SBenegaL

Blog

  • Organization Theory – 40 (Woodward’s Topology of Technology)

    In the last blog, we began our discussion about technology. In today’s blog we discuss one of the initial classifications of technology done by – Woodward.
    Woodward began attempting to find a relation between structure and performance; however no significant relation was found. That is when she began classifying the companies based on the level of technical complexity; she began seeing patterns and relation between structure and performance. 
    She classified the technologies into 3 basic technologies:

    1. Unit or Small Batch
    2. Large Batch or Mass production
    3. Continuous Processing

    The following diagram summarizes the various topologies.

    Woodward’s study showed that organizations using unit and small technologies are more successful when they have smaller spans of control, fewer levels of management and when they practice decentralized decision making.
    The study also showed that organizations that use larger batch and mass production technologies are more successful when their managers have larger spans of control and when they practice centralized decision making. 
    The successful continuous processing organizations are similar to those for unit and small batch processing technologies, they have smaller spans of control and decentralized decision making. However they have more levels of management than either of the earlier discussed technologies. 
    Though this was breakthrough in classifying companies based on the type of technology, the study was not without limitations. The 2 major drawbacks are:
    1. The study mainly focused on small and medium sized organizations – the relation discovered between structure and performance is less significant when the organizations are larger and more complex
    2. Non-manufacturing firms were not part of the study

  • Organization Theory-39 (Technology)

    In the last blog, we discussed buffering and boundary spanning roles. In todays blog, we being understanding another important concept – “technology” and continue the discussion over the next few blogs. 
    A general understanding of “technology” is more closely aligned with the concept of science that we know. However, this is pretty different when economists try to define “technology”.
    The economists and there by the organization theorists look at technology as  a means by which society provides its members with the things that they need and desire. So one can consider organization is a technology for producing a set or subset of the objects and services that society demands. This could be the environment level of analyzing the term technology.
    A dive deep into the organization and we could have a completely different perspective – the view of how things are actually done! The organization has number of departments which coordinate amongst each other to provide the material another department needs etc. A complete new technology perspective within the firm. This level of analyze would be at the organization-level. 
    One could go further and discuss these at the tasks in each of these organizational departments. However for clarity sake, we could limit the level of analysis at Organizational and Environmental level. The variations across the organizations is reduced by focusing more on the core technology to produce the organization’s primary output.
    This simplified view, enables us to compare organizations with different core technologies by which core technologies, by noting key similarities and differences between them. What gets lost in this approach is the details of technology diversity within the organization.
    Read in Kannada:

  • Organization Theory – 38 (Buffering and Boundary Spanning)

    In the last blog, we looked at a framework for understanding the relation between complexity, change and uncertainty. In today’s blog we look at how organizations handle the need for information through buffering and boundary spanning roles. We begin with understanding and then better it with 2 examples.
    Buffering involves protecting the internal operations of the organization from interruption by the environmental shocks such as material, labor, capital shortage etc. Organizations generally create a role to handle this sort of shocks. Through their efforts, uncertainty associated with a complex or changing environment is absorbed, freeing those in the production centers from concerns that might distract them from their work.
    Boundary spanning is the name given to environmental activities including passing needed information for decision makers. It also covers the activities representing the organization o its interests to the environment.
    The difference between the 2 is that while Buffering deals with the material requirements of the organization, while boundary spanning is more of information need. Many a times the 2 roles are seen to overlap – we take 2 examples in here.
    A sales person, for example is responsible for transferring the organization’s output to its customers, but they also bring important information about changing customer demands into the organization and represent the organization’s capabilities and reputation to the customer.
    Purchasing agents in organizations too combine buffering and boundary spanning roles. As they transfer required raw materials etc into the organization, they also gather information on new supplies and techniques and techniques of production from their suppliers.
    Read in Kannada:

  • Organization Theory – 37 (Uncertainty and Information need)

    In the last blog, we looked at the relation between the various ecology theories we learnt. In today’s blog we begin our discussion on Complexity and its implications.
    Early definitions of Complexity looked at it from 2 angles
    – Number of Elements in the Environment
    – Rate of Change in these environmental elements
    Put on a 2 x 2 matrix, it would look similar to the following.
    However, this definition would be relative to the person reading it and getting one standard definition for the same wouldn’t be easy. It would be easier to look at this from the information perspective.
    The information perspective argues that managers feel uncertain when they perceive the environment to be unpredictable, and this occurs when they lack the information that they feel need to make sound decisions. The new 2 x 2 would now look like the following:
    On an interesting note, Isomorphism refers to requisite variety – the belief that organizations match the complexity of the environment with internal structures and systems. i.e. when the environment is simple the organization is simple.
    Organizations which confront different conditions and elements in their environment handle this pressure nu internal differentiation. The different departments specialize to handle the change in that component of the environment!
    Read in Kannada:

  • Organization Theory – 36 (Relation between theories)

    Over the last few blogs ending with this one, we have discussed the various organization theories. In today’s blog, we look at the inter-relation between the 3 theories we studied:

    The Resource Dependency Theory is formulated at the organizational level of analysis and provides a top-management perspective looking outwards from the organization to its surrounding environment.

    The later 2 theories are formulated at the level of environment. The Population ecology model attempts to explain why there are so many different kinds of organizations. institutional theory tries to explain why many organizations look alike in essence, both these theories answer their fundamental questions with the reference to the influence to the environment no the organizations.

