You are working on a book titled “Understanding organizations…Finally”. In this book you are revisiting the topics you wrote about in your books “The structuring of organizations” and “Structure in Fives” published in 1979 and 1983 respectively. In these books you provided an extensive explanation of organization design as a configuration that is based on internal consistency among the design parameters and their compatibility with situational factors. What has changed in the meantime? What is different in your new book?
I’m not sure organizations changed so much as my perception of them. To put it in simple terms – the book focused on five basic forms of organization.
And now we have four basic forms.
I’ve got new names for them. One is called “The Personal Enterprise” which is the entrepreneurial organization – organizations that are very tightly controlled by single individuals, e.g. Donald Trump and the White House, Musk and Tesla and so on… The ones where single individuals are very influential. And there’s not much structure in a way, because everything revolves around what the boss is saying and doing.
The second one I’m calling “Program Machines”. I used to call them “Machine bureaucracy”. “Program machines” are highly structured, highly controlled, very technocratic organizations like banks, a lot of government offices etc. The rules dominate and the people who work there are not highly skilled. McDonald’s can train someone in a few hours compared to a hospital where it takes years and years of training.
The third form I call “The Professional Assembly”. It’s an organization where professionals work largely on their own. The way I do in the University or most professors do, the way doctors mostly work in hospitals… If you want a surgeon, anesthetist, nurses, and the whole staff in a very complicated operation, watch closely – they barely communicate, because everything is so structured, but in a professional way. They’re all trained to know exactly what they do. I call it “Professional assembly” because they are assembled in a hospital or the university, or in an accounting firm or in a law office.
The fourth one, I call “The Project Pioneer”. These are organizations that use expertise but use them in teamwork. They’re very heavy on teamwork. These are a creative film company, an advertising agency and so on.
These are the basic forms. The way the book differs now is that it puts much more emphasis on the fact that none of these forms can exist in a pure form. You can’t have a pure “Machine organization”. It would just go crazy with efficiency. Or if you have a pure “Professional organization” the professionals would just go out of control. You always need the forces of the other forms, and I introduced a force for each form.
So, in a “Machine organization” it’s all about efficiency.
In a “Professional organization” it’s about proficiency.
In a “Project organization” it’s about collaboration.
In a “Personal organization” it’s about consolidation by the chief.
To understand organizations, you have to understand the hybrids.
For example, a pharmaceutical company is not one or the other. It tends to be project in research, while professional in development.
There are all kinds of mixtures. An orchestra would be a bit of a hybrid between the leader–centered personal organization and the skill-centered professional organization.
What happened with the “Divisionalized form” and to the so-called Missionary organizations?
That is the second part of the book. After introducing the four forms and four forces that go with those forms, then I introduced three more forces that are common in all organizations.
Those are culture, politics or conflict and division (between units).
In every organization there’s some kind of culture, there’s always conflict, there’s always some autonomy for units, but, when an organization focuses on those three – then we have three more forms. So, we get the divisional form or the federation, we get the political arena or the conflict-driven organization and we get the missionary organization or the community ship.
Historically looking, how are new models of organizations developing and what is influencing that?
Quickly and slowly. Quickly in a sense that everybody is coming up with the latest thing. Almost all of that has been pursued for years, they just have a different name for it or a different angle. Therefore, we have new models all the time.
I devoted the next to last chapter in the book to what I think is the recent thing in organizations – “Organizations Outward Bound”. Thirty, forty years ago, we talked a lot about diversification and vertical integration as the main strategies of organizations. This whole trend was about buying other companies and bringing them in. Vertical integration was about bringing in your customers or suppliers. Diversification meant you bought other kinds of companies in.
All of that has totally reversed when we talk about outsourcing.
It is the exact opposite of vertical integration. Outsourcing means you take what you are doing and get someone else to do it on contract. Wikipedia, Zoom – these are all platform organizations in the sense that some group creates a platform and then everybody comes into that platform and uses it. That’s the biggest trend I see. So, how many really new models have I seen in the last thirty or forty years? One.
Even though we live in the 21st century, essentially we don’t understand organizations as we should, right?
We’re surrounded by organizations, yet we don’t understand them at all. We can see that every time consultants come into a professional organization and treat it like a machine organization.
Hence the title of the book “Understanding organizations…finally”. We are so ignorant of how organizations work. We kind of have a sense of how our own organization works but we don’t have this general understanding.
Let me conclude with the story I tell in the book, about two biologists. One is studying bears and the other is studying beavers. But they don’t have a vocabulary beyond “mammals”. So, they get together and compare what they learned about mammals. They get into the discussion of where mammals spend the winter.
One of them says “Well, in a cave, of course.”
The other says “A cave? Are you crazy? If they’re in a cave their predators will come and kill them!”
The first one says: “Mammals don’t have predators!” (Because he was studying bears).
They’re talking past each other because they don’t have the vocabulary.
Likewise in organizations. Nobody says: “We’re a professional organization, you’re treating us like a machine organization”. However, people need to be able to say that. Or “We’re a machine organization, you’re treating us like a professional organization.”
When can we expect your new book to be released and to “Finally understand organizations”?
Maybe spring of 2023.
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