Technology

 Defn: Technology refers to the information, equipment,

techniques, and processes required to transform inputs
into outputs in the organization – ‘How all organizations
convert inputs into outputs’
 How does one measure technology?:
1. Operations techniques used in work-flow activities
2. Characteristics of materials used in workflow
3. Degree of continuous, fixed-sequence operations
4. Extent of automation
5. Degree of interdependence between work systems
 Problem here is: varying types/sizes of organizations and
different levels of analysis
The Initial Thrust: Woodward’s
Research
 Mid-1960s – focus on industrial technology – structure
from technological perspective
 100 manufacturing firms (<250 to >1000 employees)
 measures of structure (hierarchical levels, span of
control, admin component, extent of formalization etc)
vs. financial data (profitability, sales, market share etc)
 classified companies above average, average, below
average in terms of organization effectiveness
 Findings: One optimal structure that leads to
effectiveness
 Firms categorized into three types of technologies:
UNIT, MASS, or PROCESS PRODUCTION ( unit least
technological complexity, process most complex)
 Unit producers: manufacture custom-made
products (tailor-made suits, turbines of
hydroelectric dams, or Avanti cars)
 Mass producers: large-batch or mass-
produced products ( refrigerators or Ford cars)
 Process Producers: heavily automated
continuous-process (oil, chemical refineries)
 Conclusions:
1. Distinct relationship between technology
classifications and subsequent structure of the
firms
2. Organization effectiveness related to ‘fit’
between technology and structure
3. Degree of vertical differentiation increased with
technical complexity
4. Admin component varied directly with
technology type (relationship not linear; mass-
production firms had smallest proportion of
skilled workers, they rated high in terms of
overall complexity and formalization – whereas
unit and process firms rated low on these
structural dimensions)
5. Woodward’s work represents initial transition by
OT scholars from a principles perspective to a
contingency theory of organizations
Evaluation of Woodward’s Works
1. Edward Harvey: Specific technologies present fewer
problems that require new or innovative solutions than
do more diffuse or complex technologies
2. Three different industrial organizations – rated them as
technically diffuse ( Woodward’s unit production) –
technically intermediate akin to mass production) – and
technically specific ( similar to process production) –
categorization based on major product changes firms
experienced in ten years
3. Found relationship between technical specificity and
structure
4. Organizations with specific technologies: more
specialized subunits, more authority levels, higher ratio
of managers to total personnel compared to diffuse
technology firms
5. Her measure of technology criticized as
unreliable
6. Methodology based on subjective
observations/interviews open to
interpersonal bias
7. She implies causation – but can only claim
association
8. Organizational success lack rigor
9. Research restricted to British
manufacturing firms – any generalizations
must be guarded
Knowledge-Based Technology:
Perrow’s Contribution
 An attempt to overcome limitations associated
with Woodward’s manufacturing firms bias –
towards generalizations
 Knowledge technology rather than production
technology
 Technology: 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
 Identified two underlying dimensions of knowledge
technology

1. Task Variability: variety-routiness continuum - Number

of exceptions encountered in one’s work – exceptions
few if job high in routineness ( automobile assembly
line, fry cook at McDonald’s) – job has great deal of
variety, large number of exceptions found ( top
management positions, consulting)

2. Problem Analyzability: Type of search procedures

followed to find successful methods for adequately
responding to task exceptions – search: well-defined
(logical/analytical reasoning – e.g. good student failing)
vs. ill-defined ( no formal search technique to use –
architect encountering unique design/standard
problems – use trial and error, guess work etc)
 Ten-item questionnaire( Responses scored on a
one-to seven scale for each question):
Task Variability:
1. How many of these tasks are the same from
day to day?
2. To what extent would you say your work is
routine?
3. People in this unit do about the same job in the
same job in the same way most of the time
4. Basically, unit members perform repetitive
activities in doing their jobs
5. How repetitious are your duties?
 Problem Analyzability:
1. To what extent is there a clearly known way to
do the major types of work you normally
encounter?
2. To what extent is there a clearly defined body
of knowledge of subject matter which can
guide you in doing your work?
3. To what extent is there an understandable
sequence of steps that can be followed in
doing your work?
4. To do your work, to what extent can you
actually rely on established procedures and
practices?
5. To what extent is there an understandable
sequence of steps that can be followed in
carrying out your work?
 Perrow’s Technology Classification
Few Exceptions Many Exceptions
CRAFT NONROUTINE

