What is Technology?

Technology is the term used to refer to the work performed by an organization.

Technology refers to the knowledge, tools, machines, information, skills, and materials used to complete tasks within organizations, as well as to the nature of the outputs of the organization
Example: KnitMedia

MANA 5321-541: Complex Organizations

Slide 1

September 24th, 2002: Organizational Technology (Chapter 6).

Three Levels Of Technology

1- Organizational or Core Technology used to characterize the entire organization 2- Work unit or department technology
3- Interdependent relationships result from the flow of work between work units

MANA 5321-541: Complex Organizations

Slide 2

September 24th, 2002: Organizational Technology (Chapter 6).

1- Organization-Level Technology: The Technical Core

Joan Woodwards 1950's study of British manufacturing companies developed a three category scheme for classifying organization-level technology:
Technological Complexity

1- Unit or Small Batch 2- Mass or Large Batch 3- Continuous Process or Flow

MANA 5321-541: Complex Organizations Slide 3 September 24th, 2002: Organizational Technology (Chapter 6).

Relationship Between Technical Complexity and Structural Characteristics

Structural Characteristics Number of management levels Supervisor span of control Direct/indirect labor ratio Manager/total personnel ratio Workers skill level Formalized procedures Centralization Amount of verbal communication Amount of written communication Overall structure Technology Mass Production 4 48 4:1 Medium Low High High Low High Mechanistic

Unit Production 3 23 9:1 Low High Low Low High Low Organic

Continuous Process 6 15 1:1 High High Low Low High Low Organic

Source: Joan Woodward, Industrial Organization: Theory and Practice (London: Oxford University Press, 1965).

MANA 5321-541: Complex Organizations

Slide 4

September 24th, 2002: Organizational Technology (Chapter 6).

Woodwards Results

Contingency relationship between technology and structure

1) The unit or small batch => organic structure 2) The mass or large batch => a mechanistic/bureaucratic structure 3) The continuous process or flow => an organic structure

Relationship between structure-technology and success

Many of the Organizational characteristics of the successful firms were near the average of their technology category

Structural characteristics could be interpreted as clustering into organic and mechanistic management systems.

MANA 5321-541: Complex Organizations Slide 5 September 24th, 2002: Organizational Technology (Chapter 6).

Limitations of Woodward The topologies are prototypes Her work ignores the issue of size Innovations in technology such as CIM, CAD, and CAM challenge some of the assumptions made by Woodward

MANA 5321-541: Complex Organizations

Slide 6

September 24th, 2002: Organizational Technology (Chapter 6).

Relationship of Computer-Integrated Manufacturing Technology to Traditional Technologies

Small batch

Customized NEW

Flexible Manufacturing

Mass Customization

CHOICES

PRODUCT FLEXIBILITY

Mass Production

Continuous Process

Standardized Small BATCH SIZE Unlimited

Source: Based on Jack Meredith, The Strategic Advantages of New Manufacturing Technologies For Small Firms. Strategic Management Journal 8 (1987): 249-58; Paul Adler, Managing Flexible Automation, California Management Review (Spring 1988): 34-56; and Otis Port, Custom-made Direct from the Plant. Business Week/21st Century Capitalism, 18 November 1994, 158-59.
MANA 5321-541: Complex Organizations Slide 7 September 24th, 2002: Organizational Technology (Chapter 6).

Comparison of Organizational Characteristics Associated with Mass Production and Computer Integrated Manufacturing
Characteristic
Span of Control Hierarchical levels Tasks Specialization Decision making

Mass Production
Wide Many Routine, repetitive High Centralized Stand alone Narrow, one time Manual, technical Narrow Few

CIM

Adaptive, craft-like Low Decentralized Teamwork Broad, frequent Cognitive, social Solve problems Changing/Few, close

Overall
Interactions Training Expertise

Bureaucratic, mechanistic Self-regulating, organic

Customer Demand/Suppliers Stable/Many

Source: Based on Patricia L. Nemetz and Louis W. Fry, Flexible Manufacturing Organizations: Implications for Strategy Formulation and Organization Design. Academy of Management Review 13 (1988); 627-38; Paul S. Adler, Managing Flexible Automation, California Management Review (Spring 1988); 34-56; Jeremy Main, Manufacturing the Right Way, Fortune, 21 May 1990, 54-64.
MANA 5321-541: Complex Organizations Slide 8 September 24th, 2002: Organizational Technology (Chapter 6).

Limitations of Woodward (continued) The topologies are prototypes Her work ignores the issue of size Innovations in technology such as CIM, CAD, and CAM challenge some of the assumptions made by Woodward Her work focuses on manufacturing and ignores the service economy

MANA 5321-541: Complex Organizations

Slide 9

September 24th, 2002: Organizational Technology (Chapter 6).

