolution, but soon gave it up.

I shall use the word combination for the organization that balances different forces. In effect, it does not make it near any one node of the pentagon but instead finds its place somewhere inside.

How common are combinations as compared with configurations? To some extent the answer lies in the eyes of the beholder: what looks like a relatively pure form to one person (a lumper) may look like a combination of forces to another (a splitter). Still, it is interesting to consider how organizations appear to intelligent observers. For several years now, we have sent McGill MBA students out to study organizations in the Montreal area, having first exposed them to, among other things, a book of mine on the five forms of structure. At year end, I have circulated a questionnaire asking them to categorize the organization as one of the forms, a combination of two or more, or neither. In just over half the cases—sixty-six out of one hundred and twenty-three—the students felt that a single form fit best. They identified twenty-five entrepreneurial, thirteen machine, eleven diversified, nine adhocracy, and eight professional organizations. All the rest were labeled combinations—seventeen different ones in all. Diversified machines were the most common (nine), followed by innovative professionals (eight), entrepreneurial professionals (six), and entrepreneurial machines (five).7

Kinds of Combinations

Combinations themselves may take a variety of forms. They may balance just two forces or several; these forces may meet directly or indirectly; and the balance may be steady over time or oscillate back and forth.

When only two of the five forces meet in rough balance, the organization might be described as a hybrid. This is the case with the symphony orchestra, which can be found somewhere along the line between the entrepreneurial and professional forms. Organizations can, of course, combine several forces in rough balance as well.

Consider Apple Computers. It seems to have developed under its founder, Steve Jobs, largely as an adhocracy organization that emphasized new product development. The next CEO, John Sculley, apparently felt the need to temper that innovation; he paid more attention to efficiency in production and distribution. When I presented this framework at an executive program a couple of years ago, an employee of Apple Canada saw other things going on in his operation: he added an entrepreneurial form in sales due to a dynamic leader, professional forms in marketing and training to reflect the skills there, and another adhocracy form in a new venture unit. Organizations that experience such multiple combinations are, of course, the ones that must really play LEGO.

Then there is the question of how the different forces interact with each other. In some cases, they confront each other directly; in others, they can be separated over time or place. The combination in the symphony orchestra must be close and pervasive—leadership and professional skill meet regularly, face-to-face. In organizations like Apple, however, where different units favor different forces, they can act somewhat independently. And some organizations are lucky enough to buffer the effects of the different forces; in newspapers, the more professional editorial function simply hands over its camera-ready copy to the machinelike plant for production, and there is little need for interaction.

Finally, contrasting with the combinations maintained continuously are those that achieve balance in a dynamic equilibrium over time. In other words, power oscillates between the competing forces. Richard Cyert and James March wrote some years ago about the “sequential attention to goals” in organizations, where conflicting needs are attended to each in their own turn.8 For example, a period of innovation to emphasize new product development might be followed by one of consolidation to rationalize product lines. (Might Apple Computers simply be in one of these cycles, the innovation of Jobs having been replaced by the consolidation of Sculley? Or will Sculley himself be able to get the organization to balance these two forces?)

Cleavage in Combinations

Necessary as it may sometimes be, all is not rosy in the world of combination. If configuration encourages contamination, which can drive the organization out of control, then combination encourages cleavage, which can have much the same effect. Instead of one force dominating, two or more forces confront each other and eventually paralyze the organization.

In effect, a natural fault line exists between any two opposing forces. Pushed to the limit, fissures begin to open up. In fact, Fellini made a film with exactly this theme. Called “Orchestra Rehearsal,” it is about musicians who revolt against their conductor, and so bring on complete anarchy, followed by paralysis. Only then are they prepared to cooperate with their leader, because only then do they realize he is necessary to perform effectively. But one need not turn to allegories to find examples of cleavage. It occurs in most combinations—for example, in the classic battles between the R&D people, who promote new product innovation, and the production people, who want to stabilize manufacturing for operating efficiency. Cleavage can, of course, be avoided when the different forces are naturally buffered, as in the newspaper example. But few combination organizations are so fortunate.

I have discussed combination as if it is unavoidable in certain organizations, but implied that configuration is advantageous where possible, because it is more easily managed. But in reality, combination of one kind or another is necessary in every organization. The nodes of the pentagon, where the pure configurations lie, are only imaginary ideals. Indeed, any organization that reaches one is probably on its way out of control. It is the inside of the pentagon that has die space; that is where the effective organization must find its place. Some may fall close to one of the nodes, as configuration, more or less, while others may sit between nodes as combinations. But ultimately, configuration and combination are not so very different: one represents a tilt in favor of one force over others, the other more of a balance between forces. The question thus becomes again: how does the effective organization deal with the contradiction?

