Technology and structure
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TECHNOLOGY AND STRUCTURE. TECHNOLOGY THEORISTS. Joan Woodward Charles Perrow James Thompson. Joan Woodward. In the early 1960’s Woodward demonstrated that organization structures adapt to their technology. In categorizing companies into three groups she

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Technology theorists l.jpg

  • Joan Woodward

  • Charles Perrow

  • James Thompson

Joan woodward l.jpg
Joan Woodward

In the early 1960’s Woodward demonstrated that

organization structures adapt to their technology.

In categorizing companies into three groups she

identified that production run sizes were linked

increasing levels of complexity and technological


Technology categories l.jpg
Technology Categories

Unit Production: The production of items in single units

and small batches

Mass Production: The production of large-batch


Process Production: The production of continuous

-process products such as oil and

chemical refiners

Woodward technological influence on organizational design l.jpg

  • The more complex the technology – going from a Unit

  • to a more Process system – the greater are the number of managerial personnel and the levels of authority

  • The more complex the technology, the larger is the

  • number of clerical and administrative personnel

  • The span of control of first-line managers increases

  • from Unit production systems to Mass production systems and then decreases from Mass production systems to Process production systems

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Since the work of Woodward, there have been significant

advances in production technology, which include the use

of robots, numerically-controlled machine tools, and many applications of the computer to remote control of equipment.

These advances have been called by a variety of names

including: advanced manufacturing technology, agile

manufacturing, smart factories, and flexible manufacturing systems.

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Computer-Integrated Manufacturing

  • Typically the results of three sub-components:

  • Computer-assisted design (CAD). Computers

  • are used to assist in drafting, design and engineering

  • of new parts. Allows significant variation in

  • specifications with minimum of redesign cost.

  • Computer-aided manufacturing (CAM). Computer-

  • controlled machines are used in materials-handling,

  • fabrication, production, and assembly. Allows fast

  • switching between product runs and variations.

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Computer-Integrated Manufacturing, cont’d

3.Integrated Information Networks (ERP): A

computerized system links all aspects of the

firm – accounting, marketing, purchasing,

inventory control, etc. The most common

are called Enterprise Resource Planning

programs. Most known are by SAP, People-

Soft and Oracle. Use a common database, and

allow managers to integrate their decision

making more effectively.

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Small Batch





Product flexibility







Batch Size



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Comparison of Organizational Characteristics of Mass Production vs CIM

Structure Mass Production CIM

Span of control Wide Narrow

Hierarchical levels Many Few

Tasks Routine, repetitive Adaptive, craftlike

Specialization High Low

Decision Making Centralized Decentralized

Overall Bureaucratic, mechanistic Self-regulating,


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Charles Perrow Production vs CIM

Focus is on departmental technology

and departmental structure

(usually outside the technical core)

Each department has a production

process with a distinct technology

Includes units such as HRM, R&D,

legal, engineering, QC, finance, etc.

Dimensions of technology l.jpg

Task Variety: number of exceptions in the work.

Frequency of unexpected and novel events that occur

in the conversion process.

Problem Analyzability: degree to which work activities

and problem solving activities are analyzable.

Analyzable problems can be solved with procedures

and standardized technical knowledge. Non-analyzable

problems must be dealt with by wisdom, experience

and intuition.

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  • Departments do differ from one another and can be

  • categorized by their workflow technology.

  • Structural and management processes differ based

  • upon workflow technology.

  • Managers should design departments so that

  • requirements based on technology can be met.

  • Explains differences in departmental structures in

  • mixed-type designs.

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Departmental Interdependence Production vs CIM

Interdependence mean the extent to which departments

depend on each other for resources or materials to

accomplish their tasks.

Low interdependence means the departments can do

their work independently of each other and have little

need for interaction, consultation or exchange of materials.

High interdependence means the departments must

constantly exchange resources.

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Types of Interdependency Production vs CIM

  • Pooled Interdependency

  • Sequential Interdependency

  • Reciprocal Interdependency

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Pooled Interdependency Production vs CIM

Pooled interdependence is the lowest form of

interdependence among departments. In this form,

work does not flow between units. Each contributes

to the common good of the organization, but does

its work independently.

Examples: McDonald’s restaurants, branch banks,

independent sales units based upon

territory or product lines.

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Mediating Technology Production vs CIM

Pooled interdependence is associated with organizations

employing a Mediating Technology. A Mediating

Technology provides products or services that mediate

or link clients from the external environment and, in

doing so, allows each department to work independently.

Banks, brokerage houses, real estate offices all mediate

between buyers and sellers, but the offices work

independently within the organization.

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Mediating Technology II Production vs CIM

To achieve coordination, mediating technologies rely on

both a measure of categorization and a degree of

standardization. Organizations with mediating technologies

are, in general, moderatelyflexible to changing product

demands and typically cope with uncertainty by increasing

the number of units served. Since mediating technology

combines the outputs of different units by using

predetermined categories and standard rules and procedures,

it is usually less costly than long-linked technology which

requires a certain amount of planning (scheduling) across

several tasks to ensure proper work flow.

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Sequential Interdependence Production vs CIM

Sequential interdependence exists when the outputs of one

department become the inputs of another in serial form.

This is a higher level of interdependence than pooled

relationships. The preceding unit must complete its tasks

correctly in order that the latter unit may successfully

complete its tasks. It creates a higher need for horizontal

integration mechanisms.

