1. 1 Copyright 2004 Prentice Hall Organizational Theory, Design, and Change Text and Cases Fourth Edition Gareth R. Jones

2. 2 Copyright 2004 Prentice Hall Learning Objectives 1.Identify what technology is and how it relates to organizational effectiveness 2.Differentiate between three different kinds of technology that create different competences 3.Understand how each type of technology needs to be matched to a certain kind of organizational structure if an organization is to be effective

3. 3 Copyright 2004 Prentice Hall Learning Objectives 4.Understand how technology affects organizational culture 5.Appreciate how advances in technology, and new techniques for managing technology, are helping to increase organizational effectiveness

4. 4 Copyright 2004 Prentice Hall What is Technology? Technology: the combination of skills, knowledge, abilities, techniques, materials, machines, computers, tools, and other equipment that people use to convert or change raw materials into valuable goods and services

5. 5 Copyright 2004 Prentice Hall Levels of Technology in an Organization 1.Individual level: the personal skills and knowledge that individuals possess 2.Functional or department level: the procedures and techniques that groups work out to perform their work and create value

6. 6 Copyright 2004 Prentice Hall Organizational Level 3.Organizational level: the way an organization converts inputs into outputs Mass production: the organizational technology that uses conveyor belts and a standardized, progressive assembly process to manufacture goods Craftswork: the technology that involves groups of skilled workers who interact closely to produce custom- designed products

7. 7 Copyright 2004 Prentice Hall Technology and Organizational Effectiveness Technology is present in all organizational activities: Input Conversion Output

8. 8 Copyright 2004 Prentice Hall Input Stage Technology – skills, procedures, techniques, and competences Allows each organizational function to handle relationships with outside stakeholders so that the organization can effectively manage its specific environment

9. 9 Copyright 2004 Prentice Hall Conversion and Output Stages Conversion stage: technology – a combination of machines, techniques, and work procedures Transforms inputs into outputs Output stage: technology allows an organization to effectively dispose of finished goods and services to external stakeholders

10. 10 Copyright 2004 Prentice Hall Figure 9-1: Input, Conversion and Output Processes

11. 11 Copyright 2004 Prentice Hall Technical Complexity: the Theory of Joan Woodward Programmed technology: a technology in which the procedures for converting inputs into outputs can be specified in advance Tasks can be standardized and the work process can be made predictable.

12. 12 Copyright 2004 Prentice Hall Technical Complexity Technical complexity: a measure of the extent to which a production process can be programmed so that it can be controlled and made predictable High technical complexity: exists when conversion processes can be programmed in advance and fully automated Low technical complexity: exists when conversion processes depend primarily on people and their skills and knowledge and not on machines

13. 13 Copyright 2004 Prentice Hall Technical Complexity Woodward identified 10 levels of technical complexity that are associated with three types of production technology: 1.Small-batch and unit technology 2.Large-batch and mass production technology 3.Continuous-process technology

14. 14 Copyright 2004 Prentice Hall Small-batch and Unit Technology Involves making one-of-a-kind, customized products or small quantities of products The conversion process is flexible, with techniques adapted to individual orders. Scores lowest on the dimension of technical complexity

15. 15 Copyright 2004 Prentice Hall Large-batch and Mass Production Involves producing large volumes of standardized products The conversion process is standardized and highly controllable. Scores higher on the technical complexity dimension

16. 16 Copyright 2004 Prentice Hall Continuous-Process Technology Involves producing a steady stream of output The conversion process is continuous, and individuals are only used to manage exceptions in the work process. Scores highest on the technical complexity dimension

17. 17 Copyright 2004 Prentice Hall Figure 9-2: Technical Complexity and Technology

18. 18 Copyright 2004 Prentice Hall Technical Complexity and Organization Structure An organization that uses small-batch technology Impossibility of programming conversion activities because production depends on the skills and experience of people working together An organic structure (chap. 4) is the most appropriate structure for this technology.

19. 19 Copyright 2004 Prentice Hall Mass Production Ability to program tasks in advance allows the organization to standardize the manufacturing process and make it predictable. A mechanistic structure (chap. 4) becomes the appropriate structure for this technology.

20. 20 Copyright 2004 Prentice Hall Continuous-Process Tasks can be programmed in advance, and the work process is predictable and controllable in a technical sense. But there is still the potential for a major systems breakdown An organic structure is the appropriate structure for this technology.