Conversion

So far our discussion has suggested that an organization finds its place in the pentagon and then stays there, more or less. But, in fact, few organizations get the chance to spend their entire lives in one place: their needs change, and they must undergo conversion from one configuration or combination to another.

Any number of external changes can cause such a conversion. An adhocracy organization may chance upon a great invention and settle down in machine form to exploit it. Or the stable market of a machine organization may suddenly become subject to so much change that it has to become innovative. Some conversions are, of course, temporary; the machine organization in trouble, for example, becomes entrepreneurial for a time to allow a forceful leader to impose new direction (so-called turnaround). This seems to describe Chrysler’s experience when Iacocca arrived, as well as SAS’s when Carlzon took over.

Cycles of Conversion

Of particular interest here is another type of conversion, which is somewhat predictable in nature because it is driven by forces intrinsic to the organization. Earlier I discussed the seeds of destruction contained in each configuration. Sometimes they destroy the organization, but sometimes they destroy only the configuration and drive the organization toward a more viable form. For example, the entrepreneurial form is inherently vulnerable, dependent as it is on a single leader. It may work well for the young organization, but with aging and growth the need for direction may be displaced by the need for efficiency. Then conversion to the machine form becomes necessary—the power of one leader must be replaced by that of numerous administrators.

The implication is that organizations often go through stages as they develop—if they develop— possibly sequenced into life cycles. In fact, I have placed the forces and forms on the pentagon to reflect the most common of these, with the simple, earlier stages near the top and the more complex ones lower down.

What appears to be the most common life cycle, especially in business, occurs around the left side of the figure. Organizations generally begin in the entrepreneurial form, because startup requires clear direction and attracts strong leaders. As these organizations grow, many settle into the machine form to exploit increasingly established markets. But with greater growth, established markets can become saturated, which often drives the successful organization to diversify its markets and then divisionalize its structure, taking it finally to the bottom left of the pentagon.

Those organizations highly dependent on expertise, however, will instead go down the right side of the pentagon, using the professional form if their services are more standardized and the adhocracy form if they are more innovative. (Some adhocracies eventually settle down by converting to the professional form, where they can exploit certain of the skills they have developed; this happens often in the consulting business, for example.)

Ideology is shown above politics on the pentagon because it tends to be associated with the earlier stages of an organization’s life, politics with the later ones. Any organization can, of course, have a strong culture, just as any can become politicized. But ideologies develop rather more easily in young organizations, especially with charismatic leadership in the entrepreneurial stage, whereas it is extremely difficult to build a strong and lasting culture in a mature organization. Politics, in contrast, typically spreads as the energy of a youthful organization dissipates and its activities become more diffuse. Moreover, ideologies tend to dissipate over time, as norms rigidify into procedures and beliefs become rules; then political activity tends to rise in its place. Typically, the old and spent organizations are the most politicized; indeed, it is often their political conflict that finally kills them.

Cleavage in Conversion

Conversions may be necessary, but that does not make them easy. Some do occur quickly, because a change is long overdue, much as a supersaturated liquid, below the freezing point, solidifies the moment it is disturbed. But most conversions require periods of prolonged and agonizing transition. Two sides battle, usually an old guard committed to the status quo and young “upstarts” in favor of the change. As Apple Computer grew large, for example, a John Sculley intent on settling it down confronted a Steve Jobs who wished to maintain its freewheeling style of innovation.

The organization in transition becomes, of course, a form of combination, and it has the same problem of cleavage. Given that the challenge is to the very base of its power, however, there can be no recourse to higher authority to reconcile the conflict. Once again, then, the question arises: how does the effective organization deal with the contradiction?

Contradiction

The question of how to manage contradiction has concluded each section of this article. I believe the answer lies in the two forces in the middle of the pentagon. Organizations that have to reconcile contradictory forces, especially in dealing with change, often turn to the cooperative force of ideology or the competitive force of politics. Indeed, I believe that these two forces themselves represent a contradiction that must be managed if an organization is not to run out of control.

