Management Strategies exhibited by Craft Brewers - The Craft Enterprise

Many times, organizations kind of 'evolve' without any planning as to their structure (i.e., management systems, rewards, organization and job design, etc.) especially in relation to their operating environment 

“Organizational typologies” can provide a parsimonious framework for describing complex organizational forms and for explaining outcomes such as organizational effectiveness or groupthink. Mintzberg (1979, 1983) identified five types of organizational structures that were hypothesized to result in maximal organizational effectiveness, and Porter (1980, 1985) identified three ideal-type strategies that are hypothesized to maximize competitive advantage.

Professors Alan Filley, Ray Aldag and Robert Pricer, at the University of Wisconsin –Madison, identified and developed a unique typology system that identified three adaptive strategies exhibited by entrepreneurial firms related to organizational structure and leadership to deal with the operating environment. The three types of firms – Craft Centered, Market/Innovation Centered, and Administrative – exhibit unique structural and leadership characteristics. This blog will discuss some of the characteristics of the Craft type organization including the strengths and weaknesses of it.

The Craft Centered Organization

A Craft Centered firm is operated by the owners and managers who are technical specialists, not business specialists. One example used by Professor Alan C. Filley during his research at the University of Wisconsin- Madison to illustrate a Craft firm is that of a company owned and operated by a married couple, both of whom were expert musicians. They provided music lessons and sold music instruments without developing business functions such as merchandising, operations, human resources, finance, sales or promotion. The couple earned a comfortable living that allowed them to conduct a business that was their craft. The following sections provide greater detail about characteristics specific to the Craft Centered Business.

Objectives - essentially those of survival, the comfort of the owner and the well-being of the participants. Success is measured in terms of continued profitable existence of the organization. The product/service firm avoids rules, policies, and procedures in favor of traditional methods of operation. 

Leadership- The owner-manager of such a firm operates more within an arena of technical knowledge than as a professional manager. She is likely to spend much time in production or sales and is involved in day-to-day operations. The founder in this type firm will rely on experience combined with the belief that he or she may not feel that other people can give him or her much useful information.

Levels of Power - The Craft firm is informally arranged into levels of power rather than into an impersonal hierarchy of offices, and each level defers to those at the higher rank.

Trusted Employee - Usually, the official family has assigned some supervisory responsibility as a reward for their loyal contributions to the organization and its owners. Many times trusted employees do not function well as supervisors as they may be reluctant to share knowledge with subordinates if doing so means that they have less power and prestige in the company.

Employee Morale - organization values comfort and low risk taking, it makes sense to expect that over time it will hire and retain employees with similar expectations.

Technology and Staffing - The Craft firm, because of the goal of stability and not change, will typically center on using the same technology over time with little innovation (as evidenced by new product development, adopting new technologies or new methods in their operational processes).

Weaknesses - As long as the firm’s operating environment is not drastically changed by better competition, evolving customer needs, or other major alterations, the Craft firm will survive. However, if the environment does indeed change, the Craft organization does not have the necessary capabilities or desire to adapt, which can inhibit long term survival and success.