Organizational Development and Change Management Lecture 12: Technologies and Organizational Structures

Objectives To discuss ways in which technology can be defined To assess the ways in which technology – broadly defined – influences organization design. To think about technology in relation to the tasks that (groups of) individuals in organizations complete To discuss technology, strategy and organization design.

Question When you think of ‘technology’, what do you think of?

TECHNOLOGY AND STRUCTURE TYPE OF TECHNOLOGY UNIT MASS CONTINUOUS PROCESS Structural Characteristic Number of management levels 3 4 6 Supervisor span of control 23 48 15 Direct:indirect labour 9:1 4:1 1:1 Manager:total personnel ratio Low Medium High Number of skilled staff Formalization Centralization Written communication Overall Organic Mechanistic

Call Centre Work Watch the short film on call-centre work. How would you describe that work in terms of: Number of skilled staff Formalization Centralization Written communication Use the labels ‘high’, ‘medium’ or ‘low’ to describe that work. http://www.youtube.com/watch?v=hAjzvy94JsM

Types of Call Centres MASS PRODUCTION CUSTOMIZED BATCH PRODUCTION

MASS PRODUCTION AND F.M.S Structure   Supervisor spans of control Wide Narrow Hierarchical Levels Many Few Supervisor Role Controller Facilitator Tasks Routine, simple Complex, adaptive Specialization High Low Operator discretion Considerable Formalization Limited Human Resources Interactions Training Narrow, limited Broad, frequent Expertise Standardized, manual/technical Cognitive and social, developing, problem solving Inter-organizational Customer demand Stable, predictable Changing Suppliers Many, arm’s length Few, interdependent

CHARACTERISTICS OF SERVICE AND PRODUCT ORGANIZATIONS BOTH PRODUCT Boundary Roles Few Some Many Geographical Dispersion Considerable Low Technical Expertise of Operators High Moderate Skill Emphasis Broad and interpersonal Narrow and broad Narrow and technical Centralization Medium Formalization Examples Airlines, hotels Fast food, real estate Steel, cars

CUSTOMER INTERACTION AND CUSTOMIZATION SERVICE BUSINESSES CUSTOMER INTERACTION AND CUSTOMIZATION LOW HIGH LABOUR INTENSITY ratio of labour cost to plant and equipment AIRLINES HOTELS HOSPITALS MACHINERY REPAIRS MASS RETAILING FAST FOOD RESTAURANTS PROFESSIONAL SERVICES ACCOUNTANTS LAWYERS

Questions Imagine that you are a senior manager either at McDonald’s or Subway. In which quadrant of the previous matrix would you place your company? What are the reasons behind your choice? Are there likely to be any typical managerial problems that can be associated with this mix of labour intensity and customization?

CHALLENGES FOR SERVICE MANAGERS

Questions Imagine that you are a senior manager in a hospital. Why might hospitals be placed in the ‘low labour intensity- high customization’ quadrant of the matrix? What are the typical problems that you might face as a manager?

CHALLENGES FOR SERVICE MANAGERS

CHALLENGES FOR SERVICE MANAGERS

Technology and Organization Design So far, we have looked at the technology used in organizations or specific organizational units in a broad way. We can also think about technology at the task and problem levels. This, too, has implications for organization design.

VARIETY OF TASKS AND PROBLEMS How many of your tasks are the same from day to day? Do you do the same job in the same way most of the time? How different are the problems you have to deal with on a daily basis?

ANALYSABILITY OF TASKS AND PROBLEMS To what extent is there a clearly known way to do your major tasks? To what extent is there a clearly defined body of knowledge that can be followed in your work? How often do you have to deal with unforeseen problems and difficulties? How much can you rely on established procedures and practices to do your job effectively?

DEPARTMENTAL TASKS AND TECHNOLOGIES An Apprentice Contestant CALL-CENTRE WORKERS

The Apprentice In terms of training and experience, how well prepared should apprentice contestants be (if they had to do that sort of job regularly and were not part of a TV programme that does a good line in ritual humiliation)? How much training do they get do you think? http://www.bbc.co.uk/programmes/p00bnc2s

Questions In terms of formalization, centralization, and type of communication (face- to-face meetings, written reports, etc.), how would you expect organizations associated with different areas of the preceding figure to be structured? Choose one. What are the reasons for your choices?

Mechanistic

Questions Thinking back to the points made about call centres, how would you describe call centres in terms of the analyzability and variety of the tasks that they face? How do you think most call centres are organized? Is there a mismatch between how they are organized and how they should be organized? If there is a mismatch, why does this mismatch arise?

Technology and Interaction Technology can also be thought of as ways in which groups of individuals interact.

Interdependence and Co-ordination Mechanisms

Arthur Andersen – Pooled Interdependence http://www.youtube.com/watch?v=6wA7ftPndWo

Conclusions Technology – in a broad sense of the word – matters for organizational design. The higher the levels of variety of tasks undertaken within the organization, and the higher the levels of reciprocal interdependence within the organization, the greater the need for more organic designs within the organization.