Sequential interdependence is associated with Long-Linked


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Long-Linked Technology Production vs CIM

Long-linked technology is usually associated with large

organizations that utilize sequential task organization,

such as assembly lines to accomplish their tasks.

Examples include the manufacture of automobiles,

heavy appliances, mechanical assemblies, some food

preparation processes, etc.

Long-linked technologies require high levels of

coordination between tasks to be efficient.

Long linked technology ii l.jpg
Long-Linked Technology II Production vs CIM

In long-linked technology procedures to complete a unit

of work are highly uniform and must be performed in a

specified serial order.

Organizations based upon long-linked technology

generally achieve coordination through planning

(scheduling) and typically seek to offset significant

environmental uncertainty through vertical integration.

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Reciprocal Interdependence Production vs CIM

Reciprocal interdependence is the highest level of inter-

dependence. Reciprocal interdependence exits when the

output of one unit serves as the input for a second unit,

and the output of the second unit serves as the input for

the first unit.

Reciprocal interdependence occurs in organizations with

intensive technologies.

Intensive technology l.jpg
Intensive Technology Production vs CIM

Intensive technologies provide a variety of products or

services in combination to the client. A new product

development company is an example, where design,

engineering, manufacturing and marketing all must

work combine all their resources to suit a customer’s

product needs.

Intensive technology, because of its reciprocal inter-

dependencies, requires the highest level of management

requirements. Reciprocally interdependent units work

together intimately and must be closely coordinated;

thus, a horizontal structure is appropriate.

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Intensive Technology II Production vs CIM

Intensive technology coordination requires high levels of

horizontal communication and adjustment. Managers

from multiple departments are often involved in face-to-

face communication.

Intensive technologies secure coordination through mutual

adjustment. They generally increase their tolerance for

uncertainty by ensuring the availability of a variety of

specialized services and skills in order to be prepared for

any contingency. Intensive technologies are typically the

most expensive to coordinate.

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  • Thompson posited a series of propositions regarding the

  • structural priorities necessary to account for the different

  • levels of interdependency among units.

  • Under norms of rationality, organizations group positions

  • minimize coordination costs.

  • 1A. Organizations seek to place reciprocally interdependent

  • positions tangent to one another, in a common group,

  • which is (a) local and (b) conditionally autonomous.

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Structural Priorities II Production vs CIM

1B. In the absence of reciprocal interdependence,

organizations subject to rationality norms seek to

place sequentially interdependent positions tangent

to one another, in a common group which is (a)

localized and (b) conditionally autonomous.

1C. In the absence of reciprocal and sequential

interdependence, organizations subject to norms of

rationality seek to group positions homogeneously

to facilitate coordination by standardization.

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Structural Priorities III Production vs CIM

2. When reciprocal interdependence cannot be confined to

intra-group activities, organizations subject to rationality

norms seek to link the groups involved into a second-

order group, as localized and conditionally autonomous

as possible.

3. After grouping units to minimize coordination by mutual

adjustment, organizations under rationality norms seek to

place sequentially interdependent groups tangent to one

another, in a cluster which is localized and conditionally


Structural priorities iv l.jpg
Structural Priorities IV Production vs CIM

4. After grouping units to solve problems of reciprocal

and sequential interdependence, organizations under

norms of rationality seek to cluster groups into

homogeneous units to facilitate coordination by


4A. When higher-priority coordination requirements

prevent the clustering of similar positions or groups,

organizations seek to blanket homogeneous positions

under rules which cut across group boundaries, and

to blanket similar groups under rules which cross

divisional lines.

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Structural Priorities V Production vs CIM

4B. When organizations employ standardization, which

cuts across multiple groups, they also develop

liaison positions linking the several groups and the

rule-making agency.

4C. Organizations with sequential interdependence not

contained by departmentalization rely on committees

to accomplish the remaining coordination.

4D. Organizations with reciprocal interdependence not

contained by departmentalization rely on task-force

or project groups to accomplish the remaining


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Summary of Structural Priorities Production vs CIM

  • Reciprocal relationships are the highest level of inter-

  • dependence, and should receive first priority by being

  • grouped close together in the organization so managers

  • have easy access to one another for mutual adjustment.

  • These units should report to the same person and should

  • be physically close to minimize time and effort in

  • coordination.

  • When such units cannot be located close together, the

  • organization should design coordination mechanisms,

  • such as cross-functional teams, project teams or

  • intranets to facilitate required coordination.

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Summary, cont’d Production vs CIM

2.The next priority is given to sequentially interdependent

units or tasks. Once reciprocal relationships are taken

care of, or not present, sequentially interdependent units

or tasks should be grouped together under a common

superior, and as physically close to one another as


If a common superior, or physical proximity, is not

possible the interdependence should be coordinated

through committees or task-forces.

Summary cont d52 l.jpg
Summary, cont’d Production vs CIM

3.The final priority should be given to pooled inter-

dependencies. If the interdependence cannot be

handled by forming homogeneous groups under a

common superior or close physical proximity,

standardization across units should be implemented

with liaison individuals to handle required cross-

communication between the units.

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Comparing Technology Production vs CIM

Contributor Technology

Routine Non-Routine

Woodward Mass, Process Unit

Perrow Routine, Craft,

Engineering Non-Routine

Thompson Long-linked, Intensive