Key technology constructs

In organisation domain, the term “technology” generally refers to the means, techniques, skills and knowledge that transform input into output (Daft, 2004:243; Fry, 1982; Randolph, 1981; Robbins, 1990:176). However, several technology classifications exist in organisation theory. For example, operations techniques, characteristics of materials, complexity in knowledge system, degree of routineness of operations, and interdependence between work systems (Hickson, Pugh and Pheysey, 1969; Robbins, 1990:177).

The notion that technology affects the structuring of organisations was first introduced by results of Woodward’s (1965) study on industrial organisations in England.

Woodward found that organisations utilising different production technologies were characterised by different structural forms, and effectiveness of the organisations were related to the ‘”fit” between technology and structure. Three broad categories of technology (unit, mass and process production systems) were identified along a scale, referred to as technical complexity. Increasing levels of technical complexity was matched by more structure (i.e., formalisation, centralisation, hierarchy). This relationship has been confirmed by the work of Khandwalla (1973), who indicated that mass output orientation of manufacturing firms is related to vertical integration and use of sophisticated controls. Although the level of Woodward’s study was at the organisation level (Fry, 1982), such conceptualisation of technology in the manufacturing context, including engineering, has been a long-standing technology-structure framework in organisation studies (Mintzberg, 1979).

Woodward’s (1965) work originates from manufacturing. An alternate perspective

was put forth by Perrow (1970). Perrow considered technology as the means to transform raw materials (human, symbolic, or material) into desirable goods and services (p.75). Articulating technology in terms of the knowledge necessary to execute work within an organisation, he identified two dimensions of technology. Task variability considers the number of exceptions encountered in one’s work. A routine task would be characterised by low task variability. Task analysability considers the type of search procedures followed to find successful methods of responding to exceptions. These two dimensions form a two-by-two matrix and represent four types of technologies depicted in Fig. 2.3. In Perrow’s (1970) perspective, routineness is the key element that determines the coordination and control mechanisms in organisations. The more routine the technology, the more structured the organisation in terms of formalisation, centralisation and hierarchy. Routine organisation tasks can be accomplished best through standardisation and control. In contrast, non-routine technology calls for greater structural flexibility, and interdependence between organisation units are relatively higher. Organisations characterised by non-routine technology would be decentralised with little formalisation.

Fig. 2.3 – Perrow’s technology framework

Source: Perrow, C., (1970) Organisational Analysis: A Sociological Review, Tavistock Publications, London

Another perspective of technology that has had substantial influence on Craft

Technology

Routine Technology

Non-Routine Technology

Engineering Technology Not analysable

Analysable

Few Exceptions Many Excepions

organisation literature was that of Thompson (1967), who argued that technology is a source of uncertainty in organisations. He identified three types of technology based on the nature of tasks performed by organisation units by conceptualising the interdependence between work units. Long-linked technology is characterised by tasks linked in a sequential manner as often found in assembly lines. Owing to this serial independence, coordination among activities can be done by standardisation and planning. However, uncertainties related to this technology are at the input and output side of the organisation. Mediating technology is one that links clients or customers on both input and output side of the organisation. Banks, telephone utilities, retail stores and employment agencies are examples (Robbins, 1990). The type of interdependence identified in this technology is pooled interdependence. The last type of technology called intense technology represents a customised response to a diverse set of contingencies where units are dependent on each other’s feedback. Coordination in such technology is achieved by mutual adjustment as standardisation and planning would prove relatively ineffective and units depend on each other in a reciprocal manner.

In sum, coordination between interdependent work units can be achieved through standardisation, planning, use of formal communication channels and mutual adjustments (Daft, 2004:268; Thompson, 1967; Van de Ven, Delbecq and Koenig, 1976).

Structural formalisation would decrease from mediating to long-linked and to intense technology, while structural complexity (such as centralisation, hierarchy) would increase in this order (Robbins, 1990:191).

With the observation that technology has the greatest effect on the operating core of an organisation, Mintzberg (1979) argued that conceptualisation of technology is in

disarray and renders difficulty in research. He suggested that technical system (or operations technology), i.e. the “collective instruments used by the operators to do their work” (p.250), is a more suitable articulation of the instrument that transforms inputs into outputs. This view is supported by Aldrich (1972) and Robbins (1990). Two dimensions are identified of a technical system (Mintzberg, 1979). The regulation dimension describes the extent to which work is controlled by the instrument. In the project context, this would be considered as constraints to which project activities must accommodate.

The sophistication dimension describes the complexity or intricateness of the technical system, or how well it is understood. For example, Woodward’s (1965) unit production technology would be one of little regulation and sophistication, while process production systems are frequently highly regulated with high degree of sophistication.

Mintzberg (1979) hypothesised that the more regulating the technical system, the more formalised the operating work and the more bureaucratic the structure of the operating core (p.261). He further hypothesised that the more sophisticated the technical system, the more elaborate the administrative structure, specifically the larger and more professional the support staff, the greater the selective decentralisation, and the greater the use of liaison devices (p.262).

More recently, Burton and Obel (2004) discussed technology from an information processing perspective. Consolidating various academic perspectives of technology, Burton and Obel have shown that technology is characterised by complexity, interdependence and uncertainty (p.246). These three properties have generated a need for information to reduce complexity and uncertainty while facilitating coordination between interdependencies. Burton and Obel further showed that organisations need to be designed with appropriate information processing capacity to match the demand for

information (p.7). An effective organisation would be characterised by a close fit between demand for information and information processing capacity. Neither inadequate nor excessive capacity is likely to be associated with effectiveness and efficiency. Burton and Obel posited several technology-structure relationships outlined below.

(a) Routineness of technology is positively associated with formalisation, but the association is not strong if many professionals are employed (after Miller, Glick, Wang and Huber, 1991).

(b) Routine technology is associated with centralisation, but only in the case where organisation size is small. Robbins (1990) holds a slightly different view arguing the relationship holds only if formalisation is low.

(c) If the organisation size is small and the organisation has a routine technology, then complexity (vertical and horizontal differentiation) should be medium.

(d) Routine technology is more prone to the use of rules and procedures as a means of coordination. Non-routine technology calls for a large amount of information, and coordination by integrators and groups using richer media are preferred.

Table 2.1 sums up the various perspectives of technology in organisation domain reviewed above. As a generalisation, the constructs reviewed so far can perhaps be summarised by Hunt’s (1970) observation that “the critical technological element to which organisational structure must respond seems best conceptualised as complexity”

[italics in original text] (p.244). The more complex (non-routine, sophisticated and high degree of interdependence between organisation units) the technology, the more an organisation structure becomes differentiated by occupational specialty (Dewar and

Hage, 1978) and structured (Robbins, 1990). However, based on the above review, the technology-structure is moderated by several factors such as size and type of technology.

Table 2.1 – Summary of technology conceptualisations in organisation literature

Scholar Key Concept Taxonomy of Technology

Thompson (1967) Interdependence and

coupling between work units Pooled coupling (mediating technology) Serial coupling (sequential technology) Reciprocal coupling (intense

technology)

Perrow (1970) The means to transform raw material into goods and

Mintzberg (1979) Technical system as the

instruments used to do work. Dimensions of technical system:

Regulation and Sophistication Burton and Obel

(2004) Complexity, interdependence

and uncertainty None