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? WHERE OPERATIONS TECHNOLOGY DOMINATES: THE ADHOCRACY
The influence of operations technological is most clearly seen in small organizations and in specific departments within large ones. In some instances, managers and employees simply do not know the appropriate way to service a client or to produce a particular product. This is the extreme of Thompson’s intensive type of technology, and it may be found in some small-batch processes where a team of individuals must develop a unique product for a particular client.
Mintzberg suggests that at these technological extremes, the “adhocracy” may be an appropriate design.92 An adhocracy is characterized by few rules, policies, and procedures; substantial decentralization; shared decision making among members; extreme horizontal specialization (as each member of the unit may be a distinct specialist); few levels of management; and virtually no formal controls.
The adhocracy is particularly useful when an aspect of the firm’s operations technology presents two sticky problems: (1) the tasks facing the firm vary considerably and provide many exceptions, as in a hospital, or (2) problems are difficult to define and resolve.93 The adhocracy places a premium on professionalism and coordination in problem solving.94 Large firms may use temporary task forces, form special committees, and even contract consulting firms to provide the creative problem identification and problem solving that the adhocracy promotes. For instance, Microsoft creates new autonomous departments to encourage talented employees to develop new software programs. Allied Chemical and 3M also set up quasi-autonomous groups to work through new ideas.
Section Five ? 231
Information Technology and Organizational Design
Today, information technology (IT) and the computer are virtually inseparable.95 Some even suggest that IT only refers to computer-based systems used in the management of the enterprise.96 Certainly, the computer and extensions of the personal computer are a major force in most corporations. However, substantial collateral advances have also been made in telecommunication options. Furthermore, advances in the computer as a machine are much less profound than how information technology is transforming how firms manage.
It is important to understand just what IT does from an organizational standpoint—not from the view of the PC user.97 From an organizational standpoint IT can be used, among other things, as (1) a partial substitute for some operations as well as some process controls and impersonal methods of coordination, (2) a capability for transforming information to knowledge for learning, and (3) a strategic capability.
? INFORMATION TECHNOLOGY AS A SUBSTITUTE
Old bureaucracies prospered and dominated other forms, in part, because they provided more efficient production through specialization and their approach to dealing with information. Where the organization used mediating technology or long-linked technology, the machine bureaucracy ran rampant. In these firms rules, policies, and procedures, as well as many other process controls, could be rigidly enforced based on very scant information.98 Such was the case for the post office: postal clerks even had rules telling them how to hold their hands when sorting mail.
In many organizations, the initial implementation of IT would displace the most routine, highly specified, and repetitious jobs.99 The clerical tasks in bookkeeping, writing checks for payroll, and keeping track of sales were some of the first targets of computerization. Here IT was often initiated in the form of a large centralized mainframe computer. For instance, mainframe computers were still the major business for IBM well into the 1990s. Initial implementation did not alter the fundamental character or design of the organization. To continue the example of the post office, initial computerization focused mainly on replacing the hand tracking of mail. Then IT was infused into automated reading machines to help sort mail. This called for implementation of the ZIP code.
A second wave of substitution replaced process controls and informal coordination mechanisms.
Rules, policies, and procedures could be replaced with a decision support system (DSS). In the case of a DSS, repetitive routine choices could be pro-
OB Across Functions
4 MARKETING I
Will Salespeople and Distributors Be the New Clerical Casualities of the Web?
In just a few years the stock market value of amazon.com has surpassed that of industry leader Barnes and Noble, even though Amazon has no retail stores and sells fewer books. Firms in other industries are reexamining their channels of distribution and their reliance on internal sales units. Direct sales via the Web undercut the need for traditional dealers and provide direct access for consumers. At the same time, salespeople establish valuable relationships with customers. Yet, as amazon.com illustrates, many customers may want direct access. Now most corporate Web sites serve as window dressing for corporate images rather than marketing tools. But as Amazon exemplifies, that role is changing.. .and quickly.