Chapter Six

Manufacturing and Service

Technologies

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6 -1

Definitions

Technology: work process.

Core technology: work process that
is directly related to organization's
mission.

Non-core technology: a department

work process that is important to the
organization but is not directly related
to its primary mission.
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Transformation Process for

a Manufacturing Company
ENVIRONMENT
Organization

Raw Material
Inputs

Product or Service
Outputs

Transformation
Process
Materials
Handling

Assembly

Milling
Departments

Inspection

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Woodwards Classification
Based on System of Production
Group I

Small-batch and unit

production

Group II

Large-batch and mass

production

Group III

Refer to
Exhibits
7.3 & 7.4
on Pages
249 & 250

Continuous process
production
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Terminology - Recap
Mechanistic: an organization

system marked by rules, procedure, a

clear hierarchy of authority, and
centralized decision making.

Organic: an organization system

marked by free-flowing, adaptive

processes, an unclear hierarchy of
authority, and decentralized decision
making.
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Guidelines
Determine whether the production
technology in a manufacturing firm is
small batch, mass production, or
continuous process.
Use a more organic structure with
small batch or continuous process
technologies.
Use a mechanistic structure with
mass production technologies.
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Strategy, Technology,
and Performance
When adopting a new
technology, realign strategy,
structure, and management
processes to achieve top
performance.

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Contemporary
Applications
Flexible Manufacturing Systems; the
ultimate automated factories.
Use of robots, numerically controlled
machine tools, radio-frequency
identification (RFID), wireless
technology, computerized software for
product design, and remote controls.
Also named as Computerized
Integrated Manufacturing.
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Computer-Integrated
Manufacturing
Computer-aided design
(CAD)

Computer-aided manufacturing
(CAM)

Integrated Information Network

A combination of these three implies
that a product can be designed, and
its prototype produced untouched by
human hands.
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Performance and
Structural Implications
Advantages of flexible manufacturing
Products of different sizes and types
Free intermingling of customer
requirements on the assembly line;
use of bar codes facilitating
manufacturing.
Infinite variety of products in
unlimited batch sizes; next slide.
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Relationship of Computer-Integrated
Manufacturing Technology to
Traditional Technologies
Flexible
Manufacturing

Small batch

NEW

Customized

PRODUCT FLEXIBILITY

TRA
D

ITI

ON
AL

Mass
Customization

CHOICES

Mass
Production

CH
OIC

ES

Continuous
Process

Standardized
Small

BATCH SIZE

Source: Based on Jack Meredith, The Strategic Advantages of New

2000
Manufacturing Technologies For Small Firms. Strategic Management
South-Western College Publishing
Journal 8 (1987): 249-58; Paul Adler, Managing Flexible Automation,
California Management Review (Spring 1988): 34-56; and
Cincinnati, Ohio
Otis Port, Custom-made Direct from the Plant.
Daft,
Organizational
Theory and Design, 7/e
Business Week/21st Century Capitalism, 18 November 1994, 158-59.

Unlimited
6-11

Comparison of Organizational Characteristics

Associated with Mass Production and
Computer Integrated Manufacturing
Characteristic

Mass Production

CIM

Structure:
Span of Control

Wide

Narrow

Hierarchical levels

Many

Few

Tasks
Specialization

Routine, repetitive Adaptive,

craft-like
High
Low

Decision making

Centralized

Decentralized

Overall

Bureaucratic,
mechanistic

Self-regulating,
organic

Source: Based on Patricia L. Nemetz and Louis W. Fry, Flexible

Manufacturing Organizations: Implications for Strategy Formulation
and Organization Design. Academy of Management Review 13
(1988); 627-38; Paul S. Adler, Managing Flexible Automation,
California Management Review (Spring 1988); 34-56; Jeremy Main,
Manufacturing the Right Way, Fortune, 21 May 1990, 54-64.

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Comparison of Organizational Characteristics

Associated with Mass Production and
Computer Integrated Manufacturing
Characteristic
Human
Resources:
Interactions

Mass Production

Stand alone

CIM

Teamwork

Training

Narrow, one time Broad, frequent

Expertise

Manual,
technical

Source: Based on Patricia L. Nemetz and Louis W. Fry, Flexible

Manufacturing Organizations: Implications for Strategy Formulation
and Organization Design. Academy of Management Review 13
(1988); 627-38; Paul S. Adler, Managing Flexible Automation,
California Management Review (Spring 1988); 34-56; Jeremy Main,
Manufacturing the Right Way, Fortune, 21 May 1990, 54-64.

