Organizational Theory, Design, and Change

Organizational Theory,
Design, and Change

Sixth Edition
Gareth R. Jones
Chapter 9
Organizational Design,
Competences, and
Technology
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9- 1

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
Learning Objectives (cont.)
1. Understand how technology affects
organizational culture
2. Appreciate how advances in
technology, and new techniques for
managing technology, are helping to
increase organizational effectiveness

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

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

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

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
Technology and
Competitive Advantage
 The technology of an organization’s
input, conversion, and output
processes is an important source of
competitive advantage

Figure 9.1: Input, Conversion,
and Output Processes

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

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
 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

 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
 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
 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
Figure 9.2: Technical Complexity
and Three Types of Technology

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

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

 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

Figure 9.3: Technical Complexity
and Organizational Structure

 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

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:
 Task variability
 Task analyzability

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
(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

Figure 9.4: Task Variability, Task
Analyzability, and Four Types of Technology

(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
Table 9.1: Routine and Nonroutine
Tasks and Organizational Design

Task Interdependence: The
Theory of James D. Thompson
 Task interdependence: the
manner in which different
organizational tasks are related to
one another affects an organization’s
technology and structure
 Three types of technology
 Mediating
 Long-linked
 Intensive

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

(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
(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

Figure 9.5: Task Interdependence
and Three Types of Technology

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 organization’s control over
the conversion process

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

Figure 9.6: Work Flows

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

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
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
Figure 9.7: Just-in-Time
Inventory System

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

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

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