OM0018-Unit-01-Introduction to Technology Management

Unit-01-Introduction to Technology Management

Structure:
1.1 Introduction
Objectives
1.2 Concept and Meaning of Technology and Technology Management
Technology
Technology management
1.3 Evolution and Growth of Technology
1.4 Role and Significance of Technology Management
1.5 Impact of Technology on Society and Business
Technology and competition
Key issues in managing technological innovation
1.6 Forms of Technology
Process technology
Product technology
1.7 Summary
1.8 Glossary
1.9 Terminal Questions
1.10 Answers
1.11 Case Study
1.1 Introduction
The term technology refers to knowledge, processes or products of technological activities,
according to the context in which it is used, and the term management refers to the act of
getting people together to achieve a specific goal. Management refers to the process of
planning, organizing, staffing, directing, and controlling the activities in an organization.
Thus, we can say that management of technology/technology management includes the factor
of technology in all the activities like planning, organizing, resourcing and leading the
organization.
In this unit, we will discuss about the technology management, which is needed in all the
organizations. Different people think differently about technology. In the context of business,
economists consider technology as the knowledge used in the production, commercialization
and distribution of goods and services.
In this unit, we will mainly focus on defining technology, and different types of technology. We
will also discuss about the evolution and growth of technology. We will analyze the role and
significance of technology management. In this unit, we will also study the impact of technology
on society and business. We will also analyze the two forms of technology that is process
technology and product technology.
This unit will enable us to understand the concept of technology management and its impact on
us.
Objectives:
After studying this unit, you should be able to:
Define technology.
Explain the evolution and growth of technology.
Explain the role and significance of management of technology.
Summarise the impact of technology on society and business.
Describe the two forms of technology.
1.2 Concept and Meaning of Technology and Technology Management
As we are discussing about the technology management in this unit, let us first discuss the
concept and meaning of technology, and then the concept of technology management.
1.2.1 Technology
Technology is derived from the Greek word technologia in which "techne" means craft and
"logia" means saying. On the whole, technology means having the knowledge of making
something.
Types of Technology
We can define technology in different aspects. The figure 1.1 shows the different technologies
that are commonly opted in todays market.

Figure 1.1: Different Types of Technology
Let us now briefly discuss about these technologies.
Teaching technology: We can define the technology of teaching as the technology related to
systematically designed approaches. This technology includes the objectives, instructional
procedures depending on the tasks that the student has to perform.
Instructional technology: As the name suggests, the instructional technology includes
certain type of instructions that have to be carried out in a systematic way to achieve the
objectives of the particular task. Effective instructions are brought by considering both the
human and non human resources.
Assistive technology: As the name indicates, this technology is for the assisting people who
want to work within a particular environment. The assistive technologies include technologies
used in mechanical, electronic, or microprocessor based equipments. Assistive technologies
help the disabled in different ways, such as, it:
a Assists them to learn.
a Makes the environment more accessible for them.
a Enables them to compete in the work place.
a Increases their independence or improving the quality of life.
Medical technology: The medical technology refers to the technology including the inventions
in the medical field. This has helped many of the individuals to stay alive. For example, artificial
limbs, hip and knee implantation helps the disabled to lead a better life. There are some devices
that provide respiratory assistance through oxygen supplementation and mechanical ventilation.
Information technology: We can define informational technology as the technology that
helps in accessing the knowledge and resources on a wide range of topics. For example,
internet is the best example of information technology.
1.2.2 Technology management
Technology management means using new technology to create competitive advantage which
is quite a difficult job, partly due to differing cultures in a company. Technology is often thought
to be solely the domain of the scientific and engineering personnel of an organization. Yet,
successful business use of technology requires strategic decisions about technology by
personnel in other functional areas, such as production, marketing, sales, finance, and so on.
Thus, the two cultures technical and functional need to be bridged, and management should
integrate technology strategy with business strategy. This is the essence of technology
management.
Many factors make up the technology development framework and there are several ways of
condensing these into a manageable number of groupings or dimensions.
Let us have a look at these six dimensions in the table 1.1.
Table 1.1: Technology Management Dimensions
Broad dimension Relevant factors
Objectives Technological independence
Self-reliance
International trade gain
Productivity gain
Human need satisfaction
Activities
Monitoring and control
Research & Development
Transfer and adaptation
Assessment and planning
Time
Perspective range ( > 20 years)
Long range (11 - 20 years)
Medium range (6 - 10 years)
Short range (1 - 5 years)
Constraints
Resources (human, material, finance, facilities,
energy)
Technological level (knowledge, science, skill,
information)
Management capabilities
Late starter
Mechanisms
Awareness measures
Science culture creation
Education and training
R & D institution building
Criteria Maximize positive and minimize negative effects
These dimensions given in the table 1.1 are interlinked and a proper management of technology
requires a systematic consideration of all of them.
Self Assessment Questions
1. The technology that deals with the medical inventions is called as the _________________.
2. Informational technologies are the technologies that help in accessing the knowledge and
resources. (True/False)?
3. Technology is derived from the Greek word _____________.
Activity 1:
Visit different websites and find out the definitions for technology given by different economists
across the world.
Hint: www.businessdictionary.com/definition/technology.html
1.3 Evolution and Growth of Technology
In the previous section, we learnt about the concept and meaning of technology. Now, we will
discuss about the evolution of technology, before going to the other topics about technology.
The history of technology dates back to the time when humans were able to prepare some
simple tools with easily available natural resources. History indicates that the advancement in
technology had a major leap with the invention of the wheel. From the invention of the wheel,
much usage of the technology has started. The technology in all the fields has grown to a larger
extent and now we can see the technology involved in almost all the things we use in our daily
life.
We know that there are some advanced technologies at present which include the printing
press, telephone and Internet which have helped us to communicate all over the globe.
Till now we have mainly concentrated on technology management in general. Now let us learn
about technology management in India.
Technology management in India
The Government of India is mainly focusing on the development of science and technology in
the present world. The Indian industries are operating under the controlled and regulated
economy. The technology management is generally lacking at the enterprise level except a few
enterprises. There are many Indian companies which are able to develop and produce the
internationally competitive products. The companies which use different kinds of technologies,
and are excelling today, in India are the Punjab tractors, tata automobiles, amul food and certain
drug and chemical industries. In the same way, there are many Research and Development
(R&D) institutions which have developed and commercialized the technologies in the areas of
drugs, chemicals, food technology, and computer software.
The productivity of the Indian industries largely depends on the technologies that are imported.
Most of the technologies that are used in the Indian industries are cost effective.
In July 1991, government of India introduced the new industrial policy that mainly focussed on
international competitiveness, quality, efficiency and exports. This helped in the change in
operating environment of the Indian industry. Because of this, very well planned technologies
were developed at the enterprise level.
These days, the companies are paying more attention on technology in order to be more
competitive in the business market. It is not only the large scale industries that require the
technology management; even the small scale industries also need a technology management
to face the competitive world of today.
Self Assessment Questions
4. The technology has taken its history when the humans were able to modify some natural
resources to _____________.
5. The productivity of the Indian industries largely depends on the technologies that are
imported. (True/False)?
6. The small scale industries also need a __________________ to face the competitive world of
today.
Activity 2:
Suppose that you are a lecturer in a university. You want to give a lecture on the evolution of the
computer technology. Prepare a lecture outline for the same.
1.4 Role and Significance of Technology Management
Till now, we are familiar with the concepts of the technology and the technology management.
Now let us proceed further in our discussion and move on to the role and significance of
management of technology.
There is rapid growth in technology starting from the invention of fire and wheel, till today. The
growth rate of technology is also increasing rapidly. The technology that is applied in the
production industries plays a major role in the production activities of those industries. The
proper monitoring and control of the production helps in achieving good heights in the present
market. We have to incorporate many of the technologies to carry out the processes in an
organization and compete with other companies in market.
For the successful long term operation of the business sector, we need to incorporate certain
factors like the technology and management of technology. We need to consider three main
requirements for starting a technological innovation-based firm. These three requirements are:
Idea of technological innovation.
A potential market.
Team work in both the technological and business expertise.
The three requirements mentioned above, are interlinked. The technological innovations (done
in a team for adapting knowledge from different people in the organization) need to be carried
out, for gaining the potential market, which in turn closely interacts with different divisions in an
industry.
We know that technology plays an important role in running our business and society. We also
know that advancement in the technology has greater influence on the creation of national and
individual wealth.
Let us have a quick overview of the role of technology from different aspects.
The technology of teaching helps to monitor the process of student learning and monitor
student activities.
The instructional technology play an important role in the conventional media such as
videotapes, computer assisted instruction and many other complex systems.
The assistive technology helps to achieve the idiosyncratic needs of the particular individual.
The medical technology has played an important role in the human lives. It has helped to
replace many of the infected organs with the new ones.
Information technology is playing a major role in the growing market today. This helps to
access the knowledge and information from across the world.
Self Assessment Questions
7. The advances in the technology have the greater influence on the creation of ____________
an individual wealth.
8. Methods and tools are required for managing technical ________.
9. The technological innovation has to be carried out to create competitive environment.
(True/False)?
Activity 3:
Suppose that you are working in a company as a manager and you want to start a new project
by creating a business plan. Give the necessary factors that you will consider for creating the
business plan.
Hint: Current business status.
1.5 Impact of Technology on Society and Business
In the previous section, we studied about the role and significance of management of
technology. In this section, we will study about the impact of technology on the society and
business.
The emerging technology has a great impact both on society as well as the business. There are
many advanced technologies in the medical field which has helped to save many lives in the
world.
The technology behind Automated Teller Machines (ATMs) has helped people in the society to
perform basic banking activities such as checking bank account balance, and withdrawing
funds, even when the bank is closed.
As technology is progressing, it is impacting greatly on the business too. This has helped the
associated people to communicate effectively with the employees of the different offices across
the globe. The advancement in the Internet technology has helped us to download different
documents needed to carry out our tasks. The technologies like the web conferencing and tele-
conferencing are helping us to make conference calls to conduct the meetings, training sessions
and so on.
Let us briefly describe the effects of technologies on business:
Reduced costs of operations: Different companies use different technologies for reducing
manufacturing and administrative costs.
New product and new market creation: This involves the introduction of technology for the
miniaturization of the product. This involves the technology to reduce the size, become easily
portable and useful for many applications. For example, the Sony Corporation has introduced
the miniaturization technology that aimed at developing the product with high portability.
Adaptation to changes in scale and format: This focuses on how the devices support the
different features. For example, the mobile can support the email, browsing and so on.
Improved customer service: This involves the introduction of technology for improving
customer service. This helps to gain the market in the present competitive world.
Reorganized administrative operations: This involves the effect of technology on the
administrative activities. For example, the introduction of Automated Teller Machines (ATMs) in
the bank has reduced the employee effort that is required of distributing the cash at the cash
counter.
While studying the impact of technology on society and business, we need to consider the
technology and the competition which exists in the present scenario.
1.5.1 Technology and competition
To compete in the market, technological competitiveness is necessary but this alone is not
sufficient. In this case, the corporation with inferior technology faces difficulty in competing with
corporation with superior technology. Technology helps to give the competitive edge. The
management has to manage the technology thinking that technology is also a part of business.
Managing technology includes four components, namely, the New ventures, Innovation,
Research and Research Infrastructure. We can see these concepts depicted in the figure 1.2:

Figure 1.2: Managing Technology
New Ventures: The new ventures play an important role in the business. The new hi-tech
ventures include two main tasks that have to be carried out. The new tasks are development of
the new products and creation of the new markets. The ideas of these new ventures are
concerned with the growth of organization, and the business plan for the new project.
Innovation: This involves innovating things. This includes the activities, starting from creating
the technical knowledge to the time it is implemented in the new business. These include the
ideas such as the types of innovation, sources of innovation and so on.
Research: Research plays an important role in an organization. This helps to know things
better and helps to produce the products. We have to manage and integrate corporate research
with the management functions and strategies which are helpful for the technology
management. Managing of research includes the organization of research, research personnel
and the organization research strategy.
Research Infrastructure: The technological concepts are not only confined to a particular
organization. It is first to the industry, second to the nation and then to the whole globe. The
research and development infrastructure has a greater impact on the competitive environment
of our country. In the ever growing economic world, the infrastructure plays an important role
and the firms need to be more attentive for developing the new products with the more
innovation.
Technological innovation is needed for competing in the market. There are some key issues in
managing the technological innovation, which we will learn in the next section.
1.5.2 Key issues in managing technological innovation
We know that technology is man-made and increases the physical and mental capability of
human beings. We can say that technology is the useful tool which controls the environment
and also acts as an instrument which converts the natural resources in to useful goods. This is
the main factor which affects the growth of an organization.
There are many technological developments that have taken place in the society, in the last two
centuries. These technological developments include development of transistors and
computers, air-conditioning and refrigeration, space exploration, nuclear energy, and so on.
As we have already seen managing technology involves concepts like new venture, innovation,
research and R&D infrastructure. Among all the four concepts that are discussed above,
innovation plays an important role. This has the greater effect starting from invention of
knowledge to commercialization of products and processes based on the knowledge. We will
now see some issues related to the technologies, which are briefly described below:
Technology and long-term cycles: There are some economists who argue that technology
affects growth and recession in the world economy. The infrastructure is useful for maturation of
the technologies. When the down turn starts to come up again then organizations has to invest
the capital equipment that is based on the new technologies.
Technology and comparative advantage: At the national level, the firms will have more
value when it has both the comparative advantage and also the technological lead. All the other
companies from the world look for your organization. For example, a Korean shipbuilding
industry has become the leader by increasing the size of the shipyards and many techniques
that were incorporated to increase the productivity and capacity of the vessels. The skills,
knowledge and competitive leadership have helped them to achieve more heights.
There are some of the emerging technologies that have to be dealt when you are discussing
about managing technology. The emerging technologies are the new technologies that are
sometime considered critical for humanitys future. You can see some of the emerging
technologies and their applications in the table 1.2:
Table 1.2: Emerging Technologies and their Applications
Emerging
Technology
Technologies
Potentially made
Most Important
Obsolete applications
Artificial intelligence Human brain
Involves the creation of
intelligent devices that can
replace the human brain for
many tasks.
Biotechnology Evolution
Involves the creation of
species, modifying species to
fit for a purpose.
Nanomaterials Steel, aluminium
Stronger and lighter
materials.
Scramjet Jet engines, Rockets Very fast air travel.
Wireless
communication
Wired
communication
Ensures connectivity
everywhere.
The emerging technologies given in the table 1.2 play a major role in the present world. We
know that information technology plays an important role in the present competitive market and
artificial intelligence is the subset of information technology. Artificial intelligence is that category
of computer science which is related to making computers behave like humans. Artificial
intelligence can create the human brain and replace many of the tasks.
Information technology includes both the hardware and software. The hardware includes the
physical products and components associated with the product. But software includes the know-
how technique and the procedure that is involved with that. The hardware again is of two types.
One is related to the end-use product type like the automobiles, computers and televisions. The
second type in the hardware is the production tool type like instruments, machinery and
equipments. The software technology is also of two types. One of the software type is the
"know-how" type such as the processes techniques and next is the "know-why" type technology
that includes the knowledge, skills and experience.
The technology is viewed in a different way by different people. Some think that technology is a
source of wealth, well-being. Some think that technology has destroyed many of the jobs,
environment and social values. Technology is improving the poorest of the poor. We can see
that many of the countries that are poor though they are very rich in the resources, such as new
technologies. The poorness is due to the increasing population; technological base is very small
or due to the resources that are getting depleted because of the export to other countries. It is
possible for us to achieve the basic human needs in this technological world.
We live in the technological world that is helpful in satisfying the human needs. There are many
ways of classifying the human needs. Let us see the implications of technological applications
(positive effects and negative effects) with respect to various human need factors shown in the
table 1.3.
Table 1.3: Important Implications of Technological World
Various human
Positive effect of Negative effect of
Need factors Technology Technology
Air
Control of temperature,
humidity, impurities and
quantity
Pollution, destruction of
natural cycles, and
equilibrium
Water
Increasing supply source
(ground, sea); control of
supply, temperature and
impurity
Pollution, destruction of
marine life; sinking of cities;
frequent flooding
Food
Improved agricultural
productivity; control of food
quality, variety and supply
Chemical contaminations
and diseases; destruction
of wildlife, forests, and
fishing grounds
Shelter
Improved living quarters and
materials of construction;
better utility services and
land uses
Artificial surroundings and
anti-social living,
destruction of the beauty of
Nature
Warfare
Development of civilian
technologies as by-products
of war technologies (space,
nuclear, remote-controlled)
Accumulation of means of
warfare and the menace of
large-scale destruction of
life; risk of bio-weapons and
nuclear war
Clothing
Efficient production of high
quality clothing and apparel
Exploitations of non-
renewable resources and
consumer appeal
Health
Reduction in mortality,
increase in life expectancy;
controlled birth, better
medical care
Population explosion; break
in family structure; drug
abuses; side effects of
medications
Communication
Increased contact; reduced
need for physical
movement; improved audio-
video transmission
Culture shock; co-
ordination of sabotage by
disruptive forces; raising
false aspirations
Transportation
Improved mobility of people
and goods through water,
air, and land
Pollution, noise,
congestion, accidents and
deaths
Education
Better means for storing and
dissemination of knowledge
Brain-washing through
mass media, destructive
education
Work Much specialization and
automation possible;
Tension between blue-
collar and white-collar
increased women
employment
workers, increased
inequality, strikes
Institution
Creation of systematized,
efficient and highly
productive large complex
organizations; exploitation of
natural resources; enhanced
human power
Depersonalization of
human being in the quest
for efficiency and
productivity; depletion of
energy and other natural
resources; innumerable
industrial wastes.
Information
Tremendous improvement in
processing, storing and
disseminating of voluminous
information
Privacy and security
concerns; crime and
misuse of information
power
Energy
Development of alternative
sources of energy fossil,
solar and nuclear
Threat of nuclear plant
accidents; depletion of
energy resources
Freedom
Freedom from one set of
constraints (Physical
stresses)
Creation of new set of
constraints (Psychological
stresses)
Self Assessment Questions
10. Expand ATM.
11. Innovation involves innovating things. (True/False)?
12. Technology indicates the ____________ and competitiveness of the country.
Activity 4:
Consider that you are a manager in a company and you want to manage a technology that is
newly incorporated. Prepare a list of the factors that are considered in managing technology.
Hint: Innovation.
1.6 Forms of Technology
In the previous section, we analyzed the impact of technology on society and business. In this
section, we will emphasise on two different forms of technology, namely, process technology,
and product technology. Let us start with the process technology.
1.6.1 Process technology
The process technology is the technology that is used to create and deliver products and
services. We can say that the goal of the process technology is to evolve new technologies
methodologies for assisting human-centered co-operative activities.
Let us understand process technology by taking the example of digital integrated circuits. In the
digital integrated circuits, the process technology refers to the methods that are used for making
silicon chips. This aims at reducing the size of the integrated circuits. This brings down the size
of the transistors and other components. If the size of the transistors is small, then we can
accommodate more transistors in less space. When the chips, switch very faster, then they
require lesser energy.
We can measure the technology used in the digital integrated circuits in the following manner.
Measured in Nanometres
The features of the chip are measured in micrometers. The process technology of 3 micrometer
is called as a "technology node" or "process node" that is called as the silicon chip with three
micrometers in size. But in the present world, size is measured in nanometres.
In the earlier ages, the process technology was referred to as the length of the silicon channel
between the source and drain of the field effect transistor (FET). The size of the other features
of the transistor is measured as the ratio of channel length. The other features can be larger or
smaller than the channel size. For example, in a 90 nm, there can 90nm length but the width of
the gate terminal can be only 50 nm.
1.6.2 Product technology
As we are now familiar with one of the forms of technology, that is, the process technology; let
us have a brief discussion on another form of technology, that is, the product technology.
We use product technology to define the plan for the evolution of a product. Product technology
helps us in linking the business strategies with the evolution of the product features. This helps
totally in achieving the strategic objective. In this technology, road maps play an important role
in linking the marketing strategy to product plans and then product plans to the technology
plans. These roadmaps help the corporate for planning, identifying needs, gaps, strengths and
weakness in a common language. The roadmaps help for the longer term planning and help to
improve the communication and ownership of plans. The roadmaps also help in team thinking
priority-wise, that have to be assigned in each step of the planning process.
Let us have a look at the main functions of the roadmaps in the product technology. The
functions of the roadmaps are:
Linking strategy to product plans to technology plans: The people involved in the creation
of strategies, product plans and technology plans, will create them independently. But, the
roadmaps mainly concentrate on linking. Firstly, the roadmaps link the strategic choices based
on the competitive environment to the product evolution and future implementation. After linking
this, it links the product plans to the technology implementation plans.
Enabling corporate-level technology plans: We can see the roadmaps for simple needs
that are met by a single development program, since there are roadmaps for several product
lines. The needs are identified by cross roadmaps by analysing the database of roadmaps.
Self Assessment Questions
13. The ______________ refers to the methods that are used for making the silicon chips.
14. Product technology is used to define the plan for the evolution of a product. (True/False)?
15. The process technology of 3 micrometer is called as _________.
Activity 5:
Prepare a list of the different forms of technology that is commonly used in Indian industries.
Hint: Process technology.
1.7 Summary
In this unit, we studied the concept and meaning of both the technology and technology
management. We analyzed that technology has evolved from the time when fire was invented. It
has grown to the larger extent because of which we are in the super computer era at present.
We briefly described the topics related to the technology management, which are necessary for
all the industries. We analyzed that we require business plans to start any new project.
We also saw the great impact of technology on society and business. We also discussed that to
compete with market in the present world; we require new technologies to be incorporated with
our product.
We also studied different forms of technology, namely, process technology, and product
technology. The process technology aims at reducing the size of the integrated circuits, and the
product technology links the business strategies with the evolution of the product features.
1.8 Glossary
Term Description
Commercialization The act of involving something in commerce.
Innovation The act of introducing something for the first time.
Ventures
A business enterprise that includes some kind of risk in expecting
the gain.
Transistor
A small electronic, semi conductor device which has the capability
to amplify and controls the flow of electric current.
Electrification The act of providing electricity.
Micrometer
The unit of length in metric system that is equal to one millionth (10-
6) of a meter.
Roadmap
The detailed explanation of the plan which helps to determine the
course of action.
Cross roadmap
The road maps that are used for analysing the database of the
roadmaps.
Idiosyncratic
A structural or behavioural characteristic distinctive to an individual
or group.
1.9 Terminal Questions
1. Write a short note on evolution and growth of technology.
2. Explain briefly the impact of technology on the business.
3. Explain briefly about Managing technology.
4. Briefly describe the two forms of technology.
5. Define the term technology.
1.10 Answers
Self Assessment Questions
1. Medical technology
2. True
3. Technologia
4. Simple tools
5. True
6. Technology Management
7. National
8. Resources
9. True
10. Automated Teller Machine
11. True
12. Economic growth
13. Process technology
14. True
15. Technology node or process node
Terminal Questions
1. Refer section 1.3 Evolution and Growth of Technology.
2. Refer section 1.5 Impact of Technology on Society and Business.
3. Refer section 1.5 Impact of Technology on Society and Business.
4. Refer section 1.6 Forms of Technology.
5. Refer section 1.2 Concept and Meaning of Technology.
1.11 Case Study
Case Study on the Inclusion of New Technology
This case study is about the incorporation of the technology in the Xerox
company. In 1990, the XYZ research centre that was set up by the Xerox
company was separated from the parent company as a separate entity.
The new organization called as the XYZ Ltd was expected to provide the
research services and innovative products to the industry leaders in
different areas.
In three decades it came with the new technologies and brought the good
will and prestige to the Xerox company but the profit was very less. In the
year 2000, it experienced a dip due to corporate crisis and the Chief
Executive Officer (CEO) also died. After this incident, Murthy became the
CEO and then he concentrated aggressively on improving the profitability.
The company took a massive restructuring program to maintain stability in
the company. First it was thought to combine with the other companies but
later it was considered as a wholly owned subsidiary of Xerox. There was a
great time for the company from the early 1960s to the 21st century when
many of the technologies introduced and the laser printers all came to the
use. In the 21st century the XYZ research centre was aimed to work on
innovative ideas and produce products like the blue lasers, multi beam
lasers and micro-electro-mechanical systems which has revolutionised the
Xerox industry.
Challenges:
1. Understanding the conflicting structure and culture issues involved in
managing the innovation successfully.
2. To study about the ways in which the organization lost its opportunities in
the past and the way that it has to be restructured to meet the needs of the
future.
Results
The Xerox company is now technologically improved a lot.
Questions:
1. What are the challenges faced by the XYZ research centre?
Hint: Understanding the culture of the organization
2. What was the main aim of New CEO Murthy?
Hint: Profitability.




