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Advanced Manufacturing Technology and Organization Structure: Empowerment or Subordination?

Author

Listed:
  • James W. Dean

    (Department of Management, College of Business Administration, University of Cincinnati, Cincinnati, Ohio 45221)

  • Se Joon Yoon

    (Department of Business Administration, College of Business and Economics, Yonsei University, Seoul, Korea)

  • Gerald I. Susman

    (Center for the Management of Technological and Organizational Change, College of Business Administration, Pennsylvania State University, University Park, Pennsylvania, 16802)

Abstract

Advanced manufacturing technology (AMT) includes such technologies as computer-aided design (CAD) and manufacturing (CAM), as well as computer-integrated manufacturing (CIM). Numerous case studies have found that organization structure (e.g., centralization of decision making) changes when firms introduce AMT, but the findings from such studies have been inconsistent. This paper reports the findings of a large-sample study of the relationship between AMT and organization structure. Two alternative patterns in the relationship between these two concepts were considered. The Marxist perspective, which holds that automation is used by managers as a tool to subordinate the workforce, leads to predictions that AMT will be associated with increasing differentiation (more hierarchical levels and job classifications), centralized decision making, and high levels of formalization (management by rules). The Idealist perspective, which involves the belief that managers should use new technologies to empower the workforce, leads to predictions that AMT will be associated with less differentiation, decentralized decision making, and limited formalization. The study was conducted using questionnaires, which were returned by general managers from 185 firms in the metalworking industries (SIC codes 33-37). The findings provide some support for both perspectives, as AMT was associated with both decentralization of decision making and formalization. We interpret these results as stemming from the characteristics of AMT, particularly integration, flexibility, and risk. Seen in this light, organizations have less need to centralize decisions, as AMT's capacity for integration allows information to be brought together at lower levels of the firm, and its flexibility allows departments to more easily adapt to decisions made by other departments. The risk and expense associated with AMT, however, may lead firms to institutionalize those practices associated with effective use of the technology through formal rules. In other words, formalization may be a mechanism for safely decentralizing. In general, researchers are urged to strike a balance between focusing on the intentions of management and the constraints of the technology when they study technology and organization.

Suggested Citation

  • James W. Dean & Se Joon Yoon & Gerald I. Susman, 1992. "Advanced Manufacturing Technology and Organization Structure: Empowerment or Subordination?," Organization Science, INFORMS, vol. 3(2), pages 203-229, May.
    • Handle: RePEc:inm:ororsc:v:3:y:1992:i:2:p:203-229
    DOI: 10.1287/orsc.3.2.203
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    Citations

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    Cited by:

    1. Heijltjes, M.G., 1996. "The Role of HRM Policies in the Implementation of Advanced Manufacturing Technologies," Research Memorandum 004, Maastricht University, Netherlands Institute of Business Organization and Strategy Research (NIBOR).
    2. Isabel Maria Bodas Freitas, 2011. "Technological learning environments and organizational practices--cross-sectoral evidence from Britain," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 20(5), pages 1439-1474, October.
    3. Jeffrey L. Furman & Florenta Teodoridis, 2020. "Automation, Research Technology, and Researchers’ Trajectories: Evidence from Computer Science and Electrical Engineering," Organization Science, INFORMS, vol. 31(2), pages 330-354, March.
    4. Wong, David T.W. & Ngai, Eric W.T., 2023. "The impact of advanced manufacturing technology, sensing and analytics capabilities, and planning comprehensiveness on sustained competitive advantage: The moderating role of environmental uncertainty," International Journal of Production Economics, Elsevier, vol. 265(C).
    5. Diéguez Castrillón, Mª I. & Sinde Cantorna, A.J., 2004. "Determinantes De La Política De Formación En Empresas Adoptantes De Nuevas Tecnologías De Fabricación Avanzada /," Investigaciones Europeas de Dirección y Economía de la Empresa (IEDEE), Academia Europea de Dirección y Economía de la Empresa (AEDEM), vol. 10(2), pages 115-130.
    6. Fang, Edward Aihua & Wu, Qizhi & Miao, Chaowei & Xia, Jiansheng & Chen, Dezhi, 2013. "The impact of new product & operations technological practices on organization structure," International Journal of Production Economics, Elsevier, vol. 145(2), pages 733-742.
    7. Pongpattrachai, Dichapong & Cragg, Paul & Fisher, Richard, 2014. "IT infusion within the audit process: Spreadsheet use in small audit firms," International Journal of Accounting Information Systems, Elsevier, vol. 15(1), pages 26-46.
    8. Isabel Diéguez & Ana Cantorna & Ana Canto, 2005. "Organizational Training In Manufacturing Firms And Advanced Manufacturing Technologies," Portuguese Journal of Management Studies, ISEG, Universidade de Lisboa, vol. 0(1), pages 57-70.
    9. Tan, Wee-Liang & Zuckermann, Ghil'ad, 2021. "External impetus, co-production and grassroots innovations: The case of an innovation involving a language," Technological Forecasting and Social Change, Elsevier, vol. 164(C).

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