TECHNOLOGY AND
STRUCTURE
TECHNOLOGY THEORISTS
1. Joan Woodward
2. Charles Perrow
3. James Thompson
Joan Woodward
In the early 1960’s Woodward demonstrated that
organization structures adapt to their technology.
In categorizing companies into three groups she
identified that production run sizes were linked
increasing levels of complexity and technological
sophistication.
Technology Categories
Unit Production: The production of items in single units
and small batches
Mass Production: The production of large-batch
manufacturing
Process Production: The production of continuous
-process products such as oil and
chemical refiners
Production Systems by Number Employed
WOODWARD: TECHNOLOGICAL
INFLUENCE ON ORGANIZATIONAL
DESIGN
1.
The more complex the technology – going from a Unit
to a more Process system – the greater are the
number of managerial personnel and the levels of
authority
2.
The more complex the technology, the larger is the
number of clerical and administrative personnel
3.
The span of control of first-line managers increases
from Unit production systems to Mass production
systems and then decreases from Mass production
systems to Process production systems
MASS PRODUCTION
TECHNOLOGY & DESIGN
UNIT & PROCESS
TECHNOLOGY & DESIGN
COMPUTER-INTEGRATED
MANUFACTURING
Since the work of Woodward, there have been significant
advances in production technology, which include the use
of robots, numerically-controlled machine tools, and
many applications of the computer to remote control of
equipment.
These advances have been called by a variety of names
including: advanced manufacturing technology, agile
manufacturing, smart factories, and flexible
manufacturing systems.
Computer-Integrated
Manufacturing
Typically the results of three sub-components:
1. Computer-assisted design (CAD). Computers
are used to assist in drafting, design and engineering
of new parts. Allows significant variation in
specifications with minimum of redesign cost.
2. Computer-aided manufacturing (CAM). Computercontrolled machines are used in materials-handling,
fabrication, production, and assembly. Allows fast
switching between product runs and variations.
Computer-Integrated
Manufacturing, cont’d
3. Integrated Information Networks (ERP): A
computerized system links all aspects of the
firm – accounting, marketing, purchasing,
inventory control, etc. The most common
are called Enterprise Resource Planning
programs. Most known are by SAP, PeopleSoft and Oracle. Use a common database, and
allow managers to integrate their decision
making more effectively.
NEW CHOICES
Customized
Small Batch
Flexible
Manufacturing
Mass
Customization
Product flexibility
Mass
Production
OLD CHOICES
Continuous
Process
Standardized
Small
Batch Size
Unlimited
Comparison of Organizational
Characteristics of Mass Production vs
CIM
Structure
Mass Production
Span of control
Hierarchical levels
Tasks
Specialization
Decision Making
Overall
Wide
Many
Routine, repetitive
High
Centralized
Bureaucratic, mechanistic
CIM
Narrow
Few
Adaptive, craftlike
Low
Decentralized
Self-regulating,
organic
Charles Perrow
Focus is on departmental technology
and departmental structure
(usually outside the technical core)
Each department has a production
process with a distinct technology
Includes units such as HRM, R&D,
legal, engineering, QC, finance, etc.
DIMENSIONS OF TECHNOLOGY
Task Variety: number of exceptions in the work.
Frequency of unexpected and novel events that occur
in the conversion process.
Problem Analyzability: degree to which work activities
and problem solving activities are analyzable.
Analyzable problems can be solved with procedures
and standardized technical knowledge. Non-analyzable
problems must be dealt with by wisdom, experience
and intuition.
PERROW - CONCLUSIONS
1. Departments do differ from one another and can be
categorized by their workflow technology.
2. Structural and management processes differ based
upon workflow technology.
3. Managers should design departments so that
requirements based on technology can be met.
4. Explains differences in departmental structures in
mixed-type designs.
JAMES THOMPSON –
TECHNOLOGY
SYSTEMS THEORIST
SYSTEMS MODEL OF
ORGANIZATION
Departmental Interdependence
Interdependence mean the extent to which departments
depend on each other for resources or materials to
accomplish their tasks.
Low interdependence means the departments can do
their work independently of each other and have little
need for interaction, consultation or exchange of materials.
High interdependence means the departments must
constantly exchange resources.
Types of Interdependency
• Pooled Interdependency
• Sequential Interdependency
• Reciprocal Interdependency
Pooled Interdependency
Pooled interdependence is the lowest form of
interdependence among departments. In this form,
work does not flow between units. Each contributes
to the common good of the organization, but does
its work independently.
Examples: McDonald’s restaurants, branch banks,
independent sales units based upon
territory or product lines.
Mediating Technology
Pooled interdependence is associated with organizations
employing a Mediating Technology. A Mediating
Technology provides products or services that mediate
or link clients from the external environment and, in
doing so, allows each department to work independently.
Banks, brokerage houses, real estate offices all mediate
between buyers and sellers, but the offices work
independently within the organization.
Mediating Technology II
To achieve coordination, mediating technologies rely on
both a measure of categorization and a degree of
standardization. Organizations with mediating technologies
are, in general, moderately flexible to changing product
demands and typically cope with uncertainty by increasing
the number of units served. Since mediating technology
combines the outputs of different units by using
predetermined categories and standard rules and procedures,
it is usually less costly than long-linked technology which
requires a certain amount of planning (scheduling) across
several tasks to ensure proper work flow.
Sequential Interdependence
Sequential interdependence exists when the outputs of one
department become the inputs of another in serial form.
This is a higher level of interdependence than pooled
relationships. The preceding unit must complete its tasks
correctly in order that the latter unit may successfully
complete its tasks. It creates a higher need for horizontal
integration mechanisms.
Sequential interdependence is associated with Long-Linked
Technologies..
Long-Linked Technology
Long-linked technology is usually associated with large
organizations that utilize sequential task organization,
such as assembly lines to accomplish their tasks.
Examples include the manufacture of automobiles,
heavy appliances, mechanical assemblies, some food
preparation processes, etc.
Long-linked technologies require high levels of
coordination between tasks to be efficient.
Long-Linked Technology II
In long-linked technology procedures to complete a unit
of work are highly uniform and must be performed in a
specified serial order.
Organizations based upon long-linked technology
generally achieve coordination through planning
(scheduling) and typically seek to offset significant
environmental uncertainty through vertical integration.
Reciprocal Interdependence
Reciprocal interdependence is the highest level of interdependence. Reciprocal interdependence exits when the
output of one unit serves as the input for a second unit,
and the output of the second unit serves as the input for
the first unit.
Reciprocal interdependence occurs in organizations with
intensive technologies.
Intensive Technology
Intensive technologies provide a variety of products or
services in combination to the client. A new product
development company is an example, where design,
engineering, manufacturing and marketing all must
work combine all their resources to suit a customer’s
product needs.
Intensive technology, because of its reciprocal interdependencies, requires the highest level of management
requirements. Reciprocally interdependent units work
together intimately and must be closely coordinated;
thus, a horizontal structure is appropriate.
Intensive Technology II
Intensive technology coordination requires high levels of
horizontal communication and adjustment. Managers
from multiple departments are often involved in face-toface communication.
Intensive technologies secure coordination through mutual
adjustment. They generally increase their tolerance for
uncertainty by ensuring the availability of a variety of
specialized services and skills in order to be prepared for
any contingency. Intensive technologies are typically the
most expensive to coordinate.
STRUCTURAL PRIORITIES
Thompson posited a series of propositions regarding the
structural priorities necessary to account for the different
levels of interdependency among units.
1. Under norms of rationality, organizations group positions
minimize coordination costs.
1A. Organizations seek to place reciprocally interdependent
positions tangent to one another, in a common group,
which is (a) local and (b) conditionally autonomous.
Structural Priorities II
1B. In the absence of reciprocal interdependence,
organizations subject to rationality norms seek to
place sequentially interdependent positions tangent
to one another, in a common group which is (a)
localized and (b) conditionally autonomous.
1C. In the absence of reciprocal and sequential
interdependence, organizations subject to norms of
rationality seek to group positions homogeneously
to facilitate coordination by standardization.
Structural Priorities III
2. When reciprocal interdependence cannot be confined to
intra-group activities, organizations subject to rationality
norms seek to link the groups involved into a secondorder group, as localized and conditionally autonomous
as possible.
3. After grouping units to minimize coordination by mutual
adjustment, organizations under rationality norms seek to
place sequentially interdependent groups tangent to one
another, in a cluster which is localized and conditionally
autonomous.
Structural Priorities IV
4. After grouping units to solve problems of reciprocal
and sequential interdependence, organizations under
norms of rationality seek to cluster groups into
homogeneous units to facilitate coordination by
standardization.
4A. When higher-priority coordination requirements
prevent the clustering of similar positions or groups,
organizations seek to blanket homogeneous positions
under rules which cut across group boundaries, and
to blanket similar groups under rules which cross
divisional lines.
Structural Priorities V
4B. When organizations employ standardization, which
cuts across multiple groups, they also develop
liaison positions linking the several groups and the
rule-making agency.
4C. Organizations with sequential interdependence not
contained by departmentalization rely on committees
to accomplish the remaining coordination.
4D. Organizations with reciprocal interdependence not
contained by departmentalization rely on task-force
or project groups to accomplish the remaining
coordination.
Summary of Structural
Priorities
1. Reciprocal relationships are the highest level of interdependence, and should receive first priority by being
grouped close together in the organization so managers
have easy access to one another for mutual adjustment.
These units should report to the same person and should
be physically close to minimize time and effort in
coordination.
When such units cannot be located close together, the
organization should design coordination mechanisms,
such as cross-functional teams, project teams or
intranets to facilitate required coordination.
Summary, cont’d
2. The next priority is given to sequentially interdependent
units or tasks. Once reciprocal relationships are taken
care of, or not present, sequentially interdependent units
or tasks should be grouped together under a common
superior, and as physically close to one another as
possible.
If a common superior, or physical proximity, is not
possible the interdependence should be coordinated
through committees or task-forces.
Summary, cont’d
3. The final priority should be given to pooled interdependencies. If the interdependence cannot be
handled by forming homogeneous groups under a
common superior or close physical proximity,
standardization across units should be implemented
with liaison individuals to handle required crosscommunication between the units.
Comparing Technology
Contributor
Technology
Routine
Non-Routine
Woodward
Perrow
Mass, Process
Routine,
Engineering
Long-linked,
Mediating
Thompson
Unit
Craft,
Non-Routine
Intensive