MPSW 5033 /PPSW 6033

ENGINEERING AND
TECHNOLOGY MANAGEMENT
Managing Technology
and Knowledge
Prof Ts. Dr. Effendi Mohamad
Tel: 06-3316450/ 012-3745208
effendi@[Link]
 Outline

• ORGANISATIONAL KNOWLEDGE
• STRATEGIC ALLIANCES AND NETWORK
• MANAGING RESEARCH AND
DEVELOPMENT
• MANAGING INTELECTUAL PROPERTY
 DEFINITION

▪ Organizational knowledge is the sum of all

knowledge contained within an organization
that can provide business value.
▪ It may be gained from intellectual property,
product knowledge, lessons of failure and
success, conferences ,or customer
communications.
▪ “Individual knowledge paired with that of
others individual in an organisation.”
▪ Knowledge is always learned , preserved ,and
transmitted by people.
TYPE OF KNOWLEDGE

• Explicit knowledge is easily

documented and
indisputable, like
procedures and policies,
product and service
functionality, step-by-step
tasks, research, and
content.
• It’s most likely to be
documented by technical
writers, content strategists,
instructional designers, and
information architects.
 TYPE OF KNOWLEDGE
• Tacit knowledge is a learned sense of
practical know-how, which is hard to
articulate, such as how to repair a computer
system.
• It’s the realm of your subject matter experts;
held inside your employees’ heads; and
transmitted through training, mentorships,
and communities of practice.
• According to Nonaka & Takeuchi, “Tacit
Knowledge is the knowledge of experience,
and tends to be subjective and physical.
• It is about ‘here and now’, relates to a
specific practical context.”
 TYPE OF KNOWLEDGE
• Implicit knowledge, or embedded
knowledge, is intuitive and embedded
experience.
• It’s ineffable, but you know it when
you see it, such as the experience of
senior employees, subject matter
experts, the nature of professional
relationships, and institutional
processes.
• It’s transmitted through social
relationships.
IN THE CONTEXT OF…
1. Technology trajectories
2. Knowledge-based organization
3. Commercial and technological
strengths
 1. TECHNOLOGY TRAJECTORY AND
WHY IT IS REALLY IMPORTANT?

• Technology trajectory refers to a single branch

in the evolution of a technological design of a
product/service, with nodes representing
separate designs.
• technology by itself will not lead to success
• necessity to convert intellect, knowledge and
technology into things that customer want…
HOW IT CAN BE USED?
iPhone 11 Pro launch: Thousands queue
outside Apple store in Singapore to get hold
of latest handset
Example: SMART PHONE

the Innovator/Pioneer the Followers/Imitators

The ‘costs’ for technology
trajectories??

▪ Times
▪ Skills OR Experiments
▪ Learning
HOW TO HAVE THIS?
1. …depends on firm’s own
capabilities…
i. Level of technology
ii. Skills developed
iii. Intellectual property
iv. Managerial processes and its
routine
HOW TO HAVE THIS?
2. …depends on the firm’s prior
knowledge and notion of absorptive
capacity…

…how do firms know what knowledge

to acquire and when do they know
when have they acquired it…?
HOW TO HAVE THIS?
3.…requires for dynamic competencies…

A company’s ability to compete in future is

dependent on its past activities.

Which refers to…

…absorptive capacity in the context of
R&D … (Cohen & Levinthal, 1990)
Core competencies –
some examples…
 Key points in dynamic
competencies…

i. Internal processes
Over long periods organizations build-up a
body of knowledge and skills through
experience and learning-by-doing.

ii. External linkages

Networks of relationships
2. THE KNOWLEDGE-BASED
ORGANISATION

defined as an organization that

relies on the ability of individuals
to create, obtain and apply
knowledge to produce products
or services.
 HOW TO MANAGE THE
KNOWLEDGE?

