Organizational Design, Competences, and Technology 1.
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Transcript of Organizational Design, Competences, and Technology 1.
Organizational Design,
Competences, and Technology
1
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
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
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Understand how technology affects organizational culture
Appreciate how advances in technology, and new techniques for managing technology, are helping increase organizational effectiveness
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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
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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
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Technology exists at three levels (cont.) Organizational level - The way an
organization converts inputs into outputs Mass production: the organizational
technology based on competences in using standardized, progressive assembly process to manufacture goods
Craftswork: the technology that involves groups of skilled workers who interact closely to produce custom-designed products
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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
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The technology of an organization’s input, conversion, and output processes is an important source of competitive advantage
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External resource approach for managing and controlling outside stakeholders.
Internal systems approach for innovation, product development, and reduced development time.
Technical approach for increasing efficiency and quality, and reducing costs.
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• Technical complexity
• Complex tasks and routine tasks
• Task interdependence
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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
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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
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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
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Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
Small-batch and unit technology Involves making one-of-a-kind, customized
products or small quantities of products
The conversion process is flexible, thereby providing the capacity to produce a wide range of goods that can be adapted to individual orders
Is relatively expensive
Scores lowest on the dimension of technical complexity
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Large-batch and mass production technology Involves producing large volumes of
standardized products
The conversion process is standardized and highly controllable
Allows an organization to save money on production and charge a lower price for its products
Scores higher on the technical complexity dimension
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Continuous-process technology Involves producing a steady stream of
output Production continues with little variation in
output and rarely stops
Individuals are only used to manage exceptions in the work process
Tends to be more technically efficient than mass production
Scores highest on the technical complexity dimension
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Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
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
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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 Is low when a task is standardized or repetitious
Task analyzability: The degree to which search activity is needed to solve a problem Is high when the task is routine
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Four types of technologyRoutine manufacturing: characterized by low task variability and high task analyzabilityCraftswork: both task variability and task analyzability are lowEngineering production: both task variability and task analyzability are highNonroutine research: characterized by high task variability and low task analyzability
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Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
When technology is routine, employees perform clearly defined tasks – work process is programmed and standardized Mechanistic structure
Nonroutine technology requires the organization to develop structure that allows employees to respond quickly to manage exceptions and create new solutions Organic structure
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Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
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
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Mediating technology: a technology characterized by a work process in which input, conversion, and output activities can be performed independently of one another
Based on pooled task interdependence Each part of the organization contributes
separately to the performance of the whole organization
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Long-linked technology: based on a work process in which input, conversion, and output activities must be performed in series Based on sequential task interdependence
Actions of one person or department directly affect the actions of another
Slack resources: surplus resources that enable an organization to deal with unexpected situations
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Intensive technology: a technology characterized by a work process in which input, conversion, and output activities are inseparable
Based on reciprocal task interdependence The activities of all people and all
departments are fully dependent on one another
Specialism: producing only a narrow range of outputs
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Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
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
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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 Expensive and difficult to begin manufacturing
a different kind of product when customer preferences change
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Advanced manufacturing technology: Technology which consists of innovations in materials and in knowledge that change the work process of traditional mass-production organizations
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Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
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
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Computer-aided design (CAD) Computer-aided materials management (CAMM)
Just-in-time inventory (JIT) system
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Computer-aided design (CAD): An advanced manufacturing technique that greatly simplifies the design process Computers can be used to design and
physically manufacture products
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Reduced design costs and a differentiation advantage
Improved manufacturing efficiency Easier selling and servicing with improvements made
during design Risk of failure reduced by solving problems during
design Competitive advantage and reduced costs through
quality Increased flexibility and lower cost Customized product design Quick response to environmental changes
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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
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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
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Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
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
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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
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photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
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