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.

Key Takeaways

  • Adhocracy is the opposite of bureaucracy, relying on self-organization and individual initiative to complete tasks.
  • Bureaucracy, meanwhile, relies on defined rules and hierarchy to meet goals. 
  • Adhocracies can work well in fast-changing industries where organizations that can identify and act on new opportunities the fastest have a competitive advantage. 
  • These systems can also work well in smaller companies where managers can still direct as necessary.  
  • On the other hand, adhocracy may become chaotic or inefficient in large organizations where, for example, work may be duplicated by several teams.

How Adhocracy Works

Adhocracy allows organizations to operate in a more flexible manner. It offers a sharp contrast to more formal styles of decision-making. 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. 

Special Considerations

An adhocracy, as defined by Robert H. Waterman, Jr. in his book titled “Adhocary,” is "any form of organization that cuts across normal bureaucratic lines to capture opportunities, solve problems, and get results.” Adhocracy tends to be focused on future business trends. Companies and teams utilizing an adhocracy structure remain fully adaptive, putting growth and technology above many other business goals. 

The key characteristics of an adhocracy include: 

  • The 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
  • Low or no standardization of procedures
  • Roles not clearly defined
  • Significant power belongs to specialized teams

Advantages and Disadvantages of Adhocracy 

An adhocracy can be a complex and dynamic organization that can function quite differently than a bureaucracy. Many consider adhocracy to be superior to bureaucracy and a better organizational structure. It can be very effective at problem-solving and innovation, thriving 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 the lack of hierarchy and extremism in undertaken actions. To address those problems, researchers in adhocracy suggest a model merging adhocracy and bureaucracy. This hybrid structure is known as a bureau-adhocracy.