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1 Chapter Six Manufacturing and Service Technologies ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e.

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Presentation on theme: "1 Chapter Six Manufacturing and Service Technologies ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e."— Presentation transcript:

1 1 Chapter Six Manufacturing and Service Technologies ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6 -

2 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-2 Transformation Process for a Manufacturing Company ENVIRONMENT Organization Raw Material Inputs Product or Service Outputs Transformation Process Departments Materials Handling Milling Inspection Assembly

3 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-3 Woodwards Classification Based on System of Production Group IGroup I –Small-batch and unit production Group IIGroup II –Large-batch and mass production Group IIIGroup III –Continuous process production

4 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-4 Computer-Integrated Manufacturing Computer-aided designComputer-aided design –(CAD) Computer-aided manufacturingComputer-aided manufacturing –(CAM) Integrated Information NetworkIntegrated Information Network

5 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-5 NEW CHOICES TRADITIONAL CHOICES Mass Production Small batch Flexible Manufacturing Mass Customization Continuous Process Relationship of Computer-Integrated Manufacturing Technology to Traditional Technologies BATCH SIZE SmallUnlimited Customized Standardized PRODUCT FLEXIBILITY Source: Based on Jack Meredith, The Strategic Advantages of New Manufacturing Technologies For Small Firms. Strategic Management Journal 8 (1987): ; Paul Adler, Managing Flexible Automation, California Management Review (Spring 1988): 34-56; and Otis Port, Custom-made Direct from the Plant. Business Week/21 st Century Capitalism, 18 November 1994,

6 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-6 Comparison of Organizational Characteristics Associated with Mass Production and Computer Integrated Manufacturing Characteristic Mass Production CIM Structure: Span of Control Span of ControlWideNarrow Hierarchical levels Hierarchical levelsManyFew Tasks Tasks Routine, repetitive Adaptive, craft-like Specialization SpecializationHighLow Decision making Decision makingCentralizedDecentralized Overall Overall Bureaucratic, mechanistic Self-regulating, organic 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); ; Paul S. Adler, Managing Flexible Automation, California Management Review (Spring 1988); 34-56; Jeremy Main, Manufacturing the Right Way, Fortune, 21 May 1990,

7 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-7 Comparison of Organizational Characteristics Associated with Mass Production and Computer Integrated Manufacturing Characteristic Mass Production CIM Human Resources: Interactions Interactions Stand alone Teamwork Training Training Narrow, one time Broad, frequent Expertise Expertise Manual, technical Cognitive, social Solve problems 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); ; Paul S. Adler, Managing Flexible Automation, California Management Review (Spring 1988); 34-56; Jeremy Main, Manufacturing the Right Way, Fortune, 21 May 1990,

8 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-8 Comparison of Organizational Characteristics Associated with Mass Production and Computer Integrated Manufacturing Characteristic Mass Production CIM Interorganizational: Customer Demand Customer DemandStableChanging Suppliers SuppliersMany, arms length Changing Few, close relations 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); ; Paul S. Adler, Managing Flexible Automation, California Management Review (Spring 1988); 34-56; Jeremy Main, Manufacturing the Right Way, Fortune, 21 May 1990,

9 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-9 Differences Between Manufacturing and Service Technologies 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): ; and David E. Bowen, Caren Siehl, and Benjamin Schneider, A Framework for Analyzing Customer Service Orientations in Manufacturing, Academy of Management Review 14 (1989):

10 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-10 Configuration and Characteristics of Service Organizations vs. Product Organizations ServiceProduct Structure: Separate boundary roles Separate boundary rolesFewMany Geographical dispersion Geographical dispersionMuchLittle Decision making Decision makingDecentralizedCentralized Formalization FormalizationLowerHigher Human Resources: Employee skill level Employee skill levelHigherLower Skill emphasis Skill emphasisInterpersonalTechnical

11 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-11 Departmental Technologies CRAFTCRAFT –Low analyzability –Low variety –Examples: Performing artsPerforming arts TradesTrades Fine goods manufacturingFine goods manufacturing ROUTINE –High analyzability –Low variety –Examples: Sales Clerical Drafting Auditing

