Mintezberg Five Structure & Strategy Analysis

The famous management expert, Henry Mintzberg, proposed a fivec on

figurations approach to strategic management wherein any organization can
be broken down into five core elements or parts. The interactions between
these parts determine the strategy of the organization.
• The five parts according to Mintzberg are:
The Operating Core which consists of those doing the basic work and
whose output can be directly linked to the goods and services that the
organization makes and sells. According to Mintzberg, this part is common
to all organizations since the core work must be done and hence, the
operating element has to be put in place.
The Strategic Apex, which is composed of senior management and the
senior leadership, which provides the vision, mission, and sense of purpose
to the organization. Indeed, it can be said that this part consists of those
men and women who shape and control the destinies of the organization.
 Cont…
The Middle Level Managers who are the “sandwich” layer between the
apex and the operating core. This element is peopled by those who take
orders from above and pass them as work to the operating core and
supervise them. In other words, they perform the essential function of
acting as a buffer between the senior management and the rank and file
employees.
The fourth element is the Technostructure that is composed of planners,
analysts, and trainers who perform the intellectual work. This element
provides the advice for the other parts and it is to be noted that they do
not do any work but function in an advisory capacity.
The final element is the Support Staff who perform supporting roles for the
other units and exist as specialized functions that are responsible for the
peripheral services in the organization.
• The key aspect about these configurations is that it can be used to predict
the organizational structure of any organization and used to model the
strategy that the organization follows as a result of the interaction between
these parts.
 Cont…

For instance, in many service sector companies, the organization

structure is very fluid and interchangeable with the result that the middle
managers perform crucial tasks and the apex gets directly involved in
running the organization.On the other hand, in many manufacturing
companies, it is common to find the Technostructure prevailing as the
organizational processes are bureaucratic and have mechanistic
characteristics which makes the organization function like a machine. This
is the configuration in many public sector and governmental organizations
as well.Finally, the startups have a structure that is composed of the
strategic apex and the supporting staff in their initial years of operation as
the organization structure is yet to be formalized.The key implications of
Mintzberg’s configurations are that it gives us a useful model to describe
how the organizational structure affects strategy. As many theoretical
models depend on external strategy alone, this model is preferred by
those who want to understand how internal dynamics produce strategy.
 Performance Management
Definition: Performance Management can be defined as a
process which continuously identifies, measures and
developsthe performance of the workforce in the organization.
And to do so, each individual’s performance and objectives are
connected with the overall mission and goals of the enterprise.
Hence, the two key elements of performance management are:
Continuous process
Link to mission and goals
 In performance management, the managers try to figure out,
the existing performance level of the employees and works on
improving that level. It is a systematic assessment of the
performance of an employee and using the assessment to
better the performance over time.
Cont…
 Cont…
Performance management is commonly misconstrued with
performance appraisal, which is a process of evaluating the
performance of the workforce and includes feedback/review
on an employee job performance. However, getting feedback is
not sufficient. There are three more steps involved in the
accomplishment of the process, which are:
 Performance Interview
 Archiving Performance Data
 Use of Appraisal Data
These three activities along with the feedback are the essence
of the process, when undertaken in an organized way, the
process turns out as Performance Management System (PMS).
 Concept of Performance Management
As a communication system, it is developed to assist
employees in succeeding. It not just requires direction,
from the end of managers and supervisors, but also
needs active participation on the part of employees.
• It makes sure that employees are known about their
key job functions, aware of the performance level
expected, get constant feedback on their
performance, have opportunities for training and
development, get ratings on their performance and
reward thereon, in just and fair manner.
• North Carolina Rating Scale
Cont…
 Cont…

North Carolina Rating Scale is a five point

performance management rating scale, which
guides the performance functions, expectations,
and appraisals.
 Cont…

• Outstanding Performance (O): Performance level supersedes the expected

level. The employee is doing an outstanding job and the performance goes
beyond expected level, because of the employee’s efforts and skills.
• Very Good Performance (VG): Performance level fulfills established job
expectations and in many ways exceeds it.
• Good Performance (G): Performance level of the employee, is in alignment
with the job expectations set by the organization, the employee is said to be
doing a good job.
• Below Good Performance (BG): The level of performance of employee
meets a few job expectation, but not all the parameters are met. It is said
that employee’s performance is at a minimal level and improvements are
required.
• Unsatisfactory Performance (U): The level of performance is below a certain
level, i.e. he/she fails to fulfill the established standards. It is said that the
employee is not performing well at the level expected and requires high
supervision and direction.
 Cont…