I have placed these two forces in the middle of the pentagon for a particular reason. While it is true that each can dominate an organization, and so draw it toward a distinct form (referred to earlier as ideological and political), I believe that these forces more commonly act differently from the other five. While the other forces tend to infiltrate parts of the organization, and so isolate them, these tend instead to infuse the entire organization. Thus I refer to them as catalytic, noting that one tends to be centripetal, drawing behavior inward toward a common core, and the other centrifugal, driving behavior away from any central tendency. I shall argue that both can promote change and also prevent it, and that either way the organization is sometimes rendered more effective, sometimes less.

Cooperation through Ideology

Ideology represents the force for cooperation in an organization, for collegiality and consensus. People pull together for the common good—“we” are in this together.

I use the word ideology here to describe a rich culture in an organization, the uniqueness and attractiveness of which binds the members tightly to it. They commit themselves personally to the organization and identify with its needs.

Such an ideology can infuse any form of organization. It is often found in the entrepreneurial form, because, as already noted, organizational ideologies are usually created by charismatic leaders. But after such leaders move on, these ideologies can sustain themselves in other forms too. Thus we have the ideological machine that is McDonald’s and perhaps an ideological adhocracy built by Messrs. Hewlett and Packard. And one study some years ago described colleges such as Swarthmore and Antioch as “distinctive,” in other words professional forms infused with powerful ideologies.9

Ideology encourages the members of an organization to look inward—to take their lead from the organization’s own vision, instead of looking outward to what comparable organizations are doing. (Of course, when ideology is strong, there are no comparable organizations!) A good example of this is Hewlett-Packard’s “next bench syndrome”: the product designer receives his or her stimulus for innovation, not from the aggregations of marketing research reports, but from the needs of a particular colleague at the next bench.

This looking inward is represented on the pentagon by the direction of the arrows of cooperation. They form a circle facing inward, as if to shield the organization from outside influences. Ideology above all draws people to work together to take the organization where all of them believe it must go. In this sense, ideology should be thought of as the spirit of an organization, the life force that infuses the skeleton of its formal structure.

Thus the existence of an ideology would seem to render any particular configuration more effective. People get fired up to pursue efficiency, or proficiency, or whatever else drives the organization. When this happens to a machine organization—as in a McDonald’s, which is very responsive to its customers and very sensitive to its employees—I like to call it a “snappy machine.” Bureaucratic machines are not supposed to be snappy, but ideology changes the nature of their quest for efficiency. This, of course, is the central message of the Peters and Waterman book, In Search of Excellence: effectiveness is achieved, not by opportunism, not even by clever strategic positioning, but by a management that knows exactly what it must do (“sticks to its knitting) and then does it with the fervor of religious missionaries (“hands on, value driven.”)10

There seems to be another important implication: ideology helps an organization to manage contradiction and so to deal with change. The different forces no longer need conflict in quite the same way. Infused with the common ideology, units used to opposing each other can instead pull together, reducing contamination and cleavage and so facilitating adaptation.

I have always wondered why it is that IBM could come up with the important change when it had to, much like McDonald’s, so machinelike, yet rather creative in its advertising and new product development. Likewise, if 3M and Hewlett-Packard really do conform largely to the adhocracy model, why do they have such tight control systems? I suspect we have the answer here. Their strong cultures enable these organizations to reconcile forces that work against each other in ordinary organizations. People develop a grudging respect for one another: when it matters, they cooperate for the common good. “Old Joe, over there, that nut in R&D: we production guys some-times wonder about him. But we know this place could never function without him.” Likewise in the great symphony orchestra, the musicians respect their conductor, without whom they know they could never produce beautiful music.

Such organizations can more easily reconcile opposing forces because what matters to their people is the organization itself, not any of its particular parts. If you believe in IBM more than marketing finesse or technical virtuosity per se, then when things really matter you will suspend your departmental rivalries to enable IBM to adapt.

In Competitive Strategy, Michael Porter warns about getting “stuck in the middle” between a strategy of “cost leadership” and one of “differentiation” (one representing the force for efficiency, the other representing quality and innovation).11 How, then, has Toyota been able to produce such high-quality automobiles at such reasonable cost? Why didn’t Toyota get stuck in the middle?

I believe that Porter’s admonition stems from the view, prevalent in U.S. management circles throughout this century and reflected equally in my discussion of configuration, that if an organization favors one particular force, then others must suffer. If the efficiency experts have the upper hand, then quality gets slighted; if the designers get their way, productive efficiency must lag; and so on. This may be true so long as an organization is managed as a collection of different parts—a portfolio of products and functions. But when the spirit of ideology infuses the structure, an organization takes on an integrated life of its own, and contradictions get reconciled.