1. Process and knowledge

Key role of knowledge

…knowing how to configure and
integrate resources
(e.g. raw materials, machinery, energy,
labors, etc.)…
 2. Strategy and knowledge

…knowledge management by clarifying

internal and external strategic knowledge
gaps…today and for the future.
1. What do we need to know to formulate execute our
desire strategy?
2. What strategies can we successfully execute given what
we know?
3. What do we currently know
4. What do our competitors know?
 Characterizing the knowledge-
based organization

…made up by five dimensions (Nelson, 1991)…

i. Individual assets -skills & knowledge of the
individuals; - influences the corporate success.
ii. Technological assets - the sets of reproducible
capabilities in product, process and supports
area.
iii. Administrative assets - the skill profile of
employees and managers, the routines; the
procedures and systems for getting things
done.
iv. External assets - relations established
with current and potential allies, rivals,
supplier, customers, political actors &
local communities(e.g. joint ventures,
distribution channels).
v. Project – deployment of
technological , organizational and
external asset OR a learned behavioral
pattern that contribute to or detract.
3. COMBINING COMMERCIAL AND
TECHNOLOGICAL STRENGTHS

a. Technological knowledge
- Improvement in performance of new
materials.
- Development of a new manufacturing
process.
- Improvement in quality and reliability of
product .
…ability to spot opportunities to
exploit…through
recognition of…
Internal R&D capability
External linkages capability
STRATEGIC ALLIANCES AND NETWORKS

1- Definition
2- Octopus strategy
3- Complementary capabilities and
embedded technologies
4- Forms of strategic alliance
5- Successful strategic alliance
6- Risk & limitations with strategic
alliance
 DEFINITION
• ‘A strategic alliance (also
see strategic partnership) is an agreement
between two or more parties to pursue a
set of agreed upon objectives needed
while remaining independent
organizations.
• A strategic alliance will
usually fall short of a legal partnership
entity, agency, or corporate affiliate
relationship.’
 Why needs strategic alliance?

…major factors that prevents many firms

to achieve their strategic objectives;
1. lack of resources (e.g. expertise, facilities,
etc.)
2. lack of capital for R&D activities.
3. lack of sufficient technical capabilities to
adapt to fast-paced market dynamics.
Daimler and Renault-Nissan
Alliance

Cooperation between
Daimler and Renault-Nissan
Alliance deepening in 2016
since its first start 2009.

“established a partnership
that extends from parts to
platforms, from co
development to co
production and from cars to
commercial vehicles.”
 OCTOPUS STRATEGY

…a firm develop alliances with a wide

range of companies.

…cooperation on expensive new

technology and product when the
cost of risk of going it alone is too
high.

… is about increasing value and

convenience to STRATEGIC PARTNERS
while improving our efficiency.
inter-firm
cooperation
have significant
positive
relationships
that give
positive impact
on the
innovation
performance.
 How ‘alliances’ works??
1- exchange of technology.
2- exchange of skills and know-how
Competitive advantage often resides in sets of firms acting
together:
• European Airbus strategic alliance • VHS alliance between
JVC, Sharp,
Toshiba, RCA
• Even IBM has forsaken go-it-alone strategy.
• Alliances with Toshiba, Microsoft, Siemens, HP, Cisco, Real
Networks, & many more …… • Octopus strategy (Vyas et
al., 1995)
Alliances in assembling the component
parts to make an iPhone
Reasons for entering a
strategic alliance
Forms of Strategic Alliance
 1. LICENSING

▪ well established method of acquiring technology.

▪ element of learning required by licensee and the licensor
Perform the role of trainer.

ADVANTAGES:
I. Speed of entry to different technologies
2. Reduce cost of technology development
…potential problem such as the neglect of internal
technology development.
 2. SUPPLIER RELATIONS

…based on cost-benefits to supplier such as:

i. Lower production cost if a supplier modifies a
component to fit easily into company products.
ii. Reduce R&D expenses that relates to
material/component where the supplier would
involve in testing/experimental using their
facilities.
iii. Reduce material flow to reduce inventories
through delivery schedule and lot sizes.
iv. Reduce administration costs through integrated
IS.
…consist of number of level.
…at simplest level, a good ‘customer relationship’
established through additional discounts, services for
unusual equipment, special deliveries, holding additional
stock, etc.
…next level, involve closer ‘working relationship’ where
supplier involve in sharing experience, expertise,
knowledge and investment esp. for new product
development.
…finally establish ‘long-term relationship’ (e.g. five years)
with an agreement.
 3. OUTSOURCING