    When environment has many rules and expectations to which organizations must confirm to derive necessary social legitimacy – institutional theory best explains organization’s structure and outcome.
    When the environment is not highly institutionalize and is influenced more by economic and technical competitions – population ecology perspective explains better to begin with.

    Read in Kannada:

  • Journey So Far

    Over the last nearly 35 blogs, we have looked at organization from a theoretical context.


    The study of organization theory summarizes the patter of growth of organizations through their lifespan. We have covered initially the phase of looking at organization processes like – centralization etc and its implication on the organization. We then moved on to discuss about the relation between environment and organization.


    Before we proceed, we would love to inform our future plans. Our steady success over the last 9 months of operations have given us the confidence to move to the next leap – A newsletter.


    We would love to listen to our readers what they would love to see in the newsletter. This is the starting point for us to enhancing our ambit of offerings and making it more relevant to the readers of this blog.


    Expecting your response.


    Read in Kannada:

  • Organization Theory – 35 (Institutional Theory)

    In the last blog, we looked at the population ecology model partially. In today’s blog we look at another theory – Institutional Theory.

    Environment puts demands on organization in 2 ways
    1. They make a technical and economic demands that require organizations to produce and exchange their goods and services in a market or a quasi-market.
    2. They may make social and cultural demands that requirer organizations to play particular roles in society and to establish and maintain certain outward appearances.

    Institutions generally have a repeated actions and shared concept of reality. Sometimes actions are repeated because explicitly rules or laws exist to ensure their repetition (legal and political influences). Sometimes activity patterns are supported by norms, values, and expectations (cultural influences); sometimes by a desire to be or look like another institution (social influences).

    In the institutional perspective, the environment is session as providing a more or less shared view of what organizations should look like and how they should behave.

    In this approach the manager would need to analyze the particular organization you should consider how the organization is adapting to its institutional context.

    Read in Kannada:

  • Organization Theory – 34 (Population Ecology theory)

    In the last blog, we looked at the Resource Dependency Theory of relation between organization and environment. In today’s blog we will into another theory – Population Ecology theory.

    Similar to the Resource dependency theory, the Population Ecology theory too starts with assumption that organizations depend on their environment for the resources they need to operate.

    The population ecology assumes that the environment of an organization is assumed to have the power to select from a group of competitors those organizations which best serve the needs. Organizations which share a resource pool are competitively interdependent and the patters of interdependence that they adopt within the group affect the survival and prosperity of individual members.

    The main interest of the theory to explain the evolutionary process of the organization. There are 3 evolutionary processes – variation, selection and retention – which explain the dynamics of a population.

    Variation occurs in a population through entrepreneurial innovation and through the adaptation of established organizations.

    The new organizations that are formed through birth or adaptation provide the range of choice the environment has during the selection process.
    Environment sélects on the basis of fitness – the survival. Retention equals survival.

    This model provides a more detached view of the organizations than they are normally used to taking.

    Read is Kannada:

  • Organization Theory – 33 (Resource Dependency Theory)

    In the last blog, we began our discussion about the relation between organization and environment with the contingency theory. In today’s blog we look at another theory – the Resource Dependency Theory.

    The Resource Dependency Theory suggests that “an analysis of inter-organizational relations within the network of the organization can help managers to understand the power/dependence relationships that exist between their organization and other network actors.

    Every organization depends on its environment for almost all the tangible requirements – raw materials, labor, capital, equipments, and outlets for its produce.  This dependency of the organization on its environment gives the environment a power over the organization. 

    Managers would need to perform this resource dependency analysis by identifying the source of organization’s resources. The next point of focus has to be on environmental actors which can affect these organization-environment relationships and there by the organization. These are generally competitors and regulatory agencies. This is to be followed by sorting these by criticality and scarcity. 

    With this analysis done, an apt strategy would have to be developed by the manager towards addressing these challenges from the resource front. There are numerous ways that have been traditionally followed, we would look at them in different cases at a later date.

    Read In Kannada:

  • Organization Theory – 32 (Contingency Theory Environmental – Organization Relation)

    In the earlier blog,
    we looked at the larger context of International environment and the relevance
    to the managers. Beginning today over the next few blogs we would look at some
    of the theories that highlight the organization-environment relations. Today we
    discuss the first of these theories – Contingency Theory.
    The Contingency
    Theory talks about the relation between the environmental condition and the
    nature of organization that would develop in such an organization. A careful
    observation of the business environment around us and we begin to realize that
    this theory is really true.
    Simply put, this
    theory finds that a stable environment would have the organization with strict
    line of authority, distinct areas of assigned responsibilities etc. Since, this
    resembles a machine with strict rules and predictability – this is called
    mechanistic organization. On the other hand if the environment is very dynamic,
    the organization operating within it would have to be very flexible and
    employees would have the freedom to respond with a fitting reply relevant to
    the context. Given this lively nature, this is called an organic organization.
    Of these 2 types –
    mechanical and organic, none could be said as superior to the other. Each is
    appropriate to different environmental conditions. In stable environment, the
    mechanistic form is advantageous through the standard procedures to perform
    routine activities. Under rapidly changing environment, the organic model
    scores over the mechanistic model or organizations. Flexibility of organic
    organizations, support the need for innovations and adaption.
    To summarize – the most
    effective way to organize is “contingent” upon the conditions of
    complexity and change in the environment – Thus the name “Contingency
    Theory”.
    Read in Kannada: