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Chapter 1:

Management of Technology:
An Overview
???
How AirAsia, Jetstar can offer a fly with lower
price in Airline industry?
How cellcard or ebay generate income?
How ANZ Royal Bank penetrate to Cambodia
market?
Why Kodak failure in film competition?
How 5 stars hotel sale their service world
wide?
2
???
How Cambodia government provide a visa to tourist
via electronic system?
How ATM help bank operation?
How Internet help tour operation and travel agency
to maximize their profit?
How IBM and Intel sell products online?

All answers will discuss through this course.

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Introduction
Technological change is one of the most important sources of change in the
economy.
The capacity for science and technology in some countries is not been
adequately translated into innovative and dynamic business organization. The
economy remains largely dependent on natural resources, traditional
processing and manufacturing and, for the most part, on imported
technologies.
A sound scientific and technological base is essential to economic growth in a
competitive international environment.
With the increasing impact of globalization on business, the scope for
competition is no longer limited by national boundaries or by the definition of
a particular industrial sector.
Management of technology, innovation and information have also emerged as
key requirements for success in the 21st century enterprise.
Thus, proper management of technological change, particularly at the
productive enterprise level, has become the most important consideration for
development. 4
Definition of Technology

All the knowledge, products, processes, tools,


methods, and systems employed in the creation of
goods or in providing services. [MOT, Tarek M.
Khalil p.1]
The application of science and engineering to the
development of machines and procedures in order
to enhance or improve human conditions, or at
least to improve human efficiency in some respect.
[MS. IT Dictionary]
Technology is the technical means people use to
improve their surroundings.
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Differences between science and
technology

Science is the study of why natural


things happen the way they do.
Technology is the use of knowledge to
turn resources into goods and services
that society needs.
Science and technology affect all people.

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Why study technology?

People create technological devices and


systems to satisfy basic needs and
wants.
Technology is responsible for a great
deal of the progress of the human race.
Technology is the tools to gain
competitive advantage.

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Application of Technology

Technology linked to improvements in


standards of living
Enhancement of economic prosperity for
countries, industries and businesses depends
upon the effective MOT
Technology creates wealth
Application of technology, not just its
development, is a key to success in the
competitive global economy.
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Technology and Business

The goal of an organization is to


achieve a set of objectives
Pool of knowledge available to society
Technology adds value to the assets of
a company
Conversion of resources into goods and
services
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Classification of Technology

New technology
Emerging technology
High technology
Low technology
Medium technology
Appropriate technology

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Management

Process of:
Planning
Organizing
Coordination & Leading and
Controlling

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What is MOT ?

MOT is an interdisciplinary field that


integrates science, engineering, and
management knowledge and practice. [MOT,
Tarek M. Khalil p.7]
Management of technology refers to the
design and use of the means needed within
organizations achieve economic and social
objectives through technological innovation.

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Management of Technology
(MOT)

An interdisciplinary field

NATURAL
SCIENCE

SOCIAL
SCIENCE
ENGINEERING
MOT

INDUSTRIAL
BUSINESS PRACTICE
THEORY

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The roles of MOT

MOT field helps nation and firms to answer the


following question:
How technologies is created?

How it can be exploited to create business


opportunity?
How to integrated technology with business strategy?

How to use technology gain competitive advantage?

How can technology improve the flexibility of


manufacturing and service systems?
When to enter and abandon technology?

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Management of Technology:
an entrepreneurial perspective

Technology itself does not produce commercial results. It is its


application that brings commercial benefits. Such application
comes about due to the activities of entrepreneurs.
Any economy needs paper entrepreneurs and Product
Entrepreneurs
Paper entrepreneurs - Trained in law, finance ,
accountancy etc.. manipulate systems in novel ways:
Establishing joint ventures, holding companies, finding tax
shelters, investing in commodities; going public, etc.
Product entrepreneurs - Engineers and scientists
involved in production, researchers and designers,
production managers, and businessman in produce goods
and services people want.
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Three important factors

The creativity factor

The timing factor

Managing changes
(1) Creativity Factor
Two key performance indicators : Invention and
innovation
Novelty of artifact, process and system
Imagination, passion, inspiration and incident discovery
Useful product and service
Market determination and customer evaluation
Technological innovation
Ignite from the technological/market insights
Follow to acquire necessary and complementary knowledge,
Transform all the stuff into workable procedures, physical
product, perceived service
Diffuse them to the targeted customers,
Cause some economic/social impacts
Types of innovation
Radical innovation
Paradigm shift
Incremental innovation
Kaizen
Routine innovation (rationalization and
reengineering)
Linkage between science and
technology