Thanks to Frederick Taylor and Henry Ford, workers on U.S. assembly lines have long had good reason to consider themselves mere cogs in their bureaucratic machines. Each had a job to do and was not to think about anything else—including quality and innovation. Indeed, even at the highest levels, this separation of functions has had its effect: critics of General Motors continue to bemoan the product development consequences of having had all those financial people in the chief executive’s chair. But at Toyota, one has the impression that each individual is made to feel like an embodiment of the entire system—that no matter what job one does, it helps to make Toyota great. Isn’t that why the assembly workers are allowed to shut down the line? Each one is treated as a person capable of making decisions for the good of Toyota. Thus the only thing that gets stuck in the middle at Toyota is the conventional management thinking of the West!

So far I have discussed the reconciliation of contradictions between different people and units. But even more powerful can be the effect of reconciling these forces within individuals themselves. Where ideology is strong, not just the researchers are responsible for innovation, nor the accountants for efficiency; everyone internalizes the different forces in carrying out his or her own job. In metaphorical terms, it is easy to change hats if they are all emblazoned with the same insignia.

Limits to Cooperation

Overall, then, ideology sounds like a wonderful thing. But all is not rosy in the world of culture, either. For one thing, ideologies are difficult to build, especially in established organizations, and difficult to sustain once built. For another thing, established ideologies can sometimes get in the way of organizational effectiveness.

The impression left by a good deal of current writing and consulting notwithstanding, ideology is not there for the taking, to be plucked off the tree of management technology like any other piece of fashionable fruit. As Karl Weick has argued, “A corporation doesn’t have a culture. A corporation is a culture. That’s why they’re so horribly difficult to change.”12 The fact is that there are no five easy steps to a better culture. At best, those steps lay down a thin veneer of impressions that wash off in the first political storm; at worst, they destroy whatever good remains in the prevailing culture. Effective ideologies are built slowly and patiently by committed leaders who establish compelling missions for their organizations, nurture them carefully, and care deeply about the people who make them work.

But even after an ideology is established, the time can come—and usually does eventually—when its effect is to render the organization ineffective, sometimes to the point of destroying it. This is suggested by Weick’s comment that ideologies are “so horribly difficult to change.”

I argued above that ideology promotes change by allowing an organization to reconcile contradictory forces. Now I should like to argue exactly the opposite case. Ideology discourages change by forcing everyone to work within the same set of beliefs. In other words, strong cultures are immutable: they may promote change within their own boundaries, but they themselves are not to be changed. Receiving “the word” enables people to ask every question but one: the word itself must never be questioned.

I can explain this by introducing two views of strategy, one as position, the other as perspective.13 In one case, the organization looks down to specific product-market positions (as depicted in Michael Porter’s work), in the other it looks up to a general philosophy of functioning (as in Peter Drucker’s earlier writings about the “concept of a business”). I like to ask people in my management seminars whether Egg McMuffin was a strategic change for McDonald’s. Some argue yes, of course, because it brought the firm into the breakfast market. Others dismiss this as a variation in product line— pure McDonald’s, just different ingredients in a new package. Their disagreement concerns not the change at McDonald’s so much as their implicit definition of strategy. To the former, strategy is position (the breakfast market), to the latter it is perspective (the McDonald’s way). The important point here is that change of position within perspective is easy to accomplish (the McDonald’s way, but now for breakfast), whereas change of perspective (a new way, that is, a new ideology) is extremely difficult. (Anyone for McDuckling a l’Orange?) The very ideology that makes an organization so adaptive within its own niche undermines efforts to move it to a different niche.

Thus, when change of a fundamental nature must be made—in strategy, structure, form, whatever— the ideology that may for so long have been the key to the organization’s effectiveness suddenly becomes its central problem. Ideology becomes a force for the status quo; indeed, because those who perceive the need for change are forced to challenge it, the ideology begins to breed politics!

To understand this negative effect of ideology, take another look at Figure 2. All those arrows face inward. The halo they form may protect the organization, but at the possible expense of isolating it from the outside world. In other words, ideology can cause the other forces to atrophy: direction comes to be interpreted in terms of an outmoded system of beliefs, forcing efficiency, proficiency, and innovation into ever-narrower corners. As the other arrows of the figure disappear, those of ideology close in on the organization, causing it to implode. That is how the organization dominated by the force of ideology goes out of control. It isolates itself and eventually dies. We have no need for the extreme example of a Jonestown to appreciate this negative consequence of ideology. We all know organizations with strong cultures that, like that proverbial bird, flew in ever-diminishing circles until they disappeared up their own rear ends.

