Cutting Costs Strategically
February 12, 2025
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The famous management expert, Henry Mintzberg, proposed a five configurations 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:
In other words, they perform the essential function of acting as a buffer between the senior management and the rank and file employees.
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.
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.
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