Service As a Core Technology

Manufacturing Technology 1. Tangible product 2. Products can be inventoried for later consumption 3. Capital asset intensive 4. Little direct customer interaction 5. Human element may be less important 6. Quality is directly measured 7. Longer response time is acceptable 8. Site of facility is moderately important

Service Technology 1. Intangible product 2. Production and consumption take place simultaneously 3. Labor and knowledge intensive 4. Customer interaction generally high 5. Human element very important 6. Quality is perceived and difficult to measure 7. Rapid response time is usually necessary 8. 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 Sources: Based on F. F. Reichheld and W. E. Sasser, Jr., Zero Defections: Quality Comes to Services, Harvard Business Review 68 (September-October 1990): 105-11; and David E. Bowen, Caren Siehl, and Benjamin Schneider, A Framework for Analyzing Customer Service Orientations in Manufacturing, Academy of Management Review 14 (1989): 75-95. MANA 5321-541: Complex Organizations Slide 10 September 24th, 2002: Organizational Technology (Chapter 6).

Managing Service Technology

Managing service technology is different from managing manufacturing technology The Ashton Group developed a workflow integration scale for classifying technology based on three factors:
1- Automation of equipment 2- Workflow rigidity 3- Specificity of evaluation Services tend to score low on workflow integration
Organic organizational structures that include low formalization, low specialization, and decentralization
MANA 5321-541: Complex Organizations Slide 11 September 24th, 2002: Organizational Technology (Chapter 6).

Limitations of Woodward (continued) The topologies are prototypes Her work ignores the issue of size Innovations in technology such as CIM, CAD, and CAM challenge some of the assumptions made by Woodward Her work focuses on manufacturing and ignores the service economy Finally, this approach is useful only for classifying the whole organization

MANA 5321-541: Complex Organizations

Slide 12

September 24th, 2002: Organizational Technology (Chapter 6).

2- Work Unit or Department Technology

Framework was developed by Perrow and elaborated by Daft and his colleagues Technology is defined on two dimensions: 1- Exceptions/variety

Low variety technologies permit little flexibility, whereas high variety permits greater flexibility
2- Analyzability High-analyzability tasks can usually be standardized or programmed. Low-analyzability tasks are uncertain, ambiguous, and complex
MANA 5321-541: Complex Organizations Slide 13 September 24th, 2002: Organizational Technology (Chapter 6).

Relationship of Department Technology to Structural and Management Characteristics

Low
Mostly Organic Structure 1. Moderate formalization CRAFT 2. Moderate centralization Performing Arts 3. Work experience Designers 4. Moderate to wide span Advertising 5. Horizontal, verbal COMU CRAFT 1. 2. 3. 4. 5. Mechanistic Structure High formalization ROUTINE High centralization Clerical Little training or experience Maintenance Wide span Auditing Vertical, written COMU ROUTINE 1. 2. 3. 4. 5. Organic Structure Low formalization NONROUTINE Low centralization Strategic planning Training plus experience Top management Moderate to narrow span Social science research Horizontal COMU meetings NONROUTINE

High

Mostly Mechanistic Structure 1. Moderate formalization ENGINEERING 2. Moderate centralization General Accounting 3. Formal training Engineering 4. Moderate span Legal research 5. Written and verbal COMU ENGINEERING

Low
MANA 5321-541: Complex Organizations

VARIETY
Slide 14

High

September 24th, 2002: Organizational Technology (Chapter 6).

3- Work Flow and Technological Interdependence

James Thompson developed a technology framework that focuses on the nature of interdependence and coordination among departments He defined three types of technologies that result in three different levels of interdependence. These three technologies and the resulting interdependence are best managed by different methods of coordination

MANA 5321-541: Complex Organizations

Slide 15

September 24th, 2002: Organizational Technology (Chapter 6).

Thompsons Classification of Interdependence and Management Implications

Type of Technology Form of Interdependence
Pooled (bank) Mediating Client Sequential (assembly line) Client Reciprocal (hospital) Intensive Client

Communication Requirements

Type of Coordination Required

Standardization, rules, procedures Divisional Structure Plans, schedules, feedback Task Forces Mutual adjustment, cross-departmental meetings, teamwork Horizontal Structure

Priority for Locating Units Close Together

Low communication

Low

Long-Linked

Medium communication

Medium

High communication

High

Source: Adapted from Richard Daft , Organization Theory and Design (St. Paul, MN: West Publishing, 1992) and Andrew H. Van de Ven, Andre Delbecq, and Richard Koenig, Determinants of Communication Modes Within Organizations, American Sociological Review (1976): 41.
MANA 5321-541: Complex Organizations Slide 16 September 24th, 2002: Organizational Technology (Chapter 6).

Task Design and Technology: Sociotechnical Systems

Fitting People to Jobs: The Traditional Industrial Ethic
Fitting Jobs to People: The Task of the Postindustrial Society Sociotechnical Systems: A Middle Ground

MANA 5321-541: Complex Organizations

Slide 17

September 24th, 2002: Organizational Technology (Chapter 6).

Conclusions
1- Woodwards Study in manufacturing technology. Relationships between technology and structure in high-performing organizations 2- Service technologies differ in a systematic way from manufacturing technologies; hence, organization design often differs also 3- Perrows framework applied to department technologies. Applying the wrong management system to a department will result in dissatisfaction and reduced efficiency 4- Interdependence among departments. Organization design must allow for the correct amount of communication and coordination to handle interdependence across departments. 5- New CIM technologies are adopted by organizations and having impact on organization design
MANA 5321-541: Complex Organizations Slide 18 September 24th, 2002: Organizational Technology (Chapter 6).