Nonroutine research has high task variability and low task analyzability, making it the most complex and least routine in the classification.

Q. Why is nonroutine research so complex?

A. The number of unexpected situations is large, and each exception requires search activity. Nonroutine research includes high-tech R&D, such as finding a cure for diseases and the activities of top

management team, such as planning and forecasting. Routine Technology and Organizational Structure

Perrow’s types of technology affect structure. Perrow and others have proposed that an organization should move from a mechanistic to an organic structure as tasks become more complex and less routine. With routine technology, employees perform clearly defined tasks, and the work process is standardized. (Table 9.1)

Q. What is the best structure for routine technology?

A. A tall structure with centralized decision-making fits. Because decisions are made at the top,

organizations with routine technology simplify jobs by using machines for complex tasks and minimizing the judgment needed by employees. A mechanistic structure fits.

Nonroutine Technology and Organizational Structure

Complex tasks need a structure that facilitates quick responsiveness. Q. What is the best structure for nonroutine technology?

A. A flat structure with decision-making decentralized is best, using mutual adjustment through teams and task forces. An organic structure fits.

Notes________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ • Refer to discussion question 4 here for examples of task complexity.

_________________________________________________________________________________ _________________________________________________________________________________

9.5 Task Interdependence: The Theory of James D. Thompson

James D. Thompson looked at the relationship among tasks, task interdependence, and the impact on technology and structure. People and departments who work independently have low task

interdependence. Those who rely on each another have high task interdependence. Thompson identified three types of technology: mediating, long-linked, and intensive, each associated with a different type of task interdependence. (Fig. 9.5)

Mediating Technology and Pooled Interdependence

Mediating technology is a work process in which input, conversion, and output can be performed independently. It is based on pooled task interdependence. Each part of the organization contributes independently to performance. Because individuals do not work with others, task interdependence is low.

8 | P a g e [ P H A M H O A N G H I E N

Q. Give an example of mediating technology at the department and organizational levels.

A. The sales department uses mediating technology because one salesperson does not affect another, but each person’s performance affects the department’s total sales. Mediating technology exists when little integration between departments is required. In a franchise, the performance of one store has no effect on another, but collectively, the stores determine organizational performance.

Q. What are the advantages of mediating technology?

A. Monitoring, controlling, and evaluating performance are easier by measuring outputs objectively. Costs are low because of control through standardization.

Computers facilitate mediating technology to coordinate production. Companies using mediating technology may use outsourcing. Long-Linked Technology and Sequential Interdependence

Long-linked technology is based on sequential interdependence, which means that one person’s actions affect another’s; activities are performed in a series.

Mass-production technology is founded on sequential task interdependence, which requires coordination. Errors at the beginning of production are enlarged later.

Q. How are sequentially interdependent activities coordinated? A. Program conversion processes standardize procedures.

Planning and scheduling manage connections between input, conversion, and output. Slack resources and extra resources handle unexpected situations.

Vertical integration acquires a supplier or distributor.

Coordination costs are higher, yet long-linked technology has the advantages of specialization and division of labor to increase productivity. Sequential interdependence simplifies tasks, reduces task variability, and increases task analyzability, making tasks routine. Repetition of routine tasks increases efficiency. Organizing tasks sequentially and controlling the work pace result in cost savings.

Q. What are the disadvantages?

A. Employees do not become skilled and have no opportunity for skill enhancement because they adhere to designated procedures. Sequential interdependence uses outputs to serve as inputs for another

department, so each department affects the next. Manufacturing depends on material management to secure quality inputs in a timely fashion.

Global competition increases interdependence, so firms are adopting a product team structure. Interdepartmental coordination results in more product innovation and efficiency.

Organizational Insight 9.2: USAA: Improving the Delivery of Intangible Services The United States Automobile Association (USAA) changed from mediating to long-linked technology. Q. How did USAA improve customer service? How did the new methods affect structure?

9 | P a g e [ P H A M H O A N G H I E N

A. With mediating technology, there was no interdepartmental communication to solve problems. Decision-making was centralized. Poor customer responsiveness encouraged the move to more

interdependent departments. Policy-writing and service departments were joined, then divided into five groups and evaluated on the number of complaints. Technology resulted in a flatter hierarchy with decentralized decision-making.

Intensive Technology and Reciprocal Interdependence

Intensive technology is based on reciprocal task interdependence, the work of all people and departments is inseparable, making tasks impossible to program. More complex and nonroutine tasks decrease

technical complexity. Hospitals and R&D departments use intensive technology. Because the task sequence cannot be preset, much coordination is required, making intensive technology more costly. Mutual adjustment is the means of coordination.

Q. What structures fit intensive technology?

A. Product team and matrix structures provide coordination and decentralized control to operate intensive technology. These structures are flat, promote mutual adjustment, and permit a firm to capitalize on new developments.