21. 21 Copyright 2004 Prentice Hall Figure 9-3: Complexity and Structure

22. 22 Copyright 2004 Prentice Hall The Technological Imperative The argument that technology determines structure Aston studies: also found that technology determines structure But also found that organizational size is a more important determinant of structure

23. 23 Copyright 2004 Prentice Hall Routine Tasks and Complex Tasks: the Theory of Charles Perrow Perrow’s two dimensions underlie the difference between routine and nonroutine or complex tasks and technologies: 1.Task variability 2.Task analyzability

24. 24 Copyright 2004 Prentice Hall Task Variability and Analyzability Task variability: the number of exceptions – new or unexpected situation – that a person encounters while performing a task Task analyzability: the degree to which search activity is needed to solve a problem More analyzable a task, more routine it becomes

25. 25 Copyright 2004 Prentice Hall Charles Perrow: Four Types of Technology Four types of technology 1.Routine manufacturing: characterized by low task variability and high task analyzability 2.Craftswork: both task variability and task analyzability are low 3.Engineering production: both task variability and task analyzability are high 4.Nonroutine research: characterized by high task variability and low task analyzability

26. 26 Copyright 2004 Prentice Hall Figure 9-4: Charles Perrow

27. 27 Copyright 2004 Prentice Hall Routine/Nonroutine Technology and Structure When technology is routine, employees perform clearly defined tasks – work process is programmed and standardized. Tall hierarchy and centralized Nonroutine technology – organization has to develop structure that allows employees to respond quickly to manage exceptions and create new solutions Organic structure

28. 28 Copyright 2004 Prentice Hall Table 9-1: Routine/Nonroutine and Organizational Design

29. 29 Copyright 2004 Prentice Hall Task Interdependence: the Theory of James D. Thompson Task interdependence: the manner in which different organizational tasks are related to one another Three types of technology 1.Mediating 2.Long-linked 3.intensive

30. 30 Copyright 2004 Prentice Hall Mediating Technology and Pooled Interdependence Mediating technology: a technology characterized by a work process in which input, conversion, and output activities can be performed independently of one another Based on pooled task interdependence Each part of the organization contributes separately to the performance of the whole organization.

31. 31 Copyright 2004 Prentice Hall Long-linked Technology Long-linked technology: a technology characterized by a work process in which input, conversion, and output activities must be performed in series Based on sequential task interdependence Actions of one person or department directly affect the actions of another.

32. 32 Copyright 2004 Prentice Hall Intensive Technology Intensive technology: a technology characterized by a work process in which input, conversion, and output activities are inseparable Based on reciprocal task interdependence, which means that the activities of all people and all departments are fully dependent on one another Specialism: producing only a narrow range of outputs

33. 33 Copyright 2004 Prentice Hall Figure 9-5: Task Interdependence and Technology

34. 34 Copyright 2004 Prentice Hall From Mass Production to Advanced Manufacturing Technology Mass production is based on: Dedicated machines: machines that can perform only one operation at a time, such as repeatedly cutting, drilling, or stamping out a car body part Fixed workers: workers who perform standardized work procedures, increasing an organization’s control over the conversion process

35. 35 Copyright 2004 Prentice Hall Mass Production Attempts to reduce costs by protecting its conversion process from the uncertainty of the environment Makes an organization inflexible However, organizations need to become more flexible but also control costs. Solution: Advanced Manufacturing Technology

36. 36 Copyright 2004 Prentice Hall Figure 9-6: Work Flows

37. 37 Copyright 2004 Prentice Hall Advanced Manufacturing Technology: Innovations in Materials Technology Advanced manufacturing technology: technology which consists of innovations in materials and in knowledge that change the work process of traditional mass-production organizations Materials technology: technology comprising machinery, other equipment, and computers Based on a new view of the linkages between inputs, conversion and outputs

38. 38 Copyright 2004 Prentice Hall Advanced Manufacturing Technology Computer-aided design (CAD): an advanced manufacturing technique that greatly simplifies the design process Computers can be used to design and physically manufacture products. Computer-aided materials management (CAMM): an advanced manufacturing technique that is used to manage the flow of raw materials and component parts into the conversion process, to develop master production schedules for manufacturing, and to control inventory

39. 39 Copyright 2004 Prentice Hall Just-in-time Inventory Systems Just-in-time inventory (JIT) systems: a system that requires inputs and components needed for production to be delivered to the conversion process just as they are needed Input inventories can then be kept to a minimum.

40. 40 Copyright 2004 Prentice Hall Figure 9-7: Just-in-Time

41. 41 Copyright 2004 Prentice Hall Flexible Manufacturing Technology Flexible manufacturing technology: technology that allows the production of many kinds of components at little or no extra cost on the same machine Each machine is able to perform a range of different operations.

42. 42 Copyright 2004 Prentice Hall Computer-Integrated Manufacturing (CIM) An advanced manufacturing technique that controls the changeover from one operation to another by means of commands given to the machines through computer software CIM depends on computers programmed to 1.Feed the machines with components 2.Assemble the product from components and move it from one machine to another 3.Unload the final product from the machine to the shipping area