MANAGING ORGANIZATIONS
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