Strategy Formation in an Adhocracy Henry Mintzberg and Alexandra McHugh

39 Pages·2008·1.91 MB·English

Strategy Formation in an The widely accepted view equates strategy making with
Adhocracy planning, assuming that strategies are "formulated" be-
fore they are "implemented." Based on the detailed track-
ing overtime of the actions of a single project organization,
Henry Mintzberg
strongly resemblant of an ideal type called "adhocracy,"
and this paper shows that strategies can "form" in a variety of
Alexandra McHugh different ways: from the precedents set by individual oper-
ators, from thin streams of activity that eventually pervade
an organization, from spontaneous convergence in the
behavior of a variety of actors, and so on. The paper first
identifies and tracks the strategies pursued by this orga-
nization across almost four decades of its history and then
presents the history of the organization in terms of
strategic periods. These findings are then interpreted in
conceptual terms, focusing on three themes*, the emergent
nature of the organization's strategies and the difficulties
of identifying intention in a collective context; the cycles of
behavior that resulted from attempts to reconcile the con-
current needs for convergence and divergence; and the
organization's quest for adhocracy and the problems this
posed forthe exercise of formal leadership. The paper
concludes with a "grass roots" model of strategy
formation.*
"One best way" thinking has pervaded the field of manage-
ment since Frederick W. Taylor (1947) coined the term early in
this century. It has been particularly InfluerMial in two spheres
— the designing of organizational structures and the making of
organizational strategies.
At least until recently, the underlying assumptions of organiza-
tional design have been that organizations require articulated
objectives, sharp divisions of labor, clearly defined tasks, well-
developed hierarchies, and formalized systems of control. In
fact, this configuration of elements — close to the ideal-type,
machine-like bureaucracy Weber (1958) first described —
appears to remain the predominant conception among practi-
tioners in government, mass production, and the consulting
profession: to many of them, "machine bureaucracy" is not
just one alternate form of structure, it is structure.
Strategy making still tends to be equated with planning — with
the systematic "formulation" and articulation of deliberate,
premeditated strategies, which are then "implemented." The
traditionai precepts of "making strategy explicit" (Tilles, 1963),
formulating before implementing (Andrews, 1980), and design-
ing structure to "follow" strategy (Chandler, 1962) remain
intact in almost all of the literature. This view of strategy
making, however, is unnecessarily restrictive; it is inconsistent
with more contemporary forms of structure and sometimes
with the conventional forms as well.
© 1985byComenUnrversity.
One important contemporary form is project structure, or
0001-8392/85/3002-0160/$1.00.
"adhocracy," (Bennis and Slater. 1964; Toffler, 1970). As
described by Mintzberg (1979), this configuration includes the
The authors are deeply indebted to William
following elements: (11 The organization operates in an en-
Litwack, who initiated tfie cdfection of the
data and established the basic framework vironment that is both dynamic and complex, demanding in-
in which it was analyzed, and to the Social novation of a fairly sophisticated nature. Each output tends to
Science and Humanrties Research Coun-
cit, which funded the study. be unique (e.g., a film, the prototype for a new product). (2) The
160/>WministrativeScienceQuarteHy,30(19K): 160-197
production of complex, unique outputs forces the organization
to engage highly trained experts and to combine their talents in
multidisciplinary teams. (3) These experts are housed m spe-
cialized units, for administrative and housekeeping purposes,
but are deptoyed in temporar/ teams to work on their projects;
the structure thus takes on the form of a matrix. (4) Because of
the complex and unpredictable nature of its work, the organiza-
tion relies largely on mutual adjustment for coordination, which
is encouraged by semiformal structural parameters such as
liaison personnel and standing committees. Coordination by
direct supervision and standardization are discouraged, as are
the more formalized aspects of structure that support them,
such as hierarchy, performance controls, and rules. And (5) the
organization is decentralized "selectively"; power over differ-
ent decisions is diffused in uneven ways, subject to the
availability of information and expertise needed to deal with
the issue at hand.
While adhocracy is here characterized as an ideal type, most or
all of these elements have, in fact, been described in a number
of empirical studies — in Woodward's (1965) description of the
process producers,"" Burns and Stalker's (1966) description of
electronics firms, Galbraith's (1973) study of the Boeing Com-
pany, Lawrence and Lorsch's (1967) study of plastics firms,
and in Chandler and Sayles' (1971) study of NASA. In fact,
consistent with Stinchcombe's (1965) proposition that struc-
tures tend to reflect the age of founding of their industry, all of
these organizations function in industries that developed only
well into this century. Adhocracy seems to be the structure of
the industries of our age.