…it refers to the delegation of non-core operations to an

external entity specializing in the management of that
operations.
…why outsourcing?
i. Lowering firm’s operations costs.
ii. Redirecting energy at the competencies of a particular
business.
iii. To make more efficient use of labor, capital, technology
& resources.
 4- Joint venture

…is a separate legal entity with the

partners to the alliance normally being
equity shareholders.
…costs & possible benefit from R&D
projects would be shared.
…established for a specific project and will
cease on its completion.
 5- Collaboration
…the absent of legal entity.
…provides for the opportunity to extend the
cooperation over time if so desired.
…frequently occurs in many supplier
relationships.
…many university departments work closely
with firm on a wide variety of research.
 6- R&D consortia
…a consortium describes the situation where a
number of firms come together to undertake a
large-scale activity.

…for what reasons?

1- sharing the R&D costs.

2- sharing the R&D risks.
3- pooling scarce expertise, equipment, performing
precompetitive research and setting standard.
 7- Industry clusters
…clusters are geographic concentrations of
interconnected companies, specialized suppliers,
service providers and associated institution in a
particular field present in a nation or region.

…is an important agenda for governments,

companies,and institutions.
…why need clusters?
- new direction of economic policies,
privatization, market opening, and reducing
costs of doing business.
…how clusters affect competition?
1- increase productivity based in the area.
2- driving direction and pace of innovation.
3- stimulating the formation of new business
within the clusters.
 8- Innovation networks
…phenomenon of ‘virtual organization’.
…a new label for firm’s range of supplier & market
relationships.

Example:

- Nike is a brand management firm that regards as network

firm.
- Nike essentially owns and manage the brands.
- Nike relies on established network of relationship to
produce and distribute its products.
Process of forming Strategic Alliance
 Successful Strategic Alliance

…begins with selection of the right partner.

…followed by negotiations based on each partner’s needs.
…finally, management towards collaboration which
involve large activities such as goal setting & conflict
resolution.
…requires constant work to keep the relationship sound.
…the success of a business alliances depends on the
existence mutual need & ability to work together despite
differences in organization culture.
Risks & Limitations

…strategic alliances can lead...:

1- to competition rather than cooperation.
2- to loss of competitive knowledge.
3- to conflicts resulting from incompatible
cultures & objectives.
4- to reduce management control.
…seven reasons of alliances
failure:
1. failure to understand and adapt to new
management required for the alliance.
2. failure to learn & understand cultural
differences.
3. lack of commitment.
4. strategic goal divergence.
5. Insufficient trust.
6. Operational overlaps.
7. unrealistic expectation.
 MANAGING RESEARCH AND
DEVELOPMENT

• Definitions
• Classification of R&D
• R&D management
• Fundamental dilemma
• Relationship with business strategies
• Technology leverage and R&D strategies
• Estimating R&D expenditure
 Definitions
RESEARCH?
…the systematic approach to the discovery of new
knowledge…
-academics
DEVELOPMENT?
…a continuum activities with scientific knowledge
and concepts directed toward the production of
useful materials, devices, systems or methods,
including design and development of prototype and
process...
-industry
 Classification of R&D
The main activities in Industrial R&D:

• Discovering & develop new technologies.

• Improving understanding of technology in existing
products.
• Improving and strengthening understanding of
technologies used in manufacturing.
• Understanding research results from universities & other
institutions.
R&D can be viewed as two sides of the same
coin…
 R&D Management

…each company and every competitive

environment is unique and in its own
state of change…

…R&D need to be managed according

the specific heritage and resources of the
company in its competitive industry…
Fundamental dilemma

…the need to provide an

environment that fosters creativity,
at the same time providing a stable
environment of the business…
Why R&D becomes
necessary?

…Introduction of new products

provides a clear basis on which to
compete…
 What make companies
worry to invest in R&D ?

- Where precisely to invest?

