Technology and

Organization Structure
People, Process and Leadership: Session 15
Session Plan
• Last session
• DC-10 Case

• Quiz 2: Thursday, November 16th

• Mid-term grades

Structure and
• Case Mrs. Fields’ Cookies Inc. control

• Technology and organizational design

Objectives
• Identify what technology is and how it relates to organizational effectiveness

• Differentiate among three different kinds of technology that create different competencies

• Understand how each type of technology needs to be matched to a certain kind of

organizational structure if an organization is to be effective

• Understand how technology affects organizational culture

• Appreciate how advances in technology, and new techniques for managing technology,
are helping increase organizational effectiveness
Case: Mrs. Fields’ Cookies
Common management philosophy?
• Randy
• Strong desire to maintain control overall
aspects o the organization
• Need to know exactly what every employee
was doing on a regular basis
• Debi
• Made sure that every employee understood
her way of doing things and replicated them
even in he absence
• She left nothing to the discretion of employee
• High growth would make them lose control
• Discouraged them from expanding their
business
What happened?
• Strong pressure from stakeholders to expand
• 1987: More than 500 stores in 37 states
• None of the stores were franchised
• Same management philosophy
• Most of the 4500 employees
• Young and inexperienced
• Technology
• Phone-mail system
• Company-wide computer system
• Use for control
• 1988: Diversified into related products through the
acquisition of a chain of bakery cafes
• Three times the size of Mrs. Fields’ traditional outlets
• No change in management philosophy
• The transition was not successful
• Lost $18 million and closed 85 stores the first year
• 1993: Debi had to step down as president and CEO
Case: Mrs. Fields Cookies
Why it worked? Why it stopped working?
• Save money • Untrained managers
• No training • Untrained staff
• Low wages
• Employees with no experience
• Several new products
• Single product • Perishable products
• Perishable products • Higher inventory
• Low inventory
• Several new stores at the same time
• One store at a time High task analyzability • 3 times the size of traditional outlets
• Or a few Low task variety
Low task analyzability
• Stable demand? Data no longer available
• Stable demand High task variety
• Data availability?
• Data availability (by the hour) At least in the transition
• Predictable?
• Predictable
Evolution of organizational application of IT (Daft & Uppal, 2020)

Artificial
intelligence
Technical Complexity and Three Types of Technology (Joan Woodward)

Study of 100 manufacturing firms in the 1950s

(82% fewer than 500 employees)

• Craftswork (small batches)

• The technology that involves groups of skilled
workers who interact closely to produce custom-
designed products Still an option
today
• Programmed technology
• A technology in which the procedures for
converting inputs into outputs can be specified in
advance so that tasks can be standardized and
the work process can be made predictable

• Mass production (large batches and

continuous)
• The organizational technology that uses conveyor
belts and a standardized, progressive assembly
process to manufacture goods and services
Technical Complexity and Three Types of Technology (Joan Woodward)

Case DC-10

≠ Environmental
complexity
(strength, number, and
Mechanistic interconnectedness)
≠ Task complexity
(variability & analyzability)

Case N12
Routine Tasks and Complex Tasks (Charles
Perrow)
• Task variability • Task interdependence
• The number of exceptions— new • The manner in which different
or unexpected situations—that a organizational tasks are related to
person encounters while one another
performing a task

• Mediating technology
• Task analyzability • Work process in which input,
• The degree to which search conversion, and output activities
activity is needed to solve a can be performed independently
problem of one another
Technology and organization design
Low Task Variety
Low Task Analyzability CRAFTWORK
Mostly organic design
Moderate formalization
Moderate centralization
Work experience
Moderate to wide span
High Task Analyzability ROUTINE MANUFACTURING ENGINEERING PRODUCTION
Mechanistic design
High formalization
High centralization
Little training or experience
Wide span
High Task Variety
NONROUTINE RESEARCH
Organic design
Low formalization
Low centralization
Training plus experience
Moderate to narrow span
Mostly mechanistic design
Moderate formalization
Moderate centralization
Formal training
Moderate span
 Technology and interdependence Reduces
complexity
• Long-linked technology • Specialism
• Work process in which input, conversion, • Producing only a narrow range of outputs
and output activities must be performed
in series
• Dedicated machines
• Machines that can perform only one
• Intensive technology operation at a time
• Repeatedly cutting or drilling or stamping out a
• Work process in which input, conversion, car body part
and output activities are inseparable

• Fixed workers
• Slack resources • Workers who perform standardized work
• Extra or surplus resources that enhance procedures
an organization’s ability to deal with • Increase an organization’s control over the
Inventories unexpected situations conversion process but…
Thompson’s
Classification of
Interdependence

Cheaper (reengineering)
Priority for locating people or
units close together
(unit or organizational levels)
The Work Flow in Mass Production
The Work Flow with Advanced
Manufacturing Technology Mass customization
 Advance Manufacturing technology
• Materials technology
• Machinery, other equipment, and computers
• Computer-aided design (CAD)
• Greatly simplifies the design process
• Computer-aided materials management
(CAMM)
• To manage the flow of raw materials and
component parts into the conversion process
• To develop mass production schedules for
manufacturing
• To control inventory
• Just-in-time inventory (JIT) system
• Components needed for production
delivered to the conversion process as they
are needed
• Input inventories can be kept to a minimum
• Flexible manufacturing technology
• Allows the production of many kinds of
components at little or no extra cost on the
same machine
• Computer-integrated manufacturing (CIM)
• Controls the changeover from one operation
to another by means of the commands given
to the machines through computer software
 Just-in-Time Inventory System

• What is Just-in-Time (JIT) Inventory Management? (1m)

• https://www.youtube.com/watch?v=zCTmN17ZDek&ab_channel=NetSuite
• Just in time: why we keep running out of everything | It's Complicated (5m)
• https://www.youtube.com/watch?v=-PQEP3wdVo0&ab_channel=TheGuard
ian
Impact of IT on Organizational Design
More organic organization
designs
• Smaller organizational structure

• Decentralized organizational
structures

• Improved horizontal coordination

• Improved inter-organizational
relationships
Technical complexity
Depend on humans or machines?
• Enhanced network structures
• Modular and virtual
organizational structures
Managerial Implications: Analyzing
Technology
• Analyze an organization’s or a department’s input-conversion-output processes

• Identify the skills, knowledge, tools, and machinery that are central to the production of goods and services

• Analyze the level of technical complexity associated with the production of goods and services
• Evaluate whether technical complexity can be increased to improve efficiency and reduce costs

• Analyze the level of task variety and task analyzability associated with organizational and departmental tasks

• Analyze the form of task interdependence inside a department and between departments.
• Evaluate whether the task interdependence results in the most effective way of producing goods or servicing the needs of
customers

• Analyze the structure, and evaluate the fit between technology and structure
Sociotechnical System Model for Design
Job simplification
Job rotation
Job enrichment
Job enlargement
Next Session
• Group 9 Case: Holacracy

• Group 10 Case: Responsible A.I.

• Article: When to Decentralize Decision-Making, and When Not To