Journal of High Technology Management Research 13 (2002) 157 175

Impact of advanced manufacturing technology on organizational structure

K. Abdul Ghania,*, V. Jayabalanb, M. Sugumarc
a

Department of Mechanical Engineering, Technical Teachers Training Institute, Chennai, India b Department of Mechanical Engineering, Anna University, Chennai, India c Department of Management, Monash University, Churchil Victoria, Australia

Abstract Advanced manufacturing technology (AMT) has been introduced in Indian manufacturing industries to have a competitive edge in the global market. Despite the claims that attractive benefits can accrue through the use of AMT in manufacturing firms, only modest benefits are reported. Productivity of AMT organizations is found to be low even after several years of implementation of AMT. One of the reasons attributed for low productivity is the organizational structure that remains mechanistic and not compatible with new technology in most of the AMT firms. This paper presents a framework to implement AMT in an existing environment with organic structure to achieve superior performance. Data collected from 927 employees of 27 AMT firms in a cross-sectional survey revealed significant information to change existing organizational structure and make it compatible with change in technology to achieve higher productivity. D 2002 Elsevier Science Inc. All rights reserved.
Keywords: Advanced manufacturing technology; Organic structure

1. Introduction Developing countries like India, where technological change is the thrust in manufacturing industries, have introduced advanced manufacturing technology (AMT) to have a

* Corresponding author. Fax: +91-44-254-1126. E-mail address: ritsouth@vsnl.com (K. Abdul Ghani). 1047-8310/02/$ see front matter D 2002 Elsevier Science Inc. All rights reserved. PII: S 1 0 4 7 - 8 3 1 0 ( 0 2 ) 0 0 0 5 1 - 2

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competitive edge in the global market. Despite the claims that attractive benefits can accrue through the use of AMT in manufacturing firms, only modest benefits are reported (Virmani, 1990). The superior performance of AMT firm, even in higher levels of AMT, in terms of maximum labor productivity, superior quality, and greater flexibility in response to changing market demand is still to be achieved. Firms, in which lower levels of AMT have already been introduced, are unable to progress to higher levels to achieve manufacturing prosperity (Datta, 1990; Nemetz & Fry, 1988; Virmani, 1990). One of the greatest challenges facing manufacturing firms in todays business environment is the implementation of AMT in the existing environment, which has effected a number of changes in the work place. Technology used in an organization affects the structure of work. Reorganization of AMT firm consequent to implementation of AMT is usually feared because it means disturbance of the status quo, a threat to peoples vested interests in their jobs and an upset to established ways of doing things. For these reasons, the needed reorganization is often deferred, resulting in a loss of effectiveness and an increase in the cost of manufacturing (Kotter & Schlesinger, 1979). If the organizations design is not appropriate for the work to be performed, behavioral problems can easily set in and the effectiveness of the decision-making system can be seriously undermined. Drucker (1988) has stated:
Organizational structure is an indispensable means and the wrong structure will seriously impair business performance and may even destroy it. Future organizations will be information based and composed largely of operation specialists and will have no middle management at all.

The firms technology influences the organizational structure at operational and administrative levels, and consequently, the performance of the firm (Parthasarthy & Sethi, 1992). New technologies are most likely to yield productivity gains when they are coupled with changes in the organizational and human behavior (Preece, 1995). One of the reasons attributed to the low performance of AMT firm is the organizational structure of that firm which remains static in the changed environment. The most neglected factors during the implementation of AMT are overall strategic plan, organizational design, design of jobs, skills of blue-collar employees and their work attitudes (Bailey, 1993). In a developing country, the ability to adopt technological change is the measure of success (Noori, 1997), as the firms face many uncertainties. We are interested to know about the impact of new technology on organizational structure, whether the organizational structure remains the same or different after the implementation of AMT. There has been substantial research documenting the effects of AMT on organizational structure, but much has been in a developed countrys perspective and less is known about the implications for a developing country. A systematic empirical investigation of the effects of AMT on employees and organizational structure is required in a developing economy to understand the implications of AMT in the context of their socioeconomic conditions. Such a study is important because many firms which have already implemented AMT and invested huge money in their manufacturing operations face problems and are unable to progress to higher levels of AMT. Hence, this research is a more broad-based quantitative investigation

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of change in organizational structure, consequent to technological change with a framework to implement new technology in the existing environment.

