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Technology

• Chapter Topics Definition Woodward’s Manufacturing Technology Computer Aided Manufacturing Perrow’s Typology of Technology Thompson’s Typology of Technology Service Technology Socio technical systems

Definition

• Technology refers to the information, equipment, techniques, and processes required to transform inputs into outputs in the organization • How inputs are transformed into outputs

Transformation process for a manufacturing company

Manufacturing Technology: Wood ward’s Research

Chose approximately one hundred and fifty firms in England

The firms ranged in size from fewer than two hundred in fifty to more than one thousand

Data to measure structural variables like:

-

Hierarchical levels

-

The span of control

-

The administrative component

-

The extent of formalization

-

The extent of centralization

Financial data like profitability, sales, market share, which would allow her to classify the firms as above average, average, and below average

Objective of the research: Is there a correlation between structural forms and effectiveness

Hypothesis was derived from classical theorist: There is one optimum form of organizational structure that leads to organizational effectiveness

Wood ward’s Research

Initial Results: No link between optimum form of structure and organizational effectiveness

Categorized firms into three types of technologies : unit production, mass production, and continuous process production

These categories represented a scale with increasing degree of complexity

i.

Unit production: least technological complex, manufacture custom made products

ii.

Mass production: Intermediate in technological complex, manufacture large batch or mass produced products

iii.

Continuous process production: completely automated, no stopping of production process, Highest on technological complexity

Wood ward’s Research

Conclusion:

i.

Distinct relationship between these technology classification and the structure

ii.

The effectiveness of the organization was related to the “fit” between the technology and structure

The degree of vertical differentiation increased with technical complexity.

Administrative component varied directly with the technical complexity. As technical complexity increased so did the proportion of administrative and support staff

Curvilinear relationships were found with the skill level of employees, overall complexity and formalization

Summary of Woodward’s findings

Structural

Unit

Mass

Process

characteristi

Production

Production

production

cs

Number of vertical levels

3

4

6

Supervisor’s span of control

24

48

14

Manager/ total employee ratio

1: 23

1: 16

1:8

Proportion of skilled workers

High

Low

High

Overall

Low

High

Low

Complexity

Formalization

Low

High

Low

Centralization

Low

High

Low

Wood ward’s Research

Woodward concluded that within each technological category the firms that conformed most nearly to the median for each structural component were most effective

  • 1. The mass production technology firms were: (Mechanistic)

    • - highly differentiated

    • - relied on extensive formalization

    • - did relatively little to delegate authority

  • 2. Both unit and continuous process, in contrast were structured more loosely (organic). Flexibility was achieved through:

    • - less vertical differentiation

    • - less division of labor

    • - more group activities

    • - more widely defined roles and responsibilities

    • - decentralized decision making

Unit production

In unit production firms outputs were adhoc or non standard

The unit producers’ operating work could not be standardized or formalized, so their structures were organic

Coordination that could not be handled by mutual adjustments among operators themselves was directly resolved by direct supervision by the first line supervisor

Being directly responsible for production, the first line managers worked closely with the operators typically in small work groups

This resulted in:

- Narrow span of control at the first level supervision

- High technical competence based on long practical experience of first line supervisor

Woodward characterized unit production as craft in nature, with structure built around the skills of the workers in operating core

These characteristics meant little elaboration of the administrative system

Unit production

Reasons:

  • - Most coordination in the unit production firms was ad hoc in nature

  • - coordination was handled either by mutual adjustments or by first line managers

  • - there was a little need for an elaborate managerial hierarchy or techno structure besides them

At the strategic apex span of control tended to be narrow, a reflection of adhoc nature of business

Not assured by steady stream of stream of orders, the top management had to spent more time with customers so could not supervise many people

The flow of work in these firms were from marketing, to development to production

Sales persons had to be technically competent, because the order they had to secure were non-standard, required them to work closely with development personnel

Product development people had to closely with production personnel to

ensure that the non standard products were produced according to customer specification There had to be close and continuous integration of three functions

Unit production

• Thus unit production was characterized by:

  • - little narrow functionalism or

differentiation

  • - A close knit management group

  • - a high frequency of personal contact

  • - a organic structure

Mass Production

Mass standardized production led to formalized behavior, which led to all characteristics of classic bureaucracy

Operating work was routine, unskilled, and highly formalized

Such work required little:

  • - direct supervision

  • - wide span of control for first-line supervisor

  • - fully developed techno structure to

  • - clearly defined work duties

  • - emphasis on written communication

  • - unity of command

  • - span of control at the top ranging between 5 – 7

  • - rigid separation of line and staff

-considerable activity planning

  • - long range at the strategic apex ( due to long product development

cycle) and short-range at lower levels ( primarily to deal with sales

fluctuations.)