OM0018-Unit-02-Technology Acquisition
Unit-02-Technology Acquisition
Structure:
2.1 Introduction
Objectives
2.2 Technology Acquisition
2.3 Alternatives for Acquiring New Technologies
2.4 Reasons Compelling a Company for Obtaining a New Technology
2.5 Management of Acquired Technology
2.6 Measures of Scale and Mechanisms for Acquiring Technologies
Economy of scale or Scale economy
Levels of scale
The measurement of scale
Factors affecting the choice of scale
2.7 Summary
2.8 Glossary
2.9 Terminal Questions
2.10 Answers
2.11 Case Study
2.1 Introduction
Previous unit familiarised us with the concept of technology, the evolution and growth of
technology, role and significance of management of technology. We have also seen the impact
of technology on society and business and the different forms of technology that are process
technology and product technology.
This unit will familiarise us with acquisition of technology which plays an important role in
managing the planning process in an organization. Acquiring technology is helpful for evaluating
and managing the technology.
In this unit we will study about the alternatives for acquiring new technologies. This unit will also
give us an overview of the reasons that compel the company for acquiring technology. We will
also learn about the way to manage the acquired technology and different measures of scale
and mechanisms for acquiring technology.
This unit will enable us to analyze the importance of technology acquisition and its relation with
management.
Objectives:
After studying this unit, you should be able to:
Explain the meaning of technology acquisition.
State the available options/alternatives for acquiring new technologies.
Cite the reasons compelling a company for obtaining a new technology.
Describe how acquired technology should be managed.
Explain different measures of scale and different mechanisms for acquiring technologies.
2.2 Technology Acquisition
As we are familiar with the term technology, let us now study the meaning of technology
acquisition.
Generally, we can define technology acquisition as the process that requires the strategic
planning, and is more time consuming and complicated. Acquiring technology involves the
purchase of external technology and knowledge without getting co operation from the source.
This external knowledge involves incorporation of knowledge into machinery and equipment.
We can acquire this external knowledge by hiring the people those who have the basic
knowledge of new technology.
The acquisition of a new technology arises from the need to implement a corporate technology
strategy, and as such, all the efforts and planning need to be focused on the problems of
technology acquisition. We know that a new technology is often acquired in an embodied form
along with the equipment and facilities. We also need to carry out further application
development work by establishing operational skills. The operational skills include plant-
commissioning, demonstration, and operator training. This also includes activities which help
supplier of equipment in the process of Technology acquisition.
By now, we are familiar with technology acquisition. Now let us have a brief discussion on the
advantages and disadvantages of technology acquisition.
Advantages of technology acquisition
There are some advantages that are associated with the acquisition of technology.
Acquisition helps us to get the complementary products that help for the success of the
organisation.
Acquisition helps us to acquire more revenue because of the new technologies that are
incorporated.
Acquisition helps for the improvement of research and development centres.
Our understanding of the topic will be incomplete, if we study only the advantages and leave
the disadvantages. So, let us now have a look at the disadvantages of the technology
acquisition.
Disadvantages of technology acquisition
The technology acquisition causes the change process in an organisation that affects many of
the employees of that organisation.
The technology acquisition causes the confusing and disruptive process in the organisation.
Self Assessment Questions
1. Technology acquisition is the process that requires the strategic ________.
2. Acquisition helps us to get the complementary products that help for the success of the
organisation. (True/ False)?
3. The technology acquisition causes the _____________ in the organisation that affects many
of the employees in an organisation.
2.3 Alternatives for Acquiring New Technologies
As we are now familiar with technology acquisition, we will study the different alternatives for
acquiring new technologies.
We are presently living in the competitive world. The organisations have to use the advanced
technologies to remain in competitive market of today, for long. The technology managers have
less time, fewer resources and more problems for the implementation of the technology. There
are many alternatives for acquiring the internal and external technologies. The different
alternatives are:
Develop technology in-house: This involves development of the technology within the
house. In this, the company has to make an estimate of the financial costs that are associated
with the Research and Development (R&D) and the cost of the opportunities that are associated
with R&D. This also assesses the suitability of the employees for the new project.
Buy the firm that has the technology: We have to invest for the introduction of the
technology. It is also important that following the purchase, the operations can be effectively
integrated and that there is no undue loss of key staff.
Enter into joint ventures: We know that many of the companies share the costs of the new
technology; in the same way, the benefits are also shared. The membership of the research
gets more attraction when the risks are high and the costs are heavy. There will be existence of
very good relationship between the key supplier and the major customer.
Obtain license for use of technology: We know that the term license means the purchase of
access. In this case it is the purchase of access to the proprietary technology. It can be anything
from the right to use a particular patent to a complete package, which includes know-how
agreements, commissioning assistance for new plant and processes and the provision of
updated designs and other technical information.
Education and training: The soft skills required for the new project are developed by the
training programs in the organisation. The experience makes use of techniques more
effectively. We can gain experience by keeping in touch with other companies.
Self Assessment Questions
4. The term license means the purchase of __________.
5. The soft skills required for the new project are developed by the ______________ in the
organisation.
6. The membership of the research gets more attraction when the risks are low and the costs
are also low. (True/False)?
2.4 Reasons Compelling a Company for Obtaining a New Technology
In the previous section, we learnt in brief about the different alternatives for acquiring new
technology. Now let us discuss about the reasons which compel a company for obtaining a new
technology.
The use of new technologies plays an important role in the industry. Whenever a company
wants to adapt the new technologies, it has to make decisions related to the acquisition of the
technology. The company has to see the experience of its R&D for the actual need of acquiring
the knowledge. The acquisition of technology becomes critical when the market lead time and
competition is more. The following explains the reasons that compel the company for
technology acquisition.
Technology acquisition helps to bridge the gap in technology, in the developing countries like
India. The fastest way of bridging the technology gap is through collaborations. Acquiring the
technology from outside company is more costlier than acquiring technology from the R&D of
the same company. It will be better, if we develop the new technologies from the in-house R&D.
The dependence of the company on the collaboration is bad and we should have the self-
reliance in the company every time.
Technology acquisition depends on the policy environment. Sometimes the economic policies
do not allow the foreign countries to sell their goods and services in the domestic market. In
such times, the foreign companies can get the financial returns only through the collaboration
and selling the raw materials and components.
Technology acquisition is the process by which a company acquires the rights to use and
exploit a technology for the purpose of improving or renewing processes, products or services.
It does not include retailed or mass market off the shelf software which is generally governed by
non-negotiable "shrink wrapped" licences.
Technology acquisition is mainly designed for business-to-business technology acquisition. In
few cases, technology comes from a university or research organisation. The origin of the
technology can take place in any area but it has ton be tested, proven and ready to use.
Technology acquisition helps for enhancing the productivity of an organisation. The company
planning for technology acquisition has to make the agreement between the two companies and
even the details of the costs are also present as part of the application.
Self Assessment Questions
7. Technology acquisition helps to bridge the gap in ________ in the developing countries like
India.
8. Technology acquisition is mainly designed for the business-to-business technology
acquisition. (True/ False)?
9. Technology acquisition helps for enhancing the ________ of an organisation.
Activity 1:
Consider that you are the team manager in the company and the company is planning for the
acquiring technology. Prepare a list of the reasons that are forcing to go for acquisition of
technology.
Hint: Bridge the gap in technology.
2.5 Management of Acquired Technology
In the previous section, we learnt about the reasons compelling a company for obtaining a new
technology. Managing things play an important role in an organisation. Even the technologies
that are required also require management. In this section, we will study about the management
of technology acquisition.
Once the strategic decision has been made to acquire a technology from outside the company,
the management of that acquisition becomes important. The following are the important factors
that have to be kept in mind for managing the acquisition.
The role and management of technology within the company needs to be assessed, especially
its capability of managing the transfer activity.
The allocation of appropriate staff for the transfer and application of the technology is done.
The project manager must be at a senior level, while his colleagues need to have engineering
application and change management skills.
The corporate objectives include capability and the technology transfer track record of the
prospective transferor. Effective technology acquisition is often based on a longer-term
relationship.
Clear technical and contract specifications are essential. Because of the nature of the
technology and its integration with intellectual property, the transfer constituents vary in type
and character. If the transfer is from a different culture, special attention has to be given in detail
and the meaning of language.
Contract negotiations can be time consuming. They require diplomatic skills and careful
record-keeping.
Because of the nature of its acquisition, transferred process technology needs to be handled
with even more care than indigenous technological change. It is important that all affected
company staff appreciate the nature and reasons for the acquisition.
In managing the acquisition technology, we have seen the factors that have to be kept in mind.
The managing technology should also consider the evaluation of technology. This topic of
evaluation of technology is considered in the next few paragraphs.
Evaluation of technology
The evaluation of technology is necessary in managing the acquisitions of technology. The
Evaluation can be done based on the feasibility or based upon some criteria for managing the
acquisition. Let us firstly discuss about the evaluation based on the technical feasibility.
Evaluation based on feasibility: The evaluation based on technology feasibility involves the
evaluation process that decides whether the technology is suitable for the organisation or not.
Let us see the factors that are considered in the evaluation based on technology feasibility as
shown in the figure 2.1.

Figure 2.1: Factors of Feasibility
The figure 2.1 shows the Factors of Feasibility. Based on these factors, the firm analyses the
technology and takes the decision whether to accept or reject the technology. Let us briefly
describe these factors.
Manual difficulty: The manual difficulty involves finding the skills that are required in acquiring
technology.
Space requirement: This involves checking whether it can accommodate the technology.
Life of the equipment: This involves finding the life of the equipment, so that it helps in
choosing the alternatives.
Infrastructural changes required: This involves the requirements related to the
infrastructure. This checks whether the organisation possess the infrastructure to take the new
technology or not.
Raw materials requirement: The raw materials that are required both quantitatively and
qualitatively to adapt the new technology is found out.
Capacity: This involves the capacity of an organisation to adopt the new technology.
Availability and maintainability: This checks the availability and maintenance of new
technology in the organisation.
Capital investment required: This helps us to decide whether to invest in the technology or
not. The investment is required for all the technologies that are introduced.
We have analysed from these factors that the company choose the technology depending on
the feasibility of the technology. In many of the cases, the company will not consider a single
technology, but it considers the alternate technologies and chooses the best one. When there
are more than one technologies, they are evaluated on the basis of some criteria like Economic
criteria, Techno-economic criteria and multiple criteria. Therefore, we have the technology
choice model which considers the different technologies with equal evaluation. Now, let us study
about the Technology choice model.
Technology choice model
The technology choice model is an integrated model which considers different criteria with
uniform scale of evaluation.
The technology choice model criteria are shown in the figure 2.2.

Figure 2.2: Technology Choice Model Criteria
Let us briefly explain these three criteria of technology choice model.
Economic criteria: Economic criterion is the most popular method as it involves the monetary
value and expresses the benefit in terms of monetary value. The commonly used economic
criteria method is the discounted cash flow method and parameters are the present worth or the
internal rate of return. The discount is generally made assuming a minimum attractive rate of
return (MARR). However, these monetary values can also be adjusted for inflation which is not
a normal practice.
Techno-economic criteria: Techno-economic criteria involve the verification of technical
feasibility. In addition to economic feasibility, technical feasibility is also verified when the
technologies are complex. The alternative technologies are compared for a specified set of
parameters such as:
Raw material requirement.
Personnel requirement.
Space requirement.
Material handling requirement.
Capacity per unit time.
Useful life.
Among these parameters, we can find that some are quantitative and some are qualitative. The
qualitative parameters are qualified over the scale from 0-10 as that in social sciences. An index
is then prepared by normalising the quantitative parameter values and by the addition of the
values of all parameters. Both economic evaluation and techno-economic feasibility are the
conventional methods of the choice model. They are, no doubt, necessary but are not enough to
evaluate technologies in the present situation, where the world is more concerned about the
degrading environment, mining societies, and so on. Therefore, it has become essential to
evaluate alternate technologies using multiple criteria such as environmental, and social, in
addition to economic and technical criteria. Let us study the multiple criteria.
Multiple criteria: We have to evaluate the alternate technologies using multiple criteria such
as environmental, and social, in addition to the economic and technical criteria. Technology
selection is required in all the industries of the present world. We can see many of the methods
in the multi-criteria decision making. The multiple methods include Simple weighted average
method, Elimination and choice translation algorithm (ELECTRE), and Preference organization
method for enrichment evaluation (PROMETHEE). However in these methods, there is no
formal procedure for evaluation of weights, which is essential for technology choice-making.
These are helpful in the selection of suitable technology for an organisation.
Self Assessment Questions
10. Economic criterion is the most popular method as it involves the _________.
11. Expand PROMETHEE.
12. The technology choice model is an integrated model which considers different criteria with
different scale of evaluation. (True/False)?
Activity 2:
Suppose that you are the team lead in the company and the company has decided to go for the
acquisition of the new technology. You have to check the feasibility of technology. List the
feasibility factors that you will follow for the same.
Hint: Manual difficulty.
2.6 Measures of Scale and Mechanisms for Acquiring Technologies
In the previous section, we have learnt about management of acquired technology. In this
section, we will study about the measures of scale and mechanisms for acquiring technologies.
This plays an important role in management of acquired technologies.
Technologies are evaluated taking in consideration of the competing technologies and these are
evaluated independently. Evaluation becomes necessary not only for choosing appropriate
technology, but also for verifying whether the technology in question is suitable to the
environment or not. It is said that a technology, which became popular or which was found to be
the most successful technology in a country may not be suitable to another country. The people
among countries, even within the large countries, differ in their culture, attitudes, education,
economic status. However, before determining the alternative technologies, it is necessary to
determine the scale of proposed operation. So, now we will demonstrate the scale economy.
2.6.1 Economy of scale or Scale economy
We know that every organisation requires scale of economy to run the business and for the
evaluation of the acquired technologies. Scale is not merely size but size with proportions and
consequences. When this proportion is not in harmony, it creates problems. We can define
scale as the level of planned production capacity that has determined the extent to which
specialisation has been applied in the sub-division of the component tasks and facilities of a
unified operation. We can even take the size of production or quantity of service that provides a
break as economy of scale. In many situations, it is observed that as the size increases, the
cost per unit decreases. However, the increased size is not without problems. It was also found
that the capital investment per unit of output, material cost per unit of output, fuel cost per unit of
output and so on. are lower with large size. We can achieve economies of scale by:
Specialisation of technology.
Concentration on production.
Rationalisation and standardisation of the new technology.
Let us see some disadvantages associated with the present large scale industries are:
Environmental problems: After the introduction of new technology there can be some
problems that effect the environment.
Unemployment: The introduction of new technology reduces the employees needed in the
organisation. The introduction of new technology has much use of the machines and reduces
the man power that is needed.
Market restrictions: There are market restrictions with the new technologies in which there
are some technologies that are applicable only for the few markets.
2.6.2 Levels of scale
Now, as we know the economy of scale, it is easier for us to understand the levels of scale,
which play an important role in mentioning the different hierarchies.
We can divide the problem of scale into the five hierarchies of levels, as given in the figure 2.3.

Figure 2.3: The Hierarchies of Levels
Let us now have an overview of these hierarchical levels of scale.
Level 1: Level 1 is the scale of a single unit of physical equipment called as the engineering
level or unit level. This involves the use of several separate units. We can call the scale of single
product line as the product level because the product deals with single level.
Level 2: Level 2 involves the arrangement of several product lines at a single site. This is the
scale of a single plant or factory. We can call it as the plant level.
Level 3: Level 3 is the scale of a single organisation. We can call it as the corporate level and
all the functions in this are related to the corporate scale.
Level 4: Level 4 is the scale of total industry or the industrial complex. This involves the co-
operation among organisations. This is called as the industrial level. Even in competitive
environment, common pressures and the perception of common interests foster co-operative
behaviour at the industry level.
Level 5: Level 5 is the scale at the national or society level.
2.6.3 The measurement of scale
After studying the different levels in the scale, we will now study about the measurement of
scale.
Generally, it is difficult to provide a single measure of scale. This involves the process of
determining the functions and purposes to determine the measures. Let us have a brief
discussion on these measures below:
Absolute measures of scale: The absolute measures of scale include the measures like:
Number of people employed.
Physical area or volume occupied in an organisation.
Physical mass or volume of daily or annual throughput.
Financial value of the capital employed.
Financial value of daily or annual output.
Relative measures of scale: The relative measures of scale include the measurement of
factors like:
Size of unit being considered.
Size of largest existing unit.
The performance measure of scale: The performance measure of scale includes the factors
that are related to the performance of the organisation. The performance measure of scale
includes the measures like:
Output of useful goods: This involves the resources that are given as the input for the
process. The output depends on the input that is fed in to the process.
Time / year capacity: This involves the capacity of the organisation to produce the product.
This involves the capital that has to be invested.
Own market share: This involves the market share of the target competitor. This helps to
compete with the other industries in the market.
After learning about the measures of scale, it is incomplete if we leave the factors that affect the
choice of scale and the optimum scale approaches to solve the problems of scale. So, let us
now discuss about them.
2.6.4 Factors affecting the choice of scale
There are many factors that affect the choice of scale. The factors include the political factors,
social factors like unemployment and the economic factors. Generally, the factors that favour
the increase of scale are mainly internal to the firm, whereas the factors that cause the
decrease of scale are mainly external factors. We may initially use a balance between these
two, to determine the optimum scale. We can use any of the following approaches to solve
problems of scale.
Industry-specific approach: In this approach, it is assumed that the problem of scale is
technical and industry specific. For example, electricity cannot be stored, ice-creams are
perishable and so on. While approaching the scale of such a product, you must be able to
distinguish between conclusions specific to that industry and you can decide the application of
those products.
Engineering Generalisation: Engineering aspects tend to be industry specific, but there have
been some cross-industry generalisations. The cost, here, is expressed as:
Cost = constant x capacity
C = a + p
k

Here, Constant a is the fixed cost, where as the pk is the variable cost. k is obtained from
empirical studies and recorded for a wide variety of processes and equipments. Now theoretical
base is explained for values of K but empirical results are better.
In engineering analysis, the decision is crucial at the time of procuring the equipment. Additional
capacity may not cost more if purchased at the beginning instead of a low capacity one but it
may be very costly to add that capacity later.
Technological development: This also appears to be engineering approaches but deals with
dimensional analysis and models of growth. This specifically deals with the evolution over a time
period of the relationships between the key features of engineering systems. Therefore, a
generic model is developed here:
Y
t
= a t
b
(or) Y
t
= c X
t
d

Where, Y
t
- the size of the largest unit at time t
X
t
- cumulative production up to t, and a, b, c, d are constants for the particular technology.
Industrial economics and econometrics: This approach uses static economic models and
U-shaped cost curves more generalised using standard regression techniques to fit various
parameters, rather than considering the plant design and operation. Input - Output approach is
one of the prominent techniques of econometrics.
Engineering Economic systems: This involves the use of analytical models to determine
the choice of optimal size. This considers the effect of market growth, desired Return on
Investment (ROI), scale characteristics and the costs of alternatives on the optimal size and
optimal mix. This involves the concepts like social science and organisation scale and the
control theory. These are explained as follows.
Social Science and organizational scale: It says that the scale also depends upon the size
and form of the organization. Studies reveal that there is a close relationship between the
organisational form adopted and the phases of development of industry.
Control theory: This concept involves the analytical models to control the strategies.
Computer simulation models underlying interactions consider it as a dynamic and stochastic
system and use control strategies.
Self Assessment Questions
13. Level 2 in the levels of Scale is called as the plant level. (True/False)?
14. Industry-specific approach assumes that the problem of scale is technical and
________specific.
15. Industrial economics and econometrics uses economic models. (True/ False)?
Activity 3:
Consider that you are working in the company that has acquired technology from the external
sources. You have to see the performance measure of the scale. List the factors that are
involved in the performance measure of scale.
Hint: Output of useful goods.
2.7 Summary
In this unit, we learnt about the technology acquisition, which is the process that requires the
strategic planning. Acquiring technology involves the purchase of external technology and
knowledge without the co operation of the source.
We also studied the different alternatives for acquiring new technologies. These different
alternatives include develop technology in-house, buy the firm that has technology, enter into
joint ventures, obtain license for use of technology, education and training.
We also analysed the reasons that compel the company for the technology acquisition, since
the technology acquisition helps the industry in many ways especially in the field of R&D.
We know that when we planned to acquire the knowledge from outside then it needs to be
managed properly. This also requires the evaluation of the technology that can be done in
different ways. One way of evaluating is the evaluation based on the feasibility and the other
way is by the technology choice model that considers the three criteria. These criteria include
the economic criteria, techno-economic criteria and multiple criteria.
We have also discussed about the measures of scale and the levels of scale that is given in the
hierarchical way.
2.8 Glossary
Term Description
Acquisition
The purchase of one corporation by the other. It can
be through the purchase of shares or assets.
Proprietary technology
This is the private technology that is owned by the
particular company.
Corporate technology strategy
The plan that integrates the strategies of whole
business within the organisation in terms of
technology.
Plant-commissioning
The activity that converts the installed hard-ware of a
new plant into operational activity.
Operator training
The special training given in the organisation for the
individuals to learn the specific skills.
Shrink wrapped licensee
The end user agreement that is enclosed with
software in plastic wrapped packaging.
Product lines
The group of products that are developed by the
organisation that are closely related in terms of use,
production and marketing requirements.
2.9 Terminal Questions
1. What do you mean by technology acquisition?
2. Explain any two alternatives for acquiring new technologies.
3. Give the reasons that compel a company to go for the new technology.
4. Explain in brief about evaluation based on feasibility.
5. Write a short note on economy of scale.
2.10 Answers
Self Assessment Questions
1. Planning
2. True
3. Change process
4. Access
5. Training programs
6. False
7. Technology
8. True
9. Productivity
10. Monetary value
11. Preference Organization method for Enrichment Evaluation
12. False
13. True
14. Industry
15. True.
Terminal Questions
1. Refer section 2.2 Technology Acquisition.
2. Refer section 2.3 Alternatives for Acquiring New Technologies.
3. Refer section 2.4 Reasons Compelling a Company for Obtaining a New Technology.
4. Refer section 2.5 Management of Acquired Technology.
5. Refer section 2.6.1 Economy of scale.
2.11 Case Study
Case study on acquisition of technology
This case study deals with the technology acquisition using the priority
setting method in the ABC company. This involved the introduction of
technology, for the development of an industry. This involved a decision
that has to be made for whether to develop the technology internally or buy
the technology from the external resources. The analysis of methods was
carried out and an algorithm was developed to select both priorities of
technologies. In this case, the critical factors were chosen, including the
availability and level of external resources depending on the political
situation and the cost of technology acquisition. The ABC company team
developed the feasibility attractiveness map. The parameters like feasibility
and attractiveness are considered in preparing the map. The map was
developed for both the technologies. The technology which has the majority
score in both the parameters is the resulted one and that technology is
chosen for the acquisition. The team of ABC company has developed morin
matrix segmentation which has three regions. If the technology is able to
occur in region A, then it is key technology with high feasibility and can
work on itself. Otherwise, it has to go for the external resource. Even to
develop it internally, it has to look the political situation of the country and it
should also consider the cost of internal R&D.
Based on all the factors, it has set priority to go for internal development of
R&D.
It has undergone many of the challenges mainly in improving the R&D of
the company. They are:
The shortage of those employees who know the new technology.
The cost of the R&D became more than that was expected.
But the company was successful in managing the new technology with the
available staff and the cost by seeing some other alternatives of the same
quality product.
Results:
The company has chosen the acquisition of technology internally by
devolving the R&D of the company. This helped the company for placing
itself in the competitive market.
Questions:
1. What are the challenges faced by the company in developing the R&D of
the company?
Hint: Cost of R&D.
2. What was the step taken by the company to reduce the cost of R&D?
Hint: Alternative.



