3 Joan Woodward In the early 1960’s Woodward demonstrated that organization structures adapt to their technology.In categorizing companies into three groups sheidentified that production run sizes were linkedincreasing levels of complexity and technologicalsophistication.
4 Technology Categories Unit Production: The production of items in single unitsand small batchesMass Production: The production of large-batchmanufacturingProcess Production: The production of continuous-process products such as oil andchemical refiners
12 WOODWARD: TECHNOLOGICAL INFLUENCE ON ORGANIZATIONAL DESIGN The more complex the technology – going from a Unitto a more Process system – the greater are the number of managerial personnel and the levels of authorityThe more complex the technology, the larger is thenumber of clerical and administrative personnelThe span of control of first-line managers increasesfrom Unit production systems to Mass production systems and then decreases from Mass production systems to Process production systems
17 COMPUTER-INTEGRATED MANUFACTURING Since the work of Woodward, there have been significantadvances in production technology, which include the useof robots, numerically-controlled machine tools, and many applications of the computer to remote control of equipment.These advances have been called by a variety of namesincluding: advanced manufacturing technology, agilemanufacturing, smart factories, and flexible manufacturing systems.
18 Computer-Integrated Manufacturing Typically the results of three sub-components:Computer-assisted design (CAD). Computersare used to assist in drafting, design and engineeringof new parts. Allows significant variation inspecifications with minimum of redesign cost.Computer-aided manufacturing (CAM). Computer-controlled machines are used in materials-handling,fabrication, production, and assembly. Allows fastswitching between product runs and variations.
19 Computer-Integrated Manufacturing, cont’d 3. Integrated Information Networks (ERP): Acomputerized system links all aspects of thefirm – accounting, marketing, purchasing,inventory control, etc. The most commonare called Enterprise Resource Planningprograms. Most known are by SAP, People-Soft and Oracle. Use a common database, andallow managers to integrate their decisionmaking more effectively.
20 Product flexibility NEW CHOICES Customized Small Batch Flexible ManufacturingMassCustomizationProduct flexibilityMassProductionOLD CHOICESContinuousProcessStandardizedBatch SizeSmallUnlimited
21 Comparison of Organizational Characteristics of Mass Production vs CIM Structure Mass Production CIMSpan of control Wide NarrowHierarchical levels Many FewTasks Routine, repetitive Adaptive, craftlikeSpecialization High LowDecision Making Centralized DecentralizedOverall Bureaucratic, mechanistic Self-regulating,organic
22 Charles Perrow Focus is on departmental technology and departmental structure(usually outside the technical core)Each department has a productionprocess with a distinct technologyIncludes units such as HRM, R&D,legal, engineering, QC, finance, etc.
23 DIMENSIONS OF TECHNOLOGY Task Variety: number of exceptions in the work.Frequency of unexpected and novel events that occurin the conversion process.Problem Analyzability: degree to which work activitiesand problem solving activities are analyzable.Analyzable problems can be solved with proceduresand standardized technical knowledge. Non-analyzableproblems must be dealt with by wisdom, experienceand intuition.
25 PERROW - CONCLUSIONS Departments do differ from one another and can be categorized by their workflow technology.Structural and management processes differ basedupon workflow technology.Managers should design departments so thatrequirements based on technology can be met.Explains differences in departmental structures inmixed-type designs.
28 Departmental Interdependence Interdependence mean the extent to which departmentsdepend on each other for resources or materials toaccomplish their tasks.Low interdependence means the departments can dotheir work independently of each other and have littleneed for interaction, consultation or exchange of materials.High interdependence means the departments mustconstantly exchange resources.
29 Types of Interdependency Pooled InterdependencySequential InterdependencyReciprocal Interdependency
30 Pooled Interdependency Pooled interdependence is the lowest form ofinterdependence among departments. In this form,work does not flow between units. Each contributesto the common good of the organization, but doesits work independently.Examples: McDonald’s restaurants, branch banks,independent sales units based uponterritory or product lines.
32 Mediating TechnologyPooled interdependence is associated with organizationsemploying a Mediating Technology. A MediatingTechnology provides products or services that mediateor link clients from the external environment and, indoing so, allows each department to work independently.Banks, brokerage houses, real estate offices all mediatebetween buyers and sellers, but the offices workindependently within the organization.
33 Mediating Technology II To achieve coordination, mediating technologies rely onboth a measure of categorization and a degree ofstandardization. Organizations with mediating technologiesare, in general, moderately flexible to changing productdemands and typically cope with uncertainty by increasingthe number of units served. Since mediating technologycombines the outputs of different units by usingpredetermined categories and standard rules and procedures,it is usually less costly than long-linked technology whichrequires a certain amount of planning (scheduling) acrossseveral tasks to ensure proper work flow.
