MGMT90227 Chap.4 Adaptive Structures and Holacracy
Adaptive Structures and Holacracy
A structure label does not fully describe how an organisation operates. Leaders also adjust specialisation, departmentalisation, chain of command, span of control, centralisation, formalisation and boundary spanning. This chapter treats structure as a sequence of hypotheses across growth stages.
It also examines holacracy as an employee-centric system of roles and governance, showing why self-management still requires information, accountability, onboarding, conflict resolution and ownership of unattractive but necessary work. Overall forms such as informal, functional, matrix, geographic divisional and product divisional offer a starting point. Design dimensions make them operational.
Specialisation determines whether roles stay broad or focus deeply on expertise. Departmentalisation groups work through a chosen logic. Chain of command describes reporting and authority, while span of control affects how much attention a leader can provide.
Centralisation places decisions at particular levels, formalisation makes some behaviour explicit, and boundary-spanning roles connect dependencies that the main grouping separates. Growth changes the appropriate settings. Broad roles can support speed early, then overwhelm people as work expands. A narrow span can increase coaching but add layers; a wide span can reduce hierarchy while limiting attention.
Divisions improve responsiveness around products or markets but may duplicate capability. A matrix preserves two dimensions and introduces conflicts that need legitimate resolution. The useful move is to identify the observed constraint, change the dimensions most responsible, and predict effects on people, processes, customers and performance. Holacracy illustrates why self-management is not structurelessness.
Authority is distributed through explicit roles and a governance process that changes those roles. This can help people closest to the work respond and improve it, but formal meetings can become rigid, a person without a clear role may experience uncertainty, and hidden influence can replace visible hierarchy. New employees need orientation, essential low-status work needs ownership, and disagreements need a credible path.
Access to information and commercial constraints determines whether autonomy is real. Treat structural change as an experiment rather than a conversion story. Define the dependency to improve, the decision that will move, the support people require and the new coordination cost that may appear. Pilot within a bounded unit when possible.
Retrospectives and customer evidence reveal whether the choice improves flow, while employee evidence tests clarity and participation. A recommendation is strongest when it states which evidence would justify extending the design, revising its governance or restoring a different form of coordination.
What this chapter covers
- 01
Functional, matrix and divisional forms
- 02
Centralisation and decision rights
- 03
Span and chain of command
- 04
Work specialisation and formalisation
- 05
Boundary-spanning roles
- 06
Holacratic roles and governance
- 07
Self-management trade-offs
Worked example · free
Pilot self-management with safeguards
- 6Identify which manager work currently integrates clients, capability and conflicts.
- 6Define roles, decision domains, information and governance before removing titles.
- 6Protect onboarding, essential work and conflict resolution.
- 7Pilot one unit and review clarity, speed, coordination and client outcomes.
Key terms
- Centralisation
- The concentration of decision authority near the organisational centre.
- Span of control
- The number of people for whom a leader has direct supervisory responsibility.
- Boundary spanning
- Coordination across teams, customers or external partners.
- Holacracy
- A formal employee-centric system that distributes authority through roles and governance.
Adaptive Structures and Holacracy FAQ
Is holacracy a structureless design?
No. It replaces conventional managerial hierarchy with an explicit system of roles and governance. Its meetings and processes can themselves feel rigid, which is why the design should be evaluated for fit rather than treated as the absence of structure.
What should change as a venture grows?
Overall structure and design dimensions may need adjustment as work becomes more specialised, markets multiply and dependencies rise. Leaders should change a specific setting to address observed evidence, then monitor effects on people, processes, customers and performance.
What is the main risk of self-management?
Authority can become ambiguous or shift into hidden informal influence when roles, information and conflict processes are weak. Necessary work may be neglected and newcomers may struggle to navigate the network. Explicit governance makes these risks visible and contestable.
Exam move
Learn the structural dimensions as adjustable dials rather than definitions in isolation. For each case, identify the dependency causing trouble, choose an overall form, and tune authority, span, specialisation, formalisation and boundary roles. For self-management questions, always discuss role clarity, information, accountability, governance and informal power.
Create three growth snapshots for one venture and decide which dial moves at each transition. Explain the benefit and the new coordination cost. Then test a holacracy proposal by listing the manager work that must still have an owner, including onboarding, conflict resolution, resource allocation and unattractive essential tasks.
End every recommendation with a bounded pilot and evidence from people, process, customers and performance.
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