Technology: How Organizations Turn Inputs to Outputs

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  • 0:07 How Technology Affects…
  • 2:03 Routineness & Complexity
  • 3:06 Unit Technology
  • 4:35 Mass Technology
  • 5:51 Process Technology
  • 7:17 Lesson Summary
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Lesson Transcript
Instructor: John McLaughlin
In this lesson, you will learn about the three different types of technologies used by organizations and how the type of technology used by an organization impacts the structure of that organization.

How Technology Affects Structure

When you think of the word 'technology,' you probably think of all the high-tech devices that you use every day, such as smart phones, high definition TVs, video games, and computer tablets. But the word technology does not mean the same thing as high tech. Any time science is applied to improve a process, technology has been used to make the task easier.

Applying technology can be as simple as using a knife and fork to eat a meal or as advanced as using a robot to perform surgery. Just like people, organizations use technology to make the tasks they perform easier. All organizations produce outputs, and technology is the activities, equipment, and knowledge used by organizations to convert inputs into their desired outputs.

The first thing the founders of an organization do is decide what goals they want their organization to accomplish. Then they determine what type of technology they are going to use to convert their inputs into outputs in order to achieve those goals. Finally, they select the type of structure which best suits the technology they have chosen. So, the technology an organization uses dictates the organizational structure that works best for the organization.

Let's take a look at three organizations that use different types of technologies to convert their inputs into outputs and learn how their organizational structure fits the type of technology they use.

Meet the Scoop Family: dad, Sherbet; mom, Macadamia; and daughter, Carmela. Every member of this family works for a different organization in the ice cream industry. Each of these organizations use a different type of technology to convert their inputs into outputs, and every organization adapts their structure to fit the technology they use.

Degree of Routineness

Different types of organizations use different ways to convert their inputs into their outputs. Some types of conversions are different every time, and some types of conversions are routine and predictable. Every technology has a degree of routineness, which represents the level of predictability and sameness in the process of converting inputs into outputs. The degree of routineness in the technology used by an organization is a factor in determining the appropriate structure for that organization.


Another component of the technology used by organizations which helps to determine the appropriate structure is complexity, which is a measure of the difficulty of the tasks performed necessary to convert inputs into outputs.

So, from a technology perspective, the appropriate structure for an organization is determined mainly by two factors: the degree of routineness in converting inputs into outputs and the complexity of the tasks which are necessary to turn inputs into outputs.

Unit Technology

Some organizations use technology to create unique outputs to suit the individual needs of their customers. These organizations use unit technology, which has a low degree of routineness to convert their inputs into outputs. Unit technology is small-batch production, which is used for custom and made to order goods.

Carmella Scoop works at the Magic Cow Ice Cream Shop. The Magic Cow offers forty six flavors of ice cream with twenty eight different toppings. At the Magic Cow, customers buy sundaes, cakes, and an almost unlimited combination of ice cream and toppings. Since every output at the Magic Cow is unique and custom-made to suit the unique tastes of an individual customer, this organization uses unit technology to convert their inputs into outputs.

Organizations that utilize unit technology use flexible and informal organic-type structures in order to support the low degree of routineness they use when converting their inputs into outputs. An organic structure has a low degree of formalization and departmentalization and provides ample opportunity for decision-making by all members of the organization. It is important that Carmella is able to communicate to all members of her organization and make decisions in order to create the unique outputs for the Magic Cow Ice Cream Shop. The complexity of these tasks is low, which also is best supported by an organic structure.

Mass Technology

Organizations that use technologies with a high degree of routineness to manufacture large quantities of standardized goods sometimes use mass technology to convert their inputs into outputs. Mass technology is large-volume production, which uses repetitive and simplified jobs to produce outputs.

Sherbet Scoop works for Chill Manufacturing, a company that manufactures hand-crank ice-cream makers for home use. Sherbet works on the assembly line, and his job is to securely fasten the crank handles to the freezer units and then send them to the packaging department. Chill Manufacturing uses mass technology to produce a large number of uniform goods utilizing an assembly-line process.

Since the inputs and outputs of this organization are routine and predictable and the tasks are of moderate complexity, Chill Manufacturing uses a mechanistic structure, which provides a high degree of formalization and departmentalization and little opportunity for decision-making by low-level members of the organization. Sherbet performs the same task every day, so the structure of his organization provides a formal working environment that encourages him to provide a consistent output with little opportunity for decision-making.

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