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Cognitive, social
Solve problems

6-13

Comparison of Organizational Characteristics

Associated with Mass Production and
Computer Integrated Manufacturing
Characteristic

Mass Production

CIM

Interorganizational:
Customer Demand

Stable

Changing

Suppliers

Many,

Changing

arms length

Few, close
relations

Source: Based on Patricia L. Nemetz and Louis W. Fry, Flexible

Manufacturing Organizations: Implications for Strategy Formulation
and Organization Design. Academy of Management Review 13
(1988); 627-38; Paul S. Adler, Managing Flexible Automation,
California Management Review (Spring 1988); 34-56; Jeremy Main,
Manufacturing the Right Way, Fortune, 21 May 1990, 54-64.

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Differences Between
Manufacturing and Service
Technologies
1.
2.

1.
2.
3.
4.
5.
6.
7.
8.

3.
4.
5.

Service Technology

Intangible product
Production and consumption take
place simultaneously
Labor and knowledge intensive
Customer interaction generally high
Human element very important
Quality is perceived and difficult to
measure
Rapid response time is usually
necessary
Site of facility is extremely important

Service:

Airlines, Hotels, Consultants,

Healthcare, Law firms
Sources: Based on F. F. Reichheld and W. E. Sasser, Jr.,
Zero Defections: Quality Comes to Services, Harvard Business
Review 68 (September-October 1990): 105-11; and David E.
Bowen, Caren Siehl, and Benjamin Schneider, A Framework
for Analyzing Customer Service Orientations in Manufacturing,
Academy of Management Review 14 (1989): 75-95.

6.
7.
8.

Product and Service:

Fast-food outlets, Cosmetics,

Real estate, Stockbrokers,
Retail stores
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Manufacturing Technology

Tangible product
Products can be inventoried for later
consumption
Capital asset intensive
Little direct customer interaction
Human element may be less
important
Quality is directly measured
Longer response time is acceptable
Site of facility is moderately
important

Product:

Soft drink companies,

Steel companies,
Auto manufacturers,
Food processing plants
6-15

Configuration and Characteristics

of Service Organizations vs.
Product Organizations
Service

Product

Structure:
Separate boundary roles

Few

Many

Geographical dispersion

Much

Little

Decision making

Decentralized

Centralized

Formalization

Lower

Higher

Employee skill level

Higher

Lower

Skill emphasis

Interpersonal

Technical

Human Resources:

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Non-Core Departmental
Technologies Perrows Model
Variety: task variety, number of
exceptions in the work, unexpected
situations etc high and low variety
Analyzability: of the work activities
high and low analyzability.
These two dimensions form the
basis of four major categories of
technology, ie ROUTINE, CRAFT,
ENGINEERING, and NON-ROUTINE.
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Non-Core Departmental
Technologies Perrows Model
ROUTINE: characterized by little task variety,
and use of objective and computerized
procedures.
CRAFT: characterized by a fairly stable
stream of activities, but the conversion
process is not analyzable or well understood.
ENGINEERING: Complex due to large task
variety, established procedures etc.
NON-ROUTINE: high task variety but
conversation process not analyzable.
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Departmental
Technologies
ROUTINE

High analyzability
Low variety
Examples:

Sales
Clerical
Drafting
Auditing

CRAFT

Low analyzability
Low variety
Examples:

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Performing arts
Trades
Fine goods
manufacturing

6-19

Departmental
Technologies
ENGINEERING

High analyzability
High variety
Examples:

Legal
Engineering
Tax accounting
General
accounting

NONROUTINE

Low analyzability
High variety
Examples:

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Strategic
planning
Social science
research
Applied research

6-20

Framework for Department

Technology
CRAFT

LOW

ANALYZABILITY

HIGH

NON-ROUTINE

1.

Performing arts

1.

Strategic planning

2.

Trades

2.

Social science research

3.

Fine goods manufacturing

3.

Applied research

e
inine
t
u
rorout
ROUTINE
ENGINEERING
nno
NNo
e
1. Sales
1. Legal
titnine
u
o ou
R
R
2. Clerical
2. Engineering
3. Drafting

3. Tax accounting

4. Auditing

4. General accounting

LOW

VARIETY

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HIGH

Guidelines
Use of the two dimensions of variety
and analyzability help discover
whether the work in a department is
routine or non-routine.
In case of routine, use mechanistic
structure and process.
In case of non-routine, use an
organic management process.
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Relationship of Department
Technology to Structural and
Management Characteristics
1.
2.
3.
4.
5.

1.
2.
3.
4.
5.

Mostly Organic Structure

Moderate formalization
Moderate centralization
Work experience
Moderate to wide span
Horizontal, verbal
communications

1.
2.
3.
4.
5.

