Organizational Design Competences and Technology Copyright 2013 Pearson

Organizational Design, Competences, and Technology Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -1

Learning Objectives § Identify what technology is and how it relates to organizational effectiveness § Differentiate among three different kinds of technology that create different competences § Understand how each type of technology needs to be matched to a certain kind of organizational structure if an organization is to be effective Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -2

Learning Objectives § Understand how technology affects organizational culture § Appreciate how advances in technology, and new techniques for managing technology, are helping increase organizational effectiveness Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -3

What is Technology? § Technology: The combination of skills, knowledge, abilities, techniques, materials, machines, computers, tools, and other equipment that people use to convert or change raw materials into valuable goods and services Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -4

What is Technology? § Technology exists at three levels § Individual level - The personal skills, knowledge, and competences that individuals possess § Functional or department level - The procedures and techniques that groups work out to perform their work and create value § Organizational level - The way an organization converts inputs into outputs Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -5

Technology and Organizational Effectiveness § Technology is present in all organizational activities: § Input: Allows each organizational function to handle relationships with outside stakeholders § Conversion: Transforms inputs into outputs § Output: Allows an organization to effectively dispose of finished goods and services to external stakeholders Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -6

Figure 9. 1 - Input, Conversion, and Output Processes Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -7

Technical Complexity: Theory of Joan Woodward § Programmed technology: A technology in which the procedures for converting inputs into outputs can be specified in advance § Tasks can be standardized and the work process can be made predictable Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -8

Technical Complexity (cont. ) § Technical complexity: The extent to which a production process can be programmed so that it can be controlled and made predictable § High technical complexity - Exists when conversion processes can be programmed in advance and fully automated § Low technical complexity - Exists when conversion processes depend primarily on people and their skills and knowledge and not on machines Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -9

Technical Complexity (cont. ) § Woodward identified 10 levels of technical complexity that are associated with three types of production technology: § Small-batch and unit technology § Large-batch and mass production technology § Continuous-process technology Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -10

Figure 9. 2 - Technical Complexity and Three Types of Technology Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -11

Technical Complexity and Organization Structure (cont. ) § Technological imperative: The argument that technology determines structure § For small organizations the importance of technology as a predictor of structure may be more important than it is for large organizations Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -12

Routine Tasks and Complex Tasks: Theory of Charles Perrow § Perrow’s two dimensions underlie the difference between routine and nonroutine or complex tasks and technologies: § Task variability: The number of exceptions— new or unexpected situations—that a person encounters while performing a task § Task analyzability: The degree to which search activity is needed to solve a problem Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -13

Figure 9. 4 - Task Variability, Task Analyzability, and Four Types of Technology Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -14

Table 9. 1 - Routine and Nonroutine Tasks and Organizational Design Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -15

Task Interdependence: Theory of James D. Thompson § Task interdependence: The manner in which different organizational tasks are related to one another affects an organization’s technology and structure § Three types of technology § Mediating § Long-linked § Intensive Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -16

Figure 9. 5 - Task Interdependence and Three Types of Technology Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -17

From Mass Production to Advanced Manufacturing Technology § Mass production is based on: § Dedicated machines: Machines that can perform only one operation at a time, such as repeatedly cutting or drilling or stamping out a car body part § Fixed workers: Workers who perform standardized work procedures increase an organization’s control over the conversion process Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -18

From Mass Production to Advanced Manufacturing Technology (cont. ) § Mass production: § Attempts to reduce costs by protecting its conversion processes from the uncertainty of the environment § Makes an organization inflexible § Fixed automation is a combination of dedicated machines and fixed workers Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -19

From Mass Production to Advanced Manufacturing Technology (cont. ) § Advanced manufacturing technology: Technology which consists of innovations in materials and in knowledge that change the work process of traditional massproduction organizations Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -20

Figure 9. 5 A - The Work Flow in Mass Production Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -21

Figure 9. 5 B - The Work Flow with Advanced Manufacturing Technology Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -22

Advanced Manufacturing Technology: Innovations in Materials Technology § Materials technology: Comprises machinery, other equipment, and computers § Organization actively seeks ways to increase its ability to integrate or coordinate the flow of resources between input, conversion, and output activities Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -23

Advanced Manufacturing Technology (cont. ) § Computer-aided design (CAD): An advanced manufacturing technique that greatly simplifies the design process § Computers can be used to design and physically manufacture products Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -24

Advanced Manufacturing Technology (cont. ) § Computer-aided materials management (CAMM): An advanced manufacturing technique that is used to manage the flow of raw materials and component parts into the conversation process § Develops master production schedules for manufacturing and controls inventory Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -25

Advanced Manufacturing Technology (cont. ) § Just-in-time inventory (JIT) system: Requires inputs and components needed for production to be delivered to the conversion process just as they are needed § Input inventories can then be kept to a minimum § CAMM is necessary for JIT to work effectively § Increases task interdependence between stages in the production chain Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -26

Figure 9. 7 - Just-in-Time Inventory System Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -27

Flexible Manufacturing Technology § Technology that allows the production of many kinds of components at little or no extra cost on the same machine § Each machine is able to perform a range of different operations § Machines in sequence able to vary operations so that a wide variety of different components can be produced Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -28

Computer-Integrated Manufacturing (CIM) § An advanced manufacturing technique that controls the changeover from one operation to another by means of commands given to the machines through computer software § Depends on computers programmed to: Feed the machines with components § Assemble the product from components and move it from one machine to another § Unload the final product from the machine to the shipping area § § Use of robots integral to CIM Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 9 -29

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