12 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-12 ENGINEERINGENGINEERING –High analyzability –High variety –Examples: LegalLegal EngineeringEngineering Tax accountingTax accounting General accountingGeneral accounting NONROUTINE –Low analyzability –High variety –Examples: Strategic planning Social science research Applied research Departmental Technologies

13 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-13 Relationship of Department Technology to Structural and Management Characteristics 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 communications ENGINEERING Mostly Organic Structure 1. Moderate formalization 2. Moderate centralization 3. Work experience 4. Moderate to wide span 5. Horizontal, verbal communications CRAFT Organic Structure 1. Low formalization 2. Low centralization 3. Training plus experience 4. Moderate to narrow span 5. Horizontal communications meetings NONROUTINE

14 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-14 Thompsons Classification of Interdependence and Management Implications Form of Interdependence Demands on Horizontal Communications, Decision Making Type of Coordination Required Priority for Locating Units Close Together Pooled (bank) Lowcommunication Standardization, rules, procedures Divisional Structure Low Sequential (assembly line) Mediumcommunication Plans, schedules, feedback Task Forces Medium Reciprocal (hospital) Highcommunication Mutual adjustment, cross-departmental meetings, teamwork Horizontal Structure High Client

15 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-15 Primary Means to Achieve Coordination for Different Levels of Task Interdependence in a Manufacturing Firm Reciprocal (new product development) Sequential (product manufacture) Pooled (product delivery) COORDINATIONINTERDEPENDENCE High Low Horizontal structure, cross-functional teams Face-to-face communication, Unscheduled meetings, Full-time integrators Scheduled meetings, task forces Vertical communication Plans Rules Mutual Adjustment Planning Standardization Source: Adapted from Andrew H. Van de Ven, Andre Delbecq, and Richard Koenig, Determinants of Communication Modes Within Organizations, American Sociological Review 41 (1976): 330.

16 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-16 Relationships Among Interdependence and Other Characteristics of Team Play BaseballFootballBasketball Interdependence:PooledSequentialReciprocal Physical dispersion of players: HighMediumLow Coordination: Rules that govern the sport Game plan and position roles Mutual adjustment and shared responsibility Key management job: Select players and develop their skills Prepare and execute game Influence flow of game Source: Based on William Passmore, Carol E. Francis, and Jeffrey Halderman, Sociotechnical Systems: A North American Reflection On the Empirical Studies of the 70s, Human Relations 35 (1982):

17 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-17 Design for Joint Optimization Work roles, tasks, workflow Goals and values Skills and abilities Design for Joint Optimization Work roles, tasks, workflow Goals and values Skills and abilities Sociotechnical Systems Model The Social System Individual and team behaviors Organizational/team culture Management practices Leadership style Degree of communication and openness Individual needs and desires The Social System Individual and team behaviors Organizational/team culture Management practices Leadership style Degree of communication and openness Individual needs and desires The Technical System Type of production technology (small batch, mass production, CIM, etc.) Level of interdependence (pooled, sequential, reciprocal) Physical work setting Complexity of production process (variety and analyzability) Nature of raw materials Time pressure The Technical System Type of production technology (small batch, mass production, CIM, etc.) Level of interdependence (pooled, sequential, reciprocal) Physical work setting Complexity of production process (variety and analyzability) Nature of raw materials Time pressure Sources: Based on T. Cummings, Self-Regulating Work Groups: A Socio-Technical Synthesis, Academy of Management Review 3 (1978): ; Don Hellriegel, John W. Slocum, and Richard W. Woodman, Organizational Behavior, 8 th ed. (Cincinnati, Ohio: South-Western College Publishing, 1998), 492; and Gregory B. Northcraft and Margaret A. Neale, Organizational Behavior: A Management Challenge, 2 nd ed. (Fort Worth, Tex.: The Dryden Press, 1994), 551.

18 ©2001 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e 6-18 Technology Comparison Workbook Activity McDonalds Burger King Family Restaurant Organization Goals Authority Structure Woodwards Technology Type Mechanistic vs. Organic Teamwork vs. Individual Interdependence Routine vs. Nonroutine tasks Task Specialization Task Standardization Technical vs. Social Expertise Centralized vs. Decentralized


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