Technology

Chapter Topics
Definition
Woodwards Manufacturing Technology
Computer Aided Manufacturing
Perrows Typology of Technology
Thompsons 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 wards

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 wards 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 wards Research

i.
ii.

Conclusion:
Distinct relationship between these technology
classification and the structure
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 Woodwards findings

Structural
Unit
Mass
characteristi Production Production
cs

Process
production

Number of vertical 3
levels

Supervisors span 24
of control

48

14

Manager/ total
employee ratio

1: 23

1: 16

1:8

Proportion of
skilled workers

High

Low

High

Overall
Complexity

Low

High

Low

Formalization

Low

High

Low

Centralization

Low

High

Low

Wood wards Research

1.

2.

Woodward concluded that within each technological category

the firms that conformed most nearly to the median for each
structural component were most effective
The mass production technology firms were: (Mechanistic)
- highly differentiated
- relied on extensive formalization
- did relatively little to delegate authority
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

1.
2.
3.

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
Between the technical and social system of the operating core
- conflict that is fundamentally irreconcilable even in the most well
run firms
Between the short run focus of the lower managers and the long
range focus of the senior mangers
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

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:
- operating core transcends a state of bureaucracy
- 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, shortrange 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

1.
2.

3.

CIM is typically the result of of three components

Computer-aided-design (CAD)
drafting, design, and engineering of new parts
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
Administrative automation,
Computerized accounting, inventory control, and shopfloor 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:

Perrows 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:

Perrows Contribution

1.

2.

Charles Perrow Model:

Task Variability:
Number of exception in the work
Frequency of unexpected and novel events that occur
in conversion process
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:

Perrows 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

1.
2.

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

Structure

The Common Denominator

Technology
Contribution
Woodward
Perrow
Thompson

Routine
Mass,
Process
Routine,
Engineering
Mediating,
Long linked

Non Routine
Unit
Craft, Non
routine
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
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:
- How to do the job is well understood
- 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.
2.
3.
4.

Separate boundary roles Few

Many
Geographical dispersion
Decision Making
Much
Little
Formalization
Decentralized Centralized
Lower
Higher

Human Resources
1. Employee skill level
2. Skill emphasis

Higher
Interpersonal

Lower
Technical


1.

2.

Service Business Technology

Typology of service organization that illustrates the
differences among them and the differences in
technology of each category:
Degree of labor intensity:
The ratio of labor cost incurred to the value of plant
and equipment.
Lawyers office is highly labor intensive
Trucking firm is low in labor intensity
Hospital is low on labor intensity
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


1.

2.
>

Service Business Technology

Managers of businesses in each quadrant have

different challenges
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
Businesses with high labor intensity
Managers must spend bulk of their time
managing and controlling the work force

Service Business Technology

3.

4.

Businesses with low interaction and customization:

Managers face marketing challenges
Must try to make services it provides warm, even though the
customer doesnt 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
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

TheSocial
SocialSystem
System
The
Individualand
andteam
team
Individual
behaviors
behaviors

Organizational/team
Organizational/team
culture
culture
Managementpractices
practices
Management
Leadershipstyle
style
Leadership
Degreeofofcommunication
communication
Degree
andopenness
openness
and
Individualneeds
needsand
and
Individual
desires
desires

TheTechnical
TechnicalSystem
System
The

Designfor
for
Design
JointOptimization
Optimization
Joint
Workroles,
roles,tasks,
tasks,
Work
workflow
workflow
Goalsand
andvalues
values
Goals
Skillsand
andabilities
abilities
Skills

Typeofofproduction
production
Type
technology(small
(smallbatch,
batch,
technology
massproduction,
production,FMS,
FMS,etc.)
etc.)
mass
Levelofofinterdependence
interdependence
Level
(pooled,sequential,
sequential,
(pooled,
reciprocal)
reciprocal)
Physicalwork
worksetting
setting
Physical
Complexityofofproduction
production
Complexity
process(variety
(varietyand
and
process
analyzability)
analyzability)
Natureofofraw
rawmaterials
materials
Nature
Timepressure
pressure
Time

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
organizations production system