*Chapter SixManufacturing and Service Technologies2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

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2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

DefinitionsTechnology: work process.Core technology: work process that is directly related to organization's mission.Non-core technology: a department work process that is important to the organization but is not directly related to its primary mission.6-*

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Transformation Process for a Manufacturing CompanyENVIRONMENTOrganizationRaw MaterialInputsProduct or ServiceOutputsTransformationProcessDepartmentsMaterialsHandlingMillingInspectionAssembly

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Woodwards Classification Based on System of ProductionGroup ISmall-batch and unit productionGroup IILarge-batch and mass productionGroup IIIContinuous process productionRefer to Exhibits 7.3 & 7.4 on Pages 249 & 250

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

Terminology - RecapMechanistic: an organization system marked by rules, procedure, a clear hierarchy of authority, and centralized decision making.Organic: an organization system marked by free-flowing, adaptive processes, an unclear hierarchy of authority, and decentralized decision making.6-*

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

GuidelinesDetermine whether the production technology in a manufacturing firm is small batch, mass production, or continuous process.Use a more organic structure with small batch or continuous process technologies.Use a mechanistic structure with mass production technologies.6-*

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

Strategy, Technology, and PerformanceWhen adopting a new technology, realign strategy, structure, and management processes to achieve top performance.6-*

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

Contemporary ApplicationsFlexible Manufacturing Systems; the ultimate automated factories.Use of robots, numerically controlled machine tools, radio-frequency identification (RFID), wireless technology, computerized software for product design, and remote controls.Also named as Computerized Integrated Manufacturing.6-*

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Computer-Integrated ManufacturingComputer-aided design(CAD)Computer-aided manufacturing(CAM)Integrated Information NetworkA combination of these three implies that a product can be designed, and its prototype produced untouched by human hands.

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

Performance and Structural ImplicationsAdvantages of flexible manufacturingProducts of different sizes and typesFree intermingling of customer requirements on the assembly line; use of bar codes facilitating manufacturing.Infinite variety of products in unlimited batch sizes; next slide.6-*

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-* NEW CHOICES TRADITIONAL CHOICESFlexibleManufacturing

Relationship of Computer-Integrated Manufacturing Technology to Traditional TechnologiesBATCH SIZESmallUnlimitedCustomizedStandardizedPRODUCT FLEXIBILITYSource: Based on Jack Meredith, The Strategic Advantages of New Manufacturing Technologies For Small Firms. Strategic ManagementJournal 8 (1987): 249-58; Paul Adler, Managing Flexible Automation,California Management Review (Spring 1988): 34-56; andOtis Port, Custom-made Direct from the Plant. Business Week/21st Century Capitalism, 18 November 1994, 158-59.

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Comparison of Organizational Characteristics Associated with Mass Production andComputer Integrated ManufacturingSource: Based on Patricia L. Nemetz and Louis W. Fry, Flexible Manufacturing Organizations: Implications for Strategy Formulationand Organization Design. Academy of Management Review 13 (1988); 627-38; Paul S. Adler, Managing Flexible Automation, California Management Review (Spring 1988); 34-56; Jeremy Main, Manufacturing the Right Way, Fortune, 21 May 1990, 54-64.

CharacteristicMass ProductionCIMStructure: Span of ControlWideNarrow Hierarchical levelsManyFew TasksRoutine, repetitiveAdaptive, craft-like SpecializationHighLow Decision makingCentralizedDecentralized OverallBureaucratic, mechanisticSelf-regulating, organic

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Comparison of Organizational Characteristics Associated with Mass Production andComputer Integrated ManufacturingSource: Based on Patricia L. Nemetz and Louis W. Fry, Flexible Manufacturing Organizations: Implications for Strategy Formulationand Organization Design. Academy of Management Review 13 (1988); 627-38; Paul S. Adler, Managing Flexible Automation, California Management Review (Spring 1988); 34-56; Jeremy Main, Manufacturing the Right Way, Fortune, 21 May 1990, 54-64.

CharacteristicMass ProductionCIMHuman Resources: InteractionsStand aloneTeamwork TrainingNarrow, one timeBroad, frequent ExpertiseManual, technicalCognitive, socialSolve problems

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Comparison of Organizational Characteristics Associated with Mass Production andComputer Integrated ManufacturingSource: Based on Patricia L. Nemetz and Louis W. Fry, Flexible Manufacturing Organizations: Implications for Strategy Formulationand Organization Design. Academy of Management Review 13 (1988); 627-38; Paul S. Adler, Managing Flexible Automation, California Management Review (Spring 1988); 34-56; Jeremy Main, Manufacturing the Right Way, Fortune, 21 May 1990, 54-64.

CharacteristicMass ProductionCIMInterorganizational: Customer DemandStableChanging SuppliersMany, arms lengthChangingFew, close relations

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Differences Between Manufacturing and Service TechnologiesSources: Based on F. F. Reichheld and W. E. Sasser, Jr.,Zero Defections: Quality Comes to Services, Harvard Business Review 68 (September-October 1990): 105-11; and David E. Bowen, Caren Siehl, and Benjamin Schneider, A Frameworkfor Analyzing Customer Service Orientations in Manufacturing,Academy of Management Review 14 (1989): 75-95.

