DEFINITION of 'Adhocracy'

A form of business management which emphasizes individual initiative and self-organization in order to accomplish tasks. This is in contrast to bureaucracy which relies on a set of defined rules and set hierarchy in accomplishing organizational goals. The term was popularized by Alvin Toffler in the 1970s.

BREAKING DOWN 'Adhocracy'

Adhocracy allows organizations to operate in a more flexible manner. This flexibility can work well in fast-changing industries where organizations that can identify and act on new opportunities the fastest have a competitive advantage. Adhocracy may also work best with smaller organizations where managers are still able to comprehend and direct the organization when necessary. On the other hand, adhocracy may become chaotic or inefficient in large organizations where, for example, work may be duplicated by several teams. Poorly defined working roles may prove ineffective where team members are unaware of the scope of their roles, and thus desired or necessary work is not carried out.

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