2 Transformation Process for a Manufacturing Company ENVIRONMENTOrganizationTechnologyRaw MaterialInputsProduct or ServiceOutputsTransformationProcessMaterialsHandlingAssemblyMillingInspectionDepartments
3 Woodward’s Classification Based on System of Production Group ISmall-batch and unit productionGroup IILarge-batch and mass productionGroup IIIContinuous process production
4 Computer-Integrated Manufacturing Computer-aided design(CAD)Computer-aided manufacturing(CAM)Integrated Information Network
5 Relationship of Computer-Integrated Manufacturing Technology to Traditional Technologies Small batchFlexibleManufacturingMassCustomizationNEW CHOICESCustomizedMassProductionPRODUCT FLEXIBILITYTRADITIONAL CHOICESContinuousProcessStandardizedBATCH SIZESmallUnlimitedSource: Based on Jack Meredith, “The Strategic Advantages of NewManufacturing Technologies For Small Firms.” Strategic ManagementJournal 8 (1987): ; Paul Adler, “Managing Flexible Automation,”California Management Review (Spring 1988): 34-56; andOtis Port, “Custom-made Direct from the Plant.”Business Week/21st Century Capitalism, 18 November 1994,
6 Comparison of Organizational Characteristics Associated with Mass Production and Computer Integrated ManufacturingCharacteristicMass ProductionCIMStructure:Span of ControlWideNarrowHierarchical levelsManyFewTasksRoutine, repetitiveAdaptive, craft-likeSpecializationHighLowDecision makingCentralizedDecentralizedOverallBureaucratic, mechanisticSelf-regulating, organicSource: Based on Patricia L. Nemetz and Louis W. Fry, “FlexibleManufacturing Organizations: Implications for Strategy Formulationand 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 Comparison of Organizational Characteristics Associated with Mass Production and Computer Integrated ManufacturingCharacteristicMass ProductionCIMHuman Resources:InteractionsStand aloneTeamworkTrainingNarrow, one timeBroad, frequentExpertiseManual, technicalCognitive, socialSolve problemsSource: Based on Patricia L. Nemetz and Louis W. Fry, “FlexibleManufacturing Organizations: Implications for Strategy Formulationand 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 Comparison of Organizational Characteristics Associated with Mass Production and Computer Integrated ManufacturingCharacteristicMass ProductionCIMInterorganizational:Customer DemandStableChangingSuppliersMany,arm’s lengthFew, close relationsSource: Based on Patricia L. Nemetz and Louis W. Fry, “FlexibleManufacturing Organizations: Implications for Strategy Formulationand 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 Differences Between Manufacturing and Service Technologies Manufacturing TechnologyTangible productProducts can be inventoried for later consumptionCapital asset intensiveLittle direct customer interactionHuman element may be less importantQuality is directly measuredLonger response time is acceptableSite of facility is moderately importantService TechnologyIntangible productProduction and consumption take place simultaneouslyLabor and knowledge intensiveCustomer interaction generally highHuman element very importantQuality is perceived and difficult to measureRapid response time is usually necessarySite of facility is extremely importantService:Airlines, Hotels,Consultants,Healthcare, Law firmsProduct and Service:Fast-food outlets, Cosmetics,Real estate, Stockbrokers,Retail storesProduct:Soft drink companies,Steel companies,Auto manufacturers,Food processing plantsSources: Based on F. F. Reichheld and W. E. Sasser, Jr.,“Zero Defections: Quality Comes to Services,” Harvard BusinessReview 68 (September-October 1990): ; and David E.Bowen, Caren Siehl, and Benjamin Schneider, “A Frameworkfor Analyzing Customer Service Orientations in Manufacturing,”Academy of Management Review 14 (1989):