OM0018-Unit-03-Technology Forecasting
Unit-03-Technology Forecasting
Structure:
3.1 Introduction
Objectives
3.2 Concept of Technology Forecasting
Characteristics of technology forecasting
Technology forecast method
Principles of technology forecasting
3.3 Technology Forecasting Process
3.4 Need and Role of Technology Forecasting
3.5 Forecasting Methods and Techniques
3.6 Planning and Forecasting
3.7 Summary
3.8 Glossary
3.9 Terminal Questions
3.10 Answers
3.11 Case Study
3.1 Introduction
By now, we are familiar with the concept of technology acquisition, advantages and
disadvantages of technology acquisition. Previous unit also familiarised us with the alternatives
for acquiring new technologies, and the reasons compelling a company for obtaining new
technologies. We also learnt about the management of acquired technology that is required in
all companies. We have also discussed about the measures of scale and mechanisms for
acquiring technology.
In this unit, we are going to define technology forecasting and discuss about the need for
technology forecasting. We will also study about the role of forecasting in planning process. We
are also going to discuss the different forecasting methods and techniques. At last we will see
how to relate planning and forecasting.
Objectives:
After studying this unit, you should be able to:
Define technology forecasting.
Justify the need for technology forecasting.
Examine the role of forecasting in planning process.
Describe and apply different forecasting methods and techniques.
Relate planning and forecasting.
3.2 Concept of Technology Forecasting
Before we start our discussion on technology forecasting, let us first define forecasting.
Generally, forecasting refers to the prediction of future on the basis of available information. In
the early days, traditional forecasts used to deal with the speed and power. They did not focus
on the structures of the organisation. It was assumed that inventions of the future are not easy
to predict. The forecasters were not focussed on evaluation of the forecast process.
We can define technology forecasting as the process that predicts the future characteristics and
timing of technology. The technology forecasting is done by considering the parameters,
attributes and capabilities of technology.
The forecasting process helps in effective management of technology. The forecaster need to
have clear idea of the organisational goals and goals of the units for which the forecasting is
prepared. Forecasting consists of the strength and weakness of the empirical sciences. The
technology forecasting does not have any law because of the complexities that are associated
with the systems. The complexities in technical, environmental, economical and ethical contexts
are very difficult to remove. The forecaster has to take the historical examples in order to
forecast in a better way.
Thus, we can say that technology forecasting deals with the prediction of future technological
capabilities, attributes and parameters. The technology forecasting is done at the early stage of
the project life cycle. The decisions made at the early stage influence the subsequent time of
that project. Technological forecasting is an attempt to predict the way things are going to be
done.
We know that technology considers both hardware and software. The hardware includes the
mechanical or physical hardware and software includes the procedures and methods for
organising the human activity. In this regard, the technological forecasting is nothing but the
future characteristics of useful machines, products, processes, procedures or techniques.
3.2.1 Characteristics of technology forecasting
Generally, there are some characteristics that are associated with technology forecasting. We
will now discuss them briefly.
A technological forecast relates to certain characteristics such as levels of technical
performance (e.g., technical specifications including energy efficiency, emission levels, speed,
power, safety, temperature, so on), rate of technological advances (introduction of paperless
office, picture phone, new materials, costs, so on).
A technological forecast also relates to useful machines, procedures, or techniques. In
particular, this is intended to exclude the items intended for pleasure or amusement from the
domain of technological forecasting, since they depend more on personal tastes rather than on
technological capability.
A technology forecast can be for short-term, medium-term, and long-term.
3.2.2 Technology forecast method
There are some steps in deciding the technology forecast method. We will now discuss these
steps:
Selecting information requirements: In this first step in deciding the technology forecast
project, we have to determine the purpose of the forecast that the project has to serve. We
require the following information in this case of forecast.
The rate at which new technologies replace the old one: This tells the rate at which the
new technology replaces the old technology. The substitution analysis is helpful for the growth
of the company. For example, the substitution of copper cable with the optical fibre cable.
Assistance in the management of R&D: The forecast helps to set the realistic goals for
product or process of R&D project. Technology forecast also helps in setting the strategies for
different technologies. Technology helps to improve the overall schedule of the R&D.
Evaluation of the present value of technology being developed: It is common that we
provide the monetary value to the technology during its development. Use of technology
forecast in the evaluation process involves the analysis. In this, we consider when and to what
extent the technology will be commercialised. This involves the way profitability of a company is
affected by competing and non-competing technologies.
Evaluation of the new products that can present threats or opportunities: The evaluation
is done to verify whether the new product is causing the threats or causing the opportunities.
Analysis of new technologies that may change the strategies: This analysis helps to
evaluate the improvements that a new technology offers for its internal strategies.
The elements of a forecast - the output: The data that is collected for the forecasting
process defines the amount of information that is contained in the technology forecast. We can
divide the information into four elements.
The technology being forecast (Qualitative element): This involves definition of what to
forecast in the technology. It also defines whether it is forecasting a single approach of
technology or the common technology.
The characteristics of the technology (Quantitative approach): As we have defined what
to forecast, let us now learn how to represent the technology in the form of quantitative terms.
There are both the functional and the technical parameters with this. The functional parameters
are related directly to the user. The technical parameters include the parameters like the inlet
temperature, compression ratio. We cannot mix both the technical and functional parameters.
Time: While making any decisions regarding technology, we have to consider the time when
we are forecasting for any of the project. The time of forecasting is concerned with the time the
condition or event occurs in the future.
Probability: Usually, there are some uncertainities associated with the forecast. This
probability factor defines the probability of achieving the fixed level capacity of an organisation.
Forecasting resources - the input: We have already defined what to forecast and what is
required from the forecast. Now let us learn about the inputs that have to be fed as the
resources to get the needs satisfied.
Assumptions: We can consider the assumptions to set the real factors. All the forecasts
mainly depend on the assumptions.
Insight: This is helpful to start the qualitative element of the forecast. We have to use our
minds and knowledge to form the relationship with forecast. This insight helps to merge
divergent thinking with creativity.
Data: As many of the forecasting techniques depend on the past and are developed on the
basis of past, so we need proper data that represents the technological performances of the
past. It is required to forecast for the future.
Judgement: This involves the judgement that has to be taken by the forecaster when there is
no data about the past.
3.2.3 Principles of technology forecasting
Till now, we have studied about the technology forecasting and its characteristics. Now, we will
discuss about the principles of technology forecasting, that are associated with rational
approach to predict the future.
Let us now discuss some principles of the technology forecasting.
Correct for biases in judgemental forecasts: The judgemental forecasts are strongly
influenced by the biases, such as, desiring for the outcome.
Forecasts provided by efficient markets are optimal: Most of the times, the forecast that is
developed on the past fails and this has to be developed on the basis of the present markets, so
that we can have the optimum result at least.
Use the longest time series available: The principle of using longest time series involves
using the longest time that is available and this conflict with using more relevant data.
Econometric forecasting models should be fairly simple: There should be simplicity in the
forecasting models.
Do not use judgement to revise predictions from cross-sectional forecasting models
that contain relevant information: We should avoid judgemental revisions and include the
available information about job of a candidate in a quantitative model.
Theory should precede analysis of data in developing econometric models: The
research on
[1]
parole predictions concluded that the theory should precede the development of
predictive models.
Self Assessment Questions
1. Predicting the _________ is an essential element of the planning process
2. All the forecasts mainly depend on the assumptions. (True/False)?
3. We provide the _____________to the technology during its development.
Activity 1:
Consider that you are working in ABC Company as the team lead and you
have to carry out the technology forecasting. Explain the principles of
forecasting process.
Hint: Forecasting resources-the input.
3.3 Technology Forecasting Process
In the previous section, we learnt about principles of technology forecasting. Now, we will
discuss the technology forecasting process.
The forecasting process
Twiss
[2]
has suggested some general elements for the technology forecast process.
The forecasting process involves three elements that are shown in the
figure 3.1.

Figure 3.1: The Forecasting Process
As we can see in the figure 3.1, that there are three elements involved in the forecasting
process, we will discuss them briefly. The first element is the input that has to be fed for the
process. This involves the requirements that we have to fed, so the decision-maker of the
forecast will gather the information like the assumptions and data, and feeds the information to
the second element named as forecasting techniques which will process depending on the
output that it has to contain. Lastly the resources that are required to define the forecast are
identified.
According to our working definitions, the main function of the technology is "
[3]
to lead the
decision making process towards profitable solutions with minimum uncertainties.
We can study technology forecasting in six phases, as given in the
figure 3.2.

Figure 3.2: The Components of Technological Forecasting Process
Let us now briefly explain these six phases.
Identification of needs: This is the first phase in technology forecasting process. After
identifying the expected outputs and the objectives of the future, a thorough analysis is done in
order to make sure the relevance of technology forecasting. This phase ends with a decision of
technology forecast.
Prepare project: This is the second phase in technology forecasting process. In this phase,
the forecasting activities that are planned and resources are allocated. The roles of each human
resource are carefully prepared and explained. There are three human resources, clients, core
tem and external participants. The client includes both customer and user of technology
forecast. The core team performs the activities like defining references, writing documents,
creating the structure of the forecast and filling it. The core team co-ordinates the efforts of
experts from team, external participants and clients which help to develop an entire forecast.
The external participants help in providing data, information and experience. The major sources
of information and data are identified in this phase.
Define objectives: This is the third phase in technology forecasting. This phase once again
goes through the objectives that are defined in the first and second phases. This phase decides
the dimensions of the forecast. This includes both the normative and exploratory forecast. We
use normative forecast, when the desirable future is seen and the normative forecast focus on
finding the path, from the present to the desirable state.
Perform analysis and develop Technology Forecast (TF): This is the fourth phase in the
technology forecasting process. This is the central part of the present research.
In this phase, we start with defining the boundaries of the technological system that has to be
forecasted. This, in turn, involves definition of other four steps that are clearly shown in the
diagram. The four steps in defining the boundaries include defining of the key functions and
futures, defining system in relation with the laws of system incompleteness and energy
conductivity, defining the system in terms of technological, social and environmental contexts
and lastly the analysis of the drivers and barriers for the development of the system.
After completing the definition of the boundaries, we get a shape of problem and also the
contradiction network. We have to capitalise this set of problems. This also includes the four
steps as shown in the figure 3.2. The first step in this, is reformulating the technological barriers
into the contradictions. The next step is, defining critical-to-X features, and third step involves
the revising and reformulating the collected contradictions to match with the critical to X
features. The last step in this involves mapping of obtained contradictions as a network. The
network consists of critical-to-X features, components of system and opposite values of
features.
The next step in the analysis and develop TF is the analysis of limitation of resources. This
helps to find the resources that are less and causes problems on the map. R&D helps to get the
raw materials and solve the problem. This also helps in determining the time delays of the
activities.
The next step in the analysis and develop TF involves; build the time diagram. This uses the
results that we get after the problem mapping. The different order of critical to X features is
developed by considering the different contexts.
Validate results: The fifth phase in the technology forecasting process is to validate results.
This includes the customer satisfaction with the results of TF. There are different processes that
are associated with the evaluation of the results of the forecast. Our R&D uses the traditional
method of evaluating the result of forecast. We can do peer review with the external experts and
our colleagues in between working hours of the forecast to make the evaluation easy.
Application of TF: The last phase in the technological forecast is the application of TF. This
depends mainly on the needs and the formulated objectives. We have seen the developing of
TRF using the contradiction networking. This helps mainly in all the projects.
Self Assessment Questions
4. Prepare project phase involves the forecasting activities that are planned and _________ are
allocated.
5. Normative is used when the desirable future is not seen. (True/ False)?
6. Application of TF depends mainly on the needs and formulated ________.
Activity 2:
Consider that you are the manager involved in the process of forecasting,
in a company. Suggest the phases in which you will carry out the
technology forecasting process.
Hint: Application of TF.
3.4 Need and Role of Technology Forecasting
In the previous section, we learnt about the technology forecasting along with the diagram. In
this section, we will analyse the need for technology forecasting, and role of technology
forecasting in planning process.
Need for technology forecasting
Today, we are mainly focussing on the corporate strategies, as the pressure on R&D planning is
increasing. The technology forecasting is needed for the long-term planning process.
Technology forecasting helps us in finding out the opportunities at earlier stage, and to evaluate
the significance of these opportunities.
Many different industries utilise technology forecasting for different purposes. They use it to:
Identify and evaluate new technology-based products.
Make better technology investment decisions and projecting technology advances by providing
information.
Define market needs for new technologies.
Project market adoption rates for new technologies.
Identify critical technologies and gaps.
Formulate strategic models for future development.
Role of Forecasting in Planning Process
As we have already analysed the need for technology forecasting, we will now discuss the role
of forecasting in planning process.
The forecast serves as an input to the process of making plans and decisions. Forecasting
plays many roles in planning. Let us briefly describe these roles.
The forecast identifies limits beyond which, it is not possible to go.
The forecast establishes feasible rates of progress, so that the plan can be made to take full
advantage of such rates; conversely, it does not demand an impossible rate of progress.
The forecast describes the alternatives which are open and can be chosen from.
The forecast indicates possibilities which might be achieved, if desired.
The forecast provides a reference standard for the plan. The plan can thus be compared with
the forecast at any point in time, to determine that it can still be fulfilled, or, because of changes
in the forecast, it has to be changed.
The forecast furnishes warning signals, which can alert the decision maker that it will not be
possible to continue present activities.
Note that the purpose of the forecast is to improve the quality of our decisions related to
selection of an alternative from available alternatives, and not to force us to accept a particular
decision.
Today, technology forecasting has become popular in the corporate world. All companies
including large as well as small depend on technology forecasting for their survival. Large
companies are using technology forecasting for centralising the efforts of R&D and planning for
developments of new products; at the same time, the survival of smaller companies depends on
technological innovation by using appropriate methods of technology forecasting.
Self Assessment Questions
7. The technology forecasting is helpful for the _________planning process.
8. The forecast serves as an input to the process of making plans and decisions. (True/False)?
9. The forecast provides a _________standard for the plan.
3.5 Forecasting Methods and Techniques
In the previous section, we learnt about the role of forecasting in planning process. Let us now
study about the different forecasting methods and techniques.
We can classify the technology forecasting methods into two methods, which are, exploratory,
and normative forecasting methods. These methods include some techniques too.
Let us see these methods and techniques in the figure 3. 3.

Figure 3.3: Different Technology Forecasting Methods
We will now briefly describe the different forecasting methods and techniques depicted in the
figure 3.3.
Exploratory Methods: Exploratory methods are primarily concerned with the analysis of
historical data. Selected attributes such as functional performance, technical parameters,
economic performance, and so on are plotted against time. Since, it is usually assumed that
progress is evolutionary and that technological progress is not random, it is possible to generate
characteristic curves or patterns from the data and from these patterns forecasts can be made
with varying degrees of certainty. The exploratory methods include methods like the intuitive
forecasting, extrapolation, growth curves and technology monitoring. Let us study these
methods and techniques in brief.
Intuitive forecasting: This is the most widely used forecasting method. This method assumes
that the experience and education of experts is sufficient to forecast the vectors of expansion
and evaluation in a specific field. The intuitive method mainly involves two techniques that are
the Delphi technique and the opinion polls technique.
-Delphi technique: The Delphi technique involves the comparisons of expert projections of
future technical developments. This helps us in projecting the future technical and market
developments. This also involves the uncovering of the fundamental differences in opinion. This
technique also identifies the unconventional ideas.
-Opinion polls: The opinion poll technique involves the opinion of different experts. This
technique involves the joint assessment of different ideas. This technique also helps us in
knowing the new technologies and evaluating many of the options of the new technologies.
Extrapolation technique: The extrapolation is the most usual method of forecasting in
exploratory methods. The extrapolation method involves the extension of the present methods
for the future. We can classify the techniques in extrapolation as the linear extrapolation and the
exponential extrapolation.
-Linear extrapolation: The linear extrapolation involves the creation of tangent line at the end
of known data and then extending the line beyond that limit. Linear extrapolation gives the good
results when this is extended approximately as the linear function and not too far behind the
known data.
-Exponential extrapolation: The exponential extrapolation is the non-linear extrapolation. This
includes the historical trends of a particular period of time and these trends are extended for the
future. This is reliable, simple and inexpensive.
Growth curves: This is another method included in exploratory methods. The growth curves
are reformulated from a time basis to an observation basis. This includes the numerous time
series of growth behaviour that are collected and categorised according to data characteristics.
The growth curve includes the pearl curve and gompertz curve techniques.
-Pearl curve: The pearl curve is an inhibitive model of technology growth. Pearl curves are
produced, when there is some competitive situation between the two technologies with same
growth rates.
-Gompertz curve: The gompertz curve uses the pearl curve to show the pattern in which the
maturing technologies approach the development limits. This is the preferred model for the
technology adoptions that are driven by the technical superiority of the new technology.
Technology monitoring: Technology monitoring is also an exploratory method. We can
define this method as a method that looks after the monitoring of the technologies. This is based
on analysis and meaning of signals of change. Growth curve assumes the good continuity
between the past and future and they are incapable of predicting the breakthroughs.
Normative Methods: We have discussed about the exploratory methods and techniques. We
will now discuss the normative methods of forecasting. The normative forecasting provides the
budgetary decision in the technological area. The normative approach includes the well
organised attempts to allocate the money, manpower and the other resources, on a rational
basis, that might affect the technology forecast of the future. The normative methods include the
three methods, namely, relevance trees, morphological analysis and mission flow diagrams.
Relevance tree: The relevance tree includes the hierarchical listing of the tasks and the
alternatives. In this tree, we consider each branch as a goal. The relevance tree is helpful for all
the planners to systematically assess all the interlinked technologies.
Morphological analysis: Morphological analysis involves systematic evaluation of all possible
combination of solutions to the individual parts of a system. This involves the breaking down of
main task into smaller tasks and treating all the individual tasks separately and finding the
solutions for that.
Mission flow diagrams: The mission flow diagram indicates the mapping of all the substitute
routes or sequences for finishing a given task. We need to determine the important steps on
each route and also identify the problems and costs related with each route. Then, we can
derive the performance requirements for every relevant technology and we can use the same as
normative forecasts.
Self Assessment Questions
10. The extrapolation method involves the ____________ of the present methods for the future
also.
11. The pearl curve is an inhibitive model of technology. (True/False)?
12. Exploratory techniques are primarily concerned with the analysis of _________ data.
Activity 3:
Consider that you are working under the manager who is incharge of
technology forecasting in the company. Your manager has asked you to list
the different technology forecasting methods. Prepare a list of such
methods that you will follow.
Hint: Morphological analysis.
3.6 Planning and Forecasting
In the previous section, we have learnt in detail about the methods that are involved in the
technology forecasting. In this section, we will learn about the planning and forecasting.
The planning and forecasting provides us the tools that anticipate demands and respond quickly
when the demand changes. Planning and forecasting allows us to communicate through the
entire supply chain of a company.
Nowadays we have found that there is time lag between the lead time of the event and
occurrence of that event. This lead time is the main reason for planning and forecasting. If the
lead time is zero or very small, there is no need for planning. If the lead time is long and the
outcome of the final event is conditional on identifiable factors, planning can play an important
role. In such situations, forecasting is needed to determine when an event will occur or a need
arise, so that appropriate actions can be taken. A lay person may question the validity and
efficacy of a discipline aimed at predicting an uncertain future. However, it should be recognized
that substantial progress has been made in forecasting over the past several centuries. There
are a large number of phenomena whose outcomes can now be predicted easily. The sunrise
can be predicted, as can be speed of a falling object, the onset of hunger, thirst of fatigue, rainy
weather, and many other events. The evolution of science has increased the understanding of
various aspects of the environment and consequent by the predictability of many events.
Successful forecasting is not always directly useful to managers and others. More than 100
years ago, Jules Verne correctly predicted such developments on submarines, nuclear energy
and travel to the moon. Similarly, in the mid 1800s, Charles Babbage not only predicted the
need for computers, but also proposed the design of computer. In spite of the accuracy of these
forecasts, they were of little value in helping organisations to realize those possibilities or
achieve greater success. We should also know the distinction between uncontrollable external
events (originating with the national economy, governments, customers, and competitors) and
controllable internal events (such as marketing or manufacturing decisions with the firm). The
success of a company depends on both the types of events, but forecasting applies directly to
the former, while decision making applies directly to the latter. Planning is the link that integrates
them.
To draw a line between business forecasting and technological forecasting, business
forecasting uses more quantitative techniques, whereas technological forecasting uses more
qualitative techniques. It is not that business forecasting does not use qualitative techniques,
but it is viewed with relative importance. In fact, it also depends on the factors forecasted. In
business forecasting, the stress is on physical quantities, whereas in technological forecasting it
is on the behavioural issues.
Self Assessment Questions
13. The _________ is the main reason for planning and forecasting.
14. To draw a line between business forecasting and technological forecasting, business
forecasting uses more qualitative techniques. (True/False)?
15. Planning and forecasting allows us to communicate through the entire ___________.
3.7 Summary
In this unit, we discussed about the technology forecasting, which is the prediction of
technology.
We also analysed that the main aim of technology forecasting is to lead the decision making
process towards profitable solutions with less number of uncertainties.
We also studied the six different phases of technology forecasting including identification of
needs, preparation of project, defining objectives of technology forecasting, analysing and
developing technology forecasting, validating the results and applying technology forecasting.
We also noticed that technology forecasting helps to find the opportunities at the earlier stage of
the project. Different projects use technology forecasting in different ways, depending on the
duration of forecasts.
We also studied the technology forecasting methods including the exploratory and normative
methods. We also discussed about the planning and forecasting process that helps to
communicate through the entire supply chain.
3.8 Glossary
Term Description
Inhibitive It means holding back.
Long-term technological forecasts
Forecasts for 10-20 years (a long time for the emergence of
totally new technologies).
Medium-term technological
Forecasts for 2-10 years.
forecasts
Normative Pertains to giving norms or rules.
Reformulating The act of developing again.
Short-term technological
forecasts Forecasts for usually one year or less.
3.9 Terminal Questions
1. Describe some characteristics of technology forecasting.
2. Explain in brief about the six phases in technology forecasting process.
3. Explain in brief about the need for technology forecasting.
4. Write a short note on the role of technology forecasting in planning process.
5. Explain the different forecasting methods.
6. Give a short note on planning and forecasting.
3.10 Answers
Self Assessment Questions
1. Future
2. True
3. Monetary value
4. Resources
5. False
6. Objectives
7. Long-term
8. True
9. Reference
10. Extension
11. True
12. Historical
13. Lead time
14. False
15. Supply chain
Terminal Questions
1. Refer to section 3.2 Concept of Technology Forecasting.
2. Refer section 3.3 Technology Forecasting Process.
3. Refer section 3.4 Need for Technology Forecasting.
4. Refer section 3.5 Role of Forecasting in Planning Process.
5. Refer section 3.6 Forecasting Methods and Techniques.
6. Refer section 3.7 Planning and Forecasting.
3.11 Case Study
This case study is about improving the forecasting abilities of an ABC
software development company. The ABC company delivers the sales,
demand and call volume forecasts for more than 200 customers. The
company has added more CPU servers because of the increasing
demands and it also wanted to expand its business into new markets. The
point of sale forecasts requires more processing power, but the ABC
company didnt have any other that facility.
In order to facilitate more processing power, the cost effective solution was
developed. The company has introduced a windows azure platform that is
able to provide the unlimited processing and storage capacity. The ABC
Company forecasted that it requires the 10 times more capacity of the
presently required storage.
The windows azure platform aims at providing the excellent foundation for
the online product and service offerings. This platform helped to gain more
competitive advantage over the other products in the present market . This
helped to satisfy the customer to the larger extent. There was also an
increase in the information technology of the field.
Challenges:
The ABC company in the point of sale was not having more processing
power.
There were more demands for the CPU.
Results:
The introduction of the windows azure has mainly helped to improve the
processing power
Questions:
1. What are the challenges faced by the ABC company?
Hint: Processing Power.
2. What are the main advantages of introduction of the windows azure
platform?
Hint: Competitive advantage.



OM0018-Unit-04-Technology Strategy and Competitiveness
Unit-04-Technology Strategy and Competitiveness
Structure:
4.1 Introduction
Objectives
4.2 Technology Strategy
Technology strategy and management
Elements of an accessible technology strategy
4.3 Innovation Management
4.4 Competitive Advantage
Components of competitive advantage
Creating competitive advantage using value chain
4.5 Technology Management Evaluation or Assessment
4.6 Summary
4.7 Glossary
4.8 Terminal Questions
4.9 Answers
4.10 Case Study
4.1 Introduction
By now, you must be familiar with technology forecasting and the need for technology
forecasting. Apart from this, previous unit also familiarised us with the different forecasting
methods and techniques and also with the relation of the planning and forecasting process.
In this unit, we will learn about the technology strategy, which involves the strategies that have
to be followed for managing the technology. We will also9 study about the innovation
management and the components of competitive advantage. We will analyse how a firm can
create competitive advantage using value chain. We will also see how to evaluate the
technology management in an organisation.
This unit will enable us to analyse that technology strategies help us to maintain the competitive
advantage. The competitive advantage helps to capture the competitive market.
Objectives:
After studying this unit, you should be able to:
Explain the technology strategy and innovation management.
Explain competitive advantage.
Mention the components of competitive advantage.
Create competitive advantage using value chain.
State how to evaluate/assess the TM in an organisation.
4.2 Technology Strategy
Let us first understand the concept technology strategy.
We know that a strategy is a long term view that describes a high level framework. This high
level framework describes where the organisation needs to be in the future years.
We can define technology strategy as a planning document that explains how technology
should be utilised as part of an organisations overall business strategy. The document is
usually created by an organisations technology manager and should be designed to support the
organisations overall business plan. Most of the organisations use technologies in product and
services generation, but all the organisations will not gain the positive competitive advantage
from the technologies. There are many factors in competition, and technology is only one factor
among them. Yet, some firms effectively use technology as a competitive advantage, and others
do not. One important factor in the successful use of technology is the role of general
management in technology strategy. In particular, it has been managements ability to foster
corporate core technical competencies.
The central idea here is that a business can be developed around a long-term, consistent focus
on a core technological competency. What it means, is to have a core corporate technical
competency, to lead in both innovating new-technology products and improving manufacturing
quality and lowering cost of these products. With this, not only products can be improved, but
also manufacturing process can be improved in future generations of technology.
4.2.1 Technology strategy and management
After studying the meaning of technology strategy, let us learn about the relationship between
the technology strategy and management.
The role of management in building competitive advantage for an organisation, depends on the
technology strategy. It is better to understand the intended strategy of general management. We
can see that there are three aspects of relationship between the management and technology
strategy. These are:
The view of management of the impact of general management on the business and business
strategy.
The management checks whether there is any chance of discerning the technology strategy.
The management checks whether there is any chance of discerning particular orientation
towards new markets, developing superior products and pursuing learning curve and cost
leadership.
The managers play an important role in the decision making process of the technology. The
decision making process involves many problems in sustaining and building competitive
advantage. In the case of competitive markets, technology intensity introduces the layer of
complexity.
4.2.2 Elements of an accessible technology strategy
Till now we have seen how the technology strategy and the management are related. Now, we
will study about the elements of an accessible strategy.
The accessible technology strategy defines how the technology fits within the organisation. This
is mainly helpful in integrating the technology into the business plan and business. It also makes
sure that the accessible technology strategy is aligned with the business needs. An accessible
technology strategy includes some elements.
Let us have a look at these elements in figure 4.1.