Mass Production

The production flow of functions as being from development to production to marketing

The three functions were sharply differentiated and communication between them of formal nature

Mass production were the most segmented and most riddled with hostility and suspicion

She identified three major points of conflicts

1.

Between the technical and social system of the operating core

- conflict that is fundamentally irreconcilable even in the most well run firms

2.

Between the short run focus of the lower managers and the long range focus of the senior mangers

3.

Between the line and staff groups in the administration one with authority and the other with expertise

According to Woodward all these characteristics as deriving from the organizations technical system, its standardized mass production

Mass Production (contd.)

• R.G. Hunt refers:

• mass production as performance organizations,

• The other two he calls problem solving organizations

• Unit production handled only exceptions

• Process production were concerned only with exceptions

• Mass production experience fewer exceptions, less critical in nature, many of them could be handled by formal routines

• Mass performance organizations spent their time fine tuning their bureaucratic machines

Process Production

With automation comes a dramatic reduction in number of unskilled

- operating core transcends a state of bureaucracy

operators tied directly to the pace of production The unit could be run by fewer people and even they only serve as monitors

With this change in operating work force comes a dramatic change in

structure:

  • - totally standardized, but without the people

  • - administration shifts its orientation

  • - the rules and regulations are built in machines not people

  • - so goes out the need for direct supervision

  • - technocratic standardization and with it the obsession for control

  • - incomes the corps of technical specialists , to design the technical system and than maintain it

Thus automation brings:

  • - a replacement in the operating core of unskilled workers directly tied up to technical system by skilled workers to maintain it

  • - at middle levels of structure a replacement of managers and technocratic

staff who control the work of others by support staff of professional designers who control their own work

  • - these changes dissolve the conflicts of the mass production firm

Process Production

The process producers were organic in nature:

  • - operating workers consisted mainly of skilled, indirect workers who maintained the equipment

  • - the first level supervisory spans of control were narrow, a reflection of the need for skilled

operators to work in small teams

  • - resulting in intimate and informal relationship between operators and supervisor

The process producers relied most on indoctrination and training

Highest administrative ratio, a reflection of the extensive use of support staff who designed the technical systems and carried out the functions as research and development

Process Production

The line/staff distinction was blurred in the process firms, being difficult to distinguish between executive and advisory responsibility

Functional work flowed from development to marketing to production

Such a development cycle led to a very long-range planning orientation

Such development cycle also led to a sharp separations between development and operations

This results in structure with two independent parts;

- an inner ring of operators with fixed facilities, short- range orientation, and rigid controls built into the machinery

  • - outer ring of development both product and process – with very long range orientation, loose control, and

emphasis on social relations

Process Production

The two-part structure served to reduce conflict for two reasons:

  • 1. It detached the technical and social system from one another

    • - one part of the structure concerned itself with machine, the other with people

    • - people could be free while machines could be tightly controlled

2. The two part structure served to decouple the long and short range orientation

At the strategic apex a tendency to use “ management by committee” instead of single decision maker

Wide span of control at the strategic apex

  • - due to the ability of specialists lower down to make key decisions thereby freeing top managers to

supervise large number of people

Process Production

• conclusion:

• The dominant factor in process production was the automation of technical systems

• Automation appears to place an organization in post bureaucratic state:

- the technical system is fully regulating, but of machines not people

- the social system largely outside the operating core – need not to be controlled by rules and so can emerge as organic structure, using mutual adjustment among experts, encouraged by liaison devices to achieve coordination

Computer-integrated manufacturing

• Advanced manufacturing technology, agile manufacturing, the factory of future, smart factories, or flexible manufacturing systems

• Computer-integrated manufacturing (CIM) links together manufacturing components that previously stood alone. Robots, machines , product design, and engineering analysis are coordinated by a single computer

• Revolutionized the shop-floor, enabling large factories to deliver wide range of custom made products at low mass production cost

Computer-integrated manufacturing

CIM is typically the result of of three components

1.

Computer-aided-design (CAD) drafting, design, and engineering of new parts

2.

Computer-aided manufacturing (CAM)

Computer-controlled machines in materials handling, fabrication, production, and assembly greatly increases the speed at which items can be manufactured

Allows production line to rapidly from producing one product to variety of other products by changing the instruction tapes or software in the computer

Enables the production line to quickly honor customer request for change in product design and product mix

3.

Administrative automation,

Computerized accounting, inventory control, and shop- floor tracking allows managers to monitor and control

Computer-integrated manufacturing

• Performance:

Products of different sizes, types, and customer requirements freely intermingle on the assembly line

Bar codes imprinted on a part enables machines to make instantaneous changes without slowing the product line.

A manufacturer can turnout an infinite variety of product in unlimited batch sizes

Knowledge Based technology:

Perrow’s Contribution

• Charles Perrow looked at knowledge rather than at production technology

• Defined technology as, “ the action that an individual performs upon an object, with or without the aid of tools or mechanical devices, in order to make some change in that object”

• Task Variability • Problem Analyzability

Knowledge Based technology:

Perrow’s Contribution

Charles Perrow Model:

1.

Task Variability:

Number of exception in the work

Frequency of unexpected and novel events that occur in conversion process

2.

Problem Analyzability:

When the conversion process is analyzable, the work can be reduced to mechanical steps

Participants can follow an objective, computational procedure to solve problems

Problem solution may involve the use of standard procedures such as instruction manuals, or technical knowledge such as textbook

Knowledge Based technology:

Perrow’s Contribution

When work is not analyzable, when problem arise it is difficult to identify correct solution

No store of techniques or procedure to tell a person exactly what to do

The cause of or solution to problem is not clear , so employee rely on accumulated experience, intuition and judgment

Workflow interdependence among departments
1.

Pooled interdependence: Mediating

Technology Lowest form of interdependence

Work does not flow between department

  • 2. Sequential Interdependence: Long linked

technology Interdependence is in serial form

  • 3. Reciprocal interdependence: Intensive technology

Technological uncertainty:

Thompson contribution

Conclusion:

  • 1. Mediating technology: low complexity + high formalization

  • 2. Long linked technology: Moderate complexity + formalization

  • 3. Intensive technology: high complexity and low formalization

Influence of Industry and Size

Industry:

Organizations within any given industry may have to adopt the conventional technology to be competitive

Just as industry influences the standard operating size of an organization, its degree of competition, extent of government regulations, it can also limit the viable set of technology options

Sales volume factors favors low cost manufacturer, which essentially demands that firms in the industry to use technology along the lines of mass production

Influence of Industry and Size

Size:

The strongest attack on technology imperative came from those who argue size is the critical determinant of structure.

In one case, the Aston group was able to support Woodward’s conclusion concerning structure and technology, but again the explanation was based on size

According to Aston group if technology has an influence on structure it is most likely to affect the structure closest to technology itself

1.

The larger the size of the organization the smaller the role technology is likely to play

2.

The smaller the organization, the more likely it is that the whole organization will be impinged upon by the production work flow or the operating core

Conclusion: In smaller organization the structure f operations is likely to be dominated by primary transformation process, but in large organizations the impact of technology is not likely to be so powerful

In small organizations, divisions of large organizations, or organizational activities most closely related to the operating core, technology should explain more of the resultant structure

Industry size integrative Mode

Industry

 
 
Technology Size
Technology
Size

Structure

Industry size integrative Mode Industry Technology Size Structure
The Common Denominator Technology Contribution Routine Non Routine Woodward Mass, Unit Process Perrow Routine, Engineering Craft,
The Common Denominator
Technology
Contribution
Routine
Non Routine
Woodward
Mass,
Unit
Process
Perrow
Routine,
Engineering
Craft, Non
routine
Thompson
Mediating,
Long linked
Intensive

Technology and Structure

Technology and Complexity:

Routine Technology is positively related with complexity

The greater the routineness:

  • - the fewer number of occupational groups,

  • - less training possessed by the technology

This relationship is more likely to hold for the structural activities near the operating core, such as proportion of maintenance employees, and span of control of first-line supervisor

Non routine technology is likely to lead high complexity

As the work becomes more customized, the span of control becomes narrow and vertical differentiation increases.

Customized responses require:

  • - greater use of specialists

  • - Managers require smaller span of control because they confront non programmable problems

Technology and Structure

Technology and Formalization:

Routine technology to be positively related with

- How to do the job is well understood

formalization. Routineness was significantly associated with the

presence of rules manual, job descriptions, and the degree to which job descriptions were specified Routine technologies permit allows management to

implement rules and other formalization techniques because:

- jobs are repetitive enough to justify cost to develop formalized systems

Non routine technologies require control systems that present greater discretion and flexibility

Technology and Structure

• Technology and Centralization:

• Routine technologies would be associated with centralized control

• Non routine technologies, which would rely on the knowledge of specialist, would be characterized by delegated decision making

• Technology – Centralization relationship is moderated by the degree of formalization

