Managing Technolo gy and Innovatio n

Chapter Seventeen
McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives
LO 1 List the types of processes that spur development of new technologies. LO 2 Describe how technologies proceed through a life cycle. LO 3 Discuss ways to manage technology for competitive advantage. LO 4 Summarize how to assess technology needs.
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Learning Objectives (cont.)

LO 5 Identify alternative methods of pursuing technological innovation. LO 6 Define key roles in managing technology. LO 7 Describe the elements of an innovative organization. LO 8 List characteristics of successful development projects.
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Technology and Innovation

Technology
The systematic application of scientific knowledge to a new product, process, or service.

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Technology and Innovation

Innovation
change in method or technology positive, useful departure from previous ways of doing things.

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Forces Driving Technological Development

1. Must be a need, or demand, for the
technology 2. Meeting the need must be theoretically possible, and the knowledge to do so must be available from basic science 3. Must be able to convert the scientific knowledge into practice in both engineering and economic terms
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Forces Driving Technological Development

4. The funding, skilled labor, time, space,
and other resources needed to develop the technology must be available 5. Entrepreneurial initiative is needed to identify and pull all the necessary elements together.

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Technology Life Cycle

Technology life cycle
A predictable pattern followed by a technological innovation, from its inception and development to market saturation and replacement.

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The Technology Life Cycle

Figure 17.1

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Technology Dissemination Pattern and Adopter Categories

Figure 17.2

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Diffusion of Technological Innovations

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Diffusion of Technological Innovations

An innovation will spread quickly if it
Has a great advantage over its predecessor Is compatible with existing systems, procedures, infrastructures, and ways of thinking Has less rather than greater complexity Can be tried and tested easily without significant cost or commitment Can be observed and copied easily
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Technological Innovation in a Competitive Environment

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Table 17.1

Advantages and Disadvantages of Technology Leadership

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Technology Followership
A managers decision on when to adopt
new technology also depends on the potential benefits of the new technology, as well as the organizations technology skills Following the technology leader can save development expense

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Dynamic Forces of a Technologys Competitive Impact Figure 17.3

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Assessing Technology Needs

Technology audit
Process of clarifying the key technologies on which an organization depends

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Measuring Current Technologies

Emerging
technologies are still under development and thus are unproved

Pacing
technologies have yet to prove their full value but have the potential to alter the rules of competition by providing significant advantage
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Measuring Current Technologies

Key technologies
have proved effective, but they also provide a strategic advantage because not everyone uses them

Base technologies
are those that are commonplace in the industry; everyone must have them to be able to operate

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Assessing External Technological Trends

Benchmarking
the process of comparing the organizations practices and technologies with those of other companies

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Assessing External Technological Trends

Scanning
focuses on what can be done and what is being developed places greater emphasis on identifying and monitoring the sources of new technologies for an industry

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Key Factors to Consider in Technology Decisions

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Framing Decisions about Technological Innovation

Table 17.2

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Sourcing and Acquiring New Technologies

Make-or-buy decision
The question an organization asks itself about whether to acquire new technology from an outside source or develop it itself.

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Sourcing and Acquiring New Technologies

Internal
development Purchase Contracted development Licensing

Technology trading Research

partnerships and joint ventures Acquisition of the owner of the technology

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Managers should ask the following basic questions:

Sourcing and Acquiring New Technologies

1. Is it important (and possible) in terms of competitive advantage that the technology remain proprietary? 2. Are the time, skills, and resources for internal development available? 3. Is the technology readily available outside the company?
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Technology Acquisition Options

Figure 17.4

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Technology and Managerial Roles

Chief information officer (CIO)
executive in charge of information technology strategy and development. coordinates the technological efforts of the various business units identifies ways that technology can support the companys strategy supervises new-technology development

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Technology and Managerial Roles

Technical innovator
A person who develops a new technology or has the key skills to install and operate the technology

Product champion
A person who promotes a new technology throughout the organization in an effort to obtain acceptance of and support for it.

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Technology and Managerial Roles

Executive
champion
An executive who supports a new technology and protects the product champion of the innovation.

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Organizing for Innovation

Unleashing creativity involves
encouraging creativity and celebrating failure

Bureaucracy busting is necessary

because bureaucracy is the enemy of innovation

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3Ms Rules for an Innovative Culture

Table 17.3

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Organizing for Innovation

Development project
A focused organizational effort to create a new product or process via technological advances

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Organizing for Innovation

Sociotechnical systems
An approach to job design that attempts to redesign tasks to optimize operation of a new technology while preserving employees interpersonal relationships and other human aspects of the work

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Table 17.4

Compensation Practices in Traditional and Advanced Manufacturing Firms

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