Scientific discovery
Technological innovation
Intermediated by invention/innovation
intention
Tested by market and customer
appraisal
Innovation cycle

Invention

Improvement,
Scientific discovery Breakthrough Technological innovation
& benefit
feedback

Touchstone of Market
Engines of innovation
Creativity: a purposeful idea by rearranging
some new or existed ideas
Stimulated by unsatisfactory situations
Permissive circumstances for creativity
exploitation
Interested and interesting work design
Communication and dialogue
Encourage to take risk and uncertain venture
Allow the failure consequence
Incentive: award and compensation
Searching for the creative
personnel
The capability of systemic expression
Quick response of associative ideas
Novel idea
Identify some interesting informative source and content
clearly
More curiousness
Confront and embrace problems
Unbending character
Prudential conclusion
Be interested in the analytical and explorative tasks
Trace the intellect-consuming events
Bringing innovation to market
Product definition: the persuasive/compelling
value
Market positioning: tracing the market evolution
and segmentation
4Ps marketing strategy
Product package, price mix, promotion campaign,
distribution path
Technology gap between suppliers and
demanders
Pricing strategy: market penetration or capital recovery
(2) The Timing Factor
First mover vs. second movers
Industry creating and customer education
The technological trajectory
Competitive dynamics
DAT vs. CD; LD vs. VCD; CDMA vs. GSM; PHS vs. PDC
Monitor the product life cycle
Continuous improvement: product family and
cash management
Credit of commitment and pre-announcement
Leaders vs. followers
When imitation is easy, markets don't work well, and
the profits from innovation may accrue to the owners of
certain complementary assets, rather than to the
developers of the intellectual property
Leader and winner
Leader but loser
Follower but winner
Follower and loser
Laggard

The need, in certain cases, for the innovating firm to


establish a prior position in these complementary assets
To be the market leader
Reputation Massive investment
Preempt positioning capital for pioneering
R&D and market research
Define the industry
standard Continuous income flow
for improvement
Earlier return from
learning effects Bearing the uncertainty
and failure disaster
Deterrence advantage
The lock-out risk of
Higher profit
investment
Loyal customer
Lure many competitors; a
Attaining more target of knock-out; a
appreciation and support benchmark of imitation
Technology generation & new
vision
The continuous stream of
competitors/substitutes
(technology) Paradigm shift
Market (behavior) changes
Industry (process) transformation
Watch out for the New/emerging
technology and its impacts
Cannibalization
Sustainability
(3) Managing changes
Productivity
Effectiveness
Competitiveness
Technology foresight
Market insight
Strategic planning & implementation
The Concept of Fit
Three perspectives (Alder 1989)
Business and technology strategy

Technology poster and functional


decision making practice
Synergy between decision making
practices
Technology Strategy Field
Consists of
Particular dimensions of technology policy

that is related to business strategy


Integrative models that prescribe fit between

technology policy and business strategy


Empirical links between technology strategy

and business strategy


Business Competitiveness &
Technology Strategy
Manager should (Clark, 1989)
Understand their technological base

Take an international perspective

Discipline their business function around


the production function
Integrate all business functions

Focus on time as the critical factor


Strategic Technology
Management Process
3 Key areas (Betz 1993)
Identification and development of a
firms technological capabilities
Products/processes that provide
competitive advantages
Integration of areas one and two
Technology and Business
Outcomes
Technology is critical to business outcomes
Characteristics of best practices include
Championship of technology issues
Adequate levels of technological competence
Selection of the structural for of the unit
Coupling between a technology function and
others
Extent and timing of technology control
Technology transfer mechanisms
Technology Strategy &
Leadership
Technology strategy plays an important
role in enabling firms to achieve their
leadership position
References:

Dosi, Giovanni (1982), Technological paradigms and technological


trajectories: A suggested interpretation of the determinants and
directions of technical change, Research Policy, 11(3), pp.147-
162.
Teece, David J. (1987), Profiting from technological innovation:
Implications for integration, collaboration, licensing and public
policy, Research Policy, 15(6), pp.285-305.