Organizational Insight 9.3: A New Approach at Hewlett-Packard

In 1989 Hewlett-Packard (HP) lagged behind competitors in introducing products to market. The CEO moved to reciprocal interdependence.

Q. How did HP improve development time and change structure?

A. HP increased departmental interdependence. The sequential process required new projects to go to each department and for committee approval. Slow decision-making increased development time. HP reorganized several functions into cross-functional teams, eliminated two layers in the hierarchy, decentralized control, and abandoned the committee structure. This organic structure reduced new product development time.

Q. Why would a company avoid intensive technology?

A. Intensive technology is expensive, so organizations reduce task interdependence to coordinate activities. They return to long-linked technology, which is easier to control and predict. Hospitals forecast the resources needed for patient demands.

Organizations can reduce costs through specialism, producing only a narrow range of outputs. A hospital can specialize in cancer treatment. This strategy uses resources efficiently and decreases coordination problems.

Notes________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ • Refer to discussion question 4 here for examples of task interdependence.

_________________________________________________________________________________ _________________________________________________________________________________

10 | P a g e [ P H A M H O A N G H I E N

Managerial Implications: Analyzing Technology

Managers should analyze the input-conversion process, the level of technical complexity, task variety, task analyzability, and task interdependence of an organization or department. Then managers should evaluate the fit between technology and structure.

Notes________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________

9.6 From Mass Production to Advanced Manufacturing Technology

A company can maximize gains from economies of scale and division of labor by using dedicated machines, standardized processes, and avoiding slowdowns.

Dedicated machines perform one operation at a time and produce a narrow range of low-cost products. Retooling a dedicated machine can take days, and it takes long production runs to maximize efficiency and minimize costs. An assembly line and fixed workers, performing standardized procedures, increase control over production. An organization decreases costs by protecting conversion processes from environmental uncertainty.

Q. How can environmental uncertainty be reduced?

A. Inventories of raw materials and semi finished components are stockpiled to avoid shortages that slow production. Finished goods are kept in inventory to respond quickly to customer demands. An

organization might advertise to sustain customer demand. Vertical integration protects access to inputs and to customers. (Fig. 9.6a)

Q. What is the disadvantage of mass production?

A. Mass production, characterized by high technical complexity, routine tasks, and sequential task interdependence, is inflexible and often termed fixed automation. Dedicated machines, fixed workers, and large inventories make it difficult to change production when a customer needs change.

New technologies have facilitated customer responsiveness at a low cost: flexible manufacturing, lean production, and computer-aided production.

Notes________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________

9.7 Advanced Manufacturing Technology (AMT): Innovations in Materials

Technology

Innovations in materials technology, machinery, computers, and other equipment are based on a new perspective of input, conversion, and output. AMT increases integration and coordination between these activities. Inventory is no longer stockpiled.

11 | P a g e [ P H A M H O A N G H I E N

Innovations coordinate input and conversion activities: computer-aided design (CAD), computer-aided materials management (CAMM), and just-in-time (JIT) inventory systems. Computer-integrated manufacturing (CPA) is an innovation in the conversion stage.

Computer-Aided Design

Design costs represent a large portion of mass production’s total costs and explain the production of large quantities of few products. More complex products, like cars, have higher design costs. Designing new parts requires building prototypes and scale models. Now, computer-aided design (CAD) simplifies this process and designs detailed prototypes according to a computer program and redesigns quickly. Q. Name the advantages of CAD.

A. Reduced design costs, a low cost, and a differentiation advantage; improved manufacturing efficiency; easier selling and servicing with improvements made during design; risk of failure reduced by solving problems during design; competitive advantage and reduced costs through quality; increased flexibility and lower-cost, customized product design; and quick response to environmental changes.

Computer-aided materials management manages the flow of resources in the conversion process, using computers to make decisions. Computer-aided materials management (CAMM) can manage the flow of raw materials and parts, develop manufacturing production schedules, and control inventory. In mass production, materials are pushed into the conversion process according to a predetermined plan. With CAMM, the flow of input materials is regulated by customer demand for finished goods. Thus inputs are pulled from the output stage, not pushed from the input stage.

Mass production has independent stages, so conversion workers take inventory without coordination from input workers. CAMM combines activities and increases task interdependence. Output workers inform input workers about supplies. Technical complexity increases because combined activities create a continuous process, linking raw materials to the customer. Coordination requires an organic structure. Like CAD, CAMM allows for a low-cost or a differentiation strategy. Controlling the flow of materials avoids the costs of carrying excess inventory and is flexible enough for quick response.

Just-in-time Inventory Systems Q. Describe just-in-time inventory.

A. A just-in-time inventory system, developed from the Japanese kanban (card) system, requires inputs