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.

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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.