Competition through Politics

If the centripetal force of ideology, ostensibly so constructive, turns out to have a negative consequence, then perhaps the centrifugal force of politics, ostensibly so destructive, has a positive one.

Politics represents the force for competition within an organization—for conflict and confrontation. People pull apart for their own needs. “They” get in “our” way.

Politics can infuse any of the configurations or combinations, exacerbating contamination and cleavage. Indeed, both problems were characterized as intrinsically conflictive in the first place; the presence of politics for other reasons simply enhances them. The people behind the dominant force in a configuration —say, the accountants in a machine organization, or the experts in a professional one—lord their power over everyone else, while those behind each of the opposing forces in a hybrid relish any opportunity to do battle with each other to gain advantage. Thus, in contrast to a machinelike Toyota pulling together is the Chrysler Iaccoca first encountered, pulling apart; the ideology of an innovative Hewlett-Packard stands in contrast to the politics of a NASA during the Challenger tragedy. For every college that is distinctive, there are others that are destructive.

Politics is generally a parochial force in organizations, encouraging people to pursue their own ends. Infusing the parts of an organization with the competitive force of politics thus reinforces their tendency to fly off in different directions. At the limit, the organization dominated by politics goes out of control by exploding. Nothing remains at the core—no central direction, no integrating ideology, and, therefore, no directed effort at efficiency or proficiency or innovation.

In this respect, politics may be a more natural force than ideology. That is to say, organizations left alone seem to pull apart rather more easily than they pull together. Getting human beings to cooperate seems to require continual effort on the part of a dedicated management.

Benefits of Competition

But we cannot dismiss politics as merely divisive. Politics’ constructive role in organizations is suggested by the very problems of ideology. If pulling together discourages people from addressing fundamental change, then pulling apart may be the only way to ensure that they do.

Most organizations have a deeply rooted status quo, reinforced especially by die forces of efficiency, proficiency, and ideology, all designed to promote development within an established perspective. Thus, to achieve fundamental change in an organization, especially one that has achieved configuration and, moreover, is infused with ideology, the established forces must be challenged, and that means politics. In the absence of entrepreneurial or intrapreneurial capabilities, and sometimes despite them, politics may be the only force capable of stimulating the change. The organization must, in other words, pull apart before it can pull together again. It appears to be inevitable that a great deal of the most significant change is driven, not by managerial insight or specialized expertise or ideological commitment, let alone the procedures of planning, but by political challenge.

I conclude that both politics and ideology can promote organizational effectiveness as well as undermine it. Ideology infused into an organization can be a force for revitalization, energizing the system and making its people more responsive. But that same ideology can also hinder fundamental change. Likewise, politics often impedes necessary change and wastes valuable resources. But political challenge may also be the only means to promote really fundamental change. Thus there remains one last contradiction to reconcile, that between ideology and politics themselves.

Combining Cooperation and Competition

The two catalytic forces of ideology and politics are themselves contradictory forces that have to be reconciled if an organization is to remain truly effective in the long run. Pulling together ideologically infuses life into an organization; pulling apart politically challenges the status quo; only by encouraging both can an organization sustain its viability. The centripetal force of ideology must contain and in turn be contained by the centrifugal force of politics. That is how an organization can keep itself from imploding or exploding—from isolating itself, on the one hand, and going off in all directions, on the other. Moreover, maintaining a balance between these two forces—in their own form of combination—can discourage the other forces from going out of control. Ideology helps secondary forces to contain a dominant one; politics encourages them to challenge it. All of this is somewhat reminiscent of that old children’s game (with extended rules!): paper (ideology) covers scissors (politics) and can also help cover rocks (the force for efficiency), while scissors cut paper and can even wedge rocks out of their resting places.

Let me turn one last time to the arrows of the pentagon. Imagine first the diverging arrows of competition contained within the converging circle of cooperation. Issues are debated and people are challenged, but only within the existing culture. The two achieve an equilibrium, as in the case of the Talmudic scholars who fight furiously with each other over the interpretation of every word in their ancient books, yet close ranks to present a united front to the outside world. Is that not the very behavior we find in some of our most effective business corporations, IBM among others? Or reverse the relationship and put the arrows pulling apart outside those of the halo pulling together. Outside challenges keep a culture from closing in on itself.