Organic Structure

Low formalization
Low centralization
Training plus experience
Moderate to narrow span
Horizontal communications
meetings

CRAFT

NONROUTINE

Mechanistic Structure

Mostly Mechanistic Structure

High formalization
High centralization
Little training or experience
Wide span
Vertical, written
communications

ROUTINE

1.
2.
3.
4.
5.

Moderate formalization
Moderate centralization
Formal training
Moderate span
Written and verbal
communications

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ENGINEERING
6-23

Thompsons Classification of
Interdependence and
Management Implications
Form of
Interdependence
Pooled (bank)

Demands on
Horizontal
Communications,
Decision Making
Low

Client

communication

Sequential
(assembly line)
Client

Medium
communication

Reciprocal (hospital)
High
Client

communication

Type of
Coordination
Required

Standardization,
rules, procedures
Divisional Structure
Plans, schedules,
feedback
Task Forces
Mutual adjustment,
cross-departmental
meetings, teamwork

Horizontal
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Priority for
Locating Units
Close
Together
Low

Medium

High

Structure
6-24

Primary Means to Achieve Coordination

for Different Levels of Task
Interdependence in a
Manufacturing Firm
INTERDEPENDENCE
Reciprocal
(new product development)

COORDINATION

High

Horizontal structure,
cross-functional teams
Face-to-face communication,
Unscheduled meetings,
Full-time integrators

Sequential
(product manufacture)

Mutual
Adjustment

Scheduled meetings, task forces

Vertical communication

Pooled
(product delivery)

Planning

Plans
Rules
Low

Source: Adapted from Andrew H. Van de Ven, Andre Delbecq, and

Richard Koenig, Determinants of Communication Modes Within
Organizations, American Sociological Review 41 (1976): 330.

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Standardization
6-25

Relationships Among
Interdependence and Other
Characteristics of Team Play
Baseball

Football

Basketball

Interdependence:

Pooled

Sequential Reciprocal

Physical dispersion
of players:

High

Medium

Low

Coordination:

Rules that
govern the
sport

Key management
job:

Select
players and
develop
their skills
2000

Game plan
and
position
roles
Prepare
and
execute
game

Mutual
adjustment
and shared
responsibility
Influence
flow of game

Source: Based on William Passmore, Carol E. Francis, and Jeffrey

Halderman, Sociotechnical Systems: A North American Reflection
On the Empirical Studies of the 70s, Human Relations 35 (1982):
1179-1204.

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Job Design - Sociotechnical

Systems Model
TheSocial
SocialSystem
System
The
Individualand
andteam
team
Individual
behaviors
behaviors

Organizational/team
Organizational/team
culture
culture
Managementpractices
practices
Management
Leadershipstyle
style
Leadership
Degreeofofcommunication
communication
Degree
andopenness
openness
and

TheTechnical
TechnicalSystem
System
The

Designfor
for
Design
JointOptimization
Optimization
Joint
Workroles,
roles,tasks,
tasks,
Work
workflow
workflow
Goalsand
andvalues
values
Goals
Skillsand
andabilities
abilities
Skills

Individualneeds
needsand
and
Individual
desires
desires

Sources: Based on T. Cummings, Self-Regulating Work Groups: A Socio-Technical

Synthesis, Academy of Management Review 3 (1978): 625-34; Don Hellriegel, John W.
Slocum, and Richard W. Woodman, Organizational Behavior, 8th ed. (Cincinnati, Ohio:
South-Western College Publishing, 1998), 492; and Gregory B. Northcraft and Margaret
A. Neale, Organizational Behavior: A Management Challenge, 2nd ed. (Fort Worth, Tex.:
The Dryden Press, 1994), 551.

Typeofofproduction
production
Type
technology(small
(smallbatch,
batch,
technology
massproduction,
production,etc.)
etc.)
mass

Levelofofinterdependence
interdependence
Level
(pooled,sequential,
sequential,
(pooled,
reciprocal)
reciprocal)
Physicalwork
worksetting
setting
Physical
Complexityofofproduction
production
Complexity
process(variety
(varietyand
and
process
analyzability)
analyzability)
Natureofofraw
rawmaterials
materials
Nature

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Timepressure
pressure
Time
6-27

Workbook
Activity

Technology Comparison
Organization Goals

McDonalds

Burger King

Family
Restaurant

Authority Structure
Woodwards Technology Type
Mechanistic vs. Organic
Teamwork vs. Individual
Interdependence
Routine vs. Nonroutine tasks
Task Specialization
Task Standardization
Technical vs. Social Expertise
Centralized vs. Decentralized
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