What is 'Adhocracy'

Adhocracy is a form of business management that 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. It offers a sharp contrast to more formal styles of decision-making, in which participants with a legitimate stake in the outcome are included and others excluded; options are rigorously weighed and deliberated, and meetings in turn lead to decisions followed by clear assignments, closely monitored execution, and periodic review.

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.

An adhocracy has been defined as "any form of organization that cuts across normal bureaucratic lines to capture opportunities, solve problems, and get results". When ran well, an adhocracy can be a complex and dynamic organization that can function quite different than a bureaucracy. Many consider adhocracy to be superior to bureaucracy and the organization structure of the future. It can be very effective at problem solving and innovations and thrives in diverse environments that are equipped with sophisticated and often automated technical systems that support business processes.

The disadvantages of adhocracies include half-baked solutions and personnel problems stemming from organization's temporary nature, extremism in suggested or undertaken actions, and threats to democracy and legality rising from adhocracy's often low-key profile. To address those problems, researchers in adhocracy suggest a model merging adhocracy and bureaucracy. This hybrid structure is known as a bureau-adhocracy.

Characteristics of a Adhocracy

  • Structure takes shape organically
  • Minimal formalization of employee behavioral expectations
  • Job specialization not necessarily tied to or based on formal training
  • Specialists often work in functional units for housekeeping purposes but can deploy them in small, market-based project teams to accomplish specific goals
  • Promote mutual adjustment to change within and between these teams
  • Low or no standardization of procedures
  • Roles not clearly defined
  • Selective decentralization
  • Significant power belongs to specialized teams
  • Horizontal contributions of knowledge
  • Culture based on non-bureaucratic work
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