This paper presents an in-depth description of strategy making
in one project organization, to accomplish three objectives: to
develop the concept of strategy, to present a very different
view of how it can form {without necessarily being formulated)
in an organization, and to associate this view especially, but not
exclusively, with the configuration we are calling adhocracy.
RESEARCH ON STRATEGY FORMATION
This study is part of a research project that began in 1971 with
the intention of opening up the strategy-making process con-
ceptually. Based on the definition of strategy as a pattern in a
stream of decisions or actions,^ it has sought to track ar>d
study strategies as they form and disappear in organizations
While Woodward (1965) equates process over long periods of time.
production with such a configuration, be-
cause in her view the automation of ^e
If strategy is defined only with regard to intention, the re-
operating core renders the administrative
competent of an organization a project searcher is reduced to studying perceptions, devoid of be-
structure, there is evidence that process havior. Defining strategy with respect to realization, however,
producers with large, nonprofessional
enables the researcher to track the rise and fall of strategies in
woric forces (such as steel connpantes)
tend to resemWe nriachine bureaucracies empirical terms. Moreover, the most interesting issues seem
(seeMintzberg, 1979: 257-^261.264-266.
to revolve around the interplay of these two definitions so that,
458-45^.
as shown in Figure 1, deliberate strategies (intentions realized)
can be distinguished from emergent strategies (patterns real-
ized despite or in the absence of intentions).
The original definition (Mint^wrg, 1972)
included only dectsic«is; for a number of
The definition of strategy as pattern in action may appear
reasons, not tf>e least being that decisions,
too, represent intentions and that we controversial: the term is almost always defined formally with
necessarily ended up studying actions, the regard to intention. We would argue, however, that the defini-
definition was recerrtiy modified to include
tion "in use" is often based on observed consistency in
actions. This point is ^abwated upon m a
note available from the first author. behavior, that is, pattern in action, as when a manager infers
Strategy Formation
Deliberate Strategy
Intended \ y/^ Realized
Strategy \ / Strategy
Unreali»d Emergent
Strategy Strategy
Rgura 1. Basic forms of strategy.
the "strategy" of a competitor (to which he or she might, of
course, impute intentions).
The concept of emergent strategy may also seem controver-
sial — the notion that organizations can pursue "strategies"
without intending them. After all, the term strategy has always
been associated with voluntarism and free wilt, with what Dill
(1979: 48) has called "machismo management." Were "de-
liberate" and "emergent" strategies two distinct phenomena
in practice, then there might be merit in applying the label
strategy only to the former. We contend, however, that the
two represent the end points of a continuum, indeed that there
may be no such thing as a purely deliberate strategy (intentions
realized precisely) or a purely emergent one (the total absence
of intention, despite pattem in action). Moreover, how are we
to determine intentions in a collective context, that is, the
intentions of an organization? To assume that the intentions of
the leadership are the intentions of the organization may not be
justified, since others can act contrary to these intentions.
Presumably, to be "organizational," intentions must be broadly
shared — truly collective. And yet, stated intentions can belie
the real ones — even the most detailed plans may be fanta-
sies, or simply ptoys to fool the competition. Thus, to the
extent that ostensibly deliberate strategies contain emergent
elements, the two concepts deserve to share the same label, if
only to force practitioners and researchers alike to recognize
them as part of the same phenomenon (Mintzberg and
Waters, 1985).
The formulation of deliberate strategies would seem to accord
well with the configuration of machine bureaucracy, which
requires tight coordination in order to mass-produce its prod-
ucts or services. It seems to fit with "simple structure," too, in
which an entrepreneurial leader in personal control of an
organization guides it according to his or her vision (Mintzberg,
1979), although vision need not be articulated formally and so
is less "planned" and more liable to emergent shift. Our
findings to date bear this out in part (Mintzberg, 1978; Mintz-
berg and Waters, 1982,1984; Brunet, Mintzberg, and Waters,
1986), although it would seem to be more accurate to describe
machine bureaucracies as elaborating, extrapolating, or
copying existing strategies rather than formulating radically
new ones. In contrast, the formation of emergent strategies
would seem to be most compatible with the adhocracy con-
figuration, in which many people — operating personnel, ex-
perts and advisors of all kinds, managers at all levels — are
potentially involved in the establishment of precedents and,
so, the strategies.
