A proper and clearly defined management structure is something every successful business needs. However, entrepreneurs may find that creating and implementing one isn’t as easy as it sounds. Henry Mintzberg, a Canadian academic and business management expert, set out to help companies address this issue by creating his own managerial theory. In it, Mintzberg categorizes organizational types and managerial roles to leverage strengths, resolve conflicts and prioritize workflow. Here’s how the theory’s principles are defined and how they can be implemented in your small business.
The management theory of Henry Mintzberg
Henry Mintzberg is a management expert, author and academic. He’s written nearly two dozen books on management and holds the Cleghorn Professorship of Management Studies at McGill University. Mintzberg argues that skills are learned through experience and cannot simply be taught in the classroom.
In an interview with CNN, he stated: “You can teach all sorts of things that improve the practice of management with people who are managers. What you cannot do is teach management to somebody who is not a manager … you cannot teach surgery to somebody who’s not a surgeon.”
Mintzberg recommends breaking down management roles and responsibilities and organizing the workplace to simplify complex concepts. This helps streamline companies for efficiency, improves employee engagement and allows each team member to develop their own skills.
Did you know? Though credible, Mintzberg doesn’t have this market cornered. The Weber management theory, Follett management theory and the Kanter management theory are also well regarded, as is the Taylor management theory.
Types of organizational structures
There are five organizational structures, according to Mintzberg. He suggests that companies adopt one of these structures to carry out business operations successfully, though the type that will work best for your enterprise will likely depend on your industry, how long you’ve been in business, leadership goals and other factors.
An adhocracy has no formal structure; rather, highly qualified employees form teams to complete tasks and adjust to industry changes. This is the opposite of a bureaucracy, as organizations that follow this structure have a decentralized process.
An adhocracy employs a large workforce that allows teams to quickly problem-solve, work flexibly and collaborate in innovative ways. A weakness of this kind of innovation organization is that there can be clashes among team members when it’s not clear who is in charge.
These are the characteristics of an adhocracy:
- No formal structure
- Employment of experts with varied experience
- No standard procedures
- Undefined roles
- Flexible work
- More collaboration
In a machine organization, workers operate as parts of a standardized system. Each department is responsible for its own tasks, and decision-making is centralized. These departments are incredibly formalized, and specific parameters define employees and their work. In a larger company, these departments could be accounting, marketing, human resources or other standardized teams.
Having clearly defined roles gives workers clarity on their responsibilities. But if these departments differ in workflow and are inconsistent with the business’s goals, then conflicts and incompatible work may result.
These are the characteristics of a machine organization:
- Standardized work processes
- Centralized decision-making
- Formal departments
- Clearly defined roles
- High degrees of specialization
The professional organization is similarly bureaucratic as the machine organization, but here, each professional works independently without the centralization of tasks that match their specific skill set. This structure places the strengths of organizations on highly knowledgeable workers with particular expertise.
This structure is most commonly found in educational institutions, accounting firms and law firms, where there are a lot of specialists working for one entity. Because every worker has such unique proficiency, senior management can have difficulty maintaining control and managing them, as these professionals have autonomy. [Related article: What Does It Take to Be a Good People Manager?]
These are the characteristics of a professional organization:
- Standardized work processes
- Clearly defined roles
- No centralization
- Independent work and decision-making
- High degrees of specialization
The entrepreneur organization consists of a singular structure with one person in power and a few subordinates working beneath them. Compared to other organization types, this simple structure is informal, as the size of the company gives leaders flexibility.
Most small businesses and startups begin with this structure, where the founder or founders serve as the primary leader for their teams. Many companies experience innovation and success when working in this structure, but too much power at the top can lead to poor decision-making.
These are the characteristics of an entrepreneurial organization:
- Singular, simple structure
- Strong leadership, with few senior managers
- Independent decision-making at the top
- Flexible operations
- Little delegation of power
Large companies with a variety of product offerings and divisions tend to function in a divisional or diversified organization. In this structure, divisions are autonomous and make their own decisions regarding workflow, hiring and other practices. The business’s larger, central team can focus on the overarching company vision since it’s not responsible for day-to-day decision-making.