34 Sequential Interdependence Sequential interdependence exists when the outputs of onedepartment become the inputs of another in serial form.This is a higher level of interdependence than pooledrelationships. The preceding unit must complete its taskscorrectly in order that the latter unit may successfullycomplete its tasks. It creates a higher need for horizontalintegration mechanisms.Sequential interdependence is associated with Long-LinkedTechnologies..
36 Long-Linked Technology Long-linked technology is usually associated with largeorganizations that utilize sequential task organization,such as assembly lines to accomplish their tasks.Examples include the manufacture of automobiles,heavy appliances, mechanical assemblies, some foodpreparation processes, etc.Long-linked technologies require high levels ofcoordination between tasks to be efficient.
37 Long-Linked Technology II In long-linked technology procedures to complete a unitof work are highly uniform and must be performed in aspecified serial order.Organizations based upon long-linked technologygenerally achieve coordination through planning(scheduling) and typically seek to offset significantenvironmental uncertainty through vertical integration.
38 Reciprocal Interdependence Reciprocal interdependence is the highest level of inter-dependence. Reciprocal interdependence exits when theoutput of one unit serves as the input for a second unit,and the output of the second unit serves as the input forthe first unit.Reciprocal interdependence occurs in organizations withintensive technologies.
40 Intensive TechnologyIntensive technologies provide a variety of products orservices in combination to the client. A new productdevelopment company is an example, where design,engineering, manufacturing and marketing all mustwork combine all their resources to suit a customer’sproduct needs.Intensive technology, because of its reciprocal inter-dependencies, requires the highest level of managementrequirements. Reciprocally interdependent units worktogether intimately and must be closely coordinated;thus, a horizontal structure is appropriate.
41 Intensive Technology II Intensive technology coordination requires high levels ofhorizontal communication and adjustment. Managersfrom multiple departments are often involved in face-to-face communication.Intensive technologies secure coordination through mutualadjustment. They generally increase their tolerance foruncertainty by ensuring the availability of a variety ofspecialized services and skills in order to be prepared forany contingency. Intensive technologies are typically themost expensive to coordinate.
45 STRUCTURAL PRIORITIES Thompson posited a series of propositions regarding thestructural priorities necessary to account for the differentlevels of interdependency among units.Under norms of rationality, organizations group positionsminimize coordination costs.1A. Organizations seek to place reciprocally interdependentpositions tangent to one another, in a common group,which is (a) local and (b) conditionally autonomous.
46 Structural Priorities II 1B. In the absence of reciprocal interdependence,organizations subject to rationality norms seek toplace sequentially interdependent positions tangentto one another, in a common group which is (a)localized and (b) conditionally autonomous.1C. In the absence of reciprocal and sequentialinterdependence, organizations subject to norms ofrationality seek to group positions homogeneouslyto facilitate coordination by standardization.
47 Structural Priorities III 2. When reciprocal interdependence cannot be confined tointra-group activities, organizations subject to rationalitynorms seek to link the groups involved into a second-order group, as localized and conditionally autonomousas possible.3. After grouping units to minimize coordination by mutualadjustment, organizations under rationality norms seek toplace sequentially interdependent groups tangent to oneanother, in a cluster which is localized and conditionallyautonomous.
48 Structural Priorities IV 4. After grouping units to solve problems of reciprocaland sequential interdependence, organizations undernorms of rationality seek to cluster groups intohomogeneous units to facilitate coordination bystandardization.4A. When higher-priority coordination requirementsprevent the clustering of similar positions or groups,organizations seek to blanket homogeneous positionsunder rules which cut across group boundaries, andto blanket similar groups under rules which crossdivisional lines.
49 Structural Priorities V 4B. When organizations employ standardization, whichcuts across multiple groups, they also developliaison positions linking the several groups and therule-making agency.4C. Organizations with sequential interdependence notcontained by departmentalization rely on committeesto accomplish the remaining coordination.4D. Organizations with reciprocal interdependence notcontained by departmentalization rely on task-forceor project groups to accomplish the remainingcoordination.
50 Summary of Structural Priorities Reciprocal relationships are the highest level of inter-dependence, and should receive first priority by beinggrouped close together in the organization so managershave easy access to one another for mutual adjustment.These units should report to the same person and shouldbe physically close to minimize time and effort incoordination.When such units cannot be located close together, theorganization should design coordination mechanisms,such as cross-functional teams, project teams orintranets to facilitate required coordination.
51 Summary, cont’d2. The next priority is given to sequentially interdependentunits or tasks. Once reciprocal relationships are takencare of, or not present, sequentially interdependent unitsor tasks should be grouped together under a commonsuperior, and as physically close to one another aspossible.If a common superior, or physical proximity, is notpossible the interdependence should be coordinatedthrough committees or task-forces.
52 Summary, cont’d 3. The final priority should be given to pooled inter- dependencies. If the interdependence cannot behandled by forming homogeneous groups under acommon superior or close physical proximity,standardization across units should be implementedwith liaison individuals to handle required cross-communication between the units.