Organizational Design, Diagnosis, and Development Session 4 Technological considerations

Objectives To review traditional concepts of technology To understand the relationship between technology and structure To examine contemporary concepts of technology and their relationship to structure To understand the role of technology in the process of organizational design

Traditional Concepts of Technology South Essex studies - Joan Woodward Task typologies - Charles Perrow Task interdependencies - James Thompson

South Essex Studies 100 manufacturing firms in South Essex Data collected on: –Objectives of firm & background –Manufacturing processes –Organizational structures & processes –Organizational effectiveness (market share, profitability, general reputation, labor turnover, etc.)

Modal Technology Types Unit: Production is designed to meet individual customer requirements. (Custom tailor, prototype equipment) Mass: Standardized production on an intermittent basis, such as an assembly line or large batch like a bakery. Process: production on a continuous flow such as a chemical plant, oil refinery.

Overall Findings Technological imperative: Structure varied with technology type. Woodward came to believe technology determined structure Mass is more mechanistic Unit and process are more organic Hierarchy increases from unit to mass to process

Technical Complexity & Structure for Effective Firms Characteristics Levels of management Span of control Ratio of managers to personnel Unit Mass Process Low High

Technical Complexity & Structure for Effective Firms Characteristics Ratios: 1. direct to indirect labor, 2. Manual to administra- tive staff, 3. Wages & salaries to total cost Labor costs Unit Mass Process High Low

Technical Complexity & Structure for Effective Firms Characteristics Span of supervisor control Separation of adminis- tration from operation Written communication Control & sanction pro- cedures Specialization between line & staff Unit Mass Process High Low

Technical Complexity & Structure for Effective Firms Characteristics Verbal communication Role ambiguity for jobs Organizational flexibility Skilled workers Unit Mass Process High Low

Perrow’s Types of Technology ExceptionsProblemsTechnological Type FewEasy to analyzeRoutine technology Difficult to analyzeCraft technology ManyEasy to analyzeEngineering technology Difficult to analyzeNon-routine technology

Thompson’s Types of Technology Technology TypeTask InterdependenceIntegration MediatingPooledStandardization (banks) Long-linkedSequentialHierarchy of (assembly line)Authority IntensiveReciprocalMutual (hospital)Adjustment

Advanced Information Technology The accumulation, storage, processing and transmission of data made possible by computers

Advanced Information Technology Advanced Manufacturing Technology –Computer Aided Design and Manufacturing –Computer Integrated Manufacturing Office Technology –Word processing –Communication ( , fax) –Data bases, spreadsheets –Information storage and retrieval

Impact of Automation on Job Design Manufacturing –Less skill on the shop floor –New jobs require skills in programming and electronics –Task lines blur between skill areas Office technology –Initially some de-skilling –Ability to develop multiple skills in applications

Impact of Automation on Organizational Structure Manufacturing –Flatter, more flexible structures –Increased need for coordination –Functional structures may be counter- productive Office Technology –Flatter –Decentralized

Backwards & Forwards Summing up: Today’s session considered both traditional views of the impact of technology on design (Woodward’s technological imperative, Perrow’s routineness of task and Thompson’s interdependencies) and contemporary views derived from Advanced Manufacturing Technology and Office Technology. Looking ahead: Next time we begin our exploration organizational differentiation, integration, & size