MGMT 861 Week 10 (Technology and Organization Theory)

MGMT 861MGMT 861Week 10Week 10

(Technology and (Technology and Organization Theory)Organization Theory)

Technology has been examined as both an independent variable and a dependent variable in OT research. The results have been mixed.

Technology constrains but does not dictate the precise configurations and methods that make up a specific technical system.

Scott and Davis argue that technology impacts the following three aspects of organizations: complexity, uncertainty, and interdependence (p. 129).

TECHNOLOGY AND OTTECHNOLOGY AND OT

BASED ON RATIONAL SYSTEMS VIEW (CONTINGENCY THEORY – no one best way to organize):

1. The greater the technical complexity, the greater the structural complexity (differentiation).

2. The greater the technical uncertainty, the less formalization and centralization.

3. The greater the technical interdependence, the more resources must be devoted to coordination.

SCOTT & DAVIS, CHAPTER 6SCOTT & DAVIS, CHAPTER 6

BASIC COORDINATION MECHANISMS:

1. Rules and Programs.2. Schedules3. Departmentalization4. Hierarchy5. Delegation6. Client Coordination

As a contingency theorist, Galbraith (1973) argues that an organization confronting high task demands can either reduce information processed or increase capacity to handle information.


METHODS FOR REDUCING INFORMATION:

1. Product versus process organization.2. Reduce level of performance – Have slack resources

METHODS FOR INCREASING CAPACITY:

1. Augmented hierarchies and information technologies.2. Lateral connections3. Liaisons4. Task Forces5. Project Teams6. Matrix Structures


NATURAL SYSTEMS PERSPECTIVE

As opposed to the rationalist/contingency theory perspective, this perspective considers the following:

1. Social factors affecting technology.2. Rethinking the relation between technology and

structure.3. Focusing on informal structure rather than just formal

structure.4. Role of tacit knowledge.5. Organic versus mechanical structures.


Structure is still important. Greater push to fluidity and flexibility within organizations has required better information flow (through technology).

Several figures illustrate different forms/structures of organizations and the text discusses the interplay between structure and technology within the different forms.


Just so you know, I am adding this in.

Basic hypothesis was that size determines structure, not technology. To operate given technologies, organizations had to be of requisite sizes.

Conducted an empirical test of the “technological imperative” proposition – that technology and structure are strongly related – they were not related in their study.

Used multiple measures for various measures (multiple correlation analysis) from 46 diverse organizations and 31 manufacturing organizations.

ASTON GROUP (1969) - FYIASTON GROUP (1969) - FYI

They discuss “technological discontinuities” and how they impact businesses.

The technology cycle is ever moving in industries:

1. A technological discontinuity brings radical innovation to an industry

2. There is an “era of ferment” as competitors compete to develop the best design/product/service.

3. A dominant design emerges.4. The “era of incremental change” improves and modifies

the design5. Another discontinuity hits.

ANDERSON & TUSHMAN (1990)ANDERSON & TUSHMAN (1990)

Overall, found support for their technology cycle model.

Era of ferment was associated w/more product/process variability than subsequent eras of incremental change.

Competence-destroying discontinuities were longer than competence-enhancing discontinuities (11.2 vs. 8.0 years).

Dominant designs emerge after discontinuities and do stimulate industry demand.

Discontinuous innovation never itself sets standard.


Dominant design was not located on the frontier of technological performance at the time it became dominant – (think about Windows vs. IBM OS/2)

Industry incumbents pioneer dominant designs based on competence-enhancing breakthroughs.

Contrary to their expectations, newcomers did not pioneer dominant designs based on competence-destroying breakthroughs (equally likely).

More technical progress results from the discontinuity and era of ferment than from accumulating incremental advance.


The authors examine how technologies disrupt roles within organizations which then negatively impacts the expected benefits of the technology adoption.

They use a unique method of re-analyzing and re-interpreting Barley’s (1986) data on CT scanner implementation.

They do a good job of explaining Barley’s results and conclusion that technology impacts structure/human interaction and that structure/human interaction impacts technology.

BLACK et al. BLACK et al. (2004)(2004)

Barley discussed the differences at a suburban and an urban hospital that both brought on new CT technology. The technology was the same, but the way people reacted to it and to each other was different at the two hospitals. The different patterns of decision-making at the two hospitals changed outcomes.

The authors of this study show the actual process differences and map out changes in knowledge and behaviors that impact the organization. They combine the results from the two hospitals into a more overarching theoretical framework that can predict outcomes.


Clearly, occupational separation between the doctors and the technicians – the way they dealt with each other – affected the implementation of the new technology.

The authors point out that “when implementing new technology, more knowledge does not necessarily produce a better long-run outcome, and further, collaborative outcomes cannot be achieved from every amount of staff expertise.” (p. 601) (human interaction matters)

In the end, the authors proposed model provides much more specificity than prior models.