2. Conceptual framework The framework conceptualized by Bailey (1993) and adapted by Ghani and Jayabalan (2000) describes a firms technology as an endogenous variable, following the evolutionary models that undergoes frequent adaptations to remain technically competitive. Any change in the market demand affects the product of a manufacturing firm and forces it to redesign the product. Many times the existing technology has been inadequate to incorporate the required changes in the products. Hence, the firm is forced to introduce new technology to remain competitive in the market. The framework links the technology, the organizational structure, the employees, and the product of a manufacturing firm, providing for interactions between the four variables (Bailey, 1993). The degree of fit among these four affects the firms performance on various dimensions (Ford & Saren, 1996; King & Anderson, 1995; Preece, 1995). The framework posits, inter alia, that: (1) the adoption of AMT would suggest that a firms technology is evolutionary; (2) a firms technology would influence both its operational and administrative structures to change; (3) the technological change would affect and demand changes in design and manufacturing activities; (4) consequently, jobs/tasks of employees have to be redesigned resulting in change in job characteristics; (5) superior performance may be achieved by maximum fit between technology, structure, and employees; and (6) implementation of new technology affects work and work place. Technological change is necessary not only for the survival of business but also for maintaining its competitive edge and growth. The adoption of new technology has a significant bearing on human relations within the firm. A firm is recognized to be successful if it displays its ability to assimilate technological change without impinging on the harmony of human relations of its employees. The technological choice, which is evolutionary in nature, depends on the prevailing technological development in the industry. AMT has been introduced over the years in piecemeal fashion in Indian manufacturing firms. Organizational structure has been classified into product, process, or combination and tall or flat type. A typology that subsumes most classifications and that has become popular is the mechanisticorganic structure (Burns & Stalker, 1961) also referred to as bureaucratic adhocratic (Parthasarthy & Sethi, 1992). A structure is considered mechanistic to the extent that its behavior is standardized, but it is considered organic (or adhocratic) when standardization is absent (Mintzberg, 1979). Organizational structure is considered as a function of the firms environment (Lawrence & Lorsch, 1969) and technology (Woodward, 1965). Mixed results have been obtained in research pertaining to technologystructure relationship. However, the body of literature involving technologystructure investigation is significant enough to warrant serious consideration while discussing structure (Parthasarthy & Sethi, 1992). The framework proposed in this research therefore includes technology relating to the structure.

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3. Proposed framework Technology is not only artifacts of tools and machines but also a form of knowledge comprising the entire gamut of technologies as well as the management with their total hardware and software contents. Technological change, a dynamic and multidimensional phenomenon, is responsible for lasting social changes and rapid economic development. It is conceptualized within the framework of an evolutionary epistemology of technological knowledge. It can be a modification of the existing technology or emergence of new technology like computer-based manufacturing technology (Lowe, 1995; Parayil, 1991). AMT has emerged as new technology which is defined as a group of integrated hardware-based and software-based technologies which, if properly implemented, monitored, and evaluated will lead to improving the efficiency and effectiveness of the firm in manufacturing a product (Yousseff, 1992). It includes a variety of computerized technologies such as computer-aided design (CAD), computer-aided manufacturing (CAM), flexible manufacturing system (FMS), automated material handling (AMH), automated storage/retrieval system (AS/RS), and so on (Hunt, 1987; Snell & Dean, 1992). In addition to machine tools for design and manufacturing, AMT includes computer-aided techniques for plant management such as management information system (MIS), computer-aided process planning (CAPP), material requirement planning (MRP), artificial intelligence (AI), and so on. Computer integrated manufacturing (CIM), which leads to a personless factory, has also been added to AMT (Hunt, 1987). Currently based on the automation and integration of manufacturing activities, AMT has been classified into four levels as stand-alone machines in Level 1, manufacturing cells in Level 2, linked islands in Level 3, and integrated manufacturing in Level 4 (Meredith & Hill, 1987; Snell & Dean, 1992). Implementation of AMT in the existing environment is illustrated in Fig. 1. The adoption of AMT will not ifso-facto guarantee superior performance but will further require changes in organizational characteristics. Many firms, which have implemented

Fig. 1. Implementation of AMT with organic structure.

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AMT, followed the evolutionary approach where the expected outcomes would be achieved over a period of time.

