Adhocracy is a flexible, adaptable and informal form of organization that is defined by a lack of formal structure. It operates in an opposite fashion to a bureaucracy. The term was first coined by Warren Bennis in his 1968 book The Temporary Society, later popularized in 1970 by Alvin Toffler in Future Shock, and has since become often used in the theory of management of organizations (particularly online organizations). The concept has been further developed by academics such as Henry Mintzberg 
Adhocracy arises out of the need of formal organizations to be able to recognize, understand, and solve problems in highly complex and turbulent environments.
Companies typically bring in experts from a variety of areas to form a creative, functional team. Decisions are decentralized, and power is delegated to wherever it's needed. This can make these organizations very difficult to control! The clear advantage of adhocracies is that they maintain a central pool of talent from which people can be drawn at any time to solve problems and work in a highly flexible way. Workers typically move from team to team as projects are completed, and as new projects develop. Because of this, adhocracies can respond quickly to change, by bringing together skilled experts able to meet new challenges. But innovative organizations have challenges. There can be lots of conflict when authority and power are ambiguous. And dealing with rapid change is stressful for workers, making it difficult to find and keep talent. However, given the complex and dynamic state of most operating environments, adhocracy is a common structural choice, and it's popular with young organizations that need the flexibility it allows.
Examples of adhocracy include most project or matrix organizations. Among private-sector organizations, high-technology firms—particularly young firms facing fierce competition—are sometimes organized as adhocracies. The survival of these companies depends on the success of decision makers in predicting which shifts in market conditions really matter and what technologies and strategies need to be developed to respond quickly and effectively. Occasionally, among larger multidivisional organizations, one or more units may be constituted as adhocracies, whereas the other units, performing more-routinized tasks, remain more hierarchical. Although most of the Xerox Corporation was designed as a typical multidivisional firm, its Palo Alto Research Center (Xerox PARC) was an adhocracy with a flat authority structure that functioned as a semiautonomous innovative research unit.