Intro to best selling book about how industry leaders with seemingly great leadership still fail.

In fact, the decisions that led to failure often were made when the leadership of firms was being commended for being great.

The basic premise of the book is that “widely accepted principles of good management are, in fact, only situationally appropriate.”

Key is to understand sustaining vs. disruptive technologies.

CHRISTENSEN (2000)CHRISTENSEN (2000)

Sustaining technologies improve product performance, but disruptive technologies result in worse product performance (at least in the near term).

Technologies can progress faster than market demand (Figure I.1).

Knowing how and when to invest in disruptive technologies is a challenge.

Author lays out 5 Principles:


1. Companies depend on customers and investors for resources.

2. Small markets don’t solve the growth needs of large companies.

3. Markets that don’t exist can’t be analyzed.

4. An organization’s capabilities define its disabilities.

5. Technology supply may not equal market demand.


He points out that public sector bureaucracies serve to promote equality and democratic ideals.

The paper serves as a warning that a rush to use information technologies in the public sector may result in a breakdown of the intended goals and missions of government bureaucracies.

Points out the failures of the tech boom in the private sector as there was a rush to put everything online. (Many firms failed to follow a valid strategy.)

CORDELLA (2007)CORDELLA (2007)

As governments adopt IT, there is a shift toward organizational forms that are decentralized, disaggregated, and market-based. This promotes such things as competition, new incentives and changes in prices for “customers”.

However, the public sector does not operate the same as the private sector. Nor should it.

Governments should consider the ways in which IT can help provide information, promote interaction with the public, process tasks, and conduct government transactions.

Proposes and provides a discussion of the e-bureaucratic form of government that takes advantage of powerful IT but remains true to the principles of fairness and equality of government bureaucracies.

CORDELLA (2007)CORDELLA (2007)

Discusses reengineering – remaking internal processes utilizing IT in ways that improve operations. They believe that companies should constantly remake themselves.

To successfully reengineer requires organizations and their managers to think inductively (recognize a solution and then seek a problem it might solve) rather than deductively (solve the problem).

HAMMER & CHAMPY (1993)HAMMER & CHAMPY (1993)

State that, “the real power of technology is not that it can make the old processes better, but that it enables organizations to break old rules and create new ways of working – that is, to reengineer.”

Provides examples and discussion of how reengineered companies utilize disruptive technologies and become different (better) than regular companies.

In their book, they go on to say that most reengineering efforts fail – argue that companies are not fully committed to it. Follow on books say to just reengineer parts of companies – not the whole company.

HAMMER & CHAMPY (1993)HAMMER & CHAMPY (1993)

CONTINGENCY THEORY1. There is no one best way to organize.2. Any way of organizing is not equally effective.

UNCERTAINTY AND INFORMATIONUncertainty – difference between the amount of information

required to perform the task and the amount of information already possessed by the org.

The greater the task uncertainty, the greater the amount of information that must be processed among decision makers during task execution in order to achieve a given level of performance.

GALBRAITH (1973)GALBRAITH (1973)

DISCUSSES INFORMATION PROCESSING MODELOrgs. use Rules, Programs, and Procedures in order to

manage information. Allows solutions w/out thinking.

Hierarchy used to solve issues where there are no ready-made responses. It is employed in addition to, not instead of, the use of rules. The weakness of hierarchical communication systems is that each link has a finite capacity for handling information.

Targeting or Goal Setting helps coordinate interdependent subtasks and still allows discretion at the local subtask level. This allows employees to select behaviors.


DESIGN STRATEGIES

1. Creation of Slack Resources – cost to organization.

2. Creation of Self-Contained Tasks

3. Investment in Vertical Information Systems

4. Creation of Lateral Relations


Write an overall theoretical discussion with formally stated propositions regarding technology’s effect on formalization, centralization, complexity, configuration, coordination and control and incentives.

The piece is a good overall discussion of technology’s theoretical role to organizational variables. There are 23 propositions that cover the different effects and directions that technology can push an organization.

BURTON & OBEL (1998)BURTON & OBEL (1998)

Technology Effects on Formalization: The more routine, the more activities are predictable. Indirectly leads to standardization (higher formalization) Automation leads to higher formalization

Technology Effects on Centralization Routineness and size of organization have impact More routine technology in small firm will be more cent’d

Technology Effects on Complexity Generally, the size of organization with routine or non-routine technologies has a direct correlation to complexity


Technology Effects on Configuration: A unit technology requires a matrix config. If tech is non-routine, functional config is not efficient If the tech can be broken into subtasks, the matrix config is not efficient

Technology Effects on Coordination and Control With more routine tech, more rule-oriented coordination, and less rich media, incentives can be procedure based. Less routine tech requires greater coordination and results based incentives


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MGMT 861 Week 10 (Technology and Organization Theory)