4. Organizational structure The organizational structure is defined as the formal allocation of work roles and administrative mechanism to control and integrate work activities. Traditional structure based on the specialization of task and hierarchical management may be inappropriate to the new technology and the changing internal environment in which they operate. The structure of a firm is more difficult to alter since change involves redefining jobs, changing the reporting relationships, and even eliminating some units. Studies on organizational theory assert that technology has an influence over organizational structure (Harvey, 1968; Lawrence & Lorsch, 1969; Reimann, 1980; Singh, 1986; Woodward, 1965). Many of the AMT firms operate under traditional structure which is mechanistic, more suitable for long runs of standardized production (Burns & Stalker, 1961). The models of organizational design are mechanistic or organic. The mechanistic design is synonymous with the bureaucracy, tall and centralized in that it has extensive departmentalization, high formalization, downward communication, and little participation by low-level employees in decision-making. The organic model is flat and uses cross-hierarchical and functional teams. It has low formalization, lateral and upward and downward communication networks, and high participation in decision-making (Burns & Stalker, 1961; Mintzberg, 1979). The determinants of organizational structure, which decide an organization as mechanistic or organic, are strategy, size, technology, and environment. In addition, the employees behavior and their individual differences also have to be considered for organizational design (Dalton, Todor, Spendolini, Fielding & Porter, 1980; James & Jones, 1976; Snizek & Bullard, 1983). Organization literature asserts about the fit between technology and structure for better performance (Alexander & Randolph, 1985; Prasad, 1994). A wrong structure will seriously impair business performance and may even destroy it (Drucker, 1988). The characteristics of organizational structure may be explained in terms of division of task, job description, decision-making, communication, control system, coordination, span of control at supervisory level, vertical levels, and ratio of white-collar to blue-collar employees. The psychological characteristics are motivation, group relations, leadership style, and reward. The skill characteristics are operators multiskills, supervisory skills, and skill distribution among the employees. The changes in the above characteristics of an organization with reference to the change in technology determine the behavior of organization. A firms position can be identified on the mechanisticorganic continuum and can be measured by using a semantic differential scale comprising bipolar dimensions (Parthasarthy & Sethi, 1992).

5. Planned change process Change is a complex process. Change activity, which is intentional, goal oriented, and purposeful is called planned change process (PCP). The purpose of PCP is to improve the

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ability of the organization to adapt to changes in its environment and to change employees behavior. A planned change in the context of technological change is to make changes in the structure of organization. The ability of the planning system depends on how the management focuses its efforts successfully, passes through the preparation stage where appropriate skills, attitudes, procedures, and structure of organization could be built on to harnessing the potentials of the AMT. Not only is the planning system important in motivating the initial process of strategic decision-making, but it also plays a central role in enabling firms to maintain a proactive edge by anticipating problems of implementation. The dimensions of planned change efforts (PCE) are communication, decision-making, control system, coordination, motivation, group relations, reward, training, involvement, employee counseling, facilitation and support, negotiation, incentives, and manipulations (Pareek, 1981). The degree or the level of planned change effectiveness, which determines a firm as reactive or proactive, can be measured by using an instrument (Ghani, 2001). Change is inevitable in the history of any organization. Organizations that do not change or keep pace with the changing environment soon become defunct. To function effectively, organizations have to achieve an equilibrium which is dynamic within the internal environment in terms of technology, structure, employees, and the external environment in terms of social, political, economic, and cultural factors. Hence, organizations have to change, adapting to the changing environment. The change in technology affects any organization when it is implemented. The change forces the organizations to cope with the environment to become more adaptive, otherwise they become extinct (Kotter & Schlesinger, 1979). Technology changes faster than peoples behavior. Any attempt to change the organization to meet changes in the technology generally takes place before the majority of people are ready for it. Thus, while the process of organizational change is going on, a parallel process of preparing employees to accept the change is necessary. In many ways, the introduction of the new technology is as painful for traditional management as it is for traditional employees.

6. Organizational performance The framework suggests that superior performance results when there is a fit between AMT and organizational structure. David, Pearce II and Randolph (1989), Parthasarthy and Sethi (1992), Rogers and Larson (1984), and Woodward (1965)concluded that the best fit between technology and structure was responsible for better performance of AMT plants. As the structure is evolutionary in most of the Indian manufacturing firms, the fit between technology and structure is not achieved even after several years of implementation of AMT (Ghani & Jayabalan, 2000). Hence, the performance of those firms is modest. When a PCP is initiated before the introduction of AMT to make appropriate changes in the organizational structure, the performance will increase (Ghani, 2001). For organizational scientists, the performance of organization is the productivity of that organization. Process technology has a significant impact on the operational effectiveness of a plant and hence its productivity (Sumanth, 1998). Though AMT has major benefits like faster machine

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cycle time, greater reliability, reduced inventory, saving on labor, greater flexibility, and improved quality (Uzumi & Swanson, 1990), the productivity of the AMT plant will improve only when it is integrated with the organizational structure.

