Technology and Organizational Structure

Technology and Organizational Structure

By: Yudo Anggoro, University of North Carolina at Charlotte

Technology is simply defined as the work performed by an organization (Scott &Davis, 2007). However, we need to take into account that the notion of technology is not limited to the hardware used in performing work, but also including skill, knowledge, and even arrangement of people, machines, and other physical devices (Scott & Davis, 2007; Barley, 1990). Due to rapid development of science, technology has undergone dramatic changes in terms of form and function, and to cope with these changes, some researchers have applied innovation, learning system, and improvisation to the organization (Orlikowski, 2000).

How does technology affect the design of organizational structure? Scott and Davis (2007) note that the organizational structure is designed to reduce uncertainty, to deal with complexity, and to coordinate interdependent tasks. Looking at their argument, we might infer that technology plays a crucial role in organizational structure because uncertainty, complexity, and interdependence are the dimensions of technology. Because of these dimensions, organizations need to exhibit increasing differentiation and structural flexibility. Barley (1990) gives his argument on the relation between technology and structure by noting that this process involves both micro social and macro social forces simultaneously. This argument is supported by Scott & Davis (2007) and Orlikowski (2000) who confirm that socio-cultural factors determine the technology-structure relation. This relation makes sense to me since Barley (1990) delineates structure as an abstract relational patterns or social networks inscribed by such actions and interactions.

The important role of culture in technology-structure relation is highlighted in Morril’s (1991) study. Morill (1991) conducts a study about conflict management among top managers in a Fortune 500 manufacturer that brings impact to the traditional social structure and “rules of the game”. The takeaway from this study suggests that honor- or in this case social similarity- maintain the balance within organizational structure. It is the culture that makes Executives to find similarity in terms of ethnicity, education, and gender to avoid conflict within the structure.

In order to study the use of technology in the organization, Orlikowski (2000) proposes her analytical tools that she calls the practice lens. This practice lens combines two aspects of technology; the technology as artifact and the use of technology. I sense the technology artifacts as something that can be materialized physically. They are tangible phenomenon. At the other side, the use of technology involves the experience of users. Because it depends on the experience of users, people might perceive differently on the use of technology. The use of a practice lens to study technology-structure relation focuses on what people actually do with particular technology in their activities. Orlikowski (2000) illustrates this by giving an example on the use of Notes software in 1989 that changes the collaborative behavior of people in the workplace. This result shows similar findings to Barley’s (1990) study that shows that the incoming of new radiology device influences the traditional division of labor and the professional dominance among radiologists.

Finally, by looking at the forms of organizational structure; from the simple structure to the network structure (Scott & Davis, 2007, p131); we might conclude that as the complexity increases, technology becomes more advanced. As technology developed, the division of tasks becomes more complicated and organizations expand their boundaries. In the basic forms of organizational structure, formalization does matter. But as the structure expands its complexity to network form, low formalization and centralization within the integration of activities are preferable.

References:

Barley, S. (1990). The alignment of technology and structure through roles and networks. Administrative Science Quarterly, Vol. 35:61-103.

Morrill, C. (1991). Conflict Management, honor and organizational change. American Journal of Sociology, Vol. 97:585-621.

Orlikowski, W. (2000). Using technology and constituting structures: a practice lens for studying technology in organizations. Organization Science, Vol. 11:404-428.

Scott, W.R. and Davis, G.F. (2007). Organizations and Organizing: Rational, Natural, and Open System Perspectives. Pearson, Upper Saddle River: NJ.