162/ASaJune198B
THE NATIONAL FILM BOARD OF CANADA AS AN
ADHOCRACY
The National Film Board of Canada (the NFB) was founded in
1939 as an agency of the federal government of Canada to
produce and distribute films that would interpret Canada to
Canadians and to people abroad. It has since developed an
International reputation for the quality of its documentary film-
making and for its innovations in film content, process, and
technology. In 1975, the NFB had a permanent staff of approx-
imately 950 people, with an annual budget of $23.5 million
(Canadian). The NFB is an organization quite unlike any other: it
is a film company with full production and marketing functions,
concentrating on short, documentary films aimed at predomi-
nantly nontheatrical markets, yet it falls under full state
ownership.
The NFB seems to fit the description of an adhocracy. Each of
its films is unique, and many are distinguished for their sophis-
tication and innovation. Each requires a distinct but temporary
project, which draws together experts from a variety of func-
tional departments. This suggests matrix structure, as is indi-
cated in Figure 2, the NFB's organigram {area 1975), in which
the filmmakers are shown suspended under a structure of
studios and specialized functions, as well as regions, in fact,
the absence of connections between the filmmakers and the
Figure 2. Organigram of tiw National Rim Board of Canada (ca. 1975).
Commissioner
Planning & Research Public Relations
Deputy
Commissioner
Director of Director of
English Programming French Programming
1 1
English French Technical Ottawa
^ministration Distribution
Production Production Services Bureau
{similar to English Production)
Financial Production
Management
Coordinator
Research Technical
Coordinator Coordinator
1
Studio A Studio B Studio C Studio 0 Studio E Studio G Studio H
Animation Fiction Documentary Documentary "Challenge Multimedia Environment
'or Change"
Regional Program* Regional Program Regional Program
British Columbia Prairies Maritimes
Filmmakers Filmmakers Filmmakers Filmmakers Filmmakers Filmmakers Filmmakers
*No lines shown on original organigrann connecting Regional Programs to Studios or Filmmakers.
163/ASQ, June 1986
S&ategy Fonnation
Structure indicates the relative weakness of authority and
hierarchy in the organization. Controls exist in the NFB and
attempts are made at formal planning, but most of the real
coordination has to be achieved through mutual adjustment.
Selective decentralization is perhaps best illustrated by the
process surrounding the approval and funding of film projects.
On average, the NFB has made about 75 films per year. Were
it structured as a machine bureaucracy, word would presum-
ably come down from on high, dictating subject matter, length,
style, etc., resulting in a stable and rather deliberate film-
content strategy. The facts here are rather different. Aside
from the specific films commissioned, or "sponsored," by
other government departments, all the others draw on the
general budget of the organization, supplied by the govern-
ment and supplemented by revenues from the sale and rental
of films. Film ideas generally originate with a filmmaker in
consultation with an executive producer and are eventually
proposed to a standing committee — the Program Committee
— which consists of representatives elected by the film-
makers, appointees of the Distribution Branch (marketing), the
Director of Production, and the Director of Programming. As
chief executive officer, the Film Commissioner must approve
this committee's choices, and almost inevitably does. Thus,
control over film choices is distributed across al! levels of the
organization and among various functions.
On first impression, then, this project-by-project working
rhythm would seem to epitomize adhocracy. As we probe
more deeply into NFB history, we shall elaborate on this
conclusion, showing how its structure is in fact an evolved
compromise, a balancing act worked out in response to the
demands of the individual project, on the one hand, and the
need for a certain order, on the other.
RESEARCH METHODOLOGY
To track strategies as we have defined them requires a longitu-
dinal approach; the researcher either has to five with an
organization over time (through direct observation or periodic
interviews) or has to reconstruct its behavior after the fact. The
former approach is discouraged by our finding that strategies
can remain stable over very long periods of time (Mintzberg
and Waters, 1982). An historical reconstruction is, therefore,
more feasible if not, in principle, more desirable. The method-
ology accordingly proceeded through the following four basic
steps:
Step 1: Collectior) of basic data. The study began in the
archives, with the search for traces of decisions and actions
taken by the organization, sorted into various strategy areas, as
well as traces of external trends and events in the environment
and indicators of performance. Sources for this data included
film catalogs, annual reports, in-house documents, and books
and articles on the organization, all supplemented by inter-
views to fill in gaps.