7. Review of literature If the objective of implementing AMT is indeed relatively uniform, the question becomes whether their impacts on different firms are similar as well. It is more or less evident from the literature and the subjective reactions generated from the industrial personnel and academicians that the impact of AMT on organizational structure is different and is in fact mediated by a variety of individual and organizational factors. To explore this more systematically, an extensive review of literature published in the research journals, proceedings, and books in developed countries as well as developing countries in the last two decades was made. The related literature offers insights into the implementation process of AMT and change in organizational structure. Studies pursuant to the development and implementation of AMT suggest various changes to be made in organizational structure. A critical review of literature done in the area of organizational implications of AMT is presented here. Woodward (1965) was the first to empirically demonstrate the interaction of technology with organizational structure to influence performance. She found that a linear relationship exists between technology and structural measures such as the number of hierarchical levels, span of control, and personnel ratios. Blau, Falbe, Kinley and Tracy (1976) investigated how technology influenced organizational structure. The Okayama study (Marsh & Mannari, 1981) found out that technology affected all the aspects of structure labor inputs, complexity, span of control, costs, and wages. Randolph (1981) suggested that an organization must be designed with a proper mix of technology, structure, and human behavior if it is to achieve goals and accomplish its tasks. Fry (1982) found that a stronger relationship between technology and structure existed at the group level than at the organization level. Kim and Utterback (1983), in their research study based on crosssectional analysis, revealed that influence of technology on structure in a developing country was different from a developed country. Rogers and Larson (1984) observed that AMT was closely associated with organizational structure where performance was more important than formal position. Cleveland (1985), Madique and Hayes (1984), and Naisbitt (1984), in their studies of AMT firms, reported that the hierarchy such as rank, seniority, and specialization is often ignored or eliminated. Boddy and Buchanan (1986) revealed that new technology influences organizations to change vertical levels, middle management levels, and decision-making pattern. Nemetz and Fry (1988) identified the dimensions of AMT organization as organic with a narrow span of control, few vertical levels, high integration, decentralized decision-making, horizontal communication, adoptive behavior, group rewards, and self-regulatory. David et al. (1989) examined the linkages between technology and structural fit. They found that the best fit between them was responsible for better performance. Several studies

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have examined the fit between technology and structure as a predictor of group performance (Alexander & Randolph, 1985; Campbell & Gingrich, 1986; Kozlowski & Hults, 1986; Meredith, 1987). Parthasarthy and Sethi (1992) asserted that superior performance could result when there is a fit between AMT and the structure of organization. Sharit, Chang and Salvendy (1987) and Susman and Chase (1986) concluded that maximum performance of operators depends on the multiskill practices. There is no substantial research in India in the area of organizational technology and the fit between technology and structure. The following studies were reviewed in general. Kakar (1972) opined that there was a high degree of control of tasks of subordinates by superiors in organizations in India. Chowdhary and Prasad (1978), in a study of public sector undertakings, found that technical delegation was the highest and financial delegation was the lowest. Prasad (1994), based on the various studies on the relationship between technology and organizational structure, asserted that the type of technology would influence the type of organizational structure. The findings of the research studies are summarized as follows: (1) technology has an influence over organizational structure, (2) there must be a fit between technology and structure for superior performance, and (3) the type of AMT organizational structure is organic. While these studies are optimistic about the influence of technology on structure, there are studies to indicate that there is no substantial relationship between technology and structure (Lincoln, Hanada, & McBride, 1986; Mohr, 1971; Reimann, 1980). Considering the enormous studies, which consistently focus and reiterate that technology has an influence over structure, this researcher has followed the optimistic approach of fit between technology and structure for superior performance.

