Organizational

Design,
Competences,
and Technology

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Learning Objectives
 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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Learning Objectives
 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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What is Technology?
 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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What is Technology?
 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 and Organizational
Effectiveness
 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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Figure 9.1 - Input, Conversion, and
Output Processes

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Technical Complexity: The Theory
of Joan Woodward
 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 (cont.)

 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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Technical Complexity (cont.)

 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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Figure 9.2 - Technical Complexity
and Three Types of Technology

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Technical Complexity and
Organization Structure (cont.)
 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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Figure 9-3: Technical Complexity
and Organizational Structure

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Routine Tasks and Complex Tasks:
The Theory of Charles Perrow
 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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Charles Perrow’s Model
Routine manufacturing

low task variability high task analyzability

Few exceptions are encountered in the

work process, and when an exception
does occur, little search behavior is
required to deal with it.
Examples: Sales
Clerical
Drafting
Auditing

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Craftswork
low task variability low task analyzability

Few exceptions are encountered in the

work process, but when they do occur
they require a high level of search
activity to find a solution to problems.
Examples: Performing arts
Trades
Fine goods manufacturing

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Engineering production
high task variability high task analyzability

The number of exceptions that workers

encounter is high, but finding a solution
is relatively easy because well-
understood procedures have been
established to handle exceptions.
Examples: Legal
Engineering
Tax accounting
General accounting
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 Nonroutine research
high task variability low task analyzability

Tasks are complex because not only is the

number of unexpected situations large,
but search activity is high.
Examples: Strategic planning
Social science research
Applied research

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Table 9.1 - Routine and Nonroutine
Tasks and Organizational Design

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Task Interdependence: The Theory
of James D. Thompson
 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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Figure 9.5 - Task Interdependence
and Three Types of Technology

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All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted, in any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise, without the prior written permission of the
publisher. Printed in the United States of America.

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Hall

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