Technology and the Effects on Organizational Design

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Technology and the Effects on Organizational Design

By | April 2011
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Technology and the Effects on Organizational Design
Technology impacts organizations at every level. Organizational technology is defined by Jones (2010) as “the combination of skills, knowledge, abilities, techniques, materials, machines, computers, tools, and other equipment that people use to convert or change raw materials, problems, and new ideas into valuable goods and services” (p. 240). In other words technology determines the level of efficiency of organizations. This paper highlights how technology affects organizational efficiency and provides research to explain this concept. Also, theories by Joan Woodward, Charles Perrow, and James D. Thompson will be reviewed to explain how technology influences organizational structure. Finally, these concepts will be used to predict the structures of four types of organizations.

So how does technology increase organizational efficiency? Basically, technology improves the conversion process from input to output within an organization (Jones, 2010). Technology improves overall efficiency and reduces costs at every level of the conversion process while improving quality and service. This occurs at every stage from input to conversion to output.

At the input stage technological skills, techniques and procedures allow organizations to more effectively, and successfully, handle environmental factors (Jones, 2010). For example, changes in the market can affect pricing from suppliers and the technological skills to find the best pricing for quality materials. During the conversion process the machines, techniques, and procedures established by technology determine the transformation from input to output (Jones, 2010). At this stage improvements in technology means more efficiency and less cost. When input is converted to output technology allows the best possible and most efficient method to transfer goods and services to external stakeholders (Jones, 2010). For example, improved methods to test products, market...
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