DR.

SUMITA MISHRA

Organizational Structure and

Technology
DEFINING TECHNOLOGY
 Technology refers to the information, equipment,
techniques, and processes required to transform inputs
into outputs in the organization

 How does one measure technology?

 What can be the problems therein?

 The three landmark contributions in the field of

technology and structure
JOAN WOODWARD’S RESEARCH
 British Sociologist whose research began as a field study of
management principles in South Essex

 Woodward surveyed 100 manufacturing firms to see how they

were organized and whether structure contributed to
effectiveness

 Structural dimensions, management principles and the

manufacturing process

 Technical complexity indicates the mechanization of the

manufacturing process

 Relation between technology and structure and effectiveness

was determined by the best fit between technology and
structure
KEY ELEMENTS

 Small Batch and Unit Production

-Knowledge and skills of people are more important than machines
-relatively difficult to operate as the work is not pre-
programmed and rather unpredictable
-Flat organization
-Narrow span of control
-Relatively low percentage of managers
-Organic Structure
Tailors, furniture designers, Microsoft and new product
prototypes etc.
KEY ELEMENTS

 Large Batch and Mass Production

-Bigger than small batch
-Taller hierarchies
-bottom level is huge (supervisor span of control is 48)
-Relatively greater number of managers (because hierarchy is
so tall)
-Mechanistic, bureaucratic structure
-Relatively cheap to operate
-Cars, Razor Blades, Toasters, Aluminum Cans etc
KEY ELEMENTS

 Continuous Process Production

 Primarily companies that refine liquids and powders (e.g.,
chemical companies, oil refineries, bakeries, dairies,
distilleries/breweries, electric power plants). Machines do
everything,  humans just monitor the machines and plan
changes.
 These organizations are tall and thin or even inverted pyramid:
almost nobody at the bottom
 At the very top there is an organic structure
 Lower levels more mechanistic, but because machines do
everything, there is not much paper work, low level supervision,
etc. Adherence to standards is very high
Structural Unit Mass Continuous
Characteristics
Level in the 3 4 6
hierarchy
Span of control of 23 48 15
front line supervisor
Ratio of Managers 1:23 1:16 1:8 (?)
to non Managers
Shape of the Flat with Tall with wide span Very tall with narrow
organization narrow span
span
Type of Structure Organic Mechanistic Hybrids (organic at
the top levels)
Cost of Operation High Medium Medium

Proportion of skilled High Low High

workers
CONCLUSIONS OF WOODWARD’S RESEARCH
 Distinct relationship between technology and structure

 The effectiveness of organizations was related with the fit

achieved between the technology and the structure
 Increases of vertical differentiation with increase in technical
complexity
 Complexity, Standardization and Centralization are high with the
large batch or the mass production
 The unit/continuous process productions are more loosely
structured
 Effectiveness in organizations is a result of the technology
structure fit
 Woodward’s study has had links with subsequent researches by
Harvey: Technologically Diffuse and Specific
 Criticisms
CHARLES PERROW’S RESEARCH
 The American sociologist, Charles Perrow, developed a classification scheme
based on the knowledge required to operate technology

 Perrow used two dimensions to create his typology.

 Task variability referred to the number of exceptions that a worker

encounters in his workday. Task analyzability referred to the degree search
activity is required to solve a problem. Users of the technology require less
search effort to manage exceptions when able to use existing analytical
methods rather than having to rely on their intuition and guesswork.

 Most organisations have multiple technologies that operate

interdependently. Perrow saw technology as a determinant of uncertainty in
organisations. A high level of uncertainty creates difficulty in predicting
required activities and structuring them. Firms using 'uncertain'
technologies favour an organic over a mechanic organisation structure.
TASK ANALYZABILITY AND TASK
VARIABILITY

Task Variability
1. How many of these tasks are the same from day to day?
2. To what extent would you consider your work as routine?
3. How repetitious are your duties?

Task Analyzability
4. To what extent is there a clearly known way to do the major types of
work you normally encounter?
5. To do your work, to what extent can you rely on standards and
procedures?
6. To what extent is there an understandable sequence of steps that
can be followed to do the work?
 CHARLES PERROW’S RESEARCH
1. ROUTINE
 characterised by the lack of exceptions and its depth of comprehension.
Traditional manufacturing technologies such as assembly lines belong to this
category.
 2. CRAFT

characterised by its lack of exceptions and unpredictable outcomes that are

difficult to analyse. Construction work that demands the drafting of new designs
to resolve building problems is an example of applied craft technology.
 3. ENGINEERING

characterised by many exceptions and its depth of comprehension. Standard and

accepted methods are available to provide solutions to problems. Accountants,
most engineers and laboratory technicians use engineering technologies.

 4. NON-ROUTINE

 characterised by many exceptions and poor comprehension. Problems appear

frequently with no existing solutions. Commercial space engineering is an example
of a non-routine technology.
  