Step 2: Inference of strategies and periods. The data on
decisions and actions were arranged in chronological order,
when possible plotted on common time scales, and were
analyzed to infer patterns or consistencies over time, i.e.,
strategies. The strategies were then represented in symbolic
164/ASQ,June198S
form, lined up on a common time scale, and scanned to infer
distinct overall periods in the history of the organization.
Step 3: Analyses of each period. At this point, the character of
the research changed, from the systematic collection of
"hard" data to the more intensive investigation of more qual-
itative data. Interviews were conducted with key people who
were present, and reports of the period were studied to
explain the major changes in strategies. A number of thirty- to
forty-year NFB veterans were accessible, as were several
reports, books, and theses on or related to the organization,
including the Massey Commission Report (1951), McKay
(1965), James (1968). Gray (1973), Mclnnes (1974), Jones
(1976). and Hardy (1979). Posing very specific questions in the
interviews, based on the data gathered, aided recall and helped
to avoid distortion.
Step 4: Theoretical analysis. The researchers then brain-
stormed around a number of theoretical questions to try to
interpret each historical period, as welt as the entire study, in
conceptual temis. Questions ranged across a variety of issues,
including the patterns of strategic change, the relationships
between deliberate and emergent strategies, the interplay of
environment, leadership, and organization, and the relationship
between strategy and structure.
The study of the NFB from 1939 to 1975 took place on site
over a number of years and eventually resulted in a 383-page
document based on an extensive amount of data. In particular,
each of the 2,839 original films completed between 1939 and
1975 were categorized along a number of dimensions and then
were plotted and analyzed in various ways.
The report that follows reflects the basic steps of the research.
The first section describes the various realized strategies that
we inferred in the behavior of this organization across thirty-
seven years. After using these to identify distinct periods in its
history, we then describe each period in the second section,
seeking to put some flesh on the skeleton of realized
strategies and to consider the origin of these strategies as
deliberate or emergent. The final section develops a concep-
tual interpretation of the entire study.
STRATEGIES OF THE NFB, 1939-1975
The NFB, of necessity, took a large number of actions over the
course of thirty-seven years. Discussion with its members, as
well as our own overall assessment of its activities, suggested
the following areas to be of central importance; first, the films
produced, which could be analyzed in terms of various charac-
teristics — the number made, their duration in minutes, their
content, the original language of production (English or
French), whether sponsored or not. in black and white or color,
and in 16 or 35 mm — then in terms of finance, staffing,
distribution (nnarketing), and the internal structure,
A full presentation of all the strategies identified, together with
the data and text that support their inference. Is well beyond
the space limitations of this paper (but is available from the
authors). We therefore present here only those strategies
165/ASa June 1986
Strategy FonnatkHi
most revealing of the course of the organization over time and
related material, in graphic ar)d symbolic form with a minimal
amount of textual material, except for the area of film content
(because of its importance and what it reveals about our
method of inferring strategies).
Finance. Since most of the NFB's financing arrived as direct
grants from the government, and some from sales revenues,
the area of finance is not only one of strategy (mternal actions}
but also of environment and performance (see Mintzberg et al.,
1986, for a discussion of these ambiguities). Figure 3 shows
the total annual revenues of the NFB, by source. Of particular
importance were the sudden, temporary dips in appropriations
(notably im 947-1949,1958,1970-1971) known to em-
ployees as periods of "austerity."
Figure 3. Sources of National Film Board's revenues.
30 -
Total
28 - Parliament appropriation
Sales to government departments
26 -
Rental royalties & other sales
24 -
Note: Due to the tack of consistent records, the data in the early
22 -
years are incomplete.
20 -
REVENUE 18 -
($ MILLION)
16 -
14 -
12 -
10 -
8 -
6 -
4 -
2 -
0
^ 7
1939 '40 '45 '50 '55 '60 '65 '70 '75
YEAR
Staffing. Figure 4 shows the number of persons on regular
staff since 1945, as wet! as temporary employees ("on con-
tract") since 1957. The strategies inferred (for the most part,
directly from these data) are represented symbolically below,
in the Staffing diagram. In this representation of strategies, and
all that follow, the vertical dimension is used to symbolize
certain characteristics of strategies but does not represent any
specific scale.
