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Henry Mintzberg proposes that organizations can, to some degree, select the structures they will adopt to align their business to performance requirements. He suggests 10 parameters of organizational design that must be taken into account when designing the structure of an organization.
The Design of Individual Positions
The first four parameters suggested by Mintzberg relate to the design of individual positions within the organization.
1. Job specialization
The first parameter of organizational design involves determining what each employee in the organization will do. Some jobs may have a narrow range of tasks (which Mintzberg referred to as horizontally specialized), or a broad range (horizontally enlarged). Some jobs may allow the worker little autonomy (which Mintzberg referred to as vertically specialized), others may allow much (vertically enlarged). A low skilled task, where an employee carries out routine work with restricted scope for creativity could be both horizontally and vertically specialized.
2. Behavior formalization
This describes the extent to which tasks and behaviors are standardized through the stringency of work processes. In some situations, a high degree of control is necessary and this can be achieved through strict behavior formalization. This might be important, for example, where health and safety considerations exist and rigid procedures must be followed to ensure a safe working environment. Behavior formalization can be used to bring about vertical specialization.
3. Training
Some positions within organizations are more complex and employees appointed to these will need to have acquired a body of knowledge or skills prior to carrying out the work. An organization must therefore decide what training is needed for these positions, normally before employees are recruited. Examples of this include the training required by teachers or lawyers before taking up post. In some organizations, training can be undertaken on-the-job, such as in the case of an apprenticeship.
4. Indoctrination
Indoctrination is a formal process of socialization, i.e. learning and observing the organization’s culture or values. While employees may absorb the culture and values simply as a result of day to day exposure, in Mintzberg’s hypothesis, indoctrination is a deliberate process, conducted formally with predetermined outcomes. It is designed expressly for the benefit of the organization and is controlled by it.
The Design of The Organizational Superstructure
The next two parameters describe the way that the individual positions (as defined above) now relate to each other in a managerial ‘superstructure’.
5. Unit grouping
This is where individual positions and groups are arranged within the organization in a hierarchical structure, often illustrated by a structure chart. The purposes of unit grouping are to:
- Establish a system of common supervision among positions and units
- Ensure common resources are shared between positions and units
- Assess positions and units on common measures of performance
- Encourage collaboration between the members of the units
6. Unit size
Mintzberg suggests that unit size is influenced by two key relationships: the degree of standardized behavior in the unit and the need for coordination. Units with a high degree of standardized behavior (where a high level of control is exercised through rigid procedures) will require less supervision than those units that apply more flexible procedures.
Mintzberg cites the example of highly standardized behavior in a production line of more than 50 workers which is supervised by one foreman. Coordination and interactive working are most likely to take place where communication is informal and employees are quick to respond to change. These conditions are more likely to be found in smaller units.
Design Parameters
Mintzberg next suggests lateral linkages between the individual positions and the superstructure; specifically planning and control systems, and liaison devices.
7. Planning and control systems
Put simply, action planning systems involve the setting of targets to stipulate results, while control systems measure the organization’s performance against these targets.
8. Liaison devices
While communication and collaborative working occur relatively easily within small units, it is challenging to replicate this level of liaison between separate units. According to Mintzberg, liaison devices represent the most significant development in structural design over the last 20 years of the 20th century. A number of liaison devices have been developed to address this increasingly serious problem, including:
- Liaison positions, which are jobs created to directly coordinate the work of two units
- Task forces and standing committees, brought together to address a specific project or issue of common interest
- Integrating managers who have authority over a specific interest relating to several units (such as unit managers in hospitals who co-ordinate doctors, nurses and support staff)
- Matrix structures, which match skills with requirements across a number of separate operating units
Decentralization
Mintzberg defines the structure of an organization as centralized when the power of decision-making lies at one point; and decentralized when the power of decision-making is dispersed amongst several points. While centralized decision-making ensures tight control, decentralized power should result in the organization being more responsive and in theory this should lead to faster and more accurate decision making.
Vertical decentralization
This is the term Mintzberg gives to the delegation of formal power, down through the hierarchy of the line management system.
Horizontal decentralization
This is the extent to which formal or informal power passes to non-managers, i.e. across a range of positions including managers, operators and support staff. This will only be successful where these employees have embraced the standards and values of the organization through successful indoctrination. Finally, Mintzberg further distinguishes between selective decentralization (where only one or a few types of decisions are decentralized) and parallel decentralization (where many types of decisions are decentralized).
Conclusion
Organizational structure is a complex subject, combining a range of dimensions and influences. However, organizations that wish to influence how their structure will develop must analyze the organization in its entirety, with all of its component parts and the pressures they exert on each other.
