Technology is revolutionizing how companies conduct their affairs. Today, companies no longer have to rely solely on human effort. They are able to combine the labor provided by their employees with sophisticated technology that is able to accelerate the production process (Manzoor, 2012). Firms which have embraced technology have registered a wide range of gains. These include improvements in the quality of products to reduction of the amount of time required for production. Cost savings are another gain being enjoyed by firms that have integrated modern technology into their production processes (Girosi, Meili & Scoville, 2005). The issue of technology and the role that it plays in driving business growth is the subject of this paper. The paper begins with an investigation of how technology enhances organizational efficiency. The paper then proceeds to examine various concepts that concern the adoption of technology by businesses. A look at different types of companies and how their structures are shaped by technology forms the conclusion of the paper.
Impacts of technology on organizational efficiency
It has been stated above that technology is changing how businesses operate. Efficiency is among the elements of business operations that have been shaped by new technologies. Efficiency is concerned with accelerating production while minimizing costs. Given this fact, one would expect reductions in cost to be among the ways that technology promotes organizational efficiency. Many organizations have reported that the costs that they incur have reduced considerably after the adoption of technology (Girosi, Meili & Scoville, 2005). Technology reduces costs by ridding organizations of the need to invest in costly endeavors and resources. For example, simple technologies such as the internet and smartphones have made it possible for companies to let go of employees who performed the roles that are now being done by these technologies. It is true that these companies have endured the painful experience of reducing their workforce. However, the decline in the amounts of costs incurred makes up for this pain. For firms that wish to see a drop in their costs, there is need for technology to be embraced.
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In addition to cost reduction, efficiency is also concerned with enhanced product quality. It is the desire of all companies to release products of high quality and which meet all the needs of their clients. Before the development of the technologies that are in use today, many companies struggled in their efforts to create flawless products. Today, it is possible for companies to perfect their production processes (Schwalbe, 2013). Thanks to automation, the errors and flaws that defined products in the past are no more. Companies are now able to minimize errors. Apart from creating products that will appeal to customers, automation has also allowed companies to minimize costs. This is because errors can be costly.
Speed is another element that constitutes efficiency. It concerns how fast a company can move a product from the production line to the hands of consumers. Modern technology has made it possible for organizations to reduce the amount of time that consumers have to wait before a product reaches them (Schwalbe, 2013). From communication to actual production, technology has reduced the amount of time that business processes take. Amazon is among the companies that have benefited immensely from technology. The adoption of internet has allowed the company to receive and process orders in good time. The company has also adopted technology that has allowed it to deliver orders in good time. Overall, technology has allowed businesses to perform their operations in a timely fashion while incurring very low costs.
Comparison of theories on organizational design
There are a number of theories that have been developed with the goal of shedding light on how organizations are designed and structured. Joan Woodward, Charles Perrow and James D. Thomson are among the scholars who shed light on the influences that shape the structure and design of an organization. While the theories that they developed are largely different, there are some similarities. One of these similarities concerns decision making. Perrow and Thomson recognize that the decision making structures that an organization adopts are shaped by the environment in which it operates. According to Perrow, uncertainties make it difficult for organizations to prepare for the future (“Technology and Structure”, n.d). Organizations that operate in uncertain conditions are unable to develop proper rigid structures. Their structures are designed such that they are able to adapt to the changes in the environment. This view is shared by Thomson. Thomson opined that the structure of an organization is closely linked to the realities in the operating environment. Turbulence and complexities in the environment compel organizations to adopt organic structures (Rodriguez, 2016). On the other hand, mechanistic structures are adopted by firms that operate in environments that are more stable. Woodward also agreed that the environment shaped the structure of an organization. She focused on the role that technology played. She argued that the complexity of production runs determined how sophisticated the structure of an organization will be (“Technology and Structure”, n.d). Woodward believed that complex technologies required more personnel and sophisticated management structures. She also identified how the personnel at the different levels of production were related. These relationships are defined by the complexities of the processes and technologies that organizations use. These three scholars agree that the environment is the primary force that influences the type of structure that an organization adopts.