8. Hypotheses A large number of studies on organizational theory literature assert that technology has an influence over organizational structure. If the organizational structure is not appropriate for the work to be performed, the wrong structure will seriously affect business performance. Hence, a study of organizational structure of AMT firms during and after the implementation of new technology is necessary to suggest approaches to new organizational design. Changes in organizational structure consequent to the implementation of AMT will enhance the productivity. The objective of this research was to study the changes in organizational structure of AMT firms consequent to the technological change. The following hypotheses were proposed: Hypothesis 1: There will be a significant difference in the means of organizational index (OI) of AMT plants (a) between AMT levels and (b) between the years of implementation of AMT at the same proactive level (PL). Hypothesis 2: There will be a significant difference in the means of OI of AMT plants between their PLs at the same level of AMT.

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Hypothesis 3: There will be a significant positive association between OI of AMT plant and its total productivity.

9. Research methodology The purpose of this research was to study the impact of AMT on organizational structure in AMT firms. To have sound results, a cross-sectional design with statistical control was selected. To test the hypotheses proposed, the data required were: data to measure the level of AMT, data to measure the PL, and data to measure the OI of each AMT plant. The variables were: advanced manufacturing technology level (AMTL) and the year after the implementation of AMT (AMTY) as independent variables, PL as an influencing variable, organic index (OI) and its factors as dependent variables. As this research was to study the impact of AMT on organizational structure during and after the implementation of AMT, the sample base was confined to AMT firms. Since the AMT has been implemented in selected AMT plants, the unit of analysis was the AMT plant of each AMT firm. The population to which the results have to be generalized is the AMT firms in the region. More than 65 large firms and 100 small firms have been using AMTs in their manufacturing activities. These firms located in different parts of the region, manufacture and export a variety of products like heavy engines, heavy vehicles, machine tools, engine pistons, textile machinery, automobile accessories and spares, electrical machines and components, twowheelers, and cutting tools. The sample base was the blue-collar employees, supervisors, and managers of large manufacturing plants where AMT has been implemented. As it was researched that the impact of technological change was more visible in large-scale manufacturing companies, only firms having employees about 1000 were identified (Bamber & Landsbury, 1989; Bessant, Levy, Ley, Smith & Tranfield, 1991; Boddy & Buchanan, 1986; Ghani & Sugumar, 1999; Rhodes, 1994). Formal letters seeking permission for data collection were addressed to 35 large AMT firms in the region identified from the directory of industries. Out of 35, 27 firms accorded permission. The common feature among all the firms was that all of them were doing metal cutting operations in their AMT plants. The understanding was not to disclose the identity of the firms anywhere in the research or elsewhere. A preliminary survey to identify the AMT firms into four groups based on the technology level, three groups based on the PL and three groups based on the year of implementation of AMT was made and categorized accordingly. The sample of 27 AMT plants was categorized into three groups based on AMTL (as there was no plant using AMTL 4), PL, and AMTY of AMT plants. There were nine AMT plants in each of three PL, three in each of the first, fifth, and ninth year of implementation of AMT at AMTL 1, 2, and 3. The first group of nine AMT plants was at a low PL (PL 1), the second group of nine AMT plants was at partially PL (PL 2), and the third group of nine AMT plants was at a high PL (PL 3). The sampling matrix is shown in Fig. 2. Each AMT plant has been identified by an alphabet P followed by a three-digit number. The first digit from the left indicates the level of AMT, the second, PL, and the third, year of implementation of AMT. Thus, P219 indicates a plant at AMTL 2, PL 1, and AMTY 9.

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Fig. 2. Sample matrix with cross sectional survey design.

