Task Interdependence: Thompson’s three types of technology • Mediating • Pooled interdependence • Long-linked • Sequential interdependence • Intensive • Reciprocal interdependence 9 -
Thompson’s Classification of Interdependence and Management Implications Client Client Client
Routine and Nonroutine Tasks and Organizational Design Structural characteristic Nature of technology Routine tasks Nonroutine tasks Standardization High Low Mutual adjustment Low High Specialization Individual Joint Formalization High Low Hierarchy of authority Tall Flat Decision-making authority Centralized Decentralized Overall structure Mechanistic Organic 9 -
Technical Complexity: Woodward’s Theory Some kinds of technology are more complex and difficult to control than others because some are more difficult to program than others. Technology is said to be programmed when procedures can be specified in advance to make tasks standardized and predictable. 9 -
Technical Complexity and Organization Structure Low T echnical Complexity High Structural Small-Batch and Unit Mass Production Continuous-Process Characteristics Technology Technology Technology Levels in the hierarchy 3 4 6 Span of control of CEO 4 7 10 Span of control of first- 23 48 15 line supervisor 1 to 23 1 to 16 1 to 8 Ratio of managers to nonmanagers Approximate shape of organization Relatively flat, with Relatively tall, with V ery tall, with very narrow span of control wide span of control narrow span of control Type of structure Organic Mechanistic Organic 9 - Cost of operation High Medium Low
Advanced Manufacturing Technology Computer-aided design Computer-aided materials management Just-in-time inventory systems Computer-integrated manufacturing 10 -
Small batch Mass Customization Mass Production Continuous Process Relationship of Computer-Integrated Manufacturing Technology to Traditional Technologies Flexible Manufacturing NEW CHOICES Customized PRODUCT FLEXIBILITY TRADITIONAL CHOICES Standardized BATCH SIZE Small Unlimited Source: Based on Jack Meredith, “The Strategic Advantages of New Manufacturing Technologies For Small Firms.” Strategic Management Journal 8 (1987): 249-58; Paul Adler, “Managing Flexible Automation,” California Management Review (Spring 1988): 34-56; and Otis Port, “Custom-made Direct from the Plant.” Business Week/21st Century Capitalism, 18 November 1994, 158-59.
Manufacturing Technology • Tangible product • Products can be inventoried for later consumption • Capital asset intensive • Little direct customer interaction • Human element may be less important • Quality is directly measured • Longer response time is acceptable • Site of facility is moderately important • Service Technology • Intangible product • Production and consumption take place simultaneously • Labor and knowledge intensive • Customer interaction generally high • Human element very important • Quality is perceived and difficult to measure • Rapid response time is usually necessary • Site of facility is extremely important Service: Airlines, Hotels,Consultants, Healthcare, Law firms Product and Service: Fast-food outlets, Cosmetics, Real estate, Stockbrokers, Retail stores Product: Soft drink companies, Steel companies, Auto manufacturers, Differences Between Manufacturing and Service Technologies Sources: 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 Framework for Analyzing Customer Service Orientations in Manufacturing,” Academy of Management Review 14 (1989): 75-95.