- Which projects and technology to invest?
- When to stop pouring money into a
project that look likely to fail but could yet
deliver enormous profits?
 R&D Investment and
company success
…has increased by an average 23% from
1991 to 2002…
-global scale-
Reason
…new products can provide a huge
competitive advantage…
 Relationship with
Business Strategy
…the R&D function has to make some
assessment of the future…

…conscious view of the future:

▪ Environmental forecasts (competitor &
technology)
▪ Comparative technological cost-effectiveness
(life cycle)
▪ Risk (organization culture)
▪ Capability analysis (strengths & weaknesses)
 Relationship with
Business Strategy

Two simple questions…

1- What are the aims of the business?

2- How can R&D contribute?

Example: SONY group

Business aim:
Profit generation and investment for
growth

Business strategy:
Sony possesses a wealth of expertise in
advanced camera technologies.
Technology Leverage and
R&D Strategies
Technology Leverage
and R&D Strategies
1- Survival
- roles of problem solving
- research on process or product
2- Competitiveness
- research on product improvement and
process improvement
- Amount of R&D for high-technology is
higher than R&D for low-technology
- e.g. automotive industry
3- Technology Mastery
- research on technological developments
- higher R&D expenditure

4- Break the mold

- developing new patentable technology.
- involve a higher level of basic scientific
research
 Setting the R&D Budget
Basic concept of R&D

…enable profits from today’s successful businesses to be

invested into what the company hopes will become the
profitable businesses of tomorrow…

…should consider spending between 10% ad 25% of sales

on R&D…

…R&D expenditure can be based on a constant

percentage.

Turnover provides a stable figure that grow in line with

the size of the company.
 Estimating
R&D expenditure
…large organization with more resources can
clearly afford to invest more in R&D than their
smaller counterparts…

R&D as % of sales =
(R&D expenditure/total sales income)x 100%
R&D expenditure
MANAGING INTELECTUAL
PROPERTY (IP)

▪ Definition
▪ IP Protection
▪ IP Rights Malaysia
 Definition of IP

…is a creation of the intellect which

is owned by an individual or an
organization who can then choose
to share if freely or to control its
use in certain ways…
Creation of intellect

…Intellectual property is found

almost everywhere…
but the IP needs Protection…Why?

…to ensure that an innovation or

creation is attributed to its creator or
producer, but also secure “ownership”
of it and benefit commercially as a
result.
IP RIGHTS
…are granted under the national laws of each
country or region.

Four legal means to protect an

organization’s/individual ideas and right to benefit
from those ideas:
• COPYRIGHTS
• PATENTS
• TRADE SECRET
• TRADEMARK
1- COPYRIGHTS

…is a bundle of rights to reproduce,

derive, distribute, perform, and
display an original creative work…
2- PATENTS

…is an exclusive property

right to an invention…
3- TRADE SECRET

…is a confidential technological

and commercial information
4- TRADE MARK
…allows consumers and businesses to
differentiate between goods & services
from different producers…

…can apply to brand, names signs,

symbols, colors, smells, sounds and
shapes…
IP Rights Malaysia

1- The Trademarks Act 1976.

…enforced on the 1st of September 1983.

…valid for 10 years from date of filling.
2- The Patents Act 1983

…came into force on the 1st of

October 1986.

…valid for 20 years from the

date of application.
3- The Copyright Act 1987
…effective as of 1st of December
1987.
…confers the exclusive right to the
owner of a copyright for a specific
period.
 4- The Industrial Designs
Act 1996
…which is in force from the 1st of
September 1999.
…defined to mean the features of shape,
configuration, pattern or ornament applied
to an article by any industrial process being
features.
…valid for Five (5) years from the date of
application and renewable for Two (2) more
periods of Five (5) years each.
5- The Layout Designs of Integrated
Circuits Act 2000
…in force from the 15th of August
2000.
…valid for Ten (10) years from the date
it is first commercially exploited.
6- The Geographical Indications Act 2000

…which came into effect on the 15th of

August 2001.

…specifies the process for registration of

geographical indications.

…to prevent misuse of the names of places.

7- The Optical Discs Act 2000
…which is effective as of 15th of September
2000.
…provides for the licensing and regulation
of the manufacture of optical discs, such as
VCD,DVD,CDs, etc.
…to combat the piracy of copyright works in
the form of optical discs.
Terima
Kasih