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Instruments developed and validated by Ghani (2001) were used to measure the AMT level (AMTL), PL, and OI of each AMT plant. The extent or degree of the use of AMT in each plant was determined by the mean score obtained from the total score on a 10-point scale, which indicates the plants position in the AMT scale. The instrument to measure the PL of each AMT plant had 22 items on the following dimensions: communication, motivation, group relations, rewards, involvement, training, employee counseling, facilitation and support, negotiation, incentives, and manipulations. The PL in each plant was determined from the mean score obtained from the total score marked on a five-point Likert scale from not at all to great deal. The instrument to measure OI (Ghani, 2001) consisted of 16 factors moving from points 1 to 5 from mechanistic to organic of AMT organization by using a semantic differential scale, comprising the bipolar dimensions on division of task, job description, decision-making, communication, control system, coordination, span of control, vertical levels, ratio of whitecollar to blue-collar employees, motivation, group relations, leadership style, reward, operator skills, supervisory skills, and skill distribution. The respective dimensions were single task variety of task, formal/standardizedinformal/flexible, centralizeddecentralized, vertical and directivevertical and lateral, formal rulesinformal rules, work standardmutual adjustment, lowhigh, many minimum, lowhigh, economic economic and noneconomic, formal/ impersonalinformal/personal, authoritariandemocratic and participative, individual/productiongroup/productiongroup/innovation, singlemultiskills, specificintegrative skills, and lowhigh. Vernacular versions of the instruments were used in places where the blue-collar employees knew only local language. The reliability of the vernacular instruments was established following the appropriate statistical techniques. Technology has a significant impact on the operational officiencies of a plant. Many companies use the labor productivity to justify new technologies. Partial productivity perspective has been used in many companies. This author has selected total productivity as a measure of improvement because it takes into consideration the joint and simultaneous impact of all the input resources including the new technology machines on the output. This measure has received much attention over the past 10 years as evident from case studies (Sumanth, 1998). The total productivity model defined by Sumanth (1998) is the ratio of total tangible output to total tangible input. A questionnaire developed to measure total productivity of each AMT plant included human and material resources inputs, fixed and working capital, energy input, and value of finished and partially finished units of output (Ghani, 2001).

10. Data collection The required data were collected by administering the instruments directly to the respondents in all 27 AMT plants. Prior to their participation, they were assured of complete confidentiality of their responses and informed that only generalized findings would be reported to the company. As each AMT plant has been located at different places, geographically ranging from 5 to 700 km, data collection process took nearly 6 months for all the four instruments. The number of completed instruments totaled 927 for each

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Table 1 Means, standard deviations of organizational index and productivity of AMT plants AMTY# First year PL ! AMTL ! SMPL ! OI M S.D. TP M S.D. TP M S.D. TP 1 1 35 28.49 2.42 0.88 37 28.54 2.20 0.90 34 28.53 2.10 1.11 2 39 28.87 2.42 1.04 40 29.63 2.60 1.12 33 28.39 2.26 1.23 3 41 29.00 2.54 0.98 32 29.13 2.79 1.03 30 29.38 2.11 1.20 2 1 37 34.04 3.30 1.93 35 35.14 2.35 2.58 34 36.74 3.02 2.99 2 35 36.49 3.26 2.29 32 35.55 2.94 2.60 31 37.71 1.95 3.10 3 34 38.47 2.84 2.74 33 37.39 2.18 2.67 35 37.80 2.98 3.27 3 1 32 45.81 3.13 2.11 30 47.19 2.93 3.73 37 53.32 2.26 4.17 2 30 47.11 3.13 3.21 38 49.84 2.73 3.99 31 55.63 2.61 4.23 3 36 49.33 2.50 3.60 36 51.51 2.42 4.09 30 58.67 2.25 4.27

Fifth year

SMPL ! OI

Ninth year

SMPL ! OI

AMTY year after implementation of AMT; PL proactive level; AMTL AMT level; SMPL sample; OI organizational index; M mean; S.D. standard deviation; TP total productivity of AMT plant.

instrument in 27 AMT plants, which worked out to be 44.78% of 2070 blue-collar employees, supervisors, and managers. The total productivity of each AMT plant was measured by using the instrument designed by Ghani (2001) during 19981999 for a period of 12 months.

11. Measures The level of AMT (AMTL) of each plant was obtained from the scores of individuals. The degree or extent of the use of the particular AMTL was measured by the instrument administered to 30 supervisors and production managers of each plant. This score enabled to choose the best plant based on the maximum use if there is more than one in any cell. The PL of each plant was obtained from the scores of blue-collar employees, supervisors, and managers. Change in organizational structure of each AMT plant was measured in terms of

Table 2 Results of two-way ANOVA for testing Hypothesis 1 at PL 1 Source of variation Between AMTLs Between AMTYs AMTLs AMTYs Residual Total Sum of squares 41.316 19.243 306.038 3563.473 3930.067 Degrees of freedom 2 2 4 312 320 Mean square 20.658 9.621 76.509 11.421 12.281 F statistic 1.809 0.842 6.699 Significance of F .369 (NS) .669 (NS) .000***

NS not significant. *** Significant at P < .001.

