Organizational Structure

Henri Fayol, a French management theoretician, defined, already in 1916, fourteen management principles that have turned to a well-known list for all managers. Among the list are principles of rewarding, the management chain, the fraternity of the group, and more. One of these principles, that we find discussed also by many other management theoreticians, is the principle, that every employee has one manager instructing him and in charge of him. This sounds as a very natural principle; multiplicity of managers for a single employee can confuse him, can decrease efficiency (caused by holes in time when each manager is partial in charge) and can raise organizational political problems when conflicts develop. The list of potential problems is long, and it is reasonable therefore, that organizations were based many years on a hierarchical structure.

However, in the past years new needs develop questioning the correctness and fitness of the classical hierarchical organization structure for all purposes and for all circumstances. As many workers are knowledge workers, an important parameter influencing both on the needs and on the implacable solutions.
Knowledge workers are workers that knowledge takes a significant place in their activities. Developing the knowledge is a central component of their professionalism.

How does such a worker learn and develop his knowledge? Knowledge develops through personal experience, through team working, and by having a guiding manager pushing one up:
Personal experience exists, independent of the organizational structure. If we want to leverage it, it is preferable that the experience is diverse.
Working in teams enables us to learn from our colleagues who may have different education, skills and characteristic. The organizational structure does have influence on teams in which each employee is assigned.
The manager and his ability to guide are surely influenced from the organizational structure.
All three are intensified when the organizational structure is not hierarchical, when the worker has an opportunity for more diverse activities, taking part in several teams (including different people) and working with several managers, each manager adding his observation.

Based on these, I have set, several years ago, a heterarchy organizational structure, in the company, which I manage. The Internet defines a heterarchy organizational structure as a form of organization resembling a network or fishnet, where authority is determined by knowledge and function. Such a structure resemble the matrix known organizational structure (also called "M-form"), but is rather loose. It is a network, but not as strict as the classical matrix having employees assigned to two well-defined dimensions of managers. I have adopted this structure, and it may seem like cognitive dissonance, but I see its advantages every day.

The managers in my company each have a different combination of education, experience, skills and character, all relevant to the profession in which we specialize. In each project, we decide ad-hoc, which manager will lead and who will be included in the team of work. We will always recommend part time participation, enabling the team workers to continue their participation on other projects at the same time.

In practice, this project assignment method brings to a situation, in which every employee experiences diverse activities, is assigned to several teams, in which he learns and shares every time, his knowledge with different people. Furthermore, the professional manager varies from project to project, and the employee benefits learning from the experience of various managers (usually more senior).

Six month after I ruled this organizational structure, I found out its name (the heterarchical organizational structure) and learned that a researcher, named Hedlund, wrote an article, already in 1994, claiming that knowledge based units, as R&D, should be managed according to this structure. Hedlund defined principles for heterarchical management, and coined this method "the N-FORM", N standing for novelty, or new.
The novelty of this model compared the classical M-FORM, is:

1. Combination of issues and people in the N-FORM, compared to defined distribution in the M-FORM.
2. Temporary constellations of people and units in the N-FORM, instead of stable fix organizational structure in the M-FORM.
3. Importance of staff in "low" organizational levels and importance of dialog between functions and groups in the N-FORM, rather than managing the interface in high management levels, in the M-FORM.
4. Wide organization communication in the N-FORM, instead of top-down communication in the M-FORM.
5. A role of catalysts and architects of communication infrastructure, defined for the higher management, preserving the investment in knowledge in the N-FORM, rather than guiders, controllers, monitors and resource allocation definers in the M-FORM.
6. A heterarchical organizational structure.

How do I protect my employees from confusion, inefficiency and organizational politics? I admit there is no full answer, but these challenges are addressed by assigning one (managerial) manager for each employee, to whom this employee reports regarding vacations and sickness, with whom s/he consults with when some high-level conflict rises, and with s/he speaks when they need to share their thoughts or feelings.

As everything in life, there are no advantages without disadvantages. In order to help the suggested method actually work, good work-team between the managers must exist. They must know how to cooperate; moreover, they must show good will. When good will is missing, the difficulties grow bigger, and the advantages are not as promising.

When managers work in cooperation, everyone benefits. The employee benefits from improving development of knowledge and professionalism, as to the diversity in all dimensions described; the organization benefits improved quality.

For the time being, I am an exception in this method of management. It is interesting to know how organizations will structure their knowledge-based units ten years from today.
Until then, let us wait with patience.

Yours,
Moria

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