Organizational Theory, Design, and Change Sixth Edition Gareth R' Jones

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Organizational Theory, Design, and ChangeSixth
EditionGareth R. Jones
Chapter 9 Organizational Design, Competences,
and Technology
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Learning Objectives

• Identify what technology is and how it relates to
  organizational effectiveness
• Differentiate between three different kinds of
  technology that create different competences
• Understand how each type of technology needs to
  be matched to a certain kind of organizational
  structure if an organization is to be effective

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Learning Objectives (cont.)

• Understand how technology affects organizational
  culture
• Appreciate how advances in technology, and new
  techniques for managing technology, are helping
  to increase organizational effectiveness

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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

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What is Technology? (cont.)

• Technology exists at three levels
• Individual level the personal skills, knowledge,
  and competences that individuals possess
• Functional or department level the procedures
  and techniques that groups work out to perform
  their work and create value

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What is Technology? (cont.)

• Technology exists at three levels (cont.)
• Organizational level the way an organization
  converts inputs into outputs
• Mass production the organizational technology
  based on competences in using standardized,
  progressive assembly process to manufacture goods
• Craftswork the technology that involves groups
  of skilled workers who interact closely to
  produce custom-designed products

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Technology and Organizational Effectiveness

• Technology is present in all organizational
  activities
• Input allows each organizational function to
  handle relationships with outside stakeholders so
  that the organization can effectively manage its
  specific environment
• Conversion transforms inputs into outputs
• Output allows an organization to effectively
  dispose of finished goods and services to
  external stakeholders

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Technology and Competitive Advantage

• The technology of an organizations input,
  conversion, and output processes is an important
  source of competitive advantage

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Figure 9.1 Input, Conversion, and Output
Processes
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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

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Technical Complexity (cont.)

• Technical complexity 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

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Technical Complexity (cont.)

• Woodward identified 10 levels of technical
  complexity that are associated with three types
  of production technology
• Small-batch and unit technology
• Large-batch and mass production technology
• Continuous-process technology

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Technical Complexity (cont.)

• Small-batch and unit technology
• Involves making one-of-a-kind, customized
  products or small quantities of products
• The conversion process is flexible, thereby
  providing the capacity to produce a wide range of
  goods that can be adapted to individual orders
• Is relatively expensive
• Scores lowest on the dimension of technical
  complexity

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Technical Complexity (cont.)

• Large-batch and mass production technology
• Involves producing large volumes of standardized
  products
• The conversion process is standardized and highly
  controllable
• Allows an organization to save money on
  production and charge a lower price for its
  products
• Scores higher on the technical complexity
  dimension

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Technical Complexity (cont.)

• Continuous-process technology
• Involves producing a steady stream of output
• Production continues with little variation in
  output and rarely stops
• Individuals are only used to manage exceptions in
  the work process
• Tends to be more technically efficient than mass
  production
• Scores highest on the technical complexity
  dimension

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Figure 9.2 Technical Complexity and Three Types
of Technology
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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

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Technical Complexity and Organization Structure
(cont.)

• An organization that uses mass production
  technology
• 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

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Technical Complexity and Organization Structure
(cont.)

• An organization that uses mass production
  technology
• Tasks can be programmed in advance, and the work
  process is predictable and controllable in a
  technical sense
• Still the potential for a major systems breakdown
• An organic structure is the appropriate structure
  for this technology

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Figure 9.3 Technical Complexity and
Organizational Structure
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Technical Complexity and Organization Structure
(cont.)

• Technological imperative
• The argument that technology determines structure
• Aston studies found that
• Technology is one determinant of structure
• Organizational size is a more important
  determinant of structure

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Routine Tasks and Complex Tasks The Theory of
Charles Perrow

• Perrows two dimensions underlie the difference
  between routine and nonroutine or complex tasks
  and technologies
• Task variability
• Task analyzability

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Theory of Charles Perrow (cont.)

• Task variability the number of exceptions new
  or unexpected situations that a person
  encounters while performing a task
• Is low when a task is standardized or repetitious
• Task analyzability the degree to which search
  activity is needed to solve a problem
• Is high when the task is routine

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Theory of Charles Perrow (cont.)

• Four types of technology
• Routine manufacturing characterized by low task
  variability and high task analyzability
• Craftswork both task variability and task
  analyzability are low
• Engineering production both task variability and
  task analyzability are high
• Nonroutine research characterized by high task
  variability and low task analyzability

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Figure 9.4 Task Variability, Task Analyzability,
and Four Types of Technology
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Theory of Charles Perrow (cont.)

• When technology is routine, employees perform
  clearly defined tasks work process is
  programmed and standardized
• Mechanistic structure
• Nonroutine technology requires the organization
  to develop structure that allows employees to
  respond quickly to manage exceptions and create
  new solutions
• Organic structure

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Table 9.1 Routine and Nonroutine Tasks and
Organizational Design
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Task Interdependence The Theory of James D.
Thompson

• Task interdependence the manner in which
  different organizational tasks are related to one
  another affects an organizations technology and
  structure
• Three types of technology
• Mediating
• Long-linked
• Intensive

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Theory of James D. Thompson (cont.)

• 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

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Theory of James D. Thompson (cont.)

• Long-linked technology based on 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
• Slack resources surplus resources that enable an
  organization to deal with unexpected situations

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Theory of James D. Thompson (cont.)

• Intensive technology a technology characterized
  by a work process in which input, conversion, and
  output activities are inseparable
• Based on reciprocal task interdependence
• The activities of all people and all departments
  are fully dependent on one another
• Specialism producing only a narrow range of
  outputs

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Figure 9.5 Task Interdependence and Three Types
of Technology
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From Mass Production to Advanced Manufacturing
Technology

• Mass production is based on
• Dedicated machines machines that can perform
  only one operation at a time and that produce a
  narrow range of products
• Fixed workers workers who perform standardized
  work procedures, thereby increasing an
  organizations control over the conversion process

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From Mass Production to Advanced Manufacturing
Technology (cont.)

• Mass production
• Attempts to reduce costs by protecting its
  conversion processes from the uncertainty of the
  environment
• Makes an organization inflexible
• Fixed automation is a combination of dedicated
  machines and fixed workers
• Expensive and difficult to begin manufacturing a
  different kind of product when customer
  preferences change

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Figure 9.6 Work Flows
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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 comprises machinery, other
  equipment, and computers
• Organization actively seeks ways to increase its
  ability to integrate or coordinate the flow of
  resources between input, conversion, and output
  activities

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Advanced Manufacturing Technology (cont.)

• 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
• Flow of inputs determined by customer demand

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Advanced Manufacturing Technology (cont.)

• Just-in-time inventory (JIT) system 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
• CAMM is necessary for JIT to work effectively
• Increases task interdependence between stages in
  the production chain

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Figure 9.7 Just-in-Time Inventory System
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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
• Machines in sequence able to vary operations so
  that a wide variety of different components can
  be produced

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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
• Depends on computers programmed to
• Feed the machines with components
• Assemble the product from components and move it
  from one machine to another
• Unload the final product from the machine to the
  shipping area
• Use of robots integral to CIM