166/ASa June 1^5
Figure 4. Staffing lev^.
1000 -
CO
oc 850 -
LU Regular Staff plus /
00
S 750 - Contract People /
650 -
550 -
(Estimated)
450 -
350 -
250
^ t
1939 '40 '45 '50 '55 '60 '65 70 '75
YEAR
STMTING
I
'46 '60
Distribution. Distribution, the NFB's name for marketing, can
be divided into three main channels — theatrical, nontheatrical
(e.g., schools, church groups), and television, A variety of
distribution strategies were inferred from a number of sources,
notably archival records on the media employed in different
periods and a statistical analysis of the duration of films by
year. The latter, for example, revealed a heavy emphasis on
films for television f ronn 1953 to 1957 (sharp rise of films in the
12-15 minute and then 26-30 minute range to fill slots in the
newly created Canadian Broadcasting Corporation network),
and the beginnings of a feature film strategy in the mid-1960s
(first significant appearance of films longer than 60 minutes).
These two strategies, as well as a number of others inferred
(to be discussed later), are shown symbolically below, in the
Distribution diagram.
DISTRBiniON
C
TyFocu« \
t5min.«)min. \ 60min. + more30min.
Taimision Distributic
TamatiyBFeaturw
Theatrical Distribution
Rurat, I Nontheatrical Library ]t[
Union CiroiiU
Aborttve Rvntal Scbems
Panial Shiftto sProHkct Oriwitation
167/ASa June 1965
Strategy Fornnation
Structure. Of particular interest in the structuring of this orga-
nization are the forms of departmentalization used in the
production function over the years, as well as the separatbn of
French and English filmmaking (always a contentious issue).
The various forms of structure are shown symbolically below,
in the Production Structure diagram.
Move to Montreal
Informal Units 12 Units 4 Units 5 Engiish Units Pool System 7 English Studios
2 French Units (English & French} 3 French Studios
f TV Unit"
French Production Split
Science Unit
Ragionali-
Ution
I 1
1939 '75
Nutnber and length of films. An analysis and comparison of
several types of records in the NFB archives uncovered 2,839
original films completed between 1939 and 1975. A plot of
their number per year, as well as of their average duration in
minutes, led to the inference of the strategies shown in the
Film-Number-and-Length diagram.
FILM MiMaER AM) LfNGTH
Sharp Cycles around Higher Plateau Rapid
(approK. 85film6/200Q min.l Growth PlBtBBU?
-p. —1
'55 '75
Language of films. Plots of the number and duration of films in
the French and Engiish languages revealed sharply different
patterns for each, shown as strategies in the diagram below.
iANGUAGEOFFIUWS
ENGLISH FILMS
Slow long-tarm increase in number lapprox. 2/year) and length laf^rox. 20 min./year) of gnglish films
FRENCH RLMS
StMdy growth in minimum number of French films, with sharp peaks
(rHSraasing (ensth of Fmnch films
—r
1939
'66
168/ASa June 1985
Spor)sorship of films. Films made by the NFB under direct
contract to other government departments (e.g., training films
for the RCMP) accounted for exactly one-quarter of the total
over the years, and 21 percent of all minutes of films produced.
Figure 5, which shows the proportion of minutes of sponsored
films by year, reveals one strong surge after World War !l,
which is depicted as a strategy in the diagram below.
Rgure 5. fhvportion of minutes of sponsored fHms.
75
SPONSORSHfP
r
1940 '45 '55 '60 '65 '70 '75
'50
Content of films. Finally, and perhaps most importantly, is the
actual content of the films made by the NFB. The 2,839 films
were each assigned to one of 37 content or related categories,
chosen partly with regard to the categories actually used in
NFB film catalogs. The data for three years in the 1970s was
coded by two people independently, with almost complete
agreement. We found it most useful to analyze each of the 37
categories over time in terms of three basic flows:
• trickle — defined as a stream of five or fewer films per year.
• blip — defined as one or two years in which production
increased by an increment of five, from a trickle before and
after.
169/ASQ, June 1986