ORGANIZATIONAL ADAPTATION:The Entrepreneurial problem, The Administrative Problem

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Change Management MGMT625

Lesson # 23

ORGANIZATIONAL ADAPTATION

The word adaptation is a metaphor that captures the endeavours of organizations to be fitted better to

its environment. Two things remain prominent with organisation in this process:

1) It has an articulated purpose

2) An established mechanism for achieving it.

Most organizations are constantly evaluating their purposes, questioning, verifying and re-defining

the way of interaction with their environments. Effective organisations maintain alignment with its

environment, and ineffective organization fail to maintain the alignment with environment. These

effective organizations also constantly modify and refine the mechanism by which they achieve their

purposes and are re-arranging their structure of roles, relationships and managerial processes. Hence

the essence of management is coping with external environmental change by changing objectives,

changing structures and changing processes

We will discuss here the same as the concept of organisation adaptation frame-work or model as

proposed Miles and Snow. The model contains two major elements:

1. It specifies the major decisions needed by organization to maintain an effective alignment with its

environment.

2. This also highlights an organisational typology which portrays different patterns of adaptive

behaviour.

The Adaptive Cycle:

Strategic Choice theorists argue that organization behaviour is only partially ordained by

environmental conditions and the choices made by top managers are the critical determinant of

organization structure and processes. The adaptive cycle is present in all organization, according to

Miles & Snow, and it is more visible in new or growing organizations

Now the question is what is meant by adaptive cycle? This has been defined by the two leading

scholars as under:

The Entrepreneurial problem

An entrepreneur must give a concrete definition of organization domain: a specific good or service

and a target market or market segment, and the entrepreneurial problem is an added dimension. In

either a new or on-going organization the solution to entrepreneur problem is marked by

management's acceptance of a particular product-market domain, and this acceptance becomes

evident when management decides to commit or allocate resources.

Second is to achieve objectives related to the entrepreneur domain. In many companies

entrepreneurial solution is sought by through the development and projection of an organizational

image, internally and externally. Therefore in this phase two important phenomena are the

identification of a new opportunity and the initial impetus for movement toward it. Engineering

problem begins to appear at this stage.

The Engineering Problem

The engineering problem involves the creation of a system which operationalizes management's

solution to the entrepreneurial problem. Such a system requires management to select appropriate

technology (input-transformation-output) for producing and distributing the chosen product, and

Change Management MGMT625

further need new information, communication and control linkages. (Job-order, batch or flow

production) As solution to the problems are reached through initial implementation of the

administrative system but final configuration of the organization will be reached as management

consolidates relations with the environment (final shape of the organization will be settled during

administrative phase)

The Administrative Problem

Administrative system is to reduce uncertainty within the organizational system. Therefore in this

phase management establishes process for coordinating and controlling internal operations and

rationalizing the system already developed. It also involves formulating and implementing those

principles which will enable the org. to continue to evolve (innovation). This phase is termed pivotal

by the author in the cycle of adaptation owing to the followings:

Rationalization and Articulation

Management must be adept at two conflicting functions: first, to create an administrative system

(structure & processes) for monitoring and controlling current activities and second, at the same time

allowing the system not to jeopardise the future innovation. This has been identified as lagging and

leading variable in the process of adaptation. The lagging variable suggests organization must

rationalize through the development of appropriate structure and processes, strategic decisions made

at previous points in the adjustment process. While the leading variable the administrative system

must facilitate the org. future capacity to adapt by articulating and reinforcing the paths along which

innovative capacity can proceed. Therefore an administrative system is such to deal with past and

future. The same dilemma can be identified in the classical principle of Henri Fayol; especially when

he talked of maintaining stability and initiative in the organization. In terms of marketing

management of an organization the same problem persists as revenues from existing product and at

the same time the need to develop new products and businesses. The dilemma is, how can we get

both out of the same structure one needs innovation and creativity while the other demands tight

discipline and regimentation?

Having dealt with adaptive cycle as given by Miles and Snow the question then arises how

organisations move through the cycle. For this we need to understand the typology presented by them

in the form of different set of organizational strategies. The question is what strategies organizations

employ in solving their entrepreneurial, engineering and administrative problems. The research of

Miles & Snow shows that there are essentially three-strategic types of organizations:

1. Defenders

2. Prospectors

3. Analyzers

Each strategy has a distinct way to engage or interact with its environment. Each type has its own

unique strategy for relating to its chosen market. Each has a particular configuration of technology,

structure and process that is consistent with its market strategy. Besides the fourth type of

organizations exist known as Reactor, which is identified by Miles & Snow as a form "Strategic

failure" owing to inconsistencies among its strategy, structure, technology and process.

1. Defenders

The defender deliberately enacts in an environment for which a stable form of organization is

appropriate. Stability is achieved by the defender's definition of, and solution to its entrepreneurial

problem. The defenders define it as " how to seal off a portion of the total market in order to create a

stable domain, and they do so by producing only a limited set of products directed at a narrow

segment of the total potential market. With in this domain defender strives aggressively to prevent

competitors entering its turf, but also ignores developments and trends outside of their domains. Over

a time he is successful in carving out its own niche which is difficult for competitors to penetrate.

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The engineering problem for the defender is how to produce and distribute goods as efficiently as

possible? The defender does so by developing a single core technology that is highly cost efficient

out put on continuous and predictable basis. Some defenders follow vertical integration strategy by

incorporating each stage of production from raw material to distribution of final output.

The defender's Administrative problem is "How to achieve strict control of the organization in order

to ensure efficiency. So this is resolved through structural-process mechanism described as

mechanistic bearing the following features:

i) Top management group heavily dominated by production and cost-control specialist

ii) Little or no scanning of the environment for new avenues.

iii) Functional structure characterized by division of labour, centralized control,

communications through hierarchical channels

Such administrative is suitable for generating and maintaining efficiency but have adaptive or

adaptability problems. Therefore this system operates well for stable industries and is ineffective for

turbulent industries (where market environment changes quickly)

For example this view of strategic adaptation is popular amongst managers in developing countries

e.g. electronic industries in context of Pakistan split air conditioner may be different from traditional

manufacturers of window air conditioning units. The question then is why traditional stable business

in this industry was un-able to realise and adapt quickly in the changed environment. Or it is the

organization who acted like defenders of the Miles & Snow's typology.

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