Figure 4.1: Elements of an Accessible Strategy
We will now have a brief discussion on the elements depicted in figure 4.1.
Vision statement: This involves the creation of a unique statement that defines the role of
accessible technology in the organisation and how it supports the organisations overall vision of
accessible technology objectives. We have to restate the accessible technology vision, if the
organisational vision already provides the foundation for creating accessible objectives.
Objectives: The objectives define the success metrics and clarify the details of vision
statement. The objectives use the vision of the accessible technology.
Expenses and budget: This involves the clarification that is done in regard to the expenses,
and describes the funding resources. This explains which expenses should become a part of
overall technology purchase, and which should come under a separate budget. Some
organisations include the assistive technology product costs in the main centralised
accommodation budget, and some companies deduct these expenses from the individual
technology budgets of each department. It is important for us to clarify the budget decisions and
see that the funds are allocated appropriately.
Ownership: The ownership defines the responsibilities of the team members in the project.
The ownership also plans the execution of the project. There should be one committee to see
whether the execution of the plan is moving correctly or not.
Self Assessment Questions
1. Technology strategy is a _____________that explains how technology should be utilised as
part of an organisations overall business strategy.
2. The objectives define the success metrics and clarify the details of vision statement.
(True/False)?
3. Vision statement involves the creation of a _________ statement that defines the role of
accessible technology in the organisation.
Activity 1:
Consider that you are the project manager in the ABC Company and you want to access the
technology strategy. List the elements that you will see in accessing the technology strategy.
Hint: Vision Statement.
4.3 Innovation Management
Previous section familiarised us with technology strategy. This section will familiarise us with
innovation management.
We can define innovation management as the systematic processes that help the
organisations in developing new and improved products, services and business processes. This
involves the use of creative ideas of an organisations employees that brings new innovations to
the market place, quickly and efficiently.
In business, innovation should not be only limited to the big ground breaking ideas, creative
workshops and product based companies. Innovation is often small, incremental changes to
products, services and processes. The innovation involves all the managers from different
departments. This needs to be planned and managed as a core business covering all parts of a
business. This needs to be integrated at the strategic and operational levels. The activities of
the innovation need to be driven by the strategy and current business imperatives.
The successful innovation culture consists of all the aspects of a business, and these aspects
have to be managed effectively and efficiently like any other core business.
Innovation can be built into business, at three levels. The three levels are the annual business
planning process, quarterly innovation and day-to-day activities.
Innovation is managed through some sort of platform or application. There are two types of
innovation tools that are, an electronic suggestion scheme, and a management system
controlling the innovation process.
The management of the innovation system need to be given to the senior management to
control the overall system of innovation. The best practices and tools are applied consistently
and appropriately across the organisation. Any platform should encourage for the learning
activity as a core feature.
Installing the innovation culture in any of the company has leaders and teams with ability and
commitment. In order to create culture of continuous innovation, the organisation requires
leadership and commitment from the senior management team. The management team also
see that some staff members in the organisation are rewarded for the innovative ideas they put
in. The senior management need to encourage the innovative ideas from the staff.
Self Assessment Questions
4. Innovation management is the __________ processes that help the organisations in
developing new and improved products.
5. The successful innovation culture consists of only few aspects of a business. (True/False)?
6. The management of the innovation system need to be given to the ____________________
to control the overall system of innovation.
4.4 Competitive Advantage
After innovation management, we will now study about the competitive advantage.
We can define competitive advantage as the condition in which a company operates in a more
efficient manner and higher quality when compared to its competitors in the market.
Technologys ability to redefine competitiveness at all levels has long been recognised by
philosophers, scholars, and businesspeople from Adam Smith to John Kenneth Galbraith to
Michael Porter to Bill Gates. At industry levels, technology-driven impacts are obvious. There
are many examples for technology driven systems that include the solid state devices that had
replaced the vacuum tubes and aircrafts that had replaced the railroads. Successes and failures
are also obvious at the firm level. In a simplified view, we can measure the competitiveness of a
company by the economic rents derived from certain capabilities (bundles of combined know-
how and resources) which it possesses.
Two postulates are easily accommodated by conventional strategic management:
A firms competitiveness is defined largely by specific competitive advantages.
A primary purpose of strategic management is creation of competitive advantages.
Managing technology plays an important role in the competitive success of an organisation in
the free market economy. Managing technology plays an important role in making decisions and
policies that contribute to the firms competitive advantage.
We can recognise the competitive advantage of the organisation by seeing at the way they
deliver the products. The customers look into some factors of the product when they are taking
the products or services. These factors also affect the competitive advantage of the
organisation. Let us briefly describe these factors.
Price: A lower price is perhaps the most obvious reason why customers choose one product
or service over competing alternatives. One must be careful to point out that from the
customers perspective, normally the price is important. Most of the times, the customers does
not know the previous price of the product in the market. There is a possibility for the lower price
due to international competition or internal or government subsidies. If we talk about industrial
customers; when they go for long-term arrangements with the suppliers, they will know about
the time of the lower price and they can gain the advantage.
Quality: Quality is another term that is widely used so much that hawse have to ask what is
meant specifically by a customer who claims to have purchased a particular product or service
over competing alternatives because of its higher quality. In this framework, quality will refer to
one of two different meanings that are given below:
Higher reliability at a given level of performance, i.e., conformance to specifications.
Higher level of performance.
Having made this assertion, we must recognise that there is an aesthetic dimension to quality
as well. For example, people will often prefer natural leather or wood materials to plastics or
other synthetic materials because of their higher quality, without regard necessarily to either
reliability or performance.
Reliability: Reliability is the ability of a product or service to perform at a specified, promised
level, over a reasonable useful life, under normal conditions of use. It is not, however, expected
to perform at levels higher than what was promised. A product or service is said to be defective,
if it does not meet the customer expectations. The customers purchase the products or services
for the second time, if they find that the products are more reliable, and are with fewer defects
as compared to the products used for the first time.
There are, however, two different ways to achieve high reliability. One is by inspecting the
product and by identifying and removing defects from the product-services stream before they
reach the customer. The other is, by improving production processes and getting them under
control. There are costs that result from poor reliability, such as, the costs from waste, scrap,
rework, warranties, loss of customer goodwill, and product liability. Improving reliability also
covers costs such as the investments needed to inspect or build it in. In the latter case, getting
production processes under control may require process simplification and redesign or the
implementation of an effective statistical process control (SPC) program, but if done well, it
should produce significant savings in all the cost categories resulting from poor reliability.
Performance: Performance level is referred to a feature, property or characteristic of a
product that are valued by the customer. The customer compares the performance of the
product with its competitors before making an order for the purchase. Performance has multiple
dimensions depending on the specific product or service and the customer or market segment.
For industrial customers of fabricated parts, dimensional tolerances are a performance
dimension that is often cited along with surface finish (corrosion resistance-durability), weight,
and so on. In the case of process industry customers, purity and uniformity might be relevant
performance dimensions. The range of performance dimensions is much wider for final
consumers.
Availability: Availability is a time-related competitive advantage. All other things being equal,
many customers would prefer the competitive alternative that is available soonest
instantaneously, if possible. Firms with new products which have no competing alternatives
available until competitors can copy or catch up to or leap-frog over them, have a special
availability advantage. For industrial customers operating in a just-in-time mode, availability
translates into dependable delivery at precisely the scheduled time.
Customer Service: Customer service enhances the utility of a product or the social
relationships that complement its sale and use. Traditional forms of customer service include
applications engineering, training of employees, and service-maintenance contracts. Financing
services (time payments, leasing, trade-ins, etc.) that enable the customer to purchase the
product are also included. Good customer service can also make up for a lot of customer ill will
caused by product defects.
Attractiveness: Attractiveness applies principally to consumer products, although even
industrial customers may be turned off by a products unattractive appearance. Attractiveness
obviously encompasses style and has an aesthetic component that transcends the annual style
changes of, for example, the fashion apparel industry, although what is perceived as being
attractive may have some cultural basis.
Awareness: Awareness is a factor in all other competitive advantages, as well as, a possible
reason in its own right why customers choose one product or service over competing
alternatives. If customers simply know more about one product or service than competing
alternatives, they may choose it because of the comfort level that knowledge brings them
compared to the relative uncertainty of the alternatives. If the knowledge is positive and is
repeatedly reinforced through experience and marketing or advertising activities, brand-name
loyalty may be created in customers who continue to choose it apart from any objective
evaluation of the actual facts. On the other hand, even if one product or service has a lower
price, greater reliability, higher performance, sooner availability, better customer service, or
more attractive designs than competing alternatives but customers are not aware of these facts,
they cannot influence customers choices.
Stability: Stability of long-term relationships probably applies only in very specific situations
where-again-that stability provides a comfort level to customers which they prefer over the
relative uncertainty of short-term or temporary supplier-customer relationships. For example, in
the case of strategic materials or-recently-petroleum, the stability of long-term supply contracts
may be preferred by a customer over temporary supply arrangements that offer lower prices or
other advantages. This stability may also apply to long-term social relationships between
customers and suppliers in cases where customers value the relationship itself apart from the
product or service the supplier is providing.
Customers of today expect high reliability and low prices. The winning competitor must have
either the lowest price or the highest reliability, or achieve one of the other competitive
advantages that customers value.
4.4.1 Components of competitive advantage
As we are studying about competitive advantage, we will now study about its components.
We know that development of the strategic marketing plan is very difficult in the present
competitive market. The operational roadmap becomes the valuable tool as it concentrates on
achieving the specified goals and targeted buyers. There are some components that are
associated with the competitive advantage.
Identify your targets: It involves the identification of the customers. The company has to buy
the needs and the efforts must be shifted from the reactive, product driven to the pro-active,
market driven orientation.
Market driven versus marketing driven: market driven companies are the companies that
aim at fulfilling the customer needs and they play a major role in the production planning. The
market driven companies listen to the customers and they focus at production decisions like
quantities, packaging and stylish quality. The market driven companies also develop the
marketing plans with some objectives and goals.
The marketing driven companies focus on consumer awareness by promotion like advertising,
aggressive programming and innovative point of sale material.
Better and faster: It is not a good marketing plan if we cannot maintain the competitive
advantage. In the present competitive market of today the marketing opportunities are more
time sensitive.
Action calendar: After finalising the objectives and strategies, you need to create an action
calendar. There are some guidelines in creating the action calendar, which are:
We have to estimate the time frame for each objective over the next years calendar, and we
should know the seasons conflicts that would arise in the future and affect the staff, time and
financial commitments.
It is important to involve the skilled members of your staff in preparing the action map, so that
we get more enthusiasm and new ideas and increased results.
It is important to check the frame regularly, in order to monitor the progress and deal with
unexpected changes.
Lastly, you have to adjust with the action calendar that is prepared.
The marketing budget: This component of competitive advantage involves the budgeting
plan, and it depends on the cash flow requirements and the net profit. We prepare this plan by
considering the previous years expenditures. We have to ensure that our marketing budget
adequately supports the marketing objectives that we want.
4.4.2 Creating competitive advantage using value chain
After studying about the components of competitive advantage, let us now study about creating
the competitive advantage using the value chain.
According to
[1]
Michael E Porter, the value chain is "a systematic way of examining all the
activities a firm performs and how they interact.for analyzing the sources of competitive
advantage."
Michael porter has identified many of the activities that are common to all firms. We can use
Porters value chain, to organize all the activities of a firm, into categories of primary and
support activities. Primary activities constitute the processes by which firms receive inputs
(inbound logistics), convert those inputs into outputs (operations), provide those outputs to
customers (outbound logistics), persuade customers to buy the outputs (marketing and sales),
and support customers in using the outputs (service). Support activities are processes which
provide support to the primary activities and to each other in terms of purchasing inputs
(procurement); developing new and improved ways of doing activities (technology
development); dealing with personnel (human resource management); and general
management, accounting, finance, and other activities which support the entire organisation
rather than individual activities (firm infrastructure).
You can see these value chain activities in figure 4.2.

Figure 4.2: Value Chain Activities
As per figure 4.2, primarily there are two activities associated with the value chain activities. The
two activities are primary activities and the support activities. Now let us study in brief about the
primary activities.
Primary activities: The goal of primary activities is to create the value that is more than the
cost of providing the product or service and generates the profit margin. These activities play an
important role in developing the competitive advantage. We can further divide the primary
activities into five activities.
Inbound logistics: It includes the activities like receiving, warehousing and inventory control
of input materials that has to be supplied for the process.
Operations: The operations are the value creating activities that has the ability to transform
the inputs into the final product.
Outbound logistics: These are the activities that satisfy the customer. This includes giving
the finished product to customer. This includes the activities like warehousing, order fulfilment
and
so on.
Marketing and sales: Marketing sales include the activities like getting buyers to purchase the
product, advertising, promotion, pricing, putting sign boards and so on.
Service: Service activities are the activities that maintain and increase the products value
including customer support, repair services and so on.
Till now we have learnt about the primary activities. Now let us now learn about the support
activities in the value chain activities.
Support activities: These activities, as the name indicates, are the activities which support
many of the processes. These activities can be viewed as "overhead" but many of the
organisations used them to develop the competitive advantage. We can classify the support
activities into four activities.
Procurement: This is the activity that provides the raw materials and other inputs that are
required for the value creating activities.
Technology management: These are the activities that are related to the research and
development activities, technology development activities that are used as a support for the
value chain activities.
Human resource management: These activities are related to human resources. This
includes the activities like recruiting, development and compensation of employees.
Firm infrastructure: This includes the activities that are related to the infrastructure of an
organisation. This includes the activities such as finance, legal and quality management.
After the identification of the activities of the value chain, the value chain analysis takes place.
Value chain analysis
After defining the activities differently in the chain, we have to define the linkages between these
activities. A linkage will be present, if the performance of one activity affects the other activity.
There need to be proper coordination and optimisation of the linked activities.
The better understandings of the linkages helps in make or buy decisions. The value chain
plays an important role in making the outsourcing decisions.
The value system
The firms value chain links to the value chains of upstream suppliers and downstream buyers.
This both activities result in the larger stream activities known as the value system. The
development of the competitive advantage of the organisation depends on the value chain
system.
Self Assessment Questions
7. A firms competitiveness is defined largely by specific _____________.
8. The operational roadmap is the valuable tool as it concentrates on achieving the specified
goals and targeted buyers. (True/False)?
9. Outbound logistics are the activities that satisfy the _____________.
Activity 2:
Suppose that you are working in the company as a team lead and your company is planning to
gain the competitive advantage. Your manager has asked you to list the activities involved in the
value chain process. Prepare the list for the same.
Hint: Support activities.
4.5 Technology Management Evaluation or Assessment
After a detailed discussion on competitive advantage, we will now discuss about the technology
management evaluation or assessment.
We can define technology assessment as the process of assessment that aims at collecting
information about the present and future state of technology development. This helps in
evaluating the importance of different technologies in the competitive environment. This also
helps in finding the strength of a firm in each technology. There are some main tasks associated
with the technology assessment. Let us briefly describe these tasks.
Identification of the technologies involved: The identification of the technologies involved in
technology assessment includes the identification of the technological knowledge and skills. The
technological knowledge and skills influence the position of the organisation in the present as
well as the future market. We have to follow some criteria to identify the technologies. These
criteria are:
The detailed analysis of the organisations technological structure: This includes the
detailed analysis of the organisations technology structure. This include:
s The identification of the product technologies such as the technologies in the product,
technologies used in design phase of the product.
s The identification of the production process technologies that are used.
s The identification of the support technologies that are used to perform certain activity in the
enterprise. This also helps in identifying the technologies that are used in the value chain
activities.
Assessing the technologies that have impact on the future: The second criterion is to
include the technologies that may have impact in the future. We can call these future
technologies as the emerging technologies. Technology forecasting helps us to identify the
emerging technologies.
Analysis of the competitive impact of technologies: This involves the analysis of the
competitive importance of each technology in the market. We have to consider some factors
while doing analysis. These factors are:
To what extent the technologies are relevant to sustaining organisations competitive factors.
To what extent the competence will be critical in future competition.
The competitive impact analysis provides an overall assessment of the competitive importance
of each technology.
Technological capability assessment: The technology capability analysis provides the
capability of an organisation in each technology. We can achieve this by comparing the
technological capabilities with its market competitors. This involves some variables, as given
below:
Research and development funding.
Expenses of technical innovation sustained in other technical functions.
Human resources.
Equipment and tools.
Patents and other intellectual properties.
Allocation of funds.
Self Assessment Questions
10. Technology assessment is the process of _________________ that aims at collecting the
information about the present and future state of technology development.
11. The support technologies are used to perform certain activity in the enterprise. (True/False)?
12. The competitive impact analysis provides an overall assessment of the
_____________________ of each technology.
Activity 3:
Suppose you are manager in the company. Prepare a list of the tasks that you will follow to
evaluate the technology management.
Hint: Technology capability assessment.
4.6 Summary
In this unit, we have made an effort to understand the technology strategy and competitiveness.
We discussed that the technology strategy explains how the technology has to be utilised as a
part of total business strategy. We analysed that accessible technology strategy has some
elements, which include the vision statement, objectives, expenses and budget and also the
ownership. We also analysed the relation between technology strategy and management.
We also had a brief discussion on the innovation management. While discussing, we analysed
that the innovation is managed through some sort of platform or application. We also
understood that we can build innovation at three levels, and the senior management has to take
care of innovation process.
We have seen the competitive advantage that plays an important role in todays competitive
market. We also discussed about the creation of the competitive advantage by value chain
process. The value chain process included the primary and support activities.
Finally, we have seen the assessment of the technology management that included three tasks,
that is, the identification of technology, analysis of competitive impact of the technologies and
also the technological capability assessment.
4.7 Glossary
Term Description
Innovation management It is the management of the new inventions and discoveries.
Framework It refers to the rigid structure containing something.
Aesthetic
It is the branch of philosophy that deals with the nature of
beauty.
Statistical process control (SPC)
program
The application of methods to find the variability of the
processes.
4.8 Terminal Questions
1. Write a short note on technology strategy.
2. Explain in brief about the innovation management.
3. What are the components of competitive advantage?
4. Explain the activities of competitive advantage.
5. Briefly explain the technology management evaluation.
4.9 Answers
Self Assessment Questions
1. Planning document
2. True
3. Unique
4. Systematic
5. False
6. Senior management
7. Competitive advantages
8. True
9. Customer
10. Assessment
11. True
12. Competitive importance
Terminal Questions
1. Refer section 4.2 Technology Strategy.
2. Refer section 4.3 Innovation Management.
3. Refer section 4.4 Competitive Advantage.
4. Refer section 4.4 Competitive Advantage.
5. Refer section 4.5 Technology Management Evaluation.
4.10 Case Study
Case Study on Gaining Competitive Advantage
This case study is about increasing the competitive advantage of the ABC
company in the software market. The founders of the ABC company had a
vision to build the competitive advantage of the organisation around
delivering technologies for the new world. The company was mainly
focussing on the technical advantage with its unique organisation structure
and the business development approach. To gain the competitive
advantage with Microsoft corporation this company employee has to learn
how the technologies work and also the new skills and technologies. This
also recruited the new employees those who have the passion to learn new
technologies. There was more amount of finance that was spent on training
the employees. Many of the employees got certified with Microsoft those
who had very good basic technical knowledge. Then the company now its
able to capture the competitive market. It has rewarded the certified
individuals with the high salary hikes. There are some benefits as the
number of certified employees increased in the company. The benefits are:
Improved customer satisfaction since the certified team was able to
provide the quality product.
The company was able to capture the new market with the new
technologies.
In overall the certified employees helped to gain the competitive
advantage.
Results:
The company came with big success in gaining the competitive advantage.
Questions:
1. How did the ABC Company gain the competitive advantage?
Hint: Training the employees about the new technologies.
2. What are the benefits that the ABC Company got after the increase of
the certified employees in the ABC Company?
Hint: Captured the new market.




OM0018-Unit-05-Technology Adoption, Diffusion and Absorption
Unit-05-Technology Adoption, Diffusion and Absorption
Structure:
5.1 Introduction
Objectives
5.2 Technology Adoption
5.3 Technology Diffusion
Importance of technology diffusion
Perspectives of innovation diffusion process
Activities necessary for diffusion process
5.4 Technology Absorption
Role of technology absorption
Benefits of technology absorption
Constraints in technology absorption
5.5 Technology Package and Technological Dependence
5.6 Indian Experience in Technology Absorption Efforts
5.7 Issues Involved in the Management of Technology Absorption and Government Initiatives
Issues involved in the management of technology absorption
Government initiatives for technology absorption
5.8 Summary
5.9 Glossary
5.10 Terminal Questions
5.11 Answers
5.12 Case Study
5.1 Introduction
By now, you must be familiar with the concepts of technology strategy and competitiveness. In
the previous unit, we discussed about the technology strategy and elements of accessible
technology strategy. We studied about the innovation management. We also discussed about
the components of competitive advantage and analysed how to create competitive advantage
using value chain, and how to evaluate the technology management.
We know that the technology adoption, diffusion and absorption help in acquiring the new
technologies. So, in this unit, we will study about them. We will also learn about the technology
adoption plan that is needed for the implementation of the technology plan. We will discuss
about the technology absorption and constraints in the technology absorption. We will also
understand the issues related to technology absorption and the experience of India in
technology absorption. We will also study about technology diffusion. Without proper
management no technology can be absorbed so at last we will study about issues related to the
management of technology absorption and government initiatives for technology absorption.
This unit will enable us to understand that without the use of technology adoption, we cannot get
any of the technologies and without the diffusion, technology cannot spread. Finally the
technology absorption helps us to absorb the technology.
Objectives:
After studying this unit, you should be able to:
Explain the technology adoption and technology adoption plan.
Explain the technology diffusion.
Explain the technology absorption.
Summarise the technology package and technological dependence.
Describe Indian experience in technology absorption efforts.
Discuss the issues involved in management of technology absorption and government
initiatives.
5.2 Technology Adoption
As we are familiar with the term adoption that is nothing but taking full control of the thing when
you have adopted that thing. In the same way, we can define adoption of technology or
technology adoption as the successful implementation of technology, and deriving the full
potential of the technology. Adoption is relatively easy in a new enterprise as compared to an
ongoing firm. Adoption of technology requires gearing up of all the resources such as internal
and external infrastructure, human resources, raw materials, and even marketing. As there is no
existing system in a new enterprise, it is easy to adapt to the acquired technology. Whereas, in
an ongoing enterprise, the prevailing systems have to modified and the existing work processes,
working environment and culture may have to be changed, which makes it more difficult.
The concept of technology adoption has attracted much more attention in recent times, due to
the explosive growth of new technologies worldwide. From the last few years, business and
consumer marketplaces have been exposed to the widespread use of the personal computer,
the Internet, ever present wireless communications and broadband communications.
Simon (1978) opined that many technologies that were transferred from developed to
developing countries were not successfully adapted, because of the inappropriateness of those
technologies for developing countries. He studied the causes for inappropriateness of various
technologies that were transferred from developed to developing countries, and identified the
following as specific causes:
Missing preferences of local markets and consumers.
Technology is based on imported raw materials.
Insufficient skills of local labour.
Not scaled down to local market.
Insufficient use of technology caused by the local labour, and
Excessive usage of capital goods and imported equipment.
Other general reasons that he identified were:
High cost of transfer.
Environmental pollution problems.
Impact due to plant location, and
Impact due to energy inputs.
Technology adoption plan
Till now we have learnt about the concept of technology adoption. Now, let us learn about the
technology adoption plan.
As we know that planning is needed before implementing any process. Also, before adopting
the technology we need to plan for the process of adopting. Planning for the implementation of
the new technology should be thorough and should encompass a relatively long time horizon to
assure the stability of the new system. The complex process of introducing a new technology
necessitates a practical plan which will focuses on employees needs and deals with issues of
concern to them. Key steps in this process of technology adoption plan include some of the
steps shown in figure 5.1.