Thus, I believe that only through achieving some kind of balance of these two catalytic forces can an organization maintain its effectiveness. That balance need not, however, be steady state. Quite the contrary. It should constitute a dynamic equilibrium over time, to avoid constant tension between ideology and politics. Most of the time, the cooperative pulling together of ideology, contained by a healthy internal competition, is to be preferred, so that the organization can vigorously pursue its established strategic perspective. But occasionally, when fundamental change becomes necessary, the organization has to be able to pull apart through the competitive force of politics. That seems to be the best combination of these two forces.

Conclusion

What is it, then, that makes an organization effective? Of course, were the answer easy—and easily applied—all organizations would be equally effective. Clearly, to be effective means to do the right thing and to do it right—to be both “Porterian” and “Peterian.” But I have argued that there is more to organizational effectiveness than this, that the answer must also lie in managing the consistency of form as well as the contradiction of forces. Organizations need focus, but they also need balance. The prescriptions of this article perhaps reduce to the following.

Attain configuration if you can. Getting everything together into a known form, if it all fits, more or less, is not a bad way to organize. One force can dominate just so long as you attend to the other forces, too, to avoid contamination. Otherwise, build a combination if you must, or if you can benefit from the balance of forces. But then be careful about cleavage. And whichever it is, watch out for the occasional need for conversion, during which you must also be careful of cleavage. No matter what, you will still have to manage contradiction. Thus it is critical that you infuse your organization with the cooperative force of ideology, to make it excellent. But beware of that force going out of control, too. Encourage healthy competition, occasionally even outright politics, to ensure needed adaptation. Just be sure to balance ideology and politics in their own dynamic equilibrium.

Of course, this may sound like my own “best way.” But it is not a simple way, nor should it encourage conformity. Playing jigsaw puzzle and LEGO with the same pieces is no easy matter. But that is what effective organizations seem to do.

References

1. See T.S. Peters and R.H. Waterman, In Search of Excellence (New York: Harper and Row, 1982); and

M.E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: The Free Press, 1980).

2. See H. Mintzberg, The Structuring of Organizations (Englewood Cliffs, New Jersey: Prentice-Hall, 1979) and Mintzberg on Management (New York: The Free Press, 1989). See also: D. Miller and H. Mintzberg, “The Case for Configuration,” in Organizations: A Quantum View, eds. D. Miller and PH. Friesen (Englewood Cliffs, New Jersey: Prentice-Hall, 1984).

3. C. Darwin, The Life and Letters of Charles Darwin, ed. F. Darwin (London: John Murray, 1887), p. 105.

4. The first five forms were described in some detail, under slightly different labels, in Mintzberg (1979). The last two forms were developed in:

H. Mintzberg, Power In and Around Organizations (Englewood Cliffs, New Jersey: Prentice-Hall, 1983).

5. D. Miller and M. Kets de Vries, The Neurotic Organization (San Francisco: Jossey-Bass, 1984). See also:

D. Miller and M. Kets de Vries, Unstable at the Top (New York: New American Library, 1987).

6. See D. Miller, The Icarus Paradox (New York: Harper & Row, 1990).

7. One might think that the high incidence of entrepreneurial forms reflects the students’ bias toward studying small organizations, but I think not. Many more small organizations exist, in business and elsewhere, than large ones, and they are usually entrepreneurial. I would expect the larger ones to be predominantly machine in form in any western society. As for the incidence of combinations, I believe that the diversified and adhocracy forms are the most difficult to sustain (the former is a conglomerate with no links between the divisions, the latter is a very loose and free-wheeling structure), and so these should be most common in hybrid combinations. Also, some of the combinations reflect common transitions in organizations, especially from the entrepreneurial to the machine form.

8. R.M. Cyert and J.G. March, A Behavioral Theory of the Firm (Englewood Cliffs, New Jersey: Prentice-Hall, 1963).

9. B.R. Clark, The Distinctive College (Chicago: Aldine, 1970).

10. Peters and Waterman (1982).

11. Porter (1980).

12. Quoted in W. Kiechel III, “Sniping at Strategic Planning (Interview with Himself),” Planning Review, May 1984, p. 11.

13. See H. Mintzberg, “Five Ps for Strategy,” California Management Review, Fall 1987, pp. 11–24.