In the discussion above, focus has been given to the role of the environment in determining the structure of an organization. This is as far as the theories by the three scholars are similar. An examination of the theories reveals a number of differences. One of the differences among the theories regards the business units that are affected by environmental forces to adopt different structures. Woodward focused on the whole organization. She believed that environmental factors shaped the operations of an organization in its entirety (“Technology and Structure”, n.d). On the other hand, Perrow focused on individual departments and how they are affected by changes in technology. Perrow believed that each department adopted distinct technologies that corresponded to their needs and goals (“Technology and Structure”, n.d). For instance, the technologies adopted by the human resource department are different from those used by the finance division. Thomson also narrowed his focus onto departments. Unlike Perrow who argued that different departments use different technologies, Thomson was of the view that departments are interdependent (“Technology and Structure”, n.d). This interdependence means that the departments need to share resources. The structure that the departments adopt should allow for sharing of technology to occur seamlessly. Thomson also recognized that different organizations and departments have different levels of interdependence. The departments that are highly interdependent must be structured in a manner that permits for the technologies to be shared with much ease (“Technology and Structure”, n.d). On the other hand, departments who interdependence levels are low do not necessarily require structures that facilitate easy sharing of technology.
Definitions of concepts
Technical complexity
Technical complexity has to do with the degree of sophistication of a technology. Technical complexity was addressed by Woodward in her discussion on the impacts of technology on organizational structures. According to Woodward, technologies that are complex force organizations to adopt structures that are correspondingly complex (“Technology and Structure”, n.d). On the other hand, technologies of lower sophistication levels are responded to through the adoption of simpler structures.
Task variability
Task variability is a concept that was developed by Perrow in his attempt to provide insights into how technologies are integrated into business processes. Essentially, task variability concerns the number of novel and unexpected events that take place in a process (“Technology and Structure”, n.d). Task variability determines how well an organization is able to adopt a new technology. If there are too many unexpected events, it becomes difficult for the organization to brace itself for these events. This makes the adoption of technology and the development of a rigid and stable structure rather difficult. Organizations need to strive to limit task variability to enhance the adoption of technology.
Analyzability
Analyzability is another concept that Perrow is credited with developing. Basically, analyzability refers to the degree to which an issue can be examined and some sense derived out of it (“Technology and Structure”, n.d). Analyzability is usually used in the context of problems. Problems should be analyzable. When a problem has been analyzed, procedures can then be developed and used to provide solutions. On the other hand, problems which are not analyzable cannot be tackled using procedures. Instead, one must rely on intuition and their previous experience to identify solutions to the problem (“Technology and Structure”, n.d).
Task interdependence
Task interdependence refers to the degree to which different functions are related and can be performed using similar approaches and resources (“Technology and Structure”, n.d). The examples of recruiting an employee and adopting new technology can be considered. While these tasks are basically different, they are somewhat interdependent. The interdependence is in the fact that the same resources and procedures can be used to accomplish the same tasks. For instance, the recruitment of employees could begin with inviting applications from interested candidates then selecting the most suitable. A similar approach can be used in the procurement of new technology. Bids are invited from interested parties and the selection process follows.
Organizational structures
Different organizations embrace varying structures. The particular structure that an organization adopts is determined mostly by the nature of business that the organization is involved in. In the discussion below, possible structures for organizations in different industries are explored.
A large life insurance company
It would be expected that a large life insurance company would adopt the divisional structure. Essentially, this structure involves setting up divisions which serve different geographical markets (Mills et al., 2006). This structure is adopted by organizations whose operations span large geographical areas. Since a large life insurance company would definitely have a presence in many places, the divisional structure is most appropriate.
A drive-through coffee house
The flat model of organizational structure appears to be the most suitable for a drive-through coffee house. This model is mostly adopted by small establishments with few employees who do not require direct or close supervision (Riggio, 2015). Since the functions that the employees in a coffee house perform are rather mundane, the flat structure would make most sense. This structure would spare the management of the need to supervise the employees closely.
A videogame production company
There are a number of different structures that a videogame production company could adopt. However, the functional structure seems the most appropriate. This structure is characterized by establishing divisions and structures on the basis of the functions performed by departments (Mills et al., 2006). For instance, the finance department is structured in a manner that is consistent with the function that it performs.
A solar technology company
The hierarchal structure is one of the most common structures that organizations have embraced. The defining feature of this structure is that there are different levels of employee relationship. At the highest level there are high-ranking officials who are followed by senior management. Basically, this structure ranks different officials and employees based on their position and role (Morgan, 2015). This structure is most appropriate for organizations which do not require specialized talent. One would expect that a solar technology company would mostly perform routine operations that do not necessarily require specialties. For this reason, the hierarchal model is the most suitable.
In conclusion, technology continues to play a vital role in driving business growth. An increasing number of firms are recognizing the need to adopt modern technology. One of the main gains that are being enjoyed by firms that have embraced technology is efficiency. These firms have been able to lower their costs while improving the quality of their products. These benefits serve to confirm the arguments that Joan Woodward, Charles Perrow and James D. Thomson raised in their respective theories. It is important to note that the mere adoption of technology does not guarantee success. Technology must be accompanied by the right organizational structure.
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