K. Abdul Ghani et al. / Journal of High Technology Management Research 13 (2002) 157175 Table 3 Results of two-way ANOVA for testing Hypothesis 1 at PL 2 Source of variation Between AMTLs Between AMTYs AMTLs AMTYs Residual Total Sum of squares 602.819 938.847 661.887 2344.239 4547.792 Degrees of freedom 2 2 4 297 305 Mean square 301.409 467.427 165.472 7.893 14.899 F statistic 38.187 59.473 20.964

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Significance of F .000*** .000*** .000***

*** Significant at P < .001.

OI from the scores of the above employees. The means and standard deviations of OI of AMT plants are given in Table 1. The total productivity of each AMT plant was obtained from the records of concerned AMT firm.

12. Results and analysis Impacts of AMT on organizational structure was investigated to explore the underlying pattern of relationships between AMT and organizational characteristics. The inquiries may be stated as (1) Is technology, particularly AMT, related to organizational structure? (2) Does the change in organizational structure evolutionary? (3) What possible changes may be incorporated with AMT? and (4) What insights do these findings hold to achieve higher performance of AMT plants? Analysis of variance was performed to test Hypothesis 1(a) and (b) and Hypothesis 2 to determine whether the difference in the means of OI of the AMT plants is significant between AMTLs and AMTYs? Tables 2, 3, and 4 show the results of two-way ANOVA performed for testing Hypothesis 1 at PL 1, 2, and 3 by using SPSS version 6.0. This statistical model of ANOVA is a fixed model wherein the AMT plants were categorically selected based on the AMTL and AMTY; the interaction effects have nothing to do with the main effects (Guilford, 1978). Hence, only the main effects have been considered in the

Table 4 Results of two-way ANOVA for testing Hypothesis 1 at PL 3 Source of variation Between AMTLs Between AMTYs AMTLs AMTYs Residual Total Sum of squares 3681.525 549.991 579.344 2641.968 7452.828 Degrees of freedom 2 2 4 291 299 Mean square 1840.763 274.995 144.836 9.079 24.553 F statistic 202.751 30.289 15.953 Significance of F .000*** .000*** .000***

*** Significant at P < .001.

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Table 5 Results of two-way ANOVA for testing Hypothesis 2 at AMTL 1 Source of variation Between PLs Between AMTYs PLs AMTYs Residual Total Sum of squares 18,873.111 174.409 456.581 3338.607 23,059.132 Degrees of freedom 2 2 4 302 310 Mean square 9436.555 87.204 114.145 11.055 F statistic 853.601 7.888 10.325 Significance of F .000*** .000*** .000***

*** Significant at P < .001.

ANOVA. The difference in the means of OI of AMT plants between AMTLs has been found to be insignificant at PL 1 and significant at PL 2 and 3 ( P < .001). The result indicates that AMT has no effects on organizational structure of AMT plants at low PL, but has significant effects at high PL. Hence, it is evident that the organizational structure of AMT plants has been found to have changed with the implementation of AMT and the change is significant at high PL. In developing countries, there are several manufacturing plants which are reactive in nature (less proactive). When the new technology has been introduced in those plants, the expected changes in the organizational structure do not occur even after the pay back period. However, in those firms that are proactive in nature, the organizational structure of AMT plants is different. This finding is in consonance with Blau et al. (1976), Boddy and Buchanan (1986), David et al. (1989), Marsh and Mannari (1981), Nemetz and Fry (1988), Randolph (1981), Rogers and Larson (1984), and Woodward (1965). The difference in the means of OI of AMT plants between AMTYs has been found to be insignificant at PL 1 and significant at PL 2 and PL 3 ( P < .001). The organizational structure of AMT plants at low PL (PL 1) has been found to be the same at AMTY 1, 5, or 9 whatever be the level of technology (AMTL). However, it has been found to be significantly different between the years of implementation of technology viz., AMTY 1, 5, and 9, when the AMT plants are at high PL (PL 2 or 3), The inference is that the organizational structure of AMT plants is significantly different between AMTLs or AMTYs only when those plants are at high PLs. The hypothesis (Hypothesis 1) that there will be a significant difference in the

Table 6 Results of two-way ANOVA for testing Hypothesis 2 at AMTL 2 Source of variation Between PLs Between AMTYs PLs AMTYs Residual Total Sum of squares 21,087.086 328.336 2172.715 2683.963 26,472.570 Degrees of freedom 2 2 4 300 310 Mean square 10,543.543 164.168 543.179 8.947 85.950 F statistic 1178.505 18.350 60.714 Significance of F .000*** .000*** .000***