The primary focus of the performance

management is towards the achievement of
results. It highlights the difference between
being engaged and producing results, meaning
that, when one is busy, it does not mean that
outcome is generated. It is often seen that
employees seem to be very busy, but when it
comes to performance, the results are against
what is expected. So, performance
management, is a must for every organization.
 Six Sigma
• Six Sigma is a quality-control methodology developed in
1986 by Motorola, Inc. The method uses to limit mistakes
or defects in and process. Six Sigma emphasizes cycle-time
improvement while at the same time reducing
manufacturing defects to a level of no more than 3.4
occurrences per million units or events. In other words, the
system is a method to work faster with fewer mistakes.
• Six Sigma points to the fact that, mathematically, it would
take a six-standard-deviation event from the mean for an
error to happen. Because only 3.4 out of a million
randomly (and normally) distributed, events along a
bell curve would fall outside of six-standard-deviations
(where sigma stands in for "standard deviation").
 Cont…
 In recent years, Six Sigma has evolved into a more general business-management
philosophy, focused on meeting customer requirements, improving customer
retention, and improving and sustaining business products and services. Six Sigma
applies to all industries. Many vendors, including Motorola itself, offer Six Sigma
training with the special certifications carrying the names of yellow belt, green
belt and black belt.The differing definitions below have been proposed for Six
Sigma, but they all share some common threads:
 The use of teams that are assigned well-defined projects that have a direct impact
on the organization's bottom line.
 Training in "statistical thinking" at all levels and providing key people with
extensive training in advanced statistics and project management. These key
people are designated "Black Belts." 
Review the different Six Sigma belts, levels and roles .
 Emphasis on the DMAIC approach to problem solving: define, measure, analyze,
improve, and control.
 A management environment that supports these initiatives as a business strategy.
 Cont…
 Philosophy: The philosophical perspective of Six Sigma
views all work as processes that can be defined, measured,
analyzed, improved, and controlled. Processes require
inputs (x) and produce outputs (y). If you control the inputs,
you will control the outputs. This is generally expressed as y
= f(x).
 Set of tools: The Six Sigma expert uses qualitative and
quantitative techniques or tools to drive process
improvement. Such tools include
statistical process control (SPC), control charts,
failure mode and effects analysis (FMEA), and
process mapping. Six Sigma professionals do not totally
agree as to exactly which tools constitute the set.
 Cont…
 Methodology: This view of Six Sigma recognizes the
underlying and rigorous approach known as
DMAIC (define, measure, analyze, improve and control).
DMAIC defines the steps a Six Sigma practitioner is
expected to follow, starting with identifying the problem
and ending with the implementation of long-lasting
solutions. While DMAIC is not the only Six Sigma
methodology in use, it is certainly the most widely
adopted and recognized.
 Metrics: In simple terms, Six Sigma quality performance
means 3.4 defects per million opportunities (accounting
for a 1.5-sigma shift in the mean).
Cont…
 Z- theory of Management
• Theory Z represents a humanistic approach to
management. Although it is based on Japanese
management principles, it is not a pure form of
Japanese management. Instead, Theory Z is a hybrid
management approach combining Japanese
management philosophies with U.S. culture. In
addition, Theory Z breaks away from McGregor's
Theory Y. Theory Y is a largely psychological
perspective focusing on individual result of employer-
employee relationships while Theory Z changes the
level of analysis to the entire organization.
 Cont…
• According to Professor Ouchi, Theory Z organizations exhibit a strong,
homogeneous set of cultural values that are similar to clan cultures. The clan
culture is characterized by homogeneity of values, beliefs, and objectives. Clan
cultures emphasize complete socialization of members to achieve congruence
of individual and group goals. Although Theory Z organizations exhibit
characteristics of clan cultures, they retain some elements of bureaucratic
hierarchies, such as formal authority relationships, performance evaluation,
and some work specialization. Proponents of Theory Z suggest that the
common cultural values should promote greater organizational commitment
among employees. Theory Z has been called a sociological description of the
humanistic organizations advocated by management pioneers such as Elton
Mayo, Chris Argyris, Rensis Likert, and Douglas McGregor.
• The primary features of Theory Z are summarized in the paragraphs that
follow.
 LONG-TERM EMPLOYMENT

• Traditional U.S. organizations are plagued with short-term

commitments by employees, but employers using more traditional
management perspective may inadvertently encourage this by
treating employees simply as replaceable cogs in the profit-making
machinery. In the United States, employment at will, which
essentially means the employer or the employee can terminate
the employment relationship at any time, has been among the
dominant forms of employment relationships. Conversely, Type J
organizations generally make life-long commitments to their
employees and expect loyalty in return, but Type J organizations
set the conditions to encourage this. This promotes stability in the
organization and job security among employees.
 CONSENSUAL DECISION MAKING
• The Type Z organization emphasizes
communication, collaboration, and consensus
in decision making. This marks a contrast from
the traditional Type A organization that
emphasizes individual decision-making.
 INDIVIDUAL RESPONSIBILITY

• Type A organizations emphasize individual

accountability and performance appraisal.
Traditionally, performance measures in Type J
companies have been oriented to the group.
Thus, Type Z organizations retain the emphasis
on individual contributions that are
characteristic of most American firms by
recognizing individual achievements, albeit
within the context of the wider group.
 SLOW EVALUATION AND PROMOTION
• The Type A organization has generally been
characterized by short-term evaluations of
performance and rapid promotion of high
achievers. The Type J organization, conversely,
adopts the Japanese model of slow evaluation
and promotion.
INFORMAL CONTROL WITH ORMALIZED MEASURES

• The Type Z organization relies on informal

methods of control, but does measure
performance through formal mechanisms.
This is an attempt to combine elements of
both the Type A and Type J organizations
 MODERATELY SPECIALIZED CAREER PATH

• Type A organizations have generally had quite

specialized career paths, with employees
avoiding jumps from functional area to
another. Conversely, the Type J organization
has generally had quite non-specialized career
paths. The Type Z organization adopts a
middle-of-the-road posture, with career paths
that are less specialized than the traditional
U.S. model but more specialized than the
traditional Japanese model.
 HOLISTIC CONCERN
• The Type Z organization is characterized by
concern for employees that goes beyond the
workplace. This philosophy is more consistent
with the Japanese model than the U.S. model.
• Read more:
https://www.referenceforbusiness.com/mana
gement/Str-Ti/Theory-Z.html#ixzz67JQsGTEN