Craft Technology
Structure: Organic
Task Variability: Low
Task Analyzability: High
Formalization: Low to Moderate
Centralization: Low to Moderate
Complexity: Moderate (dependent mainly
on Horizontal differentiation)
Examples: Chefs, Designers, etc.
Routine Technology
Structure: Mechanistic
Task Variability: Low
Task Analyzability: Low
Centralization: High
Formalization: High
Complexity: Low-Moderate
Examples: Store Managers, Clerical
Staff
Non Routine Technology
Structure: Organic (Hybrid)
Task Variability: High
Task Analyzability: High
Formalization: Low
Centralization: Low
Complexity: High
Examples: Strategic Planners, Top
Management
Engineering Technology
Structure: Moderately Mechanistic
Task Variability: High
Task Analyzability: Low
Formalization: Moderate
Centralization: Moderate
Complexity: Moderate
Examples: Accounting and Legal research
 CHARLES PERROW’S RESEARCH
 Perrow developed a framework for characterising the most
appropriate form of organisation to control technology.

 Perrow based his framework on the complexity of interactions in a

system and the way units in a system are coupled.

 The components of a tightly coupled system aggressively impact one

another. A system in which two or more events can interact in
unexpected ways is regarded as interactively complex.

 Nuclear power plants and catastrophic disasters

 Chernobyl disaster of 1986, Bhopal Gas tragedy and the Fukushima

Daiichi Nuclear Disaster of 2011 under TEPCO
JAMES THOMPSON’S
RESEARCH
 Thompson is not a member of the technological
imperative school

 Thompson’s contribution lies in demonstrating that

technology determines the selection of a strategy for
reducing uncertainty and that specific structural
arrangements can facilitate uncertainty reduction

 Long linked technology, mediating technology and

intensive technology all based on Task
Interdependence
 JAMES THOMPSON’S RESEARCH
 Mediating Technology
1. Individuals, departments and organizations with complementary
needs
2. Banks, Real Estate Agencies, Insurance Brokers, Employment
Agencies
3. What is the structural dimension at a bank? Or MCDonald’s
4. Pooled Interdependence (Gymnastic Team or a Ballet Group)
5. Low-Medium Complexity + High Formalization ?
6. How to reduce uncertainty?
 Long Linked Technology
1. Serial or step wise fashion
2. Inputs and outputs are sequenced (Assembly Line)
3. Sequential Interdependence
4. Medium Complexity + High Formalization?
 JAMES THOMPSON’S RESEARCH
 Intensive Technology
1. Outputs of one individual, unit or department become the
inputs of one individual, unit or department
2. A Variety of skills, techniques and methods is to be brought
together for a specific time period to achieve results
3. Hospital and the trauma centre, Basket ball team, Pharma
Companies like MSD and the R&D Teams
4. Reciprocal Interdependence
5. High Complexity + Low Centralization ?
6. How does one reduce uncertainty?
 If you find uncertainty at the input and the output stage what methods
will you use ?
 Integration= Vertical Integration (Forward + Backward)
 Horizontal Integration
 Himalaya (Long Linked Technology)
 Forward Integration (Volumes)
 Backward Integration (Own farms)
 EU (Phillips and Whirlpool)
 JAMES THOMPSON’S RESEARCH
 Dell Computer’s use of these three technologies
1. Mediating Technology
 Customer places an order with the company
 The sum total of the productivity is the pooled output of all the
sales representatives
2. Long Linked Technology
 The assembling of the different parts of the computer
 Production schedules, the layout at the assembly facility and
the order sheet to coordinate
3. Intensive Technology
 Sharing of information at the top management level
Type of Nature of Coordination Communication Physical
Technology Interdependence Location
Intensive Reciprocal: High Team work, Horizontal Locate units
meetings, Communication close together
mutual
adjustment
Long Linked Sequential: Planning, Horizontal Locate units
Moderate Work Communication with adjacent
scheduling, with nearby functions close
verbal work units, and others can
feedback Vertical be dispersed
communication
for oversight
Mediating Pooled: Low Rules, Mainly vertical Low need to
Policies, communication locate units
Procedures together
 MANUFACTURING VS. SERVICE TECHNOLOGY
 Growth of Service as a Core Technology
 Regardless of the future, the reality today is that services constitute a
major segment of the organizational landscape
 What are services?

 Services are intangible offerings of value that do not have a physical

form and are provided to a customer or client
 Teaching, medical services, banking, insurance, etc.

 How can services be managed?

 Research by the Aston Group and Work Flow Integration

1. Automation of Equipment
2. Work Flow Rigidity
3. Specificity of Evaluation
High work flow integration will lead to mechanistic designs where as low
work flow integration will lead to organic modes
 MANUFACTURING VS. SERVICE TECHNOLOGY
Tangibility Standardization Customer Timing Labor
Participation Intensity
-Concreteness -Heavy -No buffering in -Production -High
of output customization service and
-Where is the technologies consumption
-Manufacturing customization happen
vs. Servicing a basically happening -Involving the together -
car in Small unit batch customer in the Manufact
technology? production uring
-Intangibility -Separation of the process tends to
creates a process and the be capital
debate customer in -Customer intensive
manufacturing Knowledge
-Subjectivity in technologies Management
service -Customer is an
increases integral part of -Chances of
the service uncertainty are
-Counseling more
 TECHNOLOGY AND STRUCTURE: CONCLUSIONS
 Technology and Complexity

1. Routines' and complexity

2. Mechanistic and Organic Designs
3. Increase in complexity in terms of sophistication of work may also increase
the levels of vertical differentiation

 Technology and Formalization

1. Routine Technologies and the extent of formalization

2. Non routine technologies require flexibility of operations

 Technology and Centralization

1. Routine and non routine technologies
2. Degree of centralization is moderated to a great extent by the degree of
formalization