• Routine technologies should be associated with high centralized control if there is minimum rules and regulations

• If formalization is high, routine technology can be accompanied by decentralization

Service Firms

  • 1. Services differ from manufacturing organization in terms of technology:

  • a. Simultaneous production and consumption means that clients of services consume the output of the organization at the same time it is produced

  • b. Customized output and customer participation means that clients become a part of the production process

  • c. Intangible output means that a service is abstract such as information or knowledge

  • d. Service firms are labor intensive, with many employees needed to meet the needs of the customer

Service Firms

  • 2. Service structure

    • a. Boundary units are not used in services as the client cannot be sealed off from the production area; they must work together

    • b. Technical employees in service firms tend to be highly trained, have interpersonal skills, have discretion to make decisions

Configuration and structural characteristics of service Vs. product organization

Product

service

  • 1. Separate boundary roles

Few

Many

  • 2. Geographical dispersion

  • 3. Decision Making

Much

Little

  • 4. Formalization

Decentralized

Centralized

Lower

Higher

Human Resources

 
  • 1. Employee skill level

Higher

Lower

  • 2. Skill emphasis

Interpersonal

Technical

Service Business Technology

Typology of service organization that illustrates the differences among them and the differences in technology of each category:

  • 1. Degree of labor intensity:

The ratio of labor cost incurred to the value of plant and equipment.

Lawyer’s office is highly labor intensive Trucking firm is low in labor intensity Hospital is low on labor intensity

  • 2. It contains two concepts: (1) degree to which consumer interacts with the service process, and (2) the degree to which service is customized to the consumer

Service Business Technology

A service business that is high in both is considered high on measure

Where there is high and low on the two concepts, joint measure falls between high and low

A high level of interaction means that customer can intervene in the service process, demanding particular services or deletion of others

Fast food restaurants would be low on this measure because customers are treated the same and there is little customization

A prestigious restaurant with extensive waiter service, has high interaction and customization

Service Business Technology

Managers of businesses in each quadrant have different challenges

  • 1. Businesses in low labor intensity

Monitoring the technological sector of the environment is important for new departments that can be adopted

Since capacity cannot be increased easily, demand must be managed to avoid peaks and promote off peak periods

Due to inflexibility of capacity, scheduling service delivery is much more important

  • 2. Businesses with high labor intensity

>

Managers must spend bulk of their time managing and controlling the work force

Service Business Technology

3.

Businesses with low interaction and customization:

Managers face marketing challenges

Must try to make services it provides warm, even though the customer doesn’t get as much personal attention as desired

Companies can take advantage of standard operating procedures.

Tend to have classic hierarchical structure with broad base of workers and many layers of management

4.

Business with high customer interaction and customization

Must deal with higher costs and more talented labor

Managing costs by keeping them down or passing them to consumer becomes significant challenge

Maintaining quality and responding to customer intervention

Two demands of responding to customer and employees, the hierarchy tends to be flat

Sociotechnical Systems

• Recognizes the interaction of technical and human needs in effective job design

• Combining the needs of the people with the organizational needs for technical efficiency

• The Socio portion of the approach refers to the people and groups that work in the organization and how the work is organized and coordinated

• The technical portion refers to the materials, tools, machines, and processes used to transform organizational

Sociotechnical Systems Model

The The Social Social System System The The Technical Technical System System Individual Individual and and
The The Social Social System System
The The Technical Technical System System
Individual Individual and and team team
behaviors behaviors
Type Type of of production production
technology technology (small (small batch, batch,
mass mass production, production, FMS, FMS, etc.) etc.)
Design Design for for
Organizational/team Organizational/team
culture culture
Joint Joint Optimization Optimization
Level Level of of interdependence interdependence
(pooled, (pooled, sequential, sequential,
Management Management practices practices
Work Work roles, roles, tasks, tasks,
reciprocal) reciprocal)
workflow workflow
Leadership Leadership style style
Physical Physical work work setting setting
Goals Goals and and values values
Degree Degree of of communication communication
Complexity Complexity of of production production
and and openness openness
Skills Skills and and abilities abilities
process process (variety (variety and and
analyzability) analyzability)
Individual Individual needs needs and and
desires desires
Nature Nature of of raw raw materials materials
Time Time pressure pressure

Sociotechnical Systems

• The goal of the sociotechnical system approach is to design for joint optimization

• An organization functions best when socio and technical systems are designed to fit the needs of one another

• Designing the organization to meet human needs while ignoring the technical system or vice versa may cause performance problems

• The socio-technical system approach attempts to find a balance between what workers want and need and the technical requirements of the organization’s production system