Figure 5.1: Steps in Technology Adoption Plan
Let us now briefly discuss the steps involved in the technology adoption plan, as per the figure
5.1.
Identify the target group: For any project, the target group signifies the customers. This
process involves the identification of the customers. The plan can be implemented very well if
we know the view of the customers.
Locate and analyse the resistance to change: The introduction of the new technology in the
organisation cause the change process in the organisation. It is the human tendency to resist
the change, when they are very comfortable with the old values and beliefs. They locate and
analyse the resistance to change, which involves the identification and analysis of the
resistances to change.
Assess actual ability to change: We have to check whether we as the organisation, are
capable to introduce the technology and undergo change process.
Assess capacity and resources to change: We even have to see whether we have
sufficient resources to undergo the change process.
Access perceived priority of change: We have to prioritise the activities of change process.
Specific planning should include:
Identify the division(s), section(s), and individuals involved in the change.
Specify the extent of changes.
Develop a change plan which embraces timing, communication methods, involvement of
individuals, and responsibilities of individuals.
Self Assessment Questions
1. Adoption of technology can be defined as the successful implementation of technology and
deriving the full ________ of the technology.
2. Before adopting the technology we need to plan for the process of adopting. (True/False)?
3. Adoption is relatively easy in a ________________as compared to an ongoing firm.
Activity 1:
Suppose that you are working in the company as a project manager and
you are given in charge of the technology adoption. List out the steps that
you would carry out for the technology adoption.
Hint: Identify the target adoption.
5.3 Technology Diffusion
Previous section familiarised us with technology adoption, so let us now let familiarised
ourselves with the concept of technology diffusion.
In general, we know that diffusion is the process of spreading. The process of adopting the new
technology by the customers who came to know about the technology from other customers is
called as the technology diffusion. Diffusion involves special types of communication methods or
system to help diffuse changes in practice, as well as changes in knowledge or attitudes. Thus,
we can say that diffusion is the process of closing the gap between what people do not know
and what they can effectively put to use.
5.3.1 Importance of technology diffusion
After defining the technology diffusion, now let us study about the importance of technology
diffusion.
Technology diffusion plays a major role in most of the countries today. The barriers to
technology diffusion help us to determine the magnitude of technology diffusion. These barriers
determine the volumes of diffusion. Diffusion enlarges the set of available technologies and
increases the productivity of the country. In case of diffusion, productivity is determined by the
domestic technology in the production country and the diffusion technology from other countries.
The technology diffusion plays more important role in the sector of goods that are not tradable,
than the sector with the tradable goods. The free technology diffusion generates more gains
compared to that of the free merchandise trade. We can increase the merchandise trade by
removing the diffusion barriers since the countries achieve higher productivity by taking the
technology from the diffusion process.
A well-managed technology diffusion system enables an organisation to plan its technology
development projects in a more meaningful manner as well as transfer the technologies more
successfully. Such an approach results in better returns for the investments made in R&D and
technology development systems.
5.3.2 Perspectives of innovation diffusion process
After the importance of technology diffusion, we will now study about different perspectives of
innovation diffusion process.
Traditional perspective: Technological innovation and diffusion have traditionally been
viewed as separate processes. This view treats diffusion as the marketing efforts required to
expand the acceptance of the technology beyond the markets initially targeted.
Adoption perspective: The adoption perspective is most often used to describe the diffusion
process. This perspective focuses on how the various channels and modes of communication
(media, interpersonal etc.) can be used to influence a diverse group of potential customers to
adopt a technological innovation.
Infrastructure perspective: The infrastructure of the region in which the technological
innovation is targeted is an important factor in diffusing the innovation. Infrastructure aspects
that affect diffusion include transportation, terrain, weather, availability of energy,
communication, etc. Poor infrastructure development can constrain some innovations. Diffusion
will occur only if the necessary facilities exist.
Regulatory /Societal perspective: The regulatory / societal perspective looks at the effects of
government policies, regulatory requirements, and bureaucratic processes, and the
development stage of the area in which the technology is to be used. This perspective is
particularly important for diffusion of technologies in developing countries.
Models perspective: The models perspective looks at the development of models that
management can use to predict the behaviour of potential users of a technological innovation
and, consequently, develop strategies for diffusing an innovation. To model a diffusion process,
an analyst works with a few variables to fit a curve that describes the spread of innovation over
time.
Comprehensive perspective: The comprehensive perspective uses all the perspectives
discussed so far in developing a diffusion strategy. It views the diffusion process as part of a
total innovation process.
5.3.3 Activities necessary for diffusion process
In this section, we will have a brief discussion on the activities necessary for diffusion process.
We can say that diffusion is a multi-faceted activity.
Let us have a look at its main activities.
Individual action: The diffusion process begins with this activity. During the individual action
activity, the inventor proceeds (sometimes without even realising it) through a series of steps
that result in practical use of an innovative idea.
Creation of favourable conditions: The leadership in the organisation must establish the
expectation that everyone will take some responsibility for generating innovations and make
some contribution to their diffusion. In return, the people in the organisation should expect that
they will be rewarded for their efforts.
Applying basic research: This activity represents the translation of the findings of people
who have done the basic research (people) into applications. The application of basic research
is a more organised effort than individual action. In this activity, diffusion involves linking the
basic scientists work to the applied scientists work and the world outside the laboratory through
the comprehensive diffusion perspective.
Industrialisation: This activity of diffusion process focuses on developing a practical and
profitable application of the technology .It links customer demand with technical opportunities
and out of this emerges a design concept for evaluation. Linking technical opportunities with
market demand requires coordination and cooperation among applied scientists, engineers and
marketing personnel, especially market research personnel.
Commercialisation: After initial development of the technology concept, commercialisation
receives the major emphasis. The boundary between the industrialisation and
commercialization activity is hard to define exactly. Commercialisation includes finding solutions
to all the problems of defining the technology, organising trials, mechanisms for transfer of
technology and expanding and managing the technology life cycle.
Communication: Communication activities are the next major activities. The marketing
department develops a description of the attributes of the new technology, selects channels for
its marketing message, and begins development of a promotional programme. Marketing next
assesses the target market segment to identify the potential adopters that should be influenced
first. The firm next develops the corporate capabilities for managing the diffusion, setting pricing
policies and selecting and segmenting the market as a whole.
Full Scale Diffusion: This is the last activity of a comprehensive diffusion process. It includes
a search for a wider range of potential markets, new industries, new geographic regions, new
market segments that have not been explored, and new ways to couple the innovation with
other innovations.
Self Assessment Questions
4. The ___________department develops a description of the attributes of the new technology.
5. The free technology diffusion generates less gain compared to that of the free merchandise
trade. (True/False)?
6. The diffusion of technology to the late majority and laggards are more direct than that of
the_________ and early adopters.
Activity 2:
Consider that you are working in the company as a team lead and you want
to carry out technology diffusion process for the well spread of the
technology. List out activities that you will carry out for the same.
Hint: Individual action
5.4 Technology Absorption
As we have already discussed about technology diffusion in the previous section, so let us now
have a discussion on technology absorption. We know that the term absorption is nothing but
the process of absorbing something.
We have to acquire technology from sources within or outside the country, and one of the ways
to acquire technology is, by the process of technology absorption. Once a technology is
imported from another country, it needs to be absorbed and updated in accordance with the
local requirements. Foreign technology may have been developed keeping in view different
parameters relating to scale of production, raw materials and components, quality standards,
costs, levels and types of production techniques, maintenance requirements, social aspects
including environmental and pollution aspects, employment, so on It is common in many
developing countries (such as South Korea, Taiwan, Thailand, Indonesia, India, Pakistan, Sri
Lanka, Bangladesh, Philippines and including our own country) to import technology as a
package.
Most of these countries have developed indigenous R&D capabilities of varying order to absorb
and upgrade the imported technologies, and to achieve technological self-reliance. While some
countries, such as South Korea, Taiwan and Singapore have absorbed technologies
predominantly from exports, India has done so predominantly for local markets. The concept of
technology absorption differs from country to country, and even from firm to firm. In India,
absorption is generally considered as the capacity to reproduce or manufacture products
according to the "know-how" supplied by the licensor of technology, without really
understanding the "know-why" of the technology. In a country like South Korea, know-why
exercises to understand the "black-box" of technology have been emphasised at the firm level
without which exports are difficult. In fact, there are only a few countries which have attempted
to provide incentives to industry to undertake technology absorption exercises, with a view to
reducing-imports and enhancing exports. India is one of them.
5.4.1 Role of technology absorption
Till now, we have seen the meaning and concept of technology absorption. We will now study
about the important role of technology absorption in project implementation.
Let us have a look at the technology absorption in the project implementation process in figure
5.2.

Figure 5.2: Role of Technology Absorption in Project Implementation
As per the figure 5.1, technology absorption plays an important role in project implementation. It
is clear that the project absorption occurs after the project implementation, in any project. Figure
5.1 also depicts the tasks that are associated with the each phase of the project implementation
process.
5.4.2 Benefits of technology absorption
After the role of technology absorption, we will now study about the benefits that we get from
technology absorption exercises, as evidenced by Government and industry experiences so far.
These benefits are:
Repeated collaborations for the same product/ process are avoided.
Acquisition of further technologies becomes selective.
Ability is developed to unpackage the technology.
Savings can be affected in foreign exchange due to indigenisation /use of indigenous
alternatives.
Effective utilisation is made of available indigenous research expertise and facilities to achieve
the desired results.
Know-why and technology upgradation capabilities are built-up.
Exports are increased.
Technically competent groups of scientists and engineers trained in technology absorption get
matured and strengthened.
The base for technological self-reliance is enhanced.
We gain the benefits of technology diffusion, ranging from R&D services to the larger sales.
Technology diffusion helps in sustaining the growth of the company through technical strength.
Many developing countries, including India, have liberalised their industrial policies in the recent
past. In the wake of the liberalised nature of New Industrial Policy and other policy measures in
Trade and Finance, it has become imperative for industry to accelerate its R&D efforts to meet
the emerging competitive environment.
While acquisition of technology is now easier, commensurate R&D efforts will simultaneously be
needed to absorb and upgrade the acquired technology in order to become internationally
competitive. The thrust as underlined below need to be ensured for effective implementation,
absorption and upgradation of imported technology.
Industry should attempt to obtain best available technology closest to international trends and
provide R&D at the stage of project planning.
Speedy indigenisation of raw materials and components.
Efforts for unpackaging and indigenisation of tailor-made equipment in the acquired
technology.
Enhancing exports of products based on absorbed and upgraded technology.
Continuous training of research personnel in India and abroad.
Use of national and international research facilities and expertise.
Involving users, suppliers of components and materials, research organisations in undertaking
absorption exercises.
5.4.3 Constraints in technology absorption
There are some constraints associated with the technology absorption. We will now discuss
about these constraints of the technology absorption.
We know that improved productivity and quality as well as reduced costs lead to higher
efficiency in industrial operations. In labour intensive industries, these can be achieved from
optimum man/machine utilisation, lower overheads, use of versatile machines and quality
control measures and industrial engineering techniques. In capital intensive industries involving
sophisticated operations to manufacture products which are in continuous demand or which
command large markets, these can be achieved by higher automation and by organising the
operations on larger scale. In hazardous industries, safety and pollution control measures
necessitate higher capital investments in sophisticated equipment based on latest technologies.
We will now have a quick overview of factors, which are important in achieving higher
productivity, quality and reduced costs. These factors are:
Optimum utilisation of capital equipment to bring about maximum production leading to better
capital-output ratio.
Adequate investments for quality control, material and energy conservation/ recovery,
elimination of hazards which would necessitate use of sophisticated equipment.
Minimum economic scale of production, particularly in industries where scale factor is
important in optimising the operations, especially if in larger quantity of critical production
equipment is employed.
Targeting and achieving, international levels of performance and operating parameters.
These factors invariably require use of contemporary technologies needing larger capital
investments, and/or accompanied by sizeable domestic demands and satisfactory absorption of
technology. In scale sensitive industries, lower the scale of operation, lesser is the level of
technology. Level of technology is also reflected by the use of less productive and sometimes
second-hand machinery from abroad. In mass consumption industries such as petrochemicals,
man-made fibres, organic chemicals, electronic components, so on lower the initial installed
capacity, lesser is the technological level. In such cases, modernisation /R&D costs would be
heavy in order to jump to the next generation of technology.
Some of the major constraints in absorption of technology are:
Choice and use of imported technology by most Indian industries have not been at
international levels. This is an important factor while establishing scale sensitive, high
technology industries.
The demand of products whose production is influenced by scale factors of latest technologies
is generally not very large in our country. Presently these are being met by a number of units of
sub-optimal sizes as compared to international levels. This constraint increases the gaps to be
bridged through technology absorption. Industry would not be in a position either to invest
similar R&D resources in comparison with international units, or even to improve the
products/processes. Expanding the existing units and establishing new units with larger
capacities tend to minimize this gap.
In general, industry has not given adequate attention to absorption of technology. In such
cases, the firms have usually approached the collaborators once again for renewal of earlier
agreements or for new collaborations for improved or new products and processes. There are
instances where existing items made with marginal process or product improvements have
continued to be supplied even after extensions of collaborations. In the absence of a
competitive domestic market, or where industrial users are dictated by equipment/products
based on imported technologies, the inherent tendency to supply the same product hits
continued, till the users requirements change or substantial imports of a new product take
place.
Till now we have studied about the technology absorption and the constraints in technology
absorption. Let us now move on to the topic that is the Technology package and technological
dependence.
Self Assessment Questions
7. The technology absorption plays an important role in the project _____________.
8. Industry should attempt to obtain best available technology closest to international trends and
provide R&D at the stage of project planning. (True/False)?
9. The demand of products whose production is influenced by scale factors of latest
technologies is generally not ______________ in our country.
Activity 3:
Suppose that you are working in a company and you have to see the
benefits of the technology absorption that you will get and then make the
decision whether to carry out the technology adoption or not. List the
benefits of absorption of technology.
Hint: Exports are increased.
5.5 Technology Package and Technological Dependence
In the previous section, we studied about the technology absorption. In this section, we will learn
about the technology package and technological dependence.
We know that the technology is imported from other countries in the form of hardware, software
and related services. In some instances, it could be only for using foreign brand names. It could
be for a grass-root project or for further technological requirements of an existing plant, or for
modernisation or enhancement of a product capability. A foreign technology package may
consist of all or many of the aspects, such as product design, process or production know-how,
systems engineering, application information, tailor-made equipment and/or their designs,
technical services regarding maintenance/ safety / continued improvements/international
experiences,
so on
Technological dependence on foreign know-how can be in any of the following areas such as:
Product designs/ standards/ specifications.
Know-how for assembly of products.
Licensing for the use of patents/ trade marks.
Process know-how designs and basic engineering, detailed engineering, production
technology.
Quality control, safety, pollution control and continued assistance in improvements of
technology used in the existing manufacturing facilities.
Supplies of hardware and proprietary equipment and their designs.
5.6 Indian Experience in Technology Absorption Efforts
In the previous section, we have studied about the technology package and technological
dependence. In this section, we will study about the Indian experience in technology absorption.
An in-depth assessment of absorption efforts of over 50 major industrial units in different sectors
has brought out some of the constraints of Indian industry, as given below:
Lower scales of production compared to international levels, even in areas that are agreeable
to scale sensitive sectors/use of latest technologies.
Lack of attention to absorption of technology in the absence of any compulsion to be
internationally competitive.
Continued access to collaborators on nominal payments, assured market and inadequate
allocation of resources for R&D has resulted in insufficient attention for effective absorption and
improvement of imported technology.
Minimal involvement of R&D personnel in assessment of technology, further negotiations and
transfer, and transfer in implementation Of technology.
Users preference to imported technology-based products and collaborators guarantees.
Other reported constraints impeding technology absorption include delay in clearances, project
overruns in turnkey jobs, difficulties in translation, inadequate training/ expertise, incomplete
documents, lower volumes than planned, lower initial investments to play safe, delay in import
of equipment/components, delayed market response, and bottlenecks without adequate
assistance by collaborator.
Suggested measures
Some measures are given for the Indian industries for improving the technology absorption. We
will now have a brief discussion on these suggested measures.
Indian industry has been expressing its views on various matters connected with absorption
through press, seminars and representations to the Government from time to time. Let us have
a look at the summary of their views and suggestions.
The units should have their own technology policy for its acquisition, absorption and
adaptation, on long-term as well as short-term basis.
The travel grants and incentives need to be considered for participation in international
seminars/ symposia as well as for training abroad to keep abreast with the latest development in
their fields.
The R&D personnel from in-house/national laboratories should be involved intimately in the
transfer of technology from the conceptual stage itself.
Incentives and support should be given for prototype development and testing facilities, pilot
studies for adaptation, absorption and up-gradation of imported technologies. Also, support for
using the services of experts/
consultants on short -term basis may be considered in specific cases.
There needs to be a closer interaction amongst in-house R&D units, national R&D
laboratories, academic institutions, design organisations and consulting firms. Also, international
R&D collaborations can be encouraged.
The particular Information about the acquisition of foreign technologies should be widely
disseminated with a view of making R&D personnel aware of the needs of the industry. It
enables them to formulate the programmes accordingly.
The tax benefits and fiscal incentives may be considered for investments made in absorption
and upgradation of processes/ products.
In case of fast changing technologies such as electronics, foreign collaboration agreements
should be of shorter durations.
R&D expenditure should be generally 5 to 10% of the annual turnover of the company,
particularly in areas of high rate of obsolescence.
An information base for modern available technologies on global basis should be set up.
The development of new products is very expensive and time consuming. It is generally not
economical for the industry because of the low volume of manufacturing and fragmentation of
capacity. Small/ medium industries are not able to do any significant technology absorption
exercises since most of them do not have their own R&D facilities in a meaningful way.
Import of technology and know-how is limited to product design in most of the cases and
manufacturing processes are directly related to the volumes of production abroad. They are
uneconomic for the Indian firm and need be scaled down to meet the local demands.
Consequently, quality and finish may often suffer.
Self Assessment Questions
10. Technology is imported from other countries in the form of hardware, software and
______________.
11. The development of new products is very expensive and time consuming. (True/False)?
12. R&D expenditure should be generally 5 to 10% of the _____________ of the company.
5.7 Issues Involved in the Management of Technology Absorption and Government
Initiatives
In the previous section, we have studied about Indias experience in technology absorption
efforts. In this section, we will learn about the issues involved in the management of technology
absorption and the measures taken by the government for technology absorption. So, let us
now learn about the issues involved in the management of technology and the initiatives taken
by the government for the technology absorption.
The Indian industry, on the whole, has achieved a good capability in implementing and adapting
foreign technology as seen from the various experiences in different sectors.
5.7.1 Issues involved in the management of technology absorption
The Indian industry has to concentrate on some issues in technology absorption. We can
explain them as the issues involved in management of technology absorption. We know that the
Indian industry needs to focus its efforts in filling up of the gaps in technology absorption and
upgradation of some areas. Let us have a look at these areas given below.
Accelerated indigenisation and improvement of raw materials/ components/ sub-systems
through speedy R&D efforts with vendors/ ancillaries.
Basic investigations and projects in research, design and engineering, encompassing process/
product design analysis/ optimisation/ improvement, product designs for higher ranges/ new
applications, exports, process design and engineering for higher volumes and exports.
Analysis and improvement of designs and development of tailor-made production equipment.
Demonstration of improved/higher range of products/ equipment of the users.
The technology absorption projects need to be organised or established on two ways. The two
ways are explained as follows:
Individual unit basis.
Collaborative or cooperative basis, i.e. club projects involving users, manufacturers, national
research laboratories or institutions. At present there is a need for stronger linkages in research
and development work between manufacturers and users and between institutions/ national
laboratories and industry.
5.7.2 Government initiatives for technology absorption
After studying about the issues involved in the technology absorption management, we Our
Indian government over the years has directed the industry to take necessary steps to set up
R&D units for up-gradation and absorption of imported technology. There is also a stipulation
with respect to this in the terms and conditions of foreign collaborations. However, it has not
been very effective. While formal extensions of collaborations have not been numerous in
comparison to the number of new collaborations. Indian industry has quite often gone in for
further collaborations to avail the technologies for higher ranges/ capabilities or improved
process/ production techniques. The newer grass-root plants have used later technologies, but
they are also likely to become out dated as the years pass by unless necessary efforts to catch
up with technical changes are made. Industry, in general, stays at a particular level for a number
of years and then considers a jump in product range or volume of production through further
technology induction. Pursuant to the Technology Policy Statement, the Government had
stipulated that industries using technologies costing more than a payment of Rs.2 cr. should
bring out comprehensive Technology Absorption, Adaptation and Improvement (TAAI) plans.
Government has also directed industry to submit annual returns for technology implementation
and absorption. Now let us learn in detail about the Technology Absorption and Adaptation
Scheme (TAAS).
The Technology Absorption and Adaptation Scheme (TAAS)
The Technology Absorption and Adaptation Scheme (TAAS) initiated by the Government
(DSIR) as a pilot scheme during the 7thplan. TAAS aims at stimulating and accelerating the
efforts of Indian industry in technology absorption and up gradation. About 30 public and state
sector units have so far been partially supported for undertaking identified RDDE (Research,
Design, Development and Engineering) projects to absorb and upgrade specific elements in
imported technology. The support is for accelerated indigenisation /import substitution/ know-
why exercises/ product improvement and optimisation. An amount of over Rs.20 cr. has been
marshalled through a partial support in various major sectors such as electrical /electronics,
metallurgy, industrial machinery and chemicals. The projects are overviewed by Evaluation
Committees. Under the scheme, other initiatives such as workshops, technology absorption/
profile studies of different states and technology evaluation studies of critical sectors have been
undertaken. All these have encouraged the participation of industry, national
institutions/laboratories and Government in dealing with issues of technology absorption.
TAAS activities have resulted in stimulating and speeding up the R&D work in absorption of
technology. The scheme, therefore, is in a good position to encompass larger areas, to
demonstrate the beneficial effects of organised and target-oriented absorption of technology
projects. TAAS has brought out the need for enhancing the activities to catalyse and assist the
industry in technology absorption.
TAAS is expected to extend partial support to the following:
Core sector users in absorption and upgradation of products/ equipment from ancillaries
/equipment manufacturers/vendors whose technologies are based on foreign collaborations.
Cub or co-operative projects of interest to the sector, involving a group of manufacturers,
users, and national institutions, in identified areas of technology gaps.
Industry-sponsored projects with national laboratories/institutions.
Projects of small and medium enterprises, in priority areas such as energy saving, accelerated
indigenisation, efficiency and technology upgradation.
Skill utilisation in technology absorption projects by hiring of research experts and NRI
specialists as well as training in national laboratories/institutions/ international organisations for
identified areas of absorption.
After studying about the absorption and adaptation scheme it will be incomplete if we do not
study about the evaluation of technologies so now let us move on to the topic technology
evaluation studies.
Technology evaluation studies
In order to assess the performance of technology in the major sectors of Indian industry, and to
assess the gaps in technology and to suggest possible programmes for R&D and technology
upgradation, the Government has initiated studies in various important areas such as fertilisers,
steel, cement, mini steel, forgings, foundry, aluminium, so on Over 50 sectors have been
identified and in about 30 sectors, studies have .been commissioned. The reports, whenever
they come, are widely discussed in industry, government departments and other concerned
organisations, and circulated. The reports bring out the need for accelerated effort in technology
generation and absorption. Technology demonstration is also envisaged in some important
identified areas in order to speedily introduce new technologies. These studies bring out
technology gaps and needed thrusts for technology absorption.
Self Assessment Questions
13. Our Indian government has directed the industry to take necessary steps to set up R&D
units for up-gradation and absorption of _______ technology.
14. The Technology Absorption and Adaptation Scheme (TAAS) initiated by the Government
(DSIR) as a pilot scheme during the 8thplan. (True/False)?
15. The reports bring out the need for accelerated effort in technology __________ and
absorption.
5.8 Summary
In this unit, we made an effort to learn about the technology adoption, diffusion and absorption.
We learnt that technology adoption is the process of successful implementation of technology
and taking full control of the technology. We also discussed about the technology adoption plan.
We also studied about the technology diffusion, which includes the process of adopting the new
products in the market place. The barriers indicate the volumes of diffusion.
This unit also familiarised us with the technology absorption, which play an important role in the
technology acquisition when we acquire technology from outside and within the company also.
We noticed that improved productivity and quality, as well as the reduced costs are leading to
high efficiency in industrial operations.
We also described about the technology package and technological dependence. We also saw
some constraints in the Indian industry, and the measures for improving the absorption of
technology in the Indian industry.
We also analysed the issues involved in management of technology absorption. The Indian
industry focuses on filling the gaps in the technology absorption. We have seen that TAAS aims
at simulating and accelerating the efforts of Indian industry in the technology upgradation and
the absorption.
5.9 Glossary
Term Description
Barriers The structure that separates anything.
Collaborations The act of working with one another.
Obsolescence The process of being out of state or no longer useful.
Technophobia This is the dislike for new technology.
Turnkey jobs The jobs those are ready for the purpose.
5.10 Terminal Questions
1. Write a short note technology adoption.
2. What is the importance of technology diffusion?
3. What are the benefits of technology absorption?
4. Explain the suggested measures in Indian experience in the technology absorption efforts.
5. What are the government initiatives for technology absorption?
5.11 Answers
Self Assessment Questions
1. Potential
2. True
3. New enterprise
4. Marketing
5. False
6. Innovators
7. Implementation
8. True
9. Very large
10. Related services
11. True
12. Annual turnover
13. Imported
14. False
15. Generation
Terminal Questions
1. Refer section 5.2 Technology Adoption.
2. Refer section 5.3 Technology Diffusion.
3. Refer section 5.4 Technology Absorption.
4. Refer section 5.6 Indian Experience in the Technology Absorption Efforts.
5. Refer section 5.7 Issues Involved in Management of Technology Absorption and the
Government Initiatives.
5.12 Case Study
Case Study On Technology Adoption and Diffusion
This case study deals with the technology diffusion through the agent
technologies in the ABC company. There is a need of supporting tools and
methodologies for the software technologies before the adoption of the
process that takes place. The agents play an important role in the adoption
of the technologies. Though there are many agent systems, barriers are
present for the adoption of the agent technologies. The company decided
to go for technology diffusion, since there was a need for spreading the
information. It also focussed on adopting the new software technologies.
For this, the employees were supposed to learn the new technologies and
improve the skills, but there was lot of resistance to change since the
employees were very comfortable with the old skills and were not interested
in learning the new skills. Even the new technologies were very costly, but
also the company aimed at adopting the new technologies because there
were new tools and operating systems involved in the adoption process.
The technologies were successfully adopted and came into existence,
because of the good leadership led by the general manager of the
company. He managed to convince the people in the company for the
change process. He showed the leadership by adopting the technologies
that are very costly since he analysed the technologies with his team before
adopting the new technologies.
Challenges
Whenever there were changes due to the introduction of new technology,
the employees resists to the same.
The new technologies were costly and needed lot of analysis before
adoption of technology.
Results
The company adopted the new technologies that were very costly and
useful.
Questions
1. What are the challenges faced by ABC company?
Hint: The resistance to change from employees.
2. How did the general manger overcome the challenges?
Hint: Convinced the employees for the change process.