*** Significant at P < .001.

K. Abdul Ghani et al. / Journal of High Technology Management Research 13 (2002) 157175 Table 7 Results of two-way ANOVA for testing Hypothesis 2 at AMTL 3 Source of variation Between PLs Between AMTYs PLs AMTYs Residual Total Sum of squares 31,789.347 27.979 95.329 2527.110 34,514.352 Degrees of freedom 2 2 4 298 306 Mean square 15,894.673 13.990 23.832 8.480 112.792 F statistic 1874.320 1.650 2.810

171

Significance of F .000*** .194 (NS) .026*

NSnot significant. * Significant at P < .05. *** Significant at P < .001.

means of OI of AMT plants between AMTLs and AMTYs at the same PL has been accepted only at high PL. Results of two-way ANOVA for testing Hypothesis 2 at AMTL 1, 2, and 3 are shown in Tables 5, 6, and 7. The difference in the means of OI of AMT plants between PLs (PL 1, 2, and 3) has been found to be significant ( P < .001) at AMTL 1, 2, and 3. The organizational structure of AMT plants has been found to be significantly different ( P < .001) between their PLs at the three levels of AMT. It is clearly evident that the PL has emerged as an influencing factor in reorganizing the organizational structure of AMT plants when AMT is implemented. The hypothesis that there will be a significant difference in the means of OI of AMT plant between the PLs at the same level of AMT has been accepted. The changes in the organizational structure of AMT plants with AMTL/AMTY/PL are shown in Fig. 3. The OI of AMT plants with low PLs are found to be the same irrespective of the level of AMT or AMTY. However, the OI of those AMT plants at high PLs has been found to increase with AMTL at the three levels of AMTY. Total productivity (mean) of each AMT plant obtained for a period of 12 months is shown in Table 1. Correlation between the variables OI and total productivity was found out by Spearmans correlation coefficients. The correlation coefficients obtained are shown in Table 8. The correlation coefficients between OI and total productivity have been found to be insignificant at PL 1 and positive and highly significant ( P < .001) at PL 2 and 3. The results

Table 8 Results of Spearmans correlation coefficients for testing Hypothesis 3 OI TP PL 1 PL 2 PL 3 PL 1 +.0021 PL 2 +.9713 PL 3 +.9502 Significance NS P < .001 P < .001

OI organizational index; TP total productivity; NS not significant.

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indicate a significant positive correlation between OI and total productivity of AMT plants at high PLs. Hence, Hypothesis 3 is accepted for a significant correlation between OI and total productivity of AMT plants only at high PLs. This finding is in consonance with Alexander and Randolph (1985), Parthasarthy and Sethi (1992), Rogers and Larson (1984), and Woodward (1965).

Fig. 3. Changes in the organisational structure of AMT plant when AMTL/AMTY/PL increases.

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13. Conclusion The impact of AMT on organizational structure in developing countries lacks a body of research studies. The research findings present the interrelationships between the variables which were analyzed and investigated. Following the evolutionary model of technology in the socioeconomic environment, the adoption of new technology will further require appropriate changes in organizational structure. The successful AMT plant can be distinguished from the unsuccessful one by comparing the organic index of the organizational structure. The findings of the research based on the results obtained are reported below. At a macro level, mechanistic structure is evident in AMT plants as long as the plants remain at low PL. The structure of AMT plants does not show any change when the level of AMT increases as long as the PL is low. However, at high PLs, the mechanistic structure of AMT plants has been found to change significantly into an organic structure. A good, planned change effectiveness system exemplified by its score of analysis and adaptive ability may be facilitating a better synthesis between performance gaps and technologys potential to focus organizational attention in extracting much higher levels of performance. The findings of this research reiterate the importance and the need for proactive planning to facilitate changes in the organizational structure, in order to get productivity gains. Change is always difficult to implement and it is more difficult for organizations that have been designed to be rigid for a particular technology. The traditional organizational structure will increasingly become obsolete. Large manufacturing plants have been slow to adopt the new technology primarily because they have been so successful with traditional mechanistic organizations. Many plants have failed to restructure their operations to take advantage of the benefits of new technology. The technological change in an existing organizational structure examined in this study has no effect on the organizational structure of several AMT organizations, which is mostly reactive in nature (less proactive), but has significant effects on the structure of AMT organizations which are proactive. The research findings reiterate a series of changes in the AMT organizational structure for higher performance.

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