In the world of administration four philosophies define degrees of two key components which define the way it runs. The first of these components is focus, namely, the thing on which the organization places its main attention. This is defined as internal or external. The second component is function, and describes how the organizations goes about its day-to-day activities. This is defined as flexible or controlled. The grid thus formed with these two axis in mind leaves the observer with four categories: Clan, Adhocracy, Hierarchy, and Market.
The Clan mentality is defined by internal focus and flexibility. It is rather like a family, in which teamwork and cooperation are emphasized. As things go along, individual roles may change, but the group ably supports all the members in it. I think of an Amish barn raising. Everyone is willing to be helpful to those around them in whatever need may arise, even if it is not particularly in their job description.
Adhocracy is defined by external focus and flexibility. I would term it “organized chaos.” Structure and community are not so valuable in an adhocracy, but in certain settings this method sure gets the job done. It gives liberty at every possible opportunity. This liberty is to be used to stimulate creativity and new ideas. This is sometimes seen in the form of individual project time with few guidelines but that it be somehow useful.
Hierarchy is due opposite in both respects, internally focused and controlled. In a hierarchy, roles are definite and unchanging, authority is unquestionable, and tradition and conformity are highly valued. This system is not suited for creativity, as adhocracy, but is very well suited for order, discipline, and smooth function. The armed forces are a good, though rather extreme example of this type.
A Market type system is externally focused and controlled. Instead of being driven from within, it is driven from without. Popular demand is thus a key component in why this type exists as well as how it functions. It seeks to outdo competition, but not without plenty of order. Many businesses fall under this category. The difference between this and hierarchy I think may be best explained as when a job needs to get done, market is concerned that it get done, not whose job it is.
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