OM0018-Unit-07-Aspects and Issues in Technology Management
Unit-07-Aspects and Issues in Technology Management
Structure:
7.1 Introduction
Objectives
7.2 Technological Change
Characteristics of technological change
Classification of technological change
Impact of technological change
7.3 Technology Life Cycle
7.4 Technology Transformation
7.5 Technology Policies and Policy Instruments
7.6 Technological Development Options and Strategies
7.7 Technology and Socio-Economic Planning
7.8 Diffusion and Growth of Technologies
Information technology revolution
Macro effects of technological change
7.9 Summary
7.10 Glossary
7.11 Terminal Questions
7.12 Answers
7.13 Case Study
7.1 Introduction
By now you must be familiar with the emerging new technologies, its mode of selection and
implementation. You must also be familiar with automation technology and automated
decisions.
The result of technology growth has its base from inventions and innovations. The changes to
technology have occurred through substitution and diffusion. The simplest form of technological
substitution occurs when a new technology captures over a period of time, a substantial share
of the market from an existing older technology. So, in this unit we are going to deal with the
study of aspects and issues in managing a technology.
This unit will also enable to you to understand the technological changes, technology life cycle,
technological transformation, technology policy and policy instruments, planning, development
options and strategies.
Objectives:
After studying this unit, you should be able to:
Explain the need and importance of technological change, technology life cycle, and
technology transformation.
Justify the need and role of technology policies and policy instruments.
Analyse technology development options and strategies available to an organisation.
Describe the importance of linkage between technology issues and socio-economic planning
process.
Analyse diffusion and growth of technologies.
7.2 Technological Change
We have seen that technology includes knowledge knowledge that is embodied and implicit.
The firm-specific knowledge is the sum totality of all the knowledge within a firm.
We can define technology change as the process of adding up the knowledge to the existing
knowledge to accomplish things to do in a better way and perform new things together.
7.2.1 Characteristics of technological change
Let us now have a look at some characteristics of technology change.
We can characterise the transition from the old to the new technology by the creation, addition,
alteration, and sometimes even obsolescence of tasks, functions and their dependent
occupations. We can group these characteristics into three categories, which are:
Nature and rate of technology change: In this group, we try to find the common threats for
the numerous changes occurring around the globe. We also try to find out the rate or speed at
which technology changes are taking place.
Impact of technology change: In this group, we take up the effects, either direct or indirect of
technology change.
Determinants of technology change: In this group, we try to figure out what causes these
changes, that is, what are the reasons for the occurrence of technology changes.
7.2.2 Classification of technological change
After characteristics, we will now discuss about the classification of technology change.
Some of the technology changes are better noticed than others. For instance, changes that
result in new products like Walkman get media headlines, but changes in process equipment
that result in an increase in the capacity utilisation from say 65 per cent to 70 per cent hardly
find mention even in the firms own reports.
One way to classify the changes is to base it on the extent of its influence across the firm and
across the sectors. Thus, we can classify these changes as:
Incremental changes: We can define incremental change as the change that takes place
very often. For example, incremental changes in the consumer products - Lux, New Lux,
International Lux, white colour Lux, pink colour Lux and so on. These changes can even take
place in the technology.
Entrenching Changes: These are also incremental changes, continuing with relentless zeal
and ultimately end up as significant developments.
The Entrenching changes can take the form of:
- Product mix enlargement: It is derived from two different business strategies whose
interaction will produce a common trend as a whole. It also refers to the number of items carried
by the company along the product line. For example, Larsen & Toubro (L&T) manufactures dot
matrix printers at Mysore. They enlarged their product mix by developing a 24 needle dot matrix
printer-model 32/324; heavy duty 9 needle dot matrix printer-model 32NS; 300 CPS 9 needle
dot matrix printer with superior paper handling features model Paragon and so on.
- Modernisation/Expansion: It is the ongoing evolution of operations and IT infrastructure
which will help to switch over to a new technology and the adoption of change with a less impact
on day to day operations. For example, firms like TISCO increased their capacities by balancing
and modernisation. Textile sector added to its capacity by replacing old spindles with high
productivity machines.
- Process standardisation: Process standardisation has been going on to improve the
manufacturing, essentially to make it more precise in terms of "line definition", defect elimination
and super miniaturisation which we will be discussing shortly.
- System building: System building is concerned with providing support in the field of design,
engineering and installation. For example, to run a synthetic fibre plants, one needs auxiliary
support like fibre finishes, anti-oxidants, anti-static agents, delustering agent precision
engineering components and tools, metering pumps, valves, seals, and spinnerettys,
Entrenching changes do not call for organisational changes. They modify the existing methods
but proceed in the same direction. Their benefits tend to accumulate and could result in
strategic advantages for the firm.
Altering changes: These changes call for a fixing of the system and the structure. They
reshape the entire configuration through the introduction of markedly different equipment, raw
materials, form of knowledge and physical contexts. For example, consequential use of all major
innovations such as locomotive, motor car, aircraft, telegraph, telephone, radio and now
automation in offices, design, factory, and so on. They can be in the form of
- Miniaturisation: It refers to the formation of small scales for mechanical and electronic
products and services. From the 60s onwards, electronic technologies have concentrated on
super miniaturisation or compressing greater performance into smaller volumes. Todays VLSI
has over a million elements. The computer that not long ago occupied a full room now fits in a
hand. Miniaturization has cut the internal volume of an average cellular telephone by a factor of
1000 in little more than a decade.
- Automation: Automation is used in office, factory, bank and coffee shops with an aim to
reduce the need for human efforts in the production of goods and services In general
automation is the key word used everywhere. Several thousands of pick and place robots are in
use in Japan. Automation is no longer planned as a replacement-for costly labour. They have
changed the factory layout itself
- Dematerialisation: it is the concept used to reduce the quality of materials required to serve
up the economic functions. For example, we can consider the High Tensile Fastener industry,
where cold forming was adopted as a new technology. Compared to hot forming traditionally
used, cold forming offers several advantages. Most important are the savings in material cost.
Lower cost material like plain carbon and low alloy steel can be used in place of heat treated
alloy steels. When parts are made by cutting, in hot forming technology, the material wastage is
around 80 per cent. With cold forming the material wastage is reduced to 20 per cent. Use of
cheaper material and lesser quantity of material for the same product is the trend in all the
industries.
- Intelligence incorporated: The power of softwarisation or building in intelligence and systems
is increasingly felt. Microprocessors and memories become unit components in such systems
and system functioning is decided by the software changes rather than circuit modifications.
Self-healing Digital Signal Processing (DSP) devices were developed at General Electricals
Research and Development (R&D) Centre by Dr. Abhijit Chatterjee. These are used in mission
critical application such as Satellite. The self healing circuits detect and correct irregular faults
caused by loose connection of marginal components, temporary faults caused by
electromagnetic interference and permanent faults such as grounded signals.
- Genetic engineering: It is also called as genetic modification where in the direct manipulation
of organisms genetic material takes place which usually do not occur in the normal conditions.
The scientists at ET centre at Sabarmati Ashram Gaushala in Gujarat inseminated a Holstein
cross-bred cow with semen from an elite bull and using hormonal injection super-ovulated the
cow to produce as many as 15 embryos. These embryos were flushed out and implanted into
the womb of foster mothers. These foster mothers gave birth to 11 identical calves; a mother of
11 in one year.
7.2.3 Impact of technological change
We will now study about the impact of technological change.
Accelerated technological changes have impacted, not only to turn into out of date
organisational strategies, but they also invalidated past, premises and assumptions normally
relied upon by the industry.
A technology change takes place in the firm level as well as the sector level and the economy
as a whole. The question that arises at this point of time is - how are the firms affected by
technology change?
Technology changes can have different levels of impact, depending on their occurrence, and
the structure of organisation and society, as given in the figure 7.1.

Figure 7.1: Impact of Technological Changes
We will now briefly discuss about these impacts.
Direct impacts
Direct impacts of the technological changes take place very often. By removing obstructs, we
can increase the output and modern machines improve labour productivity. Direct impacts of
technology change result in direct changes. Let us have a look at some of the direct changes.
Increase in productivity: Whenever any technology changes, it results in increasing the
productivity of the company using that technology. The requirement of enhanced productivity is
the key force behind any technology making our lives easier.
Introduction of new products: Technological change results in the introduction of new
products to the market or the organisation
Organisational changes: Technological change results in change in the organisations also.
For example, by making redundant or radically altering old functions and generating new ones,
technology change can also change the relative importance of functions.
Indirect impacts
Another type of impact of technological change is Indirect impact. Though it was commonly
agreed that technology changes improve or reduce competitive strengths, there is difficulty in
relating them to specific changes, especially incremental changes. Some of the indirect effects
will reflect on:
The competitive performance occurring between the companies.
The way to attract the experts.
The company image that incurred the changes.
Self Assessment Questions
1. The _____ call for a fixing of the system and the structure.
2. The transition from the old to the new technology is characterised by the creation, addition,
alteration and sometimes even obsolescence of tasks, functions and their dependent
occupations. (True/False)?
3. Microprocessors and memories become unit components in such systems and system
functioning is decided by the software changes rather than ______
4. Technology change is the process of adding up the _____ to the existing knowledge to
accomplish things to do in a better way and perform new things together.
Activity 1:
Suppose a new web technology has come into the market. It is affecting us, as well as
organisations. Prepare a list of impacts of this new technology, which emerged as a change in
the old web technology.
7.3 Technology Life Cycle
In the previous section, we discussed about technology change along with its characteristics
and impact. In this section, we will learn about the life cycle of technology.
The life span of various technologies can be conveniently identified as consisting of four distinct
stages, all of which taken together form the Technology Life Cycle. Let us have a quick
overview of these four stages of technology life cycle.
Innovation stage: This stage represents the birth of a new product, material or process
resulting from R&D activities. In R&D laboratories, new ideas are generated depending on
gaining needs and knowledge factors. Depending on the resource allocation and also the
change element, the time taken in the innovation stage as well as in the subsequent stages
varies widely.
Syndication stage: This stage represents the demonstration (pilot production) and
commercialisation of a new technology, such as, product, material or process with potential for
immediate utilisation. Many innovations are put on hold in R&D laboratories. Only a very small
percentage of these are commercialised. Commercialisation of research outcomes depends on
technical as well as non-technical, mostly economic factors.
Diffusion stage: This represents the market penetration of a new technology through
acceptance of the innovation, by potential users of the technology. But supply and demand side
factors jointly influence the rate of diffusion.
Substitution stage: This last stage represents the decline in the use and eventual extension of
a technology, due to replacement by another technology. Many technical and non-technical
factors influence the rate of substitution. The time taken in the substitution stage depends on the
market dynamics.
7.4 Technology Transformation
Now, that we are familiar with technology life cycle, we will learn about the technology
transformation.
Development of a technology in every sector becomes difficult or undesirable, when one
expects to build it in the native environment. We can also call it as indigenous technology since
it is employed by the native or local inhabitants of the country. Nevertheless, it may be highly
desirable that, in carefully selected areas of production, there is a vertical integration with
respect to all stages of technological transformation necessary to put a product on the market,
starting from the natural resources.
The technological transformation in the production of goods starts from nature and finally goes
to the market. During this transformation, we come across five different stages which are:
The first stage is called the collective stage, which includes collective operations such as,
extracting, mining and farming.
Stage two can be called refining stage, which includes some refining operations such as
purification, preservation and metallurgy.
Processing can be considered as a third stage where chemical and electrical conversions
take place.
The fourth stage is the manufacturing stage, which includes all kinds of mechanical
conversions and fabrications.
The last stage is packaging stage, where things are assembled and packaged, to transmit to
the markets. There are considerable variations in the technology content added to the product
at each of these five stages.
Self Assessment Questions
5. The ______ stage represents the birth of a new product, material or process resulting from
R&D activities.
6. The time taken in the substitution stage depends on the market dynamics. (True/False)?
7. The first stage is called the ______ and includes such operations as extracting, mining and
farming.
8. The life span of various technologies can be conveniently identified as consisting of distinct
stages, all of which taken together form the ______.
7.5 Technology Policies and Policy Instruments
After studying about the technology transformation, we will now study about the technology
policy and technology instruments.
Technology policy formulation has to logically follow the establishment of a development
visualisation or perspective plan. This plan is described, among others, by a desired mix of the
goods to be produced and services to be provided in the country in the coming one or two
decades. The formulation of a technology policy begins with the establishment of a vision for the
country and the corresponding scenario of the mix of goods and services to be produced and
provided. We must note that the policy framework has to be broad and flexible enough, taking
into account the dynamics of change.
We can define a technology policy as a comprehensive statement created by the highest policy
making body namely the cabinet/parliament in the Government to direct, encourage and control
the generation, achievement, development and deployment of technology and science in
solving national problems or achieving national objectives set forth in the development vision or
perspective plan.
The technology policy declaration typically contains several commitments on behalf of the
Government and some categorical assurances. The policy, among other things, commits the
authority to ensure:
Establishment of institutional facilities for relevant knowledge broadcasting, and skill
development for stepwise incorporation of imported technology.
Provision of services for productive exploitation of research results and generation of
indigenous technology.
Expansion of support facilities, such as, information and documentation services, consistency
and quality control.
Satisfactory support to emerging technologies with an aim on future use in production sector.
An optimal combination of indigenous and imported technology.
Policy instruments
We can define policy instruments as the relations between the expressed purpose and the
results that are required in practice. There are both direct and indirect policy instruments. The
direct ones refer explicitly to technology functions and activities. The indirect ones, even though
primarily referring to policies, functions or activities other than technology, have an important
indirect effect on Science and Technology (S&T) activities. Different policy instruments are:
Policy instruments to build up S&T infrastructure.
Policy instruments to regulate technology import.
Policy instruments to define the pattern of demand for technology.
Policy instruments to promote the performance of S&T activities in the enterprises.
Policy instruments to support the performance of S&T activities.
Self Assessment Questions
9. Policy instruments are the relations between the expressed purpose and the results that are
required in practice. (True/False)?
10. The technology policy declaration typically contains several _____________ on behalf of the
Government and some categorical assurances.
11. Technology policy formulation has to logically follow the establishment of a development
visualisation or perspective plan. (True/False)?
Activity 2:
Search on internet, and prepare a list of policy instruments.
7.6 Technological Development Options and Strategies
After having a brief idea on the technology policy and instruments, we will now discuss about
the technology development options and strategies.
A countrys technology development strategy is determined by identifying the technological
needs with potential technological developments in the world and a thorough assessment of
available and emerging technologies. Then, the country determines a strategy to import
technologies which can be produced locally. Now, there is a universal realisation that unless a
concerted attempt is made to build local technological capabilities for absorbing imported
technologies, any attempt to develop indigenous technologies encounters enormous difficulties.
Even with regard to imported technology, it is essential for a country to be able to select, digest,
adapt and improve it for local consumption. All of these efforts justify greater priority and
allocation of resources to R&D. A requirement for efficient utilisation of R&D resources is the
development of technological infrastructure within the country, including institution building,
manpower development, and provision of support facilities and creation of a modern
environment.
Self Assessment Questions
12. The requirement for _____ comes from an explicit commitment to a national goal and the
acceptance of technology as an important strategic variable in the development process.
13. The technology policy declaration typically contains several commitments on behalf of the
______ and some categorical assurances
14. A countrys technology development strategy is determined by identifying the technological
needs with potential technological developments in the world and a thorough assessment of
available and emerging technologies. (True/False)?
7.7 Technology and Socio-Economic Planning
In the previous section, we learnt about technology development options and strategies. In this
section, we will discuss about the socio-economic planning and technology.
The Successful integration of technological considerations into the socio-economic planning
process is very essential. It is necessary that the national development strategies should include
specifically the dimension of technology development. In developed countries, there are
adequate pressures for technological considerations within the various sectors of their
economies. But in developing countries, integration of technological considerations with
economic planning at the highest level is required, in order to achieve technology-oriented
development in priority sectors.
Let us have a look at a general framework for integrating the technological considerations in the
national development planning process, in figure 7.2.

Figure 7.2: Integration of technological considerations in National Development Planning
The integration of technological aspects should extend significantly beyond simple selection of
imported technologies to the formulation of policies and guidelines. They must be directed to
generate and promote demand for local technologies and technological capabilities. Moreover,
the insertion of technological considerations in socio-economic development planning involves
both the explicit introduction of the technological issue at all phases of the planning process and
identification of implicit technology policies resulting from the national development plans.
7.8 Diffusion and Growth of Technologies
There is another way of looking at the technology life from the perspective of growth and
diffusion.
Every technology eventually reaches a down turn phase, due to the development of better
technologies in terms of performance and/or cost. In other words, technological change occurs
through substitution. You can see the process of technological advancement through
substitution schematically in Figure 7.3.

Figure 7.3: Sshaped Growth of Technologies
Most technologies follow an S-shaped growth pattern. However, it has also been observed that,
although a particular technology eventually reaches a stage where it has limited use, new
technologies are developed to achieve further growth with respect to any particular figure of
merit which is the index of particular requirement. For example, if one takes the speed of
passenger travel as a figure of merit, then Technology T1 is a propeller aircraft, T2 is the turbo
prop aircraft and T3 is the jet aircraft. Each of these technologies normally shows an S-shaped
improvement over time. Moreover, the overall growth of these successive technologies
representing a system of high order, characterised by a successive technologies representing a
system of high order, characterised by a succession of discontinuous innovations also exhibits
an S-shaped growth pattern. In this pattern:
The hardware intensive technology diffusion process can be considered to consist of five
phases.
The first is the incubation phase where many ideas are gradually reduced to one commercial
product for introduction into the market.
Next is the introduction phase where the applications of the new technology are very slow.
Later when the number of applications increases rapidly, the technology is in its growth
phase.
After sometime its growth reduces and some stability can be observed in the maturity phase.
Finally, an improved substitution makes the technology outdated and hence it enters the
decline phase. It may be noted; however, that time taken for these different patterns varies
widely. The introduction, growth and maturity phases of a technology are also referred to as the
three major stages of Technology Life Cycle.
7.8.1 Information technology revolution
Let us briefly study about the information technology revolution.
Information Technology synthesises the convergence of previously distinct and separate
technologies (IT). Information Technology refers to a very wide range of elements which are
utilised to create, transfer, transform and convey information through means, irrespective of
whether these elements are in the form of equipment or services developments in information
technology have already produced vast gains in productivity resulting in counter-inflationary
trends in prices as well as substantial improvements in technical performance of many products
and services.
We shall now discuss some of the major changes brought about by developments in information
technology.
Changes in products
Information technology brings about changes in products by replacing mechanical (e.g.
watches), electromechanical (e.g. calculators) or older electrical or electronic (e.g. computers)
parts or components, by upgrading traditional products by enhancing their capability. It includes
functions involving, for example, logic and decision-making (auto focus in cameras) and even by
creating entire new products (e.g., video games).
The product changes mentioned above have three major consequences. The first is that the
value addition is transferred from the manufacture and assembly of parts to the production of
the electronic assemblies/sub-assemblies with associated software.
The second effect relates to shortening of product life cycles. Product designs of many
products get linked to developments in information technology in general and to developments
in electronic technology in particular
The ability to create, store, retrieve, transfer, transform and convey information/data efficiently
and economically imparted to products by developments in information technology allows the
products to the integrated into larger systems so that the products are compatible with the larger
systems for enhanced capability.
Changes in services
We use the term services in its broadest sense as bundles of benefits some of which may be
intangible and others tangible, and they may be accompanied by facilitating goods. This sector
has the highest growth rate in most economies of the world and has the largest single share of
employment in the world Gross Domestic Product (GDP).Information technology is already
affecting the productivity of service production as well as increasing their transportability. With a
view to understand the changes in a better way, the classification of services made by Baumol
is as follows
Substitutable personal services: These services also require direct personal contact but it is
possible to substitute these services with technological alternatives. For example, guards can
be substituted or helped by electronic security and surveillance equipment and domestic
servants by a variety of household appliances like washing machines, ovens and mixers.
Progressive services: These services require the use of some equipment and also direct
personal contact with the receiver of the service. Technological change affects the productivity
of the equipment more directly and significantly than the personnel offering the personal
contact-based service. For example, air transportation requires the use of the airplane as well
as that of the ground and cabin crew; and broadcasting requires the use of studio and
transmitting equipment as well as the personal contact established by the broadcaster.
Explosive services: Services that do not require personal contact belong to this category such
as telecommunications. Information technology is bringing about significant productivity
increase in these services thereby reducing the unit cost and setting counter inflationary trends
in prices. Developments in information technology are also contributing to the generation of new
services in this category. For example, facsimile transmission (FAX), Videotext and Electronic
Mail.
Changes in processes
Information technology changes processes in two major ways: it allows the incorporation of
higher levels of skills and functions into equipment as in computer controlled machine tools and
robots and it increases the flexibility of many processes to achieve economies of scope
involving almost continuous production of individualised products.
Changes on organisation
The changes in products, services and processes discussed above may, in many cases, require
new forms of management structure and business organisation. This may be seen happening in
many industries but perhaps not fast enough, thus acting as a constraint in the part of other
changes. The organisation structure can no more be static but should be capable of absorbing
changes fast enough, at least in those organisations where changes in products and processes
are occurring very fast, as not to constrain, further changes. To be successful with new
technologies, an organisation must be able to innovate and produce competitively. This shows
up in the form of compliment organisations where the number of hierarchical levels gets
reduced significantly. This also gives rise to higher dependence on task groups, expert
committees and other forms of temporary working groups.
7.8.2 Macro effects of technological change
After discussing about the major impacts of information technology in the previous section, we
would like to revert to technological changes in general and their effects on the economy, its
competitiveness and its factor endowments. Let us now describe the major consequences in
terms of their macro effects.
Increasing knowledge intensity of production: The growing importance of knowledge
inputs in production is clearly visible in almost all industries. In fact, if we include in knowledge,
not only R&D but also design, engineering, advertising, marketing and management, then
knowledge input may have already become the primary factor of production displacing capital,
labour and land in advanced industrial economies.
In many industries, the product life cycle is constantly getting shorter and firms have to spend
more and more on R&D to remain at the cutting edge of technology and to exploit any
breakthroughs achieved.
Greater mismatch of skills: Technological changes have the general effect of replacing
labour with capital. As capital equipment with new technologies enters the production process it
has two intense effects:
a The employment level of personnel concerned with the production and distribution of products
comes down
a The skills required to work with the new generation of technology change.
In combination with other economic forces, the first effect continues to reduce the share of
employment devoted to the production of goods, while expanding the service sector. The
second effect changes the skill-mix of employment more abruptly as certain skills end up having
practically no or little economic value.
Erosion of competitive advantage of developing countries: The developing countries have
traditionally been having the competitive advantage of cheap and abundant labour and some
natural resources. However, as described above in the previous sections, the labour component
(unskilled and semi-skilled) in many manufacturing activities is falling, giving rise to an erosion
of this important competitive advantage.
Self Assessment Questions
15. The Successful integration of technological considerations into the ____ process is very
essential
16. Every technology eventually reaches a ____ phase due to the development of better
technologies in terms of performance and/or cost
17. Technological changes have the general effect of replacing labour with capital.
(True/False)?
7.9 Summary
We started this unit by giving a brief introduction on the aspects and issues in technology
management. We studied about the technology changes and discussed its characteristics that
are grouped into nature and impact of technology change, impact of technology change and
determinants of technology change. We classified the technology change as incremental,
entrenching and altering changes. Further, we discussed that the impact of technology change
can be direct or indirect, based on their occurrence and the structure of organisation and society
We also learnt that the changeover from old to new technology is characterised by the creation,
addition, alteration and at times even undesirability of tasks, functions and their dependent
occupations. We also came across the technology life cycle which includes innovation,
syndication, diffusion and substitution stages. We further discussed about technology policy and
technology instruments, wherein we studied that the technology policy declaration typically
contains several commitments on behalf of the Government and some categorical assurances.
We also analysed that countrys technology development strategy is determined by discovering
the technological requirements with potential technological expansion in the world and a
thorough assessment of existing and emerging technologies. In addition, successful integration
of technological reflection into the socio-economic planning process is very essential.
7.10 Glossary
Term Description
Commercialisation To relate methods to business to gain profit.
Skill mix
A potential solution to the health service
delivery problems.
Typology
The systematic study of various types that
has characteristics in common.
7.11 Terminal Questions
1. Explain technological change.
2. Explain technology policies and technology instruments.
3. Briefly describe technological development options and strategies.
4. Briefly explain diffusion and growth of technology.
5. Write about technology transformation.
7.12 Answers
Self Assessment Questions
1. Altering changes
2. True
3. Circuit modification
4. Knowledge
5. Innovation
6. True
7. Collective stage
8. Technology life cycle
9. True
10. Commitments
11. True
12. Technology policy
13. Government
14. True
15. Socio-economic planning
16. Turn down
17. True
Terminal Questions
1. Refer section 7.2 Technological Change.
2. Refer section 7.5 Technology Polices and Technology Instruments.
3. Refer section 7.6 Technology Development Options and Strategies.
4. Refer section 7.8 Diffusion and Growth of Technology
5. Refer section 7.4 Technology Transformation.
7.13 Case Study
The XYZ Company develops and maintains the legacy commercial trust
information and hazard management system. Most of the financial services
companies have been benefited by XYZ. The company aimed to conform to
the web support solutions suitable to the business and technological
strategy. In order to become more flexible with business and improve its
technology, it wanted to transform its desktop based application into a web
based application.
Challenges:
The company intended to build a common reusable technological
framework, to alter and restore all legacy applications. It ensured to create
minimum modifications to users, which means the alteration to the front-
end should bring in only few changes in contrast to the previous framework.
It also wanted to bring a common toolset for the web -based solution along
with the future enhancement in java (JSP/JSF for presentation), Hibernate
(Object Relational Mapping), oracle 10G Database (Database server) and
Apache Tomcat Web/Application server for business logic processing.
Further, it aimed to accomplish a successful Proof of Concept (POC) that
will serve as a roadmap to transfer from legacy applications to web-based
solutions.
Solutions:
The company involved ABC to meet their future requirements. ABC was
initially found to assist the clients with offshore development works. The
developmental works undertaken by ABC was numerous. It maintained a
team to accomplish the tasks involving project mangers, coordinators and
technical developers. Initially, it analysed the existing desktop XYZ
applications business processes, codes and reports and developed
hibernate objects. It designed the architecture for web application,
database and technical processes. In order to match with desktop graphical
user interface (GUI), it developed web-front using JSP/JSF. It conducted
the unit test and system test for its various applications. Ultimately, ABC
was able to complete entire java GUI, application and data layer structure
at correct time and budget. Further, it assisted its clients in their
outstanding works to ensure timely delivery.
Questions:
1. Discuss about the ABC Company.
2. Explain the transition process from legacy application to the web based
application.



