TECHNOLOGY

Technology can be described as the branch of knowledge that deals with the application of principles of
science and engineering to develop products and services with relevance to the society.
Example include medical technology, information technology, green technology and recycling
technology.

By developing and bringing new products/materials/processes to the market, technology develops

solutions to most issues that concern human beings such as transportation, communication, entertainment,
health, agriculture, infrastructure, industry, and education.

It also changes the rules of interaction for trade and commerce among organisations and countries.

Technology is seen as a resource to enhance efficiency and transparency in transactions.

Use of technologies in some core socioeconomic functions enhances efficiency and accessibility.
For example, the use of IT to provide education through the various multimedia tools, and so on has
increased the effectiveness of the learning process. Education through distance learning is accessible to
more people. Technology helping car industry to converge to digital technology with enhanced
effectiveness to driving and vehicles which are fuel efficient and safer.

Example of organization GE, Microsoft and Apple leverage their technology prowess with other
resources to develop and market products that are efficient and in demand.

Importance of Technology:
 Reducing the cycle time leading to cost advantage and better time management.
 Cost reduction by process improvement.
 Cost reduction by raw material substitution.
 New product development.
 Creating and supporting information technology-based organisation forms.
 Improving the quality and performance of the product.
 Creating new industries.
 Serving new markets or un-served needs.
 Leverage competitiveness by lowering costs, create differentiation.

Technology Strategy:

Firms applies Technology strategy to address the technological threats and opportunities in its external
environment to guide it in acquiring, developing and applying technology for competitive
advantage.
It is important to constantly review and monitor the technology strategy of an organization to cope with
dynamic environment.

competitive strategy stance:

Technology can play as a source of competition to sustain advantage in product differentiation or cost or
to develop new products/lines of business to make inroads in uncharted areas.

Value chain:

It refers to the technological capabilities that the firm decides to develop internally – the core
technologies. The other technologies used by the firm are the peripheral technologies.

Resource commitment:

The greater the technological depth enables an organization to be flexible and respond to new customer
demands.

Management Stance (Organisational Fit):

This refers to the extent an organisation can structure itself so as to meet the requirements of competitive,
value chain and resource commitment stances.

ENACTMENT OF TECHNOLOGY STRATEGY:

Technology strategy is enacted through the sourcing and deployment of technology.

1. Sourcing:
Internal sourcing of technology:
The R&D department efforts lead to generation of knowledge.
Internal development of technology results in proprietary technology which a firm can use to
create an advantage.

External Sourcing of technology:

Can take place through licensing, strategic technology agreements and mergers, acquisitions or
alliances. External Sourcing of technology has to be done after considering
 the ease of availability of technology – If it is easily available, it will be by competitors
also
 Transaction costs – ability to purchase the technology
 The extent integration can be made possible better

2. Deployment:
Deploymet of technology in value chain process enables an organization to enhance operational
capabilities. For e.g adoption of Enterprise resource planning (ERP) systems can be used by a
firm to improve inventory and lead to efficiencies in sales, marketing and distribution.
Customer relationship management (CRM) helps integrating with customers.
INNOVATION:
The implementation of ideas is innovation.

Innovation is the transformation of technology into products and processes within the organisation
which are an improvement over the earlier ones or totally different ones.

Innovation is the conversion of an idea into a marketable product.

Innovation leads to growth and profitability of business organisations.

The responsibility for innovation lies with either the research and development department or the
technology department depending on the structure of the organisation.

The change brought about by innovation can be reactive status quo, incremental, transitional or radical
transformational.

Types of Innovation

 Reactive Status Quo Innovation:

This is a situation when an organization is reactive in being innovative.
For example, an organization shifts to a “cleaner” Euro II compliant engine because it is mandated by the
government to do so.

 Incremental Innovation:
Organizations bring about incremental changes in products/processes because incremental changes are
easy to implement and also lead to perceptible differentiation of the product. For example, consider the
incremental change in Intel Chips: Pentium I, Pentium II, Xeon, and Continuum to suit the different
generations of computers.

 Transitional innovation
Many innovations are based on transitional innovations, Example: cars
For similar engine power, the change in exteriors or accessories can upgrade or downgrade a model
making it suitable for different ranges of price preferences.

It can be architectural or modular.

Architecture implies the change in the outward appearance and internal configuration of the components
to reduce, enlarge or differentiate the functionality of the product. For example, a ceiling fan’s
components of blade and motor can be used to create fans for industrial use or table fans

Modular transformation refers to the significant change in the elements and technology of the product.
For example, the change from analogue dialling to digital in a telephone is a modular innovation.

 Radical innovation
These innovations entail changes in the components architecture, and knowledge as well the processes in
the organisation.
Most organisations run into trouble when dealing with revolutionary changes, called Disruptive
Innovation.

Amazon has redefined the concept of a book store. Shuffling it from bricks and mortar to bricks and
clicks.

 Process based innovations

These include innovations or application of technology to hitherto manual processes.

The extensive use of automation,computers, information technology, lean manufacturing, mass

customisation, just-in-time inventory management, total preventive maintenance, total quality
management, and outsourcing are examples of process innovations.

 Product – Based innovation

Innovations that embody technology to enhance a product’s quality, functionality, usability, flexibility
and thus the market reach are product based innovations. Most car makers such as Renault and
Volkswagen are keen to introduce diesel engine variants to the market as diesel is a much cheaper fuel
than petrol.

To be innovative an organization needs to :

1. Have an entrepreneurial mind set – which can visualise, articulate and create an end product on
the basis of the idea.
2. The availability of resources – of special importance is human resources. First rate people
produce first class results.
3. An actionable idea which has an operational validity.
4. An idea with economic validity that should be able to produce economic results.
5. An attitude to take risk and deal with uncertainty.

Importance of innovation

1. To improve and optimize operations. Improvement of operations is the basis for market
expansion and short term profitability. However sustained incremental innovation can create a
power of superiority. Example Japanase cars like Honda and Toyota have consistent upgrading
and improvement.
2. Develop emerging business.
Improved technology is an advantage for gaining ground in emerging businesses. Example Smart
phone companies like Samsung and Apple.
3. Create future businesses. Example access to sustainable energy.

Innovation and strategic fit

Technological innovation is an important competitive tool; it improves an organisation’s performance
across functions and different managerial activities.
Service process innovations result in improvement to the service provider’s productivity and flexibility;
more rapid production and/or delivery of services; improvement in quality of services provided; increased
market presence through a wider range or a more “userfriendly” set of services.
Product-process innovation has a positive impact on financial results, market position and bargaining
power.

The role of technology and innovation in the strategic design for future of the organization:
The changes in the technology environment is happening so fast shortening the time available for
organisations to respond to the high degree of preparedness.

WHY TECHNOLOGY AND INNOVATION?

1. Because of changes in the external environment add potential to have positive or negative
impacts.
2. Globalisation
3. Advances in Information technology
4. It is essential for the long-term sustainability and profitability of the
organization.

QU: How information technology is being integrated in Strategic Formulation in an organisation?

QU: How information technology is being integrated in Strategic Implementation in an organisation?