Part VI : Organizational Design, Competences and Technology:

# Technology:
Technology is the making, modification, usage, and knowledge of tools, machines, techniques, crafts,
systems, and methods of organization, in order to solve a problem, improve a pre-existing solution to a
problem, achieve a goal, handle an applied input/output relation or perform a specific function. It can also
refer to the collection of such tools, including machinery, modifications, arrangements and procedures.
Hence, technology is the combination of skills, knowledge, abilities, techniques, materials, machines,
computers, tolls, and other equipments that people use to convert or change raw materials into valuable
goods and service.
Inside an organization, technology exists at three levels: individual, functional or departmental, and
organizational. At the individual level, technology is the personal skills, knowledge, and competencies
that individual employee possess. At the functional or departmental level, the procedures and technique
that the groups work out to perform their work create competences that constitute technology. The
interactions of the members in a team, their cooperative efforts and techniques developed and used are
technologies at functional level. Similarly, the way an organization converts inputs into outputs is used to
characterize technology at the organizational level. Mass production is the organizational technology
based on competences in using a standardized, progressive assembly process to manufacture goods.
Craftwork is the technology that involves groups of skilled workers, interacting closely and blending their
competences to produce custom-designed products.
# Technology and Organizational Effectiveness:
Organizations are always involves in a process: Input, Transformation and Output. Organizations take
inputs from the environment and create value from the inputs by transforming them into outputs through a
conversion process. In the entire process technology is present.
Input Stage: At the input stage, technology skills, procedures, techniques, and competencies
allows each organizational function to handle relationships with outside stakeholders so that the
organization can effectively manage its specific environment. Technology is involved in the
acquisition of manpower in the HR function, competencies are used at the time of material
purchase, and techniques are applied for obtaining capital at cost favorable to the company.
Conversion Stage: At the conversion stage, technology a combination of machines, techniques,
and work procedures transforms inputs into outputs. The best technology allows an organization
to add the most value to its inputs at the least cost of organizational resources. Organizations often
try to improve the efficiency to their conversion processes, and they can improve it by training
employees in new time management techniques and by allowing employees to devise better ways
of performing their jobs.
Output Stage: At the output stage, technology allows an organization to effectively produce
finished goods and services to external stakeholders. To be effective, an organization must possess
competencies in testing the quality of finished product, in selling and marketing the product, and
in managing after-sales services to customers.
The technology of an organizations input conversion, and output process is an important source of its
competitive advantage. Every organizations use technology to create competencies that lead to higher
value for stakeholders. There are basically three principal approaches in measuring and increasing
organizational effectiveness.

- Mukesh Kumar Goit

Kantipur Valley College

a) External Resource Approach: An organization using external resource approach uses technology to
increase its ability to manage and control external stakeholders. Any new technological
developments that allow an organization to improve its services to customers, such as the ability to
customize products or to increase products quality and reliability, increase the organizations
effectiveness.
b) Internal System Approach: An organization taking the internal system approach uses technology to
increase the success of its attempts to innovate, to develop new products, services, and process,
and to reduce the time needed to bring new products to market.
c) Technical Approach: An organization taking the technical approach uses technology to improve
efficiency and reduce costs while simultaneously enhancing the quality and reliability of its
products.
Organizations use technology to become more efficient, more innovative, and better able to meet the
needs and desires of stakeholders. Each department or function in an organization is responsible for
building competencies and developing technology that allows it to make a positive contribution to
organizational performance. When an organization has technology that enables it to create value, it needs
structure that maximizes the effectiveness of the technology.
# Different Types of Technologies:
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 for converting
inputs into outputs can be specified in advance so that task can be standardized and work process can be
made predictable.
According to researcher, Joan Woodward, the technical complexity of a production process that is, the
extent to which it can be programmed so that it can be controlled and made predictable is the important
dimension that differentiates technologies.
High Technical Complexity exists when conversion processes can be programmed in advance and
fully automated. With full automation, work activities and outputs that result from them are
standardized and can be predicted accurately.
Low Technical Complexity exists when conversion processes depend primarily on people and
their skills and knowledge and not on machines. With increased human involvement and less
reliance on machines, work activities cannot be programmed in advance, and results depend on the
skills of the people.
Mainly there are three types of production technology with different level of complexity.
a) Small-Batch and Unit Technology:
Organizations that employ small-batch and unit technology makes one-of-a-kind, customized products or
small quantities of products. Small-batch and unit technology has lowest level of technological
complexity because any machines used during the conversion process are less important than peoples
skills and knowledge. People decide how and when machines will be used, and the production process
reflects their decisions about how to apply their knowledge. With small-batch and unit technology, the
conversion process is flexible because the worker adapts techniques to suit the orders of individual
customers. The flexibility of small-batch technology gives an organization the capacity to produce a wide
range of products that can be customized for individual customers. Small-batch and unit technology is
relatively expensive to operate because the work process is unpredictable and the production of
customized, made-to-order products makes advance programming of work activities.