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Configuration and Characteristics of Service Organizations vs. Product Organizations

ServiceProductStructure: Separate boundary rolesFewMany Geographical dispersionMuchLittle Decision makingDecentralizedCentralized FormalizationLowerHigherHuman Resources: Employee skill levelHigherLower Skill emphasisInterpersonalTechnical

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

Non-Core Departmental Technologies Perrows ModelVariety: task variety, number of exceptions in the work, unexpected situations etc high and low varietyAnalyzability: of the work activities high and low analyzability. These two dimensions form the basis of four major categories of technology, ie ROUTINE, CRAFT, ENGINEERING, and NON-ROUTINE.6-*

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

Non-Core Departmental Technologies Perrows ModelROUTINE: characterized by little task variety, and use of objective and computerized procedures.CRAFT: characterized by a fairly stable stream of activities, but the conversion process is not analyzable or well understood.ENGINEERING: Complex due to large task variety, established procedures etc.NON-ROUTINE: high task variety but conversation process not analyzable.6-*

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Departmental TechnologiesCRAFTLow analyzabilityLow varietyExamples:Performing artsTradesFine goods manufacturingROUTINEHigh analyzabilityLow varietyExamples:SalesClericalDraftingAuditing

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*ENGINEERINGHigh analyzabilityHigh varietyExamples:LegalEngineeringTax accountingGeneral accountingNONROUTINELow analyzabilityHigh varietyExamples:Strategic planningSocial science researchApplied researchDepartmental Technologies

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

Framework for Department TechnologyRoutine Non-routineANALYZABILITYLOWVARIETYHIGHLOWHIGH

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

GuidelinesUse of the two dimensions of variety and analyzability help discover whether the work in a department is routine or non-routine. In case of routine, use mechanistic structure and process.In case of non-routine, use an organic management process.6-*

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Relationship of Department Technology to Structural and Management Characteristics

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Thompsons Classification of Interdependence and Management ImplicationsClient Client Client

Form of InterdependenceDemands on Horizontal Communications, Decision MakingType of Coordination RequiredPriority for Locating Units Close TogetherPooled (bank)LowcommunicationStandardization, rules, procedures

Divisional Structure

LowSequential (assembly line)MediumcommunicationPlans, schedules, feedback

Task Forces

MediumReciprocal (hospital)HighcommunicationMutual adjustment, cross-departmental meetings, teamwork

Horizontal Structure

High

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Primary Means to Achieve Coordination for Different Levels of Task Interdependence in a Manufacturing FirmReciprocal(new product development)COORDINATIONINTERDEPENDENCEHighLowHorizontal structure,cross-functional teams

Face-to-face communication,Unscheduled meetings,Full-time integrators

Scheduled meetings, task forces

Vertical communication

Plans

RulesMutualAdjustmentPlanningStandardizationSource: Adapted from Andrew H. Van de Ven, Andre Delbecq, and Richard Koenig, Determinants of Communication Modes WithinOrganizations, American Sociological Review 41 (1976): 330.

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Relationships Among Interdependence and Other Characteristics of Team PlaySource: Based on William Passmore, Carol E. Francis, and JeffreyHalderman, Sociotechnical Systems: A North American ReflectionOn the Empirical Studies of the 70s, Human Relations 35 (1982):1179-1204.

BaseballFootballBasketballInterdependence:PooledSequentialReciprocalPhysical dispersion of players:HighMediumLowCoordination:Rules that govern the sportGame plan and position rolesMutual adjustment and shared responsibilityKey management job:Select players and develop their skillsPrepare and execute gameInfluence flow of game

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Design for Joint Optimization

Work roles, tasks,workflow

Goals and values

Skills and abilitiesJob Design - Sociotechnical Systems ModelThe Social SystemIndividual and teambehaviors

Organizational/teamculture

Management practices

Leadership style

Degree of communicationand openness

Individual needs and desires

The Technical System Type of production technology (small batch, mass production, etc.)

Level of interdependence (pooled, sequential, reciprocal)

Physical work setting

Complexity of production process (variety and analyzability)

Nature of raw materials

Time pressure

Sources: Based on T. Cummings, Self-Regulating Work Groups: A Socio-TechnicalSynthesis, Academy of Management Review 3 (1978): 625-34; Don Hellriegel, John W.Slocum, and Richard W. Woodman, Organizational Behavior, 8th ed. (Cincinnati, Ohio:South-Western College Publishing, 1998), 492; and Gregory B. Northcraft and MargaretA. Neale, Organizational Behavior: A Management Challenge, 2nd ed. (Fort Worth, Tex.:The Dryden Press, 1994), 551.

2000South-Western College PublishingCincinnati, OhioDaft, Organizational Theory and Design, 7/e

6-*Technology ComparisonWorkbookActivity

McDonaldsBurger KingFamily RestaurantOrganization GoalsAuthority StructureWoodwards Technology TypeMechanistic vs. OrganicTeamwork vs. IndividualInterdependenceRoutine vs. Nonroutine tasksTask SpecializationTask StandardizationTechnical vs. Social ExpertiseCentralized vs. Decentralized