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

9-1

Organizational Design,

Competences, and Technology

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

Organizational level - The way an organization converts inputs into outputs

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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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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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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

Task analyzability: The degree to which search activity is needed to solve a problem

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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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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

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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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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): An advanced manufacturing technique that greatly simplifies the design process Computers can be used to design and

physically manufacture products

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