- Mukesh Kumar Goit

Kantipur Valley College

b) Large-Batch and Mass Production Technology:

Organizations that employ large-batch or mass production technology produce large volumes of
standardized products such as cars, razor blades, aluminum cans and soft drinks. With large-batch and
mass production technology, machines control the work process. Their use allows tasks to be specified
and programmed in advance. As a result, work activities are standardized, and the production process is
highly controllable. To increase control over the work process and make it predictable, organizations try
to increase their use of machines and equipment that is, they try to increase the level of technical
complexity and increase their efficiency. The control provided by large-batch and mass production
technology allows an organization to save money on production and charge a lower price for its products.
c) Continuous-process Technology:
With continuous-process technology, technical complexity reaches its height. In continuous-process
technology, the conversion process is almost entirely automated and mechanized; employees generally are
not directly involved. Their role in production is to monitor the plant and its machinery and ensure its
efficient operation. The task of employees engaged in continuous-process technology is primarily to
manage exceptions in the work process, such as machine breakdown or malfunctioning equipment. The
hall mark of continuous-process technology is the smoothness of fits operations. Production continues
with little or no variation and the outputs and rarely stops. Continuous-process production tends to be
more technically efficient than mass production because it is more mechanized and automated and thus is
more predictable and easier to control. It is more cost efficient than both unit and mass production
because labor costs are such a small proportion of its overall costs.
# Technical Complexity and Organizational Structure:
There is found to be a strong relationship between structure and the type of technology by different
research studies. Each technology is associated with a different structure because each technology
presents different control and coordination problems. Organizations with small-batch technology typically
have three levels in their hierarchy; organizations with mass production technology typically have four
levels; and organizations with continuous-process technology, six levels. As technical complexity
increases, organizations become taller, and the span of control of the CEO widens. The span of control of
first-line supervisors first expands and then narrows. It is relatively small with small-batch technology,
widens greatly with mass production technology and contracts dramatically with continuous-process
technology. These findings results in the very different shaped structures as shown in the figure.

- Mukesh Kumar Goit

Kantipur Valley College

In the small-batch technology there is impossibility of programming conversion activities because

production depends on the skills and experience of people working together. An organization that uses
small-batch technology has to give people flexibility to the customers request and produce the exact
product the customer wants. For this purpose, such an organization has a relatively flat structure (three
levels in the hierarchies), and the decision making is decentralized to small teams where first-line
supervisors have a relatively small span of control. Each supervisor and work group decides how to
manage each decision as it occurs at each step of the input-conversion-output process. This type of
decision requires mutual adjustment-face-to-face communication with co-workers and often with
customers. The most appropriate structure for unit and small-batch technology is an organic structure in
which managers and employees work closely to coordinate their activities to meet changing work
demands.
In the organizations that use mass production technology, the ability to program tasks in advance allows
the organization to standardize the manufacturing process and make it predictable. The first-line
supervisors span of control increases because formalization through rules and procedures becomes the
principal method of coordination. Decision making becomes centralized, and the hierarchy of authority
becomes taller as managers rely on vertical communication to control the work activities in a mass
production setting, and the organizational structure becomes taller and wider, as shown in the above
figure.
In the organization that uses continuous-process technology, tasks can be programmed in advance, and the
work process is predictable in a technical sense, but there is still the potential for a major systems
breakdown. The principal control problem facing the organization is monitoring the production process to
control and correct unforeseen events before they lead to disaster. The need to constantly monitor the
operating system, and make sure that each employee conforms to accepted operating procedures, is the
reason why continuous-process technology is associated with the tallest hierarchy of authority. Managers
at all levels closely monitor their subordinates actions. Because employees also work together as a team
and jointly work out procedures for managing and reacting to unexpected situations, mutual adjustment
becomes the primary means of coordination. Thus an organic structure is appropriate for managing
continuous-process technology, because the potential unpredictable events require the capability to
provide quickly, flexible response.
# Task Interdependence and Organization structure and Technology:
In the 1967 book "Organizations in Action," sociologist James D. Thompson defined three types of
interdependence to describe the intensity of interactions and behaviors within an organizational structure.
Task interdependence is the manner in which different organizational tasks are related to one another
which affects an organizations technology and structure. When task interdependence is low, people and
departments are individually specialized i.e. they work separately and independently to achieve
organizational goals. When tasks interdependence is high, people and departments are jointly specialized
that is, they depend on one another for supplying the inputs and resources they need to get the work
done. The study of interdependence helps business owners understand how the different departments or
units within their organization depend on the performance of others.

- Mukesh Kumar Goit

Kantipur Valley College

a) Mediating Technology and Pooled Interdependence:

Mediating Technology is characterized by a standardised transformation process and unique inputs and
outputs. Service providers deliver unique services to unique clients based on a pre-defined delivery
process. Mediating technology is based on pooled task interdependence, which means that each part of the
organization whether a person, team, or department contributes separately to the whole organization.
With this technology, task interdependence is low because people do not directly rely on others to help
them perform their tasks. While departments may not directly interact and do not directly depend on each
other in the pooled interdependence model, each does contribute individual pieces to the same overall
puzzle. This creates an almost blind, indirect dependence on the performance of others wherein one
departments failures could lead to the failure of the overall process.
b) Long-Linked Technology and Sequential Interdependence:
Long-linked technology is a production process consisting of a fixed sequence of steps to transform
standardised inputs into standardised outputs. Long-linked technology is based on sequential task
interdependence, which means that the actions of one person or department directly affect the actions of
another, so work cannot be successful completed by allowing each person or department to operate
independently. Mass production is based on sequential task interdependence. The actions of the employee
at the beginning of the production line determine how successfully the next employee can perform his
task, and so forth on down the line. Because sequential interactions have to be carefully coordinated,
long-linked technology requires more coordination than mediating technology. One result of sequential
interdependence is that any error that occurs at the beginning of the production process becomes
magnified in the letter stages.
c) Intensive Technology and Reciprocal Interdependence:
Intensive technology is characterized by a work process where input, conversion, and output activities are
inseparable. Intensive technology is based on reciprocal interdependence, which means that the activities
of all people and all departments are fully dependent on one another. Reciprocal interdependence is
similar to sequential interdependence in that the output of one department becomes the input of another,
with the addition of being cyclical. In this model, an organizations departments are at their highest
intensity of interaction. The move to reciprocal interdependence and intensive technology has two effects:
Technical complexity declines as the ability of managers to control and predict the work process lessens,
and task becomes more complex and non-routine.

- Mukesh Kumar Goit

Kantipur Valley College