10 Configuration and Characteristics of Service Organizations vs Configuration and Characteristics of Service Organizations vs. Product OrganizationsServiceProductStructure:Separate boundary rolesFewManyGeographical dispersionMuchLittleDecision makingDecentralizedCentralizedFormalizationLowerHigherHuman Resources:Employee skill levelSkill emphasisInterpersonalTechnical
13 Relationship of Department Technology to Structural and Management Characteristics Mechanistic Structure1. High formalization2. High centralization3. Little training or experience4. Wide span5. Vertical, writtencommunicationsROUTINEMostly Mechanistic Structure1. Moderate formalization2. Moderate centralization3. Formal training4. Moderate span5. Written and verbalENGINEERINGMostly Organic Structure3. Work experience4. Moderate to wide span5. Horizontal, verbalCRAFTOrganic Structure1. Low formalization2. Low centralization3. Training plus experience4. Moderate to narrow span5. Horizontal communicationsmeetingsNONROUTINE
14 Thompson’s Classification of Interdependence and Management Implications Form of InterdependenceDemands on Horizontal Communications, Decision MakingType of Coordination RequiredPriority for Locating Units Close TogetherPooled (bank)LowcommunicationStandardization, rules, proceduresDivisional StructureSequential(assembly line)MediumPlans, schedules, feedbackTask ForcesReciprocal (hospital)HighMutual adjustment, cross-departmental meetings, teamworkHorizontal StructureClientClientClient
15 Primary Means to Achieve Coordination for Different Levels of Task Interdependence in a Manufacturing FirmINTERDEPENDENCECOORDINATIONHighReciprocal(new product development)Horizontal structure,cross-functional teamsFace-to-face communication,Unscheduled meetings,Full-time integratorsScheduled meetings, task forcesVertical communicationPlansRulesMutualAdjustmentSequential(product manufacture)PlanningPooled(product delivery)StandardizationLowSource: Adapted from Andrew H. Van de Ven, Andre Delbecq, andRichard Koenig, “Determinants of Communication Modes WithinOrganizations,” American Sociological Review 41 (1976): 330.
16 Relationships Among Interdependence and Other Characteristics of Team Play BaseballFootballBasketballInterdependence:PooledSequentialReciprocalPhysical dispersion of players:HighMediumLowCoordination:Rules that govern the sportGame plan and position rolesMutual adjustment and shared responsibilityKey management job:Select players and develop their skillsPrepare and execute gameInfluence flow of gameSource: Based on William Passmore, Carol E. Francis, and JeffreyHalderman, “Sociotechnical Systems: A North American ReflectionOn the Empirical Studies of the 70’s,” Human Relations 35 (1982):
17 Sociotechnical Systems Model The Social SystemIndividual and teambehaviorsOrganizational/teamcultureManagement practicesLeadership styleDegree of communicationand opennessIndividual needs anddesiresThe Technical SystemType of productiontechnology (small batch,mass production, CIM, etc.)Level of interdependence(pooled, sequential,reciprocal)Physical work settingComplexity of productionprocess (variety andanalyzability)Nature of raw materialsTime pressureDesign forJoint OptimizationWork roles, tasks,workflowGoals and valuesSkills and abilitiesSources: Based on T. Cummings, “Self-Regulating Work Groups: A Socio-TechnicalSynthesis,” Academy of Management Review 3 (1978): ; Don Hellriegel, John W.Slocum, and Richard W. Woodman, Organizational Behavior, 8th ed. (Cincinnati, Ohio:South-Western College Publishing, 1998), 492; and Gregory B. Northcraft and MargaretA. Neale, Organizational Behavior: A Management Challenge, 2nd ed. (Fort Worth, Tex.:The Dryden Press, 1994), 551.
18 Technology Comparison WorkbookActivityTechnology ComparisonMcDonald’sBurger KingFamily RestaurantOrganization GoalsAuthority StructureWoodward’s Technology TypeMechanistic vs. OrganicTeamwork vs. IndividualInterdependenceRoutine vs. Nonroutine tasksTask SpecializationTask StandardizationTechnical vs. Social ExpertiseCentralized vs. Decentralized