Ill defined and Shoe making, Strategic planning,

Unanalyzable Furniture Restoring, Basic research activities
Performing artists
PROBLEM
3 4 ANALYZABILITY

1 2
ROUTINE ENGINEERING
Well defined and
analyzable Mass production Construction of office
Processes: steel, Buildings, tax
Automobiles, tellers accountants

TASK VARIABILITY
 Perrow’s Technology-Structure
Predictions
Structural Characteristics
Cell Technology Formalization Centralization Span of Coordination and
Control Control

1 Routine High High Wide Planning and rigid

rules

2 Engineering Low High Moderate Reports and

meetings

3 Craft Moderate Low Moderate- Training and

wide meetings

4 Nonroutine Low Low Moderate- Group norms and

narrow group meetings

Perrow’s findings have received larger support from empirical studies ( medium-
Sized manufacturing concerns, health and welfare agencies, state employment
Agencies etc)
Technological Uncertainty:
Thompson’s Contribution
 James Thompson: Technology determines
the selection of a strategy for reducing
uncertainty and the specific structural
arrangements can facilitate uncertainty
reduction
 Proposed three types of technology that
differentiated by the tasks that an
organizational unit performs
1. Long-linked Technology (Characterized
by Sequential Interdependence)
INPUT A B C D OUTPUT

•Tasks sequentially interdependent – fixed sequence

of repetitive steps
• Mass-Production assembly lines, school cafeteria
• Require efficiency, coordination
• Major uncertainties lie on input, output sides
•Control input/output to reduce Uncertainties
•Soln: vertical integration ( backward, forward )
•Procedures highly standardized
•Moderate complexity and formalization ( planning and
scheduling )
2. Mediating Technology ( Characterized by
pooled interdependence )

Transformation Client
Client
Process B
A

•Links clients on both input and output sides of the system

•Banks, telephone utilities, large retail stores etc
•Mediators perform an interchange function linking two
otherwise independent units
•Linking unit responds with standardizing the organization’s transactions
and establishing conformity in client’s behavior
•Banks bring together savers and borrowers – success depends on
attracting both – risks in this
•Dealing with uncertainty: increase population served – many
depositors, diversified portfolio
•Low complexity, high formalization ( rules, procedures)
3. Intensive Technology ( characterized by
reciprocal interdependence )
Resources Inputs
A
Transformation Output
B
Process
C
D

Feedback
•Customized response to a diverse set of contingencies
•Technologies in hospitals, universities, research labs, military combat teams
•High complexity and low formalization
•Requires mutual adjustment
Industry-Size Integrative Model

Industry Technology Size

Organizational
Structure
Manufacturing vs. Service Technologies:
 Research studies only on manufacturing or
service organizations indicate relationship
between technology nd structure
 Mixed studies wash out underlying relationships
Technology and Complexity:
 Routine technology positively associated with
low complexity
 Greater the routineness, fewer the number of
occupational groups and the less training
possessed by professionals
 Nonroutine technology leads to high complexity
– as work becomes more sophisticated, span of
control narrows, vertical differentiation increases
Technology and Formalization
 Technology positively related with formalization
 However, when size is controlled, the relationship
vanishes
 Non routine technology require control systems that
permit greater discretion and flexibility
Technology and Centralization
 Results inconsistent – Some support for routine
leading to centralization and non routine generating
delegation
 Routine technology associated with centralization if
minimum rules and regulations – if formalization is
high routine technology can be accompanied by
decentralization