OM0018-Unit-08-Technology Generation and Development
Unit-08-Technology Generation and Development
Structure:
8.1 Introduction
Objectives
8.2 Technology Generation
Process
Determinants
8.3 Technology Development
Process
Determinants
Technology development approaches
8.4 Importance of Technology Generation and Development
8.5 Need for Technology Strategy
8.6 Importance of Research and Development (R&D)
Corporate research and product lifetimes
Production costs and R&D
Translation of R & D efforts to technology
8.7 Summary
8.8 Glossary
8.9 Terminal Questions
8.10 Answers
8.11 Case Study
8.1 Introduction
Previous unit familiarised us with the different aspects and issues in technology management,
including the change in technology, the life cycle of technology, and transformation of
technology. Apart from these aspects, the unit enabled us to understand the different
technology policies and technology instruments. We also discussed about different technology
development options and strategies, the relationship between technology and socio-economic
planning, and diffusion and growth of technologies.
In this unit, we will study about the generation of technology, wherein we will study the process
of technology generation, its importance, and its determinants. We will also study about the
technology development, which will enable us to understand the technology development
process, and the different technology development approaches. We will also analyse the need
for technology strategy. We will also discuss about the importance of Research and
Development (R&D), and its efforts are translated to technology.
This unit will enable us to understand the importance of technology generation and
development.
Objectives:
After studying this unit, you should be able to:
Explain the process of technology generation and development, and its importance at the
national and enterprise levels.
Explain the need for technology strategy for continued competitiveness and growth of a firm.
List out the determinants and their relationships in technology generation.
Describe various approaches available for the development of technology at enterprise level.
Identify the importance of R & D.
List out various inputs required to translate the R & D efforts to technology.
8.2 Technology Generation
We will start our discussion with the meaning of technology generation.
Technology generation and development is often identical with the term "Research and
Development (R&D)". However, technology generation involves R&D efforts, while technology
development involves further stages of translating R&D efforts into marketable products,
processes and services. Basically, we can consider the R&D process as having four distinct
stages as shown in figure 8.1.

Figure 8.1: Stages of R & D Process
As per the figure 8.1, the recognition of a need for innovation is one of the inspirations for R&D.
A Research" on existing knowledge for satisfying identified need helps in idea generation-this is
the need push which is shown in the figure 8.1. The other primary motivation for R&D is to find
potential applications for advances in knowledge. Research" on existing activity for introducing
new knowledge also helps in idea generation-this is the technology push as shown in the
figure 8.1. The development" includes creation, design and production and marketing of the
generated idea. Through the entire process, its ideas and knowledge which are being followed,
and the process is not complete, until the new idea is converted into a marketable product or
service, which can be a hardware or software intensive technology.
Let us understand the objectives of Corporate R & D and R&D Projects.
Corporate research and development is the principal corporate asset for long-term technological
competitiveness. We can classify corporate research activities by the purpose of the research:
To support current businesses.
To provide new business enterprise.
To explore possible new technology basis.
The R&D projects tend to go through the following stages:
Basic research and invention.
Applied research and functional prototype.
Engineering prototype and testing.
Production prototype and pilot production.
Product testing and modification.
Initial production and sales.
The first three stages are usually called "research", while stages four to six are called
"development; hence, the term "research and development (R&D)". Each stage of innovating a
new product is expensive, with the expense increasing by an order of magnitude at each stage.
The management decisions to continue from research to development are therefore very
important. Overall, the expenses of modern industry for R&D were considerable. The major
purpose of research is to reduce technical risk before production-scale investment is committed.
It is generally reported that at each stage, the cost rises by orders of magnitudes in the ratio
1:10. It is precisely this reason, that technology generation and development is costlier than
basic R&D, and hence all countries or all enterprises are not able to pursue these activities at
similar levels.
8.2.1 Process
As we are discussing about the technology generation, let us now discuss about the process of
technology generation.
Let us have a look at an illustration of the various inputs required for generation of technologies
in Figure 8.2.

Figure 8.2: Process of Technology Generation
In the figure 8.2, goals, surroundings, criteria and resource allocation are some of the inputs to
R&D, the output of which is technology. The input resources into R&D organisations are the
traditional inputs such as money, materials, facilities, energy, labour and management, and the
intelligence-based inputs such as science, knowledge, skills, information and existing
technologies. The effectiveness of any R&D is determined in terms of the usefulness of the
technologies it produces with respect to the overall objectives of the corporation
Besides these factors, the R&D or technology generation involves many other aspects such as,
monitoring and evaluation of R&D projects, funding of R&D, training and development, resource
personnel, interactions at all levels, management policies and support, the availability of support
structures and incentives at government level, timely collection and interpretation of technical
and other information. The quality of resource leadership and commitment of the top
management for research is extremely important. In Indian industry or corporate sector, it is
generally observed that the research personnel occupy secondary place to finance, marketing
and production personnel, and are not given due importance in decision-making at corporate
level. Sometimes, inefficient personnel from other departments are posted or transferred to R&D
department, thereby indicating a complete neglect of R&D concept. Such management attitudes
need to be changed in the overall interest of the company.
8.2.2 Determinants
After the process, we will now discuss about the determinants in technology Generation.
The main determinants of technology generation are the stages of skills and abilities of the
associate, its competitors and supplier network, as well as the competitive environment. The
higher level of local capabilities and competitive environment will lead to a better quality of the
initial transfer and rapid upgrading. Many of the multinational corporations invest in supporting
the in-house skills and technical knowledge to a great extent, with a view to achieve efficient
production, but not necessarily to raise the capabilities to the next level of technology. In order
to achieve this, countries require policies, which:
Modify the competitive atmosphere and encourage promoting the use of world-class
technologies and management methods.
Improve the skill base and employee training. The policies should help to raise the quality of
labour force outside the firm and ensure to provide better training to the employees within the
firm.
Motivate the investors to shift into more complex technologies, and promote the technological
functions undertaken locally.
Improve the technology access for local enterprise, by providing information on foreign and
local sources of technology.
Self Assessment Questions
1. Technology generation and development is often identical with the term ________.
2. The effectiveness of any R&D is determined in terms of the usefulness of the technologies it
produces with respect to the overall objectives of the corporation. (True/False)?
3. Many of the multinational corporations invest in supporting the in-house skills and technical
knowledge to a great extent with a view to achieve efficient production but not necessarily to
raise the capabilities to the next level of _________.
Activity 1:
Imagine you are generating a technology for your business. What are the necessary inputs you
will consider for it?
Hint: Goals, surroundings, criteria.
8.3 Technology Development
The previous section familiarised us with technology generation along with its process and
determinants. This section will help you to understand its development.
Though, broadly speaking, the D of R&D covers Technology Development, the latter has
much wider implication. For better understanding, more elaboration of various factors that
determine technology development is described in this section.
8.3.1 Process
Let us first study about the process of technology development.
The various stages of technology development process or life cycle, starting from the generation
of ideas in the R&D department, to estimate market and inputs required, to execute projects, to
perform trials and modifications are depicted in figure 8.3.
We may observe that this process is tedious and requires top management commitment and
support from outside. Risk factor is large and the success rate depends upon the quality of
inputs provided to the R&D department.

Figure 8.3: Technology Development Process
8.3.2 Determinants
As we are studying about technology development, we will now study about the determinants in
technology development.
You can see the determinants and their interrelationship in technology development from R&D
to technology diffusion and substitution are shown in figure 8.4.

Figure 8.4: Determinants in Technology Development
A per the figure 8.4, natural resources are assembled and processed through the succeeding
stages. The supply factors include natural resources, human resources, fund allocation, and
produced resources. The demand side factors include market potential venture capital and
enterprise profitability. The coordinating organisations, supporting facilities and government
policies and systems have a major role to play in the success of the technology development
process.
8.3.3 Technology Development Approaches
This section will give us a brief idea about the approaches of technology development.
In-house R&D: Technology development activities are generally carried out through setting up
of separate in-house R&D units within the business, managed and headed by a well-qualified
and experienced chief, directly reporting to the top management. However, this unit has close
interactions with other departments within the company and there could even be exchange of
personnel among different departments. The strength and facilities in the in-house R&D unit
would depend upon the technology policy of the company and the nature of the business. In
large companies, there are sometime R&D labs for each department and a central R&D lab for
major R&D projects. Industrial R&D is mostly product or process oriented with specific
objectives and time schedule; and not basic research. Incremental developmental efforts or
import substitution efforts are generally common in most of the industries in developing
countries including India, while emphasis is on new technologies or new applications of
technologies in advanced countries.
Co-operative R&D: A group of companies in a particular industrial sector promotes an R&D
centre as a society or a non-profit making company. The R&D is funded by the participating
companies and the government. This R&D centre undertakes R&D as per the requirements of
the companies in their larger interest, and sets up expertise and facilities of common nature and
which are usually expensive. A company can also support specific projects to this centre.
Cooperative research facilities are normally utilised for the projects which are not of cautious
nature from the business point of view. Otherwise, most important part of the R&D can be done
at the centre and the remaining part involving finer details or critical technological aspects
affecting the competitiveness is done at the in-house R&D division of the company.
Contract research: A company may contract components of technology development to
suitable R&D organisations, academic institutions, or consultants or experts. The in-house R&D
unit may coordinate the progress of the activities, to develop the desired technologies. This
approach usually requires considerable internal technological and managerial capabilities
coupled with a strong Science and Technology (S&T) information base.
R&D collaboration: A company may collaborate with another company in areas of common
interest, if costs of development are high. Such inter-firm collaborative R&D efforts are
becoming common in developed countries mainly due to high costs and shorter technology life
cycles. It is found in areas such as micro-electronics, materials, information technologies, bio-
technologies, and so on. A firm may also collaborate with the public funded or privately funded
R&D institutions on case-to-case basis, where R&D results are shared mutually, and so are the
expenses. A company in India may even collaborate with another company or R&D institution
abroad, on mutually agreed terms.
Research societies: Large corporations or industrial houses may set up independent
research societies, in addition to their in-house R&D units. Such societies may undertake R&D
activities mostly relating to the broad interests of the promoting companies in line with the
national interests. They will also take advantage of those facilities for the activities and
programmes in their in-house R&D unit. Governments usually encourage such societies and
provide several tax concessions and financial incentives.
Research companies: Large firms of technology innovative industrialists may support
research companies, specifically for conducting research and development of technologies for
others on commercial basis. The development costs and reasonable profits are recovered from
the sale and transfer of technologies. Such a concept is common in USA, and other developed
countries while it is yet to gain recognition in developing countries such as India. A company
may adopt any of the approaches or a combination of the approaches depending on its needs
and resources.
Self Assessment Questions
4. Technology development activities are generally carried out through setting up of separate
_____ units within the business, managed and headed by a well-qualified and experienced
chief, directly reporting to the top management.
5. The coordinating organisations, supporting facilities and government policies and systems
have a major role to play in the success of the technology development process.
6. Risk factor is large and the success rate depends upon the quality of inputs provided to the
__________.
Activity 2:
Suppose you have to create a document on development of technology. Enlist the steps to
develop a new technology that you can add in your document.
Hint: Various stages.
8.4 Importance of Technology Generation and Development
As we are now familiar with both the technology generation and technology development, we
will now study about their importance.
Distributed Energy Systems Technology Generation group is committed to the development of
practical, real-world energy solutions to meet their customers evolving needs. Through new
product development, key strategic relationships and industry leading solutions, they are
focused on meeting present commercial needs while advancing the innovation required creating
future energy choices. Partnering with commercial, as well as the government entities like the
US Department of Energy, National Renewable Energy Laboratory, National Science
Foundation, NASA and California Energy Commission, the Technology Generation group is
advancing technologies in several core areas.
Hydrogen fuelling systems: Distributed Energy Systems is developing hydrogen fuelling
systems to meet the needs of an increasing number of fuel cell electric and convenient power
applications. Individuals, task force, and communities seek out the hydrogen fuelling systems
because they are available in a range of production capacities and produce pure hydrogen.
Military & Aerospace hydrogen applications: Leveraging the core proton exchange
membrane (PEM) technology, Distributed Energy Systems designs, develops models and builds
solutions to meet the needs of commercial aerospace partners and civilian and military
government agencies. From high pressure electrochemical cells to high energy density
regenerative fuel cell (RFC) energy storage systems, the work is being developed for low earth
orbit (LEO) and geosynchronous earth orbit (GEO) satellites, high altitude airships and high
altitude winged aircraft. These advanced technologies also have applications in ground-based
and marine environment.
Backup power and renewable-to-hydrogen systems: Regenerative fuel cell technology can
be used in a wide range of backup power applications including telecommunications, critical
loads, peak shaving, remote geographies, and load levelling in finest power markets. In an effort
to look for ways to extend present resources, the technology has been used and validated with
renewable sources of energy such as wind and solar. To meet the growing demand for
electrolysers for hydrogen-based renewable energy systems, Distributed Energy Systems has
developed the HOGEN RE hydrogen generator. As the next evolution of the companys
advanced proton exchange membrane (PEM) electrolyser, the HOGEN RE generator
incorporates sophisticated power electronics to make integration to renewable power sources
easy and efficient.
Megawatt wind turbine technology: Distributed Energy Systems has developed an
advanced gearless drive train design for megawatt (MW) scale wind turbine applications. This
slow speed permanent magnet generator directly coupled to the blade hub, and connected to
the grid with an advanced power converter platform offers advantages in efficiency, reliability
and performance. They have also designed and tested a 1.5 MW slow speed permanent
magnet generator for direct drive wind turbine applications and developed and commercialised
a power converter platform for wind and related applications based on their FlexPhase power
module technology.
Self Assessment Questions
7. Distributed Energy Systems ___________ is committed to the development of practical, real-
world energy solutions to meet their customers evolving needs.
8. Distributed Energy Systems is developing hydrogen fuelling systems to meet the needs of an
increasing number of fuel cell electric and convenient power applications. (True/False)?
9. To meet the growing demand for electrolysers for hydrogen-based renewable energy
systems, Distributed Energy Systems has developed the _________ hydrogen generator.
8.5 Need for Technology Strategy
This section will give you an overview of the need of technology strategy.
Whether or not an organisation would generate or develop its own technology and with what
intensity it would follow, the efforts in this respect would depend upon technology strategy it has
planned or adopted.
Though the term strategy is commonly used as an antonym of tactics, it actually implies long-
term, purposeful and interconnected efforts. While tactics means the action to deal with
immediate specific problems. Technology Strategy" may accordingly be defined as a strategy to
deal with the technology and related issues at macro and micro levels, with respect to set
objectives.
Let us have a quick overview of types of technology strategies and their need.
Macro-level strategy: At macro level, each country outlines and adopts a technology strategy
to achieve its political, economic and social objectives and translates the same into action
through appropriate policies and mechanisms. These strategies may be different for different
countries. For example, US may adopt to excel in "defence" or "warfare technologies" or in
generation of first stage new technologies for knowledge-based industries, while Japan may
decide to excel in technologies for consumer products of newer designs at lower costs. Korea
may decide to adopt and upgrade imported technologies using mass production techniques for
consumer products without really caring much for high quality levels. Also, without bothering for
defence or other strategic applications. On the other hand, India may decide to develop its own
capabilities in strategic areas such as defence, atomic energy and space where technologies
are usually closely guarded or for maximum utilisation of its own resources. Thus, technology
strategies may vary with the national perspectives, and accordingly policies and mechanisms
are evolved and implemented. Financial resources play an important role in evolving the
technology strategies. Depending on the resources available and the will of the government, the
policies are evolved, mechanisms are set up and measures are taken to ensure the
achievement of the set objectives.
Micro-level strategy: The extraordinary range and potential uses of contemporary technology
have important consequences for industrial and commercial firms. The industrial and
organisational disorder produced by technological change, and increased international
competitive pressures provide threats and opportunities for firms. An effective strategic
approach to technology allows firms to cope better with these changes, and reduces the threats
and insecurities facing them and their employees.
The basic role of technology strategy in business planning is to help ask the questions like: what
business the corporation plans to be in and how it should be positioned? Effective planning
identifies the present decisions required to create desirable and competitive corporate futures.
In particular, technology strategy must anticipate the transient impact of technological innovation
on the future competencies of the corporation. An appropriate level of formal planning provides
systematic and documented strategy. The inputs to the process occur through participation of
staff and line management and of special planning groups. Technology scenarios should help
management focus on the interaction of changes between technology and change in markets,
resources, regulation and competition.
Importance of technology strategy
Mark Dodgson has identified the following five issues which bear on the importance of
corporate strategy for technology:
The need to cope with technological uncertainty.
Complexity and discontinuous nature of technological development.
The need for technology to be viewed in a global context.
The need to attain complementarities.
The relationship between corporate strategy technology and public technology policies.
Linking business and technology strategy: According to Fredrick Betz, the basic role of
technology strategy in any business planning is to pose three fundamental questions:
In what business should the firm engage in future?
How should the firm be positioned in these businesses?
What research, production and marketing will be necessary to attain those positions?
Formulating a technology strategy
In planning technology strategy for competitive advantage, the following steps have been
suggested:
Identify all the distinct technologies and sub-technologies in the value chain.
Identify potentially relevant technologies in other industries or those under scientific
development.
Determine the likely path of change of key technologies.
Determine which technologies and potential technological changes are most significant for
competitive advantage and industry structure.
Assess a firms relative capabilities in important technological aspects and the cost of making
improvements.
Select a technology strategy, encompassing all important technologies, that reinforces the
firms overall competitive strategy.
Reinforce business unit technology strategy at the corporate level.
Self Assessment Questions
10. _________ may accordingly be defined as a strategy to deal with the technology and related
issues at macro and micro levels, with respect to set objectives.
11. According to Fredrick Betz, the basic role of technology strategy in any business planning
is to pose three fundamental questions. (True/false)?
12. Select a technology strategy, encompassing all important technologies, that reinforces the
firms overall _________.
8.6 Importance of Research and Development (R&D)
After discussing about the technology generation and technology development, and the need for
technology strategy, we will now discuss about the importance of R&D projects in corporate
research and the relation between R&D and production costs.
8.6.1 Corporate research and product lifetimes
R&D projects in corporate research create and extend the lifetimes of corporate products that
avoid technological obsolescence of businesses. Extending product lifetimes can be done by:
Improving the production processes to lower production costs and increase quality.
Upgrading and improving current product models.
Creating next generation product models.
The function of corporate research is to create and extend the lifetimes of the companys
products. This is an essential function because all products have finite lifetimes which can
extend to a period of one year or many years. In times of new and rapidly changing
technologies, lifetimes tend to be short. A mature technology product may have a very long
lifetime if no clearly superior technology has emerged. But even in a long-lived product, periodic
reformulations, variation in product lines, and changes in packaging provide some change in the
product. To maintain a long-lived product, quality must be maintained on balance with
competing products, if not more, and cost reduction in production must be ahead of competitors.
8.6.2 Production costs and R&D
Production costs of new products usually decline over times, due to process and product
improvement. In any new product line, initial production costs are usually much higher than later
production costs. All new products based on new technologies have initially high per unit
product costs, because of:
Large R&D and plant investment costs.
Small volumes of initial production.
Inefficiencies in the production processes and in production design.
For a successful product, these factors improve over time. The increasingly larger volume of
production also lowers per unit overhead charges. Innovations and improvements in production
processes create more efficient production procedures.
Market share, Profit margins, Pricing strategy
These are also highly dependent on R&D efforts at corporate level and the efficiency at which
R&D is carried out. The entry into a new high technology market is restricted because
knowledge is new and is not widely known. Products then are high priced because sales volume
is small and production costs are high. Yet, if the price is held there too long, other competitors
can enter with technology products, since high profit margins and growing markets provide the
competitive incentive. However, if prices are reduced in anticipation of production costs being
increased in future, a competitor has less incentive to enter, and may incur losses. The strategic
trick is for the technology innovator to ride the markets faster than the competitors and enter
new products earlier than others. It is precisely due to this reason that open competitiveness
encourages innovations as happens in advanced economies while restrictive policies and
assured markets through licensing systems discourage innovations.
8.6.3 Translation of R & D efforts to technology
This section will examine the relationship between R&D capabilities and technology
commercialisation, and innovation performance in IT-related businesses.
The R&D was focussed on influencing the innovation performance of firms which resulted in a
significant impact on innovation. The research implication of this decision is that the
measurement of firms performance should not only depend on the intensity of R&D
expenditures, but a broader set of factors, including learning and external networking
capabilities.
The technology commercialisation capabilities of firms participated as the role of a mediator in
the relationship between R&D and innovation performance. Within the innovation cycle of input
(R&D capabilities), process (technology commercialisation capabilities) and output (innovation
performance), it is found that R&D occasionally influence performance in an absolute fashion.
But its consequence was most often resolved by technology commercialisation capabilities. The
practical assumption of this decision to the companies is that, in order to enhance their
performance they must avoid closely focusing on R&D. Instead, they should also invest in
capabilities to commercialise technologies resulting from R&D. When direct and indirect benefits
of public R&D funding are compared together, the explanatory power of the relationship
between R&D capabilities, technology commercialisation capabilities and innovation
performance were stronger among the latter than the former.
Self Assessment Questions
13. R&D projects in corporate research create and extend the lifetimes of corporate products
that avoid ________ obsolescence of businesses.
14. Production costs of new products usually decline over times, due to process and product
improvement. (True/False)?
15. The entry into a new high technology market is restricted because ____ is new and is not
widely known.
8.7 Summary
We started this unit by giving a brief introduction on technology generation and development.
We understood that technology generation and development is comparable with the term
"Research and Development (R&D)". On the other hand, technology generation engross R&D
efforts, while technology development involve additional stages of translating R&D efforts into
profitable products, processes and services. We also came to know that recognition of a need
for innovation is one of the inspirations for R&D. We further classified R&D projects into the
following stages- basic research and invention, applied research and functional prototype,
engineering prototype and testing, production prototype and pilot production, product testing
and modification and initial production and sales. We learnt about the process of technology
production wherein we saw goals, surroundings, criteria and resource allocation as some of the
inputs to R&D, the output of which is technology. We analysed that the effectiveness of any
R&D is determined in terms of the usefulness of the technologies it produces with respect to
the general objectives of the business. We learnt about the main determinants of technology
generation, which includes the stages of skills and abilities of the associate, its competitors and
supplier network as well as the competitive environment.
We further discussed about the technology development approaches wherein we learnt the in-
house R&D and Co-operate R&D, R&D collaboration, Research Societies and Research
companies. We also discussed the Technology generation group which focussed on hydrogen
fuelling system, military and aerospace hydrogen application; back up power and renewable-to
hydrogen system and megawatt wind turbine technology. We defined Technology Strategy" as
a strategy to deal by means of the technology and related issues at macro and micro levels,
with respect to set objectives.
In addition, we learnt about the importance of R&D in corporate research and product lifetime
and production costs and R&D, with the affect of R&D on technology.
8.8 Glossary
Term Description
Transient
Passing particularly quickly into and out of existence or
producing results beyond itself.
Leveraging
It is depositing a small portion of the purchase price or
a technique of taking position in the investment.
Obsolescence
It is the state of being which occurs when an object,
service or practice is no longer wanted even though it
may still be in good working order.
Reformulation
To change or update a plan or idea that is already
formulated.
Electrolyser
A device which is used to breakdown water utilising
electricity, into hydrogen and oxygen.
Geosynchronous
It refers to satellite that evolve around the earth with the
same speed, but need not be the same distance from
the earth.
8.9 Terminal Questions
1. Explain Technology Generation.
2. Explain Technology Development.
3. Discuss the importance Technology Generation and Development.
4. Explain the need for technology strategy.
5. Explain the importance of R&D.
8.10 Answers
Self-Assessment Questions
1. Research and Development
2. True
3. Technology
4. In-house R&D
5. True
6. R&D department
7. Technology Generation group
8. True
9. HOGEN RE
10. Technology strategy
11. True
12. Competitive strategy
13. Technological
14. True
15. Knowledge

Terminal Questions
1. Refer section 8.2 Technology Generation.
2. Refer section 8.3 Technology Development.
3. Refer section 8.4 Importance of Technology Generation and Development.
4. Refer section 8.5 Need for Technology Strategy.
5. Refer section 8.6 Importance of R&D.
8.11 Case Study
The Human Resource (HR) director of R&D was called by the leadership
team of ABC to organise a formal training specifically to the R&D people.
Even though R&D training programs have been in position in the 1985s and
90s, the programs were neglected in the late 95s due to supply issues and
challenging priorities all the way through the company. The present
leadership appealed the HR to build up a corporate university. By definition,
a corporate university binds business learning efforts directly to primary
business goals.
Challenge:
A whole of six colleges make up the R&D University, one for every level in
the company opening with incoming scientists and mangers at group 1 up to
directors and top scientists at group 5. The primary goal of these colleges
was to bring up the levels of marketable innovation, in large part, by
increasing networking across business to encourage cross-fertilisation of
thoughts. The leadership was well built, but the problem was to begin the
task.
Solution:
The R&D leadership took the initiative and defined the goals and
aspirations. To cause an increase in modernisation by rising networking
across various business and success measure and providing training which
is equally official and compulsory. The leadership defined the scope of the
program as being limited to R&D people and lead to the success of having
R&D people teach other R&D people. The formal training provided a way to
establish this tradition which was lost during the last decade of global
growth. By covering all these steps, HR was ready to design its next stage-
design the college. This was accomplished by the HR by building up a task
force to create the R&D colleges. The task force was headed by the HR
leader and R&D leadership encouraged the people to become members.
The professionals of R&D represented the various business units and
scientific disciplines. A lot of questions were raised during the decision
process and the choices led to the successful formation of the R&D
University across five levels of the organisation. The victory of the college is
well received all over the R&D. The main aim of the program was to
increase networking with the hope that networking would direct to greater
innovation.
Questions:
1. Explain the issue that lead to the establishment of corporate University
along with the challenges faced.
2. Discuss the steps taken to accomplish the desired task.