A downside of the divisional organizational structure is the potential for conflict and competition for company resources between divisions.
These are the characteristics of divisional organization:
- Operating units with autonomy
- Decentralized decision-making
- Singular focus for each team
- More control and accountability for managers
Bottom Line: There is no perfect structure for all businesses. If you implement one and feel it isn’t working or you outgrow it, try another!
How to implement Mintzberg’s theory
Once you’ve identified an organizational structure suited to your business, you can further set your company up for success by using Mintzberg’s guidance on organizational parts and managerial roles.
Break up the basic parts of your organization.
Mintzberg says that every organization should have six basic parts.
- Strategic apex: These are the people at the top of the company who are responsible for following its mission and empowering others to do so. [Follow our tips to empower your staff.]
- Middle line: The managers below the apex convey their objectives and strategies to the workers.
- Operating core: These are the employees who make the products or provide the services.
- Technostructure: This refers to employees in larger organizations who analyze productivity, workflow and technology.
- Support staff: These are workers who provide administrative services for leaders at the apex and the company at large.
- Ideology: This part is concept-based; it’s a business’s clearly outlined mission and detailed values that leaders can communicate to the entire workforce.
Break up your managerial roles.
Though every manager is different, Mintzberg makes the case that everyone should practice and master each of these interpersonal, informational and decision-making roles.
- Figurehead: A figurehead is responsible for social, ceremonial and legal matters. They represent their company in a professional manner.
- Leader: All managers must be leaders with excellent communication skills and the ability to inspire and coach their teams. Employees should be able to look to their managers for support and guidance. You can learn how to test for leadership abilities to ensure you’re putting the right people in this position.
- Liaison: Liaisons are responsible for networking inside and outside their company and relaying necessary information.
- Monitor: A monitor seeks information both within and outside of the company to assess the business’s operations and identify issues that need to be addressed and changes that need to be made.
- Disseminator: Disseminators are responsible for passing valuable information to employees and delegating assignments accordingly.
- Spokesperson: These managers relay information externally, acting as a spokesperson for the business’s brand.
- Entrepreneur: Acting as entrepreneurs, these managers should inspire change and innovation. They should also create and implement new ideas.
- Disturbance-handler: Any external or internal issues or roadblocks should be handled by this type of manager.
- Resource-allocator: These managers must allocate and oversee various resources, from funding to equipment needs.
- Negotiator: The negotiator is responsible for participating in and directing negotiations within the organization, such as leading salary negotiations with employees.
Tip: It’s difficult to find someone who captures all of these strong management attributes, which is why some businesses opt to hire an individual for each type of manager. Still, encourage leadership training and cross-training among your managers to help them improve in areas where they lag behind.
How Mintzberg’s theory applies to SMBs
Small and midsize businesses can use Mintzberg’s theory to define their managerial organization and inform roles and responsibilities. Since its initial publishing in the early 1970s, Mintzberg’s theory has influenced generations of companies by helping them instill better decision-making structures, increase self-awareness and build trust with employees.
Because of their size, most small businesses should start out using an entrepreneurial organizational model. Since small businesses are formed when a person or professional partners have an idea for a product or service, all the decision-making should initially come from them. They are the ones who know how the business should operate and how to execute their ideas.
As you scale your business, you’ll need to hire a leadership team to share in your growing number of responsibilities because, at a certain point, one or two people managing an entire workforce becomes untenable. Evaluate your business’s workflow to determine how and where your team members are most productive. From there, decide on a business structure that works best within your system and can easily be adopted by your current team. Then appoint people to the managerial roles your company needs.
Initially, it may be challenging to transfer control to new team members or change established processes. Allow enough time to be able to honestly assess whether your organizational type, parts and roles are working. You can always reevaluate and adjust your managerial structure as needed.
Sammi Caramela contributed to the writing and research in this article.