Tid-bits from Chapter 2 What do you wish to do? Why? Write a “future” mission statement. Write a vision. Develop a strategy. Develop goals to actionize strategy. (strategic direction) Strategic direction: (opportunities, threats, uncertainty, resource availability, strengths, distinctive competence, leader style, past performance) Long

Do you have a competitive advantage? Core competencies? Formulating strategies: Porter model and Miles and Snow strategy typology Porter: Differentiation vs low-cost leadership Miles and Snow: Prospector, Defender, Analyzer, Reactor Four Effectiveness Approaches: Goal approach, Resource- based approach, Internal process approach, Strategic constituents approach Long

What is Structure? Designates formal reporting relationships Identifies grouping of individuals into units and units into the organization Includes design of systems to ensure communication, coordination and integration of effort Long

Designed for efficiency: Centralized Designed for learning: Decentralized Long

Information-sharing Perspective on Structure Design: Provide both vertical and horizontal information flow to accomplish organizational goals. If structure doesn’t fit, people will have either too little information or spend time processing information not vital to their tasks. Vertical linkages are designed primarily for control. Horizontal linkages are designed for coordination and collaboration, which usually means reducing control. Long

Design Options for Grouping Employees into Departments Functional Grouping CEO Engineering Marketing Manufacturing Divisional Grouping CEO Division A Division B Division C Long

Technology MGT 4153 Dr. Rebecca Long

What is Technology? (pages 259-261) Work processes, techniques, machines, and actions used to transform organizational inputs (materials, information, ideas) into outputs (products and services) Core Non-Core Long

Core vs Non-Core Core technology is the work process that is directly related to the organization’s mission, such as teaching in a school, medical services at a medical clinic Non-core technology is a department work process that is important to the organization but is not directly related to its primary mission. (HR, Accounting, R&D, Marketing)

What is the difference between manufacturing technology and service technology? Manufacturing: Core technology begins with raw materials (e.g., steel, aluminum, composite metals) if their products are created using those materials. Service: (UPS) Includes production equipment to sort and transport the product and procedures to ensure that the product is delivered on time and in good condition. Long

Joan Woodward (British industrial sociologist) Developed a scale and organized the firms she studied according to technical complexity of the manufacturing process. Technical complexity (page 262) represents the extent of mechanization of the manufacturing process. High Technical Complexity: Most of the work done by machines. Low Technical Complexity: Workers play a larger role in the production process. Long

Woodward’s Manufacturing Technologies Group I (Low Technical Complexity) (organic) Small-batch and unit production (job shops, small orders, relies heavily upon the human operator) Custom work the norm. (Kelly handbags hand-sewn) (page 262) Group II (Mechanistic) Large-batch and mass production (characterized by long production runs of standardized parts [traditional assembly lines]) (page 263) Group III (High Technical Complexity) (Organic) Continuous process production (entire process is mechanized) (page 263) Long

Flexible Manufacturing Systems (page 268) (Also called computer-integrated manufacturing, smart factories, advanced manufacturing technology, agile manufacturing, or the factory of the future. FMS links together manufacturing components that previously stood alone. Robots, machines, product design and engineering analysis are coordinated by a single computer system). Result of: Computer-aided design (CAD) Computer-aided manufacturing (CAM) Integrated Information Network Long

Lean Manufacturing: Uses highly trained employees at every stage of the production process, who take a painstaking approach to details and problem solving to cut waste and improve quality. The heart of lean manufacturing is people, not machines. Employees are trained to attack waste and strive for continuous improvement in all areas. One lesson of LM is that there is always room for improvement. (pages 269-272) Long

Mass & Flexible Manufacturing (page 272) Characteristic Mass Production FMS Structure: Span of Control Wide Narrow Hierarchical levels Many Few Tasks Routine, repetitive Adaptive, craft-like Specialization High Low Decision making Centralized Decentralized Overall Bureaucratic, mechanistic Self-regulating, organic

Manufacturing versus Service Technologies (page 274, Exhibit 7.7) Tangible product Products can be inventoried for later consumption Capital asset intensive Little direct customer interaction Human element may be less important Quality is directly measured Longer response time is acceptable Site of facility is moderately important Service Intangible product Production and consumption take place simultaneously Labor and knowledge intensive Customer interaction generally high Human element very important Quality is perceived and difficult to measure Rapid response time is usually necessary Site of facility is extremely important Service: Airlines, Hotels, Consultants, Healthcare, Law firms Product and Service: Fast-food outlets, Cosmetics, Real estate, Stockbrokers, Retail stores Product: Soft drink companies, Steel companies, Auto manufacturers, Food processing plants

Service versus Product Organizations (page 277, Exhibit 7.8) Structural Characteristics: Separate boundary roles Few Many Geographical dispersion Much Little Decision making Decentralized Centralized Formalization Lower Higher Human Resources: Employee skill level Skill emphasis Interpersonal Technical

Department level of analysis for departments not necessarily within the technical core (pages 279-280) Analyzes the nature of departmental technology and its relationship with departmental structure, developed by Charles Perrow. He specified two dimensions of departmental activities relevant to organizational structure and process. Variety – The frequency of unexpected and novel events that occur in the conversion process. Are work processes performed the same way every time or differ from time to time. Analyzability – Can the work be reduced to mechanical steps and can participants follow an objective, computational procedure to solve problems?

Departmental Technologies (280-281) CRAFT Low analyzability Low variety Examples: Performing arts Trades Fine goods mfg. NONROUTINE Low analyzability High variety Examples: Strategic planning Social science Applied research ROUTINE High analyzability Low variety Examples: Sales Clerical Drafting Auditing ENGINEERING Examples: Legal Engineering Tax accounting General accounting

Department Technology & Structural/Management Characteristics (283) Mechanistic Structure 1. High formalization 2. High centralization 3. Little training or experience 4. Wide span 5. Vertical, written communications ROUTINE Mostly Mechanistic Structure 1. Moderate formalization 2. Moderate centralization 3. Formal training 4. Moderate span 5. Written and verbal ENGINEERING Mostly Organic Structure 3. Work experience 4. Moderate to wide span 5. Horizontal, verbal CRAFT Organic Structure 1. Low formalization 2. Low centralization 3. Training plus experience 4. Moderate to narrow span 5. Horizontal communications meetings NONROUTINE

Key to Previous Slide: Formalization Centralization Staff qualifications Span of control Communication and coordination Long

Implications of Thompson’s Interdependence (pages 284 & 285) Form of Interdependence Demands on Horizontal Communications, Decision Making Type of Coordination Required Priority for Locating Units Close Together Pooled (bank) Low communication Standardization, rules, procedures Divisional Structure Sequential (assembly line) Medium Plans, schedules, feedback Task Forces Reciprocal (hospital) High Mutual adjustment, cross-departmental meetings, teamwork Horizontal Structure Client Client Client Long