OM0018-Unit-09-Technology Transfer
Unit-09-Technology Transfer
Structure:
9.1 Introduction
Objectives
9.2 Transfer of Technology
9.3 Models of Technology Transfer
Traditional technology transfer models
Qualitative technology transfer models
Other models
9.4 Technology Transfer Modes
9.5 Dimensions of Technology Transfer
9.6 Features of Technology Package
9.7 Routes of Technology Transfer
9.8 Summary
9.9 Glossary
9.10 Terminal Questions
9.11 Answers
9.12 Case Study
9.1 Introduction
Previous unit familiarised us with technology generation and development. In the previous unit,
we studied about the process and need of technology generation and development,
determinants in technology generation and development, development approaches, and about
R&D.
In this unit, we will study about technology transfer, its models including traditional models,
qualitative models, and some other famous models. We will also study about technology
transfer modes, such as passive mode, semi-active mode, active mode, and horizontal and
vertical transfer. We will have a brief discussion on the dimensions of technology transfer,
features of technology package, and the routes of technology transfer.
This unit will enable us to use appropriate model for transferring a technology.
Objectives
After studying this unit, you should be able to:
Define technology transfer.
Explain the models of technology transfer and their uses.
Describe technology transfer modes.
Explain the dimensions of technology transfer and features of technology package.
Identify routes of technology transfer.
9.2 Transfer of Technology
We all are familiar with the term technology, so let us start our discussion with the meaning of
transfer of technology or commonly called as technology transfer.
Basically there are two ways of acquiring a new technology: either develop it or purchase it. The
second way of acquiring new technology, that is, purchasing a new technology, is commonly
called "technology transfer". In the process of technology transfer, there are sellers whom we
call "transferors" or "licensors as well as buyers whom we call "transferees" or "licensees".
You must note that no transfer of technology can take place unless and until we put the
technical knowledge to use. We can not only include scientific or engineering items, but also
some factors such as, the manufacturing, marketing, distribution and customer service, in
technology transfer.
Let us have a look at some of the key factors included in technology transfer.
Transplantation of technology involves shift from one set of well-defined conditions to another
set in which at least one key variable may differ. Secondly, the recipient may apply the
technology to a different purpose from that of the supplier.
A sense of advantageousness prevails in the transfer of technology, whether asserted or not.
The transfer process embraces a rich variety of mechanisms and relationships between
recipient and donor (supplier of technology). The process can vary from a routine people-less
passive transfer to turnkey contract where the donor takes the full responsibility for all phases of
the contract.
The nature of the technology that is transferred, and the way it is transferred are critical to the
success of the process of technology transfer.
Technology transfer may initiate as an answer to the problems of others. Adoption of such
outside solution to solve an inside problem is technology transfer. Though it provides solution
for problem, there are some issues which you have to face during planning and managing
technology transfer. We can classify these issues into three categories, which are:
Technology transfer process issues.
Corporate capability issues.
Operating environment and National Innovation System (NIS) issues.
We will now discuss about these issues.
Let us start with a brief discussion on the types of issues that you may face during planning and
managing the transfer of technology, as given in
figure 9.1.

Figure 9.1: Types of Technological Transfer Issues
Technology transfer process issues: The word technology transfer process refers to the
steps or the stages in the transfer of technology. Thus, you may have to face problems during
all the stages, such as, justification and selection stage, planning stage, negotiation stage, and
implementation stage. Let us have a look at the problems you face during these stages.
Justification and selection stage issues
Misjudgements during the preparation of a business case for a technology transfer may lead
you to select wrong technology.
The technology may cost too high to purchase, install, operate, and maintain.
The technology you have selected may be too complex to understand easily and to interpret
the transferee.
The technology may need to adjust considerably to suit for local conditions.
Planning stage issues
While transferring the technology to a developing country setting, the transferor may misjudge
the problems incurred in it.
Transferor may not understand the needs of the transferee completely.
Transferor may need to manage the planning process when the transferee manager is not
involved in it.
The transferor and transferee may have different objectives.
You may have not chosen appropriate mechanisms to implement the transfer technology.
Negotiation stage issues
There may be different negotiation approaches and strategies.
Transferor and transferee may not trust each other.
Both transferor and transferee may have inappropriate goal during negotiations.
Both transferor and transferee may fail to accomplish agreement on price, product, and market
strategies.
Technology transfer implementation issues
Transferors may not have skilled technology transfer managers.
Transferee may not trust in transferor developed systems.
Transferors may fail to accomplish quality targets.
Transferors may get delayed in obtaining additional materials, needed for fast operation, from
the local environment.
The cost may be too high due to poor implementation.
Corporate capability issues: After discussing about technology transfer process issues, we
will now study about some issues related to the capability of the company, that is, corporate
capability.
Issues due to inadequate skills
The transferee may fail to attract the essential skills due to economic and business limits.
Transferees employees may not have experience and they may not have essential skills at
the industry level.
The transferee personnel may not be provided required training.
Transferee may do not have encouragement systems to learn and assimilate new
technologies.
Issues due to ineffective management
Transferors may not have perceptible and dedicated top management support for the project.
Transferor and transferee managers may have different working methods and practices.
The competition for the ownership of the technologies among Individual or organisation, and
there may be not-invented-here syndrome.
Top managements may fail to identify the transferee and transferor personnel who would work
thoroughly from the beginning of the project till implementation.
Operating environment and NIS issues: After discussing about two types of issues, we will now
discuss about another type of issues, namely, operating environment and NIS issues.
Local markets are reducing due to unfavourable changes in the economic levels of the
country.
The physical infrastructure may be poor.
The mechanisms to protect intellectual property may be insufficient.
They may depend more on foreign suppliers and imports.
They may do not have good education and training institutions to improve skills.
They may have limited foreign exchange facility.
The tax environments may be unclear.
Self Assessment Questions
1. Purchasing a new technology is commonly referred as ___________.
2. Technology transfer may initiate as an answer to the problems of others. (True/False)?
3. Transferor and transferee managers may have _________ working methods and practices.
9.3 Models of Technology Transfer
As we are now clear with the concept of technology transfer, let us now study about models of
technology transfer. Like some other concepts related to technology, technology transfer also
has some models associated with it. First, let us have a look at some traditional technology
transfer models.
9.3.1 Traditional technology transfer models
The appropriability model: This model indicates the significance of research quality, and the
pressure in the competitive market, in achieving the technology transfer. It also emphasises the
promotion of the use of the findings of the research. As per this model, the process of transfer of
technology takes place, when the users have been found by the technology, or the competitive
market has discovered the technology.
The dissemination model: This approach makes a suggestion for the diffusion or
dissemination (distribution) of the significance of technology and innovation, to the possible
users. Experts should do this dissemination. This model believes that an expert, who will
transfer the technology, will transfer the knowledge only to the user, who is willing. The limitation
of this model is that it offers one-way communication only.
The knowledge utilisation model: This model gives priority to the importance of
communication between the technology developers and the technology users, and the
importance of the barriers existing in an organisation, of technology transfer. The focus of this
model is on the effective organisation of knowledge. Some researchers have argued that this
model a limitation of linear biasness. This model helps in reduction of the complexity in the
process of technology transfer to a process with ordered stages.
Till now, in this section we have studied different traditional models. Let us now have a look at
qualitative technology transfer models.
9.3.2 Qualitative technology transfer models
There are several technology transfer models. They are
The Bar-Zakay model: This model is based on a project management approach, and was
introduced by Bar-Zakay (managing partner of films, who focussed his practice on personal
injury and wrongful death law). As per this model, we can divide the process of technology
transfer into four stages:
Search.
Adapt.
Implement.
Maintain.
This model specifies the activities to be carried out and also accentuates the importance of both
transferor and transferee to expertise for undertaking technological forecasting, long-range
planning, and gathering of project-related intellect. In this model, the term donor is used, which
refers to the transferor and gives an impression that the owner of technology is giving away a
valuable asset out of selfless reasons. A disadvantage of the Bar-Zakay model is that the
activities, terms, and facts expressed in this model had reversed the position of the consumers
(mainly passive) of technology who trusted on the programs supported the purchase of
technology to a greater extent during the period 1960 to 1970. And during that period the
government controls were used to identify the speed, direction, and value of technology flows.
The Bar-Zakay model helps us to learn some facts, which are:
The need of comprehensive examination of the technology transfer process from search stage
all through post-implementation stage.
Adoption of a process approach to plan and implement the technology transfer projects.
The need of objectives and decision points to strengthen the activities, to correct the mistakes,
or even to terminate the projects at any point of time.
The Behrman and Wallender Model: Behrman (an American playwright and screen writer)
and Wallender (fictional inspector of books and film) introduced a process for international
technology transfer which is more applicable to multinational corporations. As per this model,
we can divide the process into seven stages, which are:
1. Develop scheme and plan to attain decisions regarding location and prepare a business case
which includes good resource consideration.
2. Decide the product design technologies to be transferred.
3. Specify details of the plant to be designed for production, and other aspects related to
construction and infrastructure development.
4. Construct the plant and start-up production.
5. Adapt the process and product (if needed) and strengthen the production schemes to suit
basic prerequisites.
6. Improve the product technology transferred by means of local skills.
7. Provide external support to strengthen the interdependence between the transferor and
transferee.
The only disadvantage of this model is that, during the first three stages, the transferor develops
the technology transfer project where transferee is not involved much, thereby emphasise
dependency. On the other hand, the transferee is involved in the fifth and sixth stages, which
helps in understanding and improving product and process technologies. This emphasises the
technology transfer does not completes with the start-up of production unless there is a
mechanism to foster assimilation the project is rejected to have delivered.
The Behrman and Wallender model helps us to learn some facts, which are:
The transferee must involve in the process of technology transfer project from the beginning.
The initiation of production doesnt mean that a technology transfer project is completed.
If the measures taken are not accurate to ensure adaptation of the transferred technology, the
technology transfer is said to be unsuccessful.
The Dahlman and Westphal Model: Dahlman and Westphal introduced a process on the
basis of their experience of work carried out in the Republic of Korea, speedily industrialising
countries, during 1980. As per this model, we can divide the process into nine stages, which
are:
Perform pre-investment feasibility study to gather information and perform a techno-economic
study to ascertain project potential.
Perform a preliminary identification of technologies required, based on the feasibility study
performed.
Perform basic engineering studies which include the preparation of layouts, process flow
diagrams, and other design specifications of the plant and mechanism and the core technology
to be transferred.
Perform an engineering study in detail which includes the preparation of a civil engineering
plan in detail that includes specifications based on manufacturing and installing and identify the
peripheral technology required for the effective technology transfer.
Select the suppliers for equipment and contract out services to assemble the plant and
mechanism and plan for the co-ordination of the work among various parties.
Set up and implement a guidance and education plan for the workers who are probably
working in the technology transfer project according to the consultation with the suppliers of
technology.
Construct the plant.
Start-up with operations.
Build up trouble-shooting skills and start up activities to solve design and operational issues as
they come up, particularly during the first few years of operation.
This model emphasises the involvement of the transferee at all the stages during planning and
implementing process of technology transfer project. Thus, it may refer to as an improved model
over Behrman and Wallender model. The major disadvantage of this model is that it assumes
that the transferee has the access to high level engineering skills. Since, this is not true in many
developing countries. Also it pays less attention for negotiation and post-implementation stages.
The Dahlman and Westphal model helps us to learn some facts, which are:
A sequential process is required to study the technology transfer.
A careful feasible study on the technology transfer projects has to be done before beginning
the project since those projects requires serious resource commitments.
The transferee must be involved in the planning right from the beginning.
Transferees must develop necessary good engineering and project management skills without
which the process of technology transfer cannot be handled effectively.
The Schlie, Radnor, and Wad Model: Schlie introduced a simple, universal model for
technology transfer process. This model describes seven elements which manipulates the
planning, implementation, and ultimate success to any technology transfer project. These seven
elements include:
The transferor, who sells the technology to the recipient.
The transferee, who buys the technology.
The technology that has to transfer.
The transfer mechanism chosen for the transfer the preferred technology.
The environment in which the transferor is working. The transferor environment characteristics
can manipulate the effectiveness of the transfer process. It includes:
-Among others.
-Financial status.
-Business point of reference (inward versus outward).
-Constancy (Stability).
-Attitude and obligation to the transfer project.
-Operating policies.
The environment in which the transferee is working. The transferee environment
characteristics can manipulate the absorptive capacity of the transferee. It includes:
Physical and organisational infrastructure.
Availability of skills.
Attitude and obligation to the transfer project.
Technological status.
Financial status.
Business point of reference (inward versus outward).
Stability.
The larger environment that surrounds both the transferor and the transferee. This
environment has three layers; they are sub-regional, regional, and global. If the layers of the
larger environment will not uphold, then it will affect the cross-border and international
technology transfer even if the immediate operating environments of the transferor and the
transferee are favourable to the technology transfer. Factors that influence the success of
technology transfer project in the larger environment are:
Political relationships between countries.
Exchange rates.
Investment background.
Trade negotiations.
Balance of trade.
Relative technological levels.
Status of intellectual property protection government.
The seven elements of this model are suitable even in todays business environment. The way
they establish themselves can change with respect to time. The only disadvantage of this model
is that it does not offer any guidelines to a transferee that what it should do.
This model helps us to learn some facts, which are:
When planning and implementing a technology transfer project, various changes that had
taken place and are taking place in the worldwide business environment today is helpful for the
managers of technology to develop good insights into the transferee, transferor, and larger
environments.
We have to choose the technology transfer mechanism based on a sophisticated
understanding of the other six elements.
The Chantramonklasri Model: Chantramonklasri further improved the Dahlman and
Westphal Model. Chantramonklasri introduced the model having five phases. Which are:
Carry out a study on pre-investment and feasibility.
Develop engineering specifications and design based on the study on feasibility.
Initiate the production of principal goods based on the developed engineering specifications
and designs.
Commission and include ample of the workforce.
Initiate commercial production.
Though the first two phases are valid, it is not clearly mentioned whether the required principal
goods can be produced within the transferee environment unless the transfer arrangement also
includes the transfer of technology needed to manufacture these. This model may be valid in
technologically developed countries, such as, India and China, but not in other smaller
developing countries.
9.3.3 Other models
After discussing about traditional and qualitative models of technology transfer, we will now
discuss about some other famous models of technology transfer.
Bridging agencies: There are some agencies because of whom the transfers of technology
take place, comprises of government departments, industries, financial institutions, consultants,
venture capital companies, research companies, and R&D organisations, and so on. We can
call these agencies as the bridging agencies as given in figure 9.2.

Figure 9.2: Bridging Agencies
The users of new technologies include industries both from the private as well as the public
sector, agencies that are very large and technically oriented, such as, ISRO (Indian Space
Research Organisation), government departments, AEC (Atomic Energy Commission), and so
on. It can be seen that a wide spectrum of participants in the total economy are technology
users.
Research and diffusion model: As per this model, the simplified diffusion of technology from an
agency that is mission-oriented assists the technology development with the intention of its
mission, and then makes arrangements for the technology diffusion to other industries by
knowledge transfer. You can see this in figure 9.3.

Figure 9.3: Research and Diffusion Model
This is usually a slow process.
Problem solver model: As per this model, the generation and transfer of technology, acts as
a companion of problem solving, as given in figure 9.4.

Figure 9.4: Problem Solver Model
Self Assessment Questions
4. Behrman and Wallender introduced a process for _______________ which is more
applicable to multinational corporations.
5. The ______________ must involve in the process of technology transfer project from the
beginning.
6. The initiation of production doesnt mean that a technology transfer project is completed.
(True/False)?
9.4 Technology Transfer Modes
Previous section familiarised us with the traditional and quality models developed for the
technology transfer process. This section will familiarise us with the different modes of
technology transfer.
Basically technology transfer is categorised into passive and active modes. The modes of
technology transfer refer to the transferors role in the application of technology to solve the
users problem. The technology transfer is called active, if the transfer methods assist the
possible user in its application. In active mode, the transfer process goes after the interpretation
of the transmitted information, suggests the user how to use the technology, or shows the
applications of the technology for the apparent use. However, there may be an intermediate
mode also, known as semi-passive mode. In semi-passive mode, the transfer activity is in the
middles of the other two modes, that is, active and passive modes.
Let us have a look at some examples of technology transfer modes.
Passive mode: The technology transfer is called passive, if the transfer methods offer the
technology to the possible users without assisting them in their application, such as by a report
or oral presentation. In passive mode, technology transfer is also known as knowledge transfer.
The published literature is the most well-known and widely used form of passive technology
transfer. It is illustrated in the figure 9.5 (a).

Figure 9.5 (a): Technology Transfer (Passive Mode)
As per figure 9.5(a), there is no direct communication or assistance from the originator of the
technology, to the producer of finished consumer item. Even though, in technology transfer,
thousands of products are produced and consumed from passive mode, that is, the transfer of
knowledge, there is no straightforward communication. Some of the forms of passive technology
transfer are television repair manuals and how-to-do-it guides-for home repairs.
Semi-active mode: In this mode of technology transfer, the function of the agent of
technology transfer (in addition to self-education or self-recovery of elements of technology
transfer) is somewhat limited, as illustrated in figure 9.5(b).

Figure 9.5 (b): Technology Transfer (Semi-active Mode)
The technology transfer agent (consultant or technology expert) screens available pertinent
information for product development. Here the function of transfer agent is only to interpret or
communicate. He will not actively get involved in the application of the technology.
Active mode: The active mode of technology transfer takes forward the procedure to an
actual form. In this mode, the technology transfer agent or consultant will be fully involved and
acts as a bridge in technology transfer from technology source to entrepreneur or implementing
agency.
Horizontal and Vertical technology transfer: In horizontal technology transfer, the
technology transfer is from one firm to another. The horizontal transfers occur normally between
the firms in various countries, mainly because of the competition and advancement or near
advancement of technologies. In vertical technology, the technology transfer is done, from an
R&D organisation to a firm. The vertical transfers are done mainly inside the country and the
recent technologies may frequently need additional efforts in terms of setting up commercial
viability. Such a transfer has huge risk.
Let us have a look at some technology bases, along with their technology transfer modes, and
relevant users or needs, in table 9.1.
Table 9.1: Connecting Technology with Users
TECHNOLOGY BASE
TECHNOLOGY
TRANSFER MODES USERS / NEEDS
Engineering

Traffic Safety
Emergency Health Care
Communications

Crime Prevention
Medicine Electronics (Passive or Active)
Public Transportation
Drinking Water Quality
Energy

Energy Conservation
Urban Construction so on.
Structures

Private Sector
Chemicals
Materials
Computers so on.

Industry Agriculture
Mining
Consumer Products
Automotive
Medicine so on.
Self Assessment Questions
7. Technology transfer is categorised into _________ and __________ modes.
8. The __________ mode technology transfer carries the process through to an actual.
9. In ____________ approach the technology transaction takes the form of supply of complete
factories and industrial plants by a developed country to a developing country.
9.5 Dimensions of Technology Transfer
After studying about the different modes of technology transfer, we will now study about the
dimensions of the technology transfer.
The time and resources required to transfer a given technology depend upon:
What is actually transferred?
The mode of transfer.
The incorporation abilities of the receiving enterprise.
The abilities and inspiration of the supplier enterprise.
The technology progress varies in character, that is, whether it is transferring or diffusing. We
transfer technology from an enterprise to an individual, and diffuse the technology from an
individual to an enterprise. To understand the implication of the culture, you must praise the
variation between transfer and diffusion. The advancement of the technology depends on the
combined effect of transfer and diffusion.
From the above concept, we can say that the individual is the pivotal point of technology
movement, whether transfer or diffusion. It conveys you the concept of cultural dimension.
Several years ago, a minibus manufacturing plant was closed in Pakistan. A program of ten
years for the transfer of built-up and market technology had failed. The buses produced were
identical with those successfully built and marketed in foreign country. But in Pakistan, they
could not maintain the building-up quality. The sale of buses was dull, and required excessive
maintenance and repair. They could not find the solutions even after the investigation of the
problem. So, they left their program forgetting their whole experience. Actually, the problem was
with the bus and not with the customers. Since the vehicle was designed as per the supervision
and administration of British manufacturing plant, distribution and marketing organisation. It was
designed to be driven in England or similar environments where repair services and spare parts
will be easily available.
As we find difficult to adjust with the foreign culture, technology is also not culture free. Those
creating and applying technology perform within the context of their culture, and incorporate it
into their work. In our discussion, the manufactured product works with the culture from which it
came. The same is true for other technologies like, refineries, electric power stations, mining
machinery, computerised information systems, engineering, education, and so on. So, either the
technology must adapt different culture or the people who use the technology must adapt to the
culture used in the technology for successful transfer. Usually, the combination of both is
required for the successful technology transfer. If it is transferred without any adjustments can
be referred to the result of blind luck.
Most recently developed technologies are embedded with western type cultural qualities,
including that available from developed countries. Most of these qualities are considerably
different or do not exist in other cultures. However, they influence both the transfer and
successful application of the technology.
The qualities often include:
The problem-solving method and logic.
The decision making social authority structure.
Taking initiative action for analysis value.
The time management and plan as it relates to tasks and activity.
The relationship between performance and incentives.
The view and appreciation of pre-emptive action to prevent future problems.
The social suggestion including questionnaire, conflict and confrontation.
Source of personal status in the work place and society.
The relationship of fatalism and self-determination.
The vertical and horizontal orientation to organisational authority.
Self Assessment Questions
10. Technology is _________________ is from the organisation to an individual, and the
technology is _______________ from an individual to organisation.
11. Most recently developed technologies are embedded with ____________ type cultural
qualities.
12. Either the technology must adapt _________________ or the people who use the
technology must adapt to the culture used in the technology for successful transfer.
9.6 Features of Technology Package
In the previous section, we learnt about the dimensions of technology transfer process. In this
section, we will learn about the features of technology packages.
You are now familiar with technology transfer, and you might be thinking that what technology
package is. So let us start with the definition of technology package. Technology package is
nothing but the technology services, which include estimated market price, annual payments,
and so on.
The technology package consists of three principal elements, namely, product design,
production technique, and management systems.
Product design may range from simple items to highly complex (example, automotive) parts.
The techniques related to production and the layout of the plant comprises of photocopies and
flowcharts, formulas, sheets for process, instructions for fabrication, designs of tools and fixture,
operational procedures and material specifications.
Management Systems comprises of different plans, blueprints and technical control systems
(along with relevant marketing and financial controls). These covers design and blueprint of
plant, quality control and testing, acquirement of material, inventory control, techniques for
equipment maintenance and repair, and machine loading.
The three principal categories of technical information or know-how inherent in technological
systems are general knowledge, system-specific and firm-specific knowledge. These various
categories of knowledge may be in the form of written fabricating or processing equipment.
General Knowledge refers to information common to industry such as blueprint reading, tool and
fixture design and fabrication, welding techniques, and so on.
Since the technology is a package (or service) type that cannot be viewed, it shows the feature
attributes of packages, which includes:
Indivisibility: Since there are few demanding parties, a lot of time and effort is required to find
out apparent customers, unlike product transfer. In particular, industry is gaining good reputation
corresponding to company credit- rating and technology capability because of different
language, culture, and commercial practice that overseas customers have.
Consumer participation: Technology transfer activities together with objective technology
data, technology sales data, document submissions in Korean and local governments and so on
needs various documentation systems. As a result, technology peacekeeping troops are
needed to accomplish English documentation tasks, negotiation, and contracts. They must be
experts in international manner and language skills, financial analysis and marketing research
skills, international contracts skills, and communication skills to sensibly persuade counterparts.
So, technology transfer responsibilities should be recognised as technology mediation rather
than being a duty domain of patent attorneys.
Non-traceability: Since the technology is an indefinable item, it can gain trust only by
providing the technology capability as per the customer requirement. In particular, samples or
demonstration along with data from public organisations as evidences with authority are
essential. The authoritative public organisations may include the patent office, testing and
research centres, and so on.
Difficulties in standardisation: The scope of the corporate market can be widened with the
help of technology transfer. In terms of market size and opportunities and overall good market
expansion opportunities, growth and revenue are very important factors that can be gained
respectively without production facilities or operation funds.
9.7 Routes of Technology Transfer
After discussing about the features of technology package or services, we will now discuss
about the routes of technology transfer.
The principal routes of enterprise-to-enterprise technology transfer are:
Licensing or Franchise: Licensing and Franchise arrangements vary from a complete
package of instructions, technical assistance and training to mere permission for the
manufacture and sale of a product.
Suppliers of materials and parts: Suppliers of materials and parts are often willing to provide
a full range of technical support, information and manufacturing know-how, and they can be as
effective in know-how transfer as in industrial licensing arrangements. The manufacturing of
colour TV sets in India is a classic example of this type. The manufacturers did not have a
formal technology transfer agreement but had an understanding with the foreign suppliers of
materials and components regarding technical assistance in production.
Equipment supplier: A variety of technical services are provided by equipment suppliers,
including operational and maintenance procedures and even processing know-how (typical in
chemical industry). As we know that some technologies are machine-based, therefore the ability
is shifted along with the plant and equipment supply.
Outright purchase: Outright purchase of turnkey plants or of the