Reframing Organizations. Lee G. Bolman

Reframing Organizations - Lee G. Bolman


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Mom or pop constantly monitor what is going on and exercise complete authority over daily operations. William Hewlett and David Packard began their business in a garage, as did Apple Computer's Steve Jobs and Steve Wozniak. Simple structure has the virtues of flexibility and adaptability. One or two people control the operation and can turn on a dime when needed. But virtues can become vices. Authorities can block as well as initiate change, and they can punish capriciously as well as reward handsomely. A boss too close to day‐to‐day operations is easily distracted by immediate problems, neglecting long‐range strategic issues. A notable exception was Panasonic founder Konosuke Matsushita, who promulgated his 250‐year plan for the future of the business when his young company still had less than 200 employees.

      Machine Bureaucracy

      McDonald's is a classic machine bureaucracy. Members of the strategic apex make the big decisions. Managers and standardized procedures govern day‐to‐day operations. Like other machine bureaucracies, McDonald's has support staffs and a sizable technostructure that sets standards for the cooking time of French fries or the assembly of a Big Mac or quarter pounder.

      Like other machine bureaucracies, McDonald's deals constantly with tension between local managers and headquarters. Local concerns and tastes weigh heavily on decisions of middle managers. Top executives, aided by analysts armed with massive data, rely more on generic and abstract information. Their decisions are influenced by company‐wide concerns. As a result, a solution from the top may not always match the needs of individual units. Faced with declining sales and market share, McDonald's introduced a new food preparation system in 1998 under the marketing banner “Made for you.” CEO Jack Greenberg was convinced the cook‐to‐order system would produce the fresher, tastier burgers needed to get the company back on the fast track. However, franchisees soon complained that the new system led to long lines and frustrated customers. Unfazed by the criticism, Greenberg invited a couple of skeptical financial analysts to flip burgers at a McDonald's outlet in New Jersey so they could see firsthand that the concerns were unfounded. The experiment backfired. The analysts agreed with local managers that the system was too slow and decided to pass on the stock (Stires, 2002). The board replaced Greenberg at the end of 2002.

      Professional Bureaucracy

      Harvard University affords a glimpse into the inner workings of a professional bureaucracy. As in other organizations that employ large numbers of highly educated professionals, Harvard's operating core is large relative to other structural elements, although the technostructure has grown in recent years to accommodate mandated programs such as gender and racial equity. At the operating sphere, each individual school has substantial autonomy to chart its own course. Procedures for things like teaching evaluations that are typically campus‐wide at other universities are localized at Harvard. Few managerial levels exist between the strategic apex and the professors, creating a flat and decentralized profile.

      Control relies heavily on professional training and indoctrination. Insulated from formal interference, professors have almost unlimited academic freedom to apply their expertise as they choose. Freeing highly trained experts to do what they do best produces many benefits but leads to challenges of coordination and quality control. Tenured professors, for example, are largely immune from formal sanctions. At Harvard, that has often protected senior faculty who were guilty of serial sexual harassment (Bikales, 2020). In the case of a professor whose teaching performance was moving from erratic to bizarre, a Harvard dean did the one thing he felt he could do—he relieved the professor of teaching responsibilities while continuing to pay his full salary. The dean was not disappointed when the professor quit in anger (Rosovsky, 1990).

      Divisionalized Form

Schematic illustration of the Divisionalized Form.

      Source: Mintzberg (1979, p. 393). Copyright ©1979. Reprinted by permission of Prentice Hall, Upper Saddle River, NJ.

      One of the oldest businesses in the United States, Berwind Corporation began in coal‐mining in 1886. It now houses divisions in business sectors as diverse as manufacturing, financial services, real estate, and land management. Each division serves a distinct market and supports its own functional units. Division presidents are accountable to the corporate office in Philadelphia for specific results: profits, sales growth, and return on investment. As long as they deliver, divisions have relatively free rein. Philadelphia manages the strategic portfolio and allocates resources based on its assessment of market opportunities.

      Divisionalized structure offers economies of scale, resources, and responsiveness while controlling economic risks, but it creates other tensions. One is a cat‐and‐mouse game between headquarters and divisions. Headquarters wants oversight, while divisional managers try to evade corporate control:

      Our top management likes to make all the major decisions. They think they do, but I've seen one case where a division beat them. I received … a request from the division for a chimney. I couldn't see what anyone would do with a chimney … [But] they've built and equipped a whole plant on plant expense orders. The chimney is the only indivisible item that exceeded the $50,000 limit we put on plant expense orders. Apparently they learned that a new plant wouldn't be formally received, so they built the damn thing. (Bower, 1970, p. 189)

      Another risk in independent divisions form is that headquarters may lose touch with operations. As one manager put it, “Headquarters is where the rubber meets the air.” Divisionalized enterprises become unwieldy unless goals are measurable and reliable information systems are in place (Mintzberg, 1979).

      Adhocracy


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