The utility of the concept of the organization as a socio-technical system
The Social-technical system simply refer to social and technical system which involve the production and administrative technologies and both formal and informal behavior respective. The social system also includes the organizational culture of the company. The utility of the concept of the organization as social-technical system in an establishment or an organization is a broad concept that entails different aspect and use, which depends on the goals of each company. The organization culture of a company as a long term effect in influences the relative views, choices and goals of such organization.
The structure can be refer to as a “formal decision making framework by which various task are normally divided, grouped and coordinated” (Gemmy, 1998). This is a yardstick for the policy making, proper procedure management and clearly stated goals. “In this form of organization structure, the whole idea is propagated by the top management and there is a diagrammatic display of the relevant organizational structure, job titles, lines of authority and relationship between various department” (Gemmy, 1998).
There are various steps that are usually taken for an effective organization structure such steps are as follows; (1) Review plans (2) list task (3) group task into job (4) group job (5) assign work (6) delegate authority. There are different forms of organization structure in term of power delegation, decentralization and centralization. Centralization refer to the extent to which decision making is concentrated towards the top officials while decentralization form simply refer to the way such decision making is made more closer to the employee, So considering the form of organizational structure of the AES company I would say that its more of a decentralized form of organization. Since decentralization, gives power to the employer it can cause such organization to loose focus of the main organizational goal and also decrease effectiveness but when we consider the long term effect of a decentralized company over the centralized companies in regards to the closeness to the client or customer we tend to see a wider difference in their merits.
The decentralized environment which gives power to the employees makes it possible for such employee who is closer to the customer take quick decision when it is indicated. Competition also mandate power to be decentralized, this can be seen in the case of the company under review the AES such as their change in culture or restructuring in order to be able to effectively fix their culture. As stated by the Roger W. Sant, Their restructuring also favor the expansion of their headquarters. Roger W. Sant said “”We took our own model to an extreme. We took it to an exaggerated level,”(cited Washington Post Company, 2003). He was referring their organizational model which tends to focus more on the centralized form of organization there is a need for paradigm shift towards a decentralized form.
Some of the structure of the organization under review rest upon the form of structure whereby each aspect is conditioned to work independently. The impact on this on the total growth of the company hence the company is trying to change it model. They want to focus more on the management changes and debt restructuring. The organizational approach of the company is that of mechanistic approach because it approach used to be very rigid, clearly defined jobs and a well defined Hierarchical form of structure. The emphasis is more on formalization which is the general view of bureaucratic organizations.
Organization design is the “creation of an organization’s structure, traditionally functional, divisional, and/or matrix” (Gemmy, 1998). The functional organization design has it authority being decided by the group functions and activities while of divisional design operates autonomously and the matrix depends on the form of design that delineate the employees to report to one or two managers. In AES matrix design has been the order of the day and the restructuring is now adapting to the functional approach. The risk of this is that when authority is distributed the company tends to lose focus of the goals and the objectives of the founding principles.
Socio-technical system was defined by the computing case.org as the “intellectual tool to help us recognize patterns in the way technology is used and produced” (computercases.org, 2008). This term is simply used to define the technologies, physical surroundings, people, and procedures. Generally the technology aspect involve the technologies involve in the use of production of the company output and the social system includes people and their habits, core values, behavioral styles. It also involves the reward system. It is the formal power structure which is usually depicted on a company chart and also the informal power structure derived from knowledge and personal influence. It also involves administrative technologies also include communication analysis and control. The social aspect is much concern with the people and the type of decision they take to effectively manage the establishment. The social system includes both formal and informal behavior as well as organizational culture.
The socio-technical system is also a term approach to complex organizational work design which identifies the relationship between the technology and the people in an organization or the interaction between the society’s complex infrastructures and the human behavior. There are four major principles that are implicated when it comes to the socio-technical system; these are responsibility autonomy, adaptability, whole task and meaningful tasks.
The social and the technical aspect should be a joint process which is meant to effectively help develop an organization and not to inhibit it growth but in organization such as the AES there is inhibition of the social system by the technical system. This had great impact on the balance sheet of the company. To achieve the definitive organizational goal either aspect or system must be adequately plan and integrate with one another in order to positively affect the growth of the company and it returns on it investment.
The technical systems of the AES responsible for the restructuring are buying and buildings of plants, safe and clean electricity while the social system involve in the restructuring of the company are the business model, falling in energy prices, entrepreneurial management, including fun in it core value.
The technical systems are the cause of the on going restructuring because the organization tends to focus mainly on the tall form of structure where the entire employee and the managers tend to be confined to their own area of specialization, no interference. These limit the number of employee and also the closeness to customers. This remains a major obstacle to the customer-staff relationship. Hence the AES is undergoing a major culture change as identified by the new CEO to decentralized power and focus mainly on the closeness to the customers.
The major social system that can be attributed to the cause of the restructuring is the failed business model, entrepreneur management structure, falling in energy prices and the currencies devaluation.
The concept of the socio-technical machine is a beneficial one because it adequately integrates the technology and the people involve together but this can be contraindicated if not properly design and maintain.
Allen, G. (1998).The Organizing Process. Modern Management. Retrieved Sept. 1, 2008, from http://telecollege.dcccd.edu/mgmt1374/book_contents/3organizing/org_process/org_process.htm
ComputingCases.org, (2008).A Fixation on the Technical Failures (and Fixes) in the System. Retrieved Sept 1, 2008. From http://computingcases.org/general_tools/teaching_with_cases/general_pitfalls/pitfalls_tech_failures.html
ComputingCases.org(2008). Why a Socio-Technical System? Retrieved Sept. 1, 2008, from http://computingcases.org/general_tools/sia/socio_tech_system.html
ComputingCases.org, (2008).The Search for a Single Cause Retrieved Sept. 1, 2008, from http://computingcases.org/general_tools/teaching_with_cases/general_pitfalls/pitfalls_single_cause.html
ComputingCases.org, (2008).The Rush to Legalism. Retrieved Sept. 1, 2008, from http://computingcases.org/general_tools/teaching_with_cases/general_pitfalls/pitfalls_legalism.html
ComputingCases.org, (2008).The Loose Ascription of “Human Error”. Retrieved Sept. 1, 2008, from http://computingcases.org/general_tools/teaching_with_cases/general_pitfalls/pitfalls_ascription.html
McNeil, Martha (2003). AES’s New Power Center; Struggling Utility Overhauls Corporate (Lack of) Structure. The Washington Post. Retrieved Sept 1, 2008. From http://coursepacks.xanedu.com/pcp/inthenews/Robbins_Mgmt_4e/5.html