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Relationship between technology and organizational structure

This is an excerpt from Understanding Sport Organizations 3rd Edition by Trevor Slack.

By Trevor Slack and Andy Miah

While the debate over whether technology determines the structure of an organization is unresolved, some important indicators can be found in the relationship between technology and the different elements of structure. This section reviews some findings on the relationship of technology to complexity, formalization, and centralization.

Technology and Complexity

Findings about the relationship between technology and complexity yield a mixed message. Technologies such as Woodward's mass-production technology, Perrow's routine technology, and Thompson's long-linked technology are generally associated with bureaucratic structures. Therefore, one can expect this type of technology to be related to high levels of task specialization and vertical differentiation. However, specialization as measured by the amount of professional training of the workforce is likely to be low (Hage & Aiken, 1969). When technology is nonroutine, as in Perrow's classification or Woodward's unit production technology, one is likely to find a more organic structure. Here task specialization and the number of vertical levels in the organization will be low, but complexity as measured by the amount of professional training of staff is likely to be high. These mixed results should not be construed as a product of weak or inadequate research. Rather, they serve to underscore a point made by Hrebiniak (1974, p. 408), that both structure and technology are multidimensional concepts and “that when dealing only with general categories of either concept [such as the notion of complexity] it might be unreasonable to assume clear relationships or empirical trends.”

Technology and Formalization

Notwithstanding Hrebiniak's caution about the problems of trying to relate technology to broadly based concepts of organizational structure, a clearer pattern emerges in regard to technology and formalization. Gerwin (1979) reviewed five studies (Blau & Schoenherr, 1971; Child & Mansfield, 1972; Hickson et al., 1969; Hinings & Lee, 1971; Khandwalla, 1974) that showed technology to be positively related to formalization. However, when he controlled for size the relationship disappeared. What Gerwin's review suggests is that the smaller the organization, the greater the impact of technology on formalization.

Technology and Centralization

While there are exceptions (Hinings & Lee, 1971), the majority of studies (Blau & Schoenherr, 1971; Child & Mansfield, 1972; Hage & Aiken, 1969; Hickson et al., 1969; Khandwalla, 1974) have shown a relationship, albeit often small and not statistically significant, between the level of technology within an organization and the extent to which decision making is decentralized. Generally speaking, organizations that employ routine technology will be more centralized; those with nonroutine technology are likely to be decentralized.

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