Module 3: Impact of Technology on Structure
PGP 2014-16 Section C & D
Term 1:June-September
2014
Sourav Mukherji
Associate Professor of Organization Behaviour
Indian Institute of Management Bangalore, Ind
RECAPITULATION: ORGANIZATION DESIGN GETS
IMPACTED BY VARIOUS CONTINGENCY FACTORS
STRATEGY
DEPENDENCY
ON
ENVIRONMEN
T
CULTUR
E
POWER
POLITIC
S
STRUCTURE &
PROCESSES
1.
2.
3.
4.
5.
6.
7.
Centralization
Formalization
Specialization
Coordination
Control systems
Learning
Decision Making
IMPACT OF
TECHNOLO
GY
SIZE
AND
GROWT
H
© S Mukherji
2
3
WE WILL LOOK AT THE IMPACT OF TECHNOLOGY ON
ORGANIZATION DESIGN
STRATEGY
DEPENDENCY
ON
ENVIRONMEN
T
CULTUR
E
POWER
POLITIC
S
STRUCTURE &
PROCESSES
1.
2.
3.
4.
5.
6.
7.
Centralization
Formalization
Specialization
Coordination
Control systems
Learning
Decision Making
IMPACT OF
TECHNOLO
GY
SIZE
AND
GROWT
H
Caveat: In reality, all these factors are interrelated
© S Mukherji
TECHNOLOGY IS AN ORGANIZATION’S PRODUTION
PROCESS
4
Three aspects of technology
1
2
3
Equipment and tools used in production
Design and process of production
Knowledge / know-how needed for production
Input
Material, information, ideas Transformation process
Process variability, standardization, interdependence Output
Products, services,
© S Mukherji
TECHNOLOGY CAN BE VIEWED FROM MULTIPLE
LEVELS
Viewed from…
5
Focus of organizational structure
Environment
Organization is a technology for producing objec that society desires – black box approach
Organization
Dominant method or knowledge used to produce a certain output – CORE or MODAL technology
Unit / department
Multiple technologies employed by differ departments to produce different output
• An organization is a product of many different objects, activities and knowledge bases operating and interacting simultaneously • One needs to state level of focus and analysis to avoid confusion © S Mukherji between core and unit level technology
6
WE WILL LOOK AT THREE TYPES OF
TECHNOLOGY CLASSIFICATION
Organizational
Technology
(Woodward)
Inter – unit
Interdependencies
(Thomson)
Unit technology
(Perrow)
© S Mukherji
WOODWARD’S CONTINGENCY THEORY OF
TECHNOLOGY
Typology of production processes
7
Technology classification
Low
Production of single pieces to customers
Group I
Production of technically complex units
Small batch & one at a time unit production
3.
Fabrication of large equipment in stages
4.
Production of pieces in small batches
5.
Production of components in large batches
& subsequently assembled diversely
Degree of
6.
Production of large batches in assembly line
Group II automation 7.
Mass production
Large batch &
8. Continuous process production combined mass production with preparation of product by large batch or mass production
9.
Continuous process production of chemicals in batches
Group III
10. Continuous flow production of liquids, gases and solid shapes
Continuous
1.
2.
process production High
© S Mukherji
8
TECHNOLOGY IMPACTS STRUCTURAL DIMENSIONS
Structural dimensions
Levels of management
Span of control
Formalization
Centralization
Verbal communication
Skill level of workers
Overall structure
Unit production Mass production 3
23
low low high high 4
48
high high low low organic
Continuous process 6
15
low low high high mechanistic
orga
Noted a high degree of similarity in structural features between unit production and continuous process
• Woodward mainly studied small and medium sized organizations
• Relationships were less significant for large organizations
• Woodward studied only manufacturing industries and ignored service
© S Mukherji
CLASSIFICATION OF SERVICE TECHNOLOGIES
SERVICE
PACKAGES
Unique Selective Restricted Generic
Expert
Service
Service
Shop
Increasin g scale of
Consulting
Service
Factory
SERVICE
PROCESSES
operation s Higher Education
Package
Delivery
Increasing customization
Source: D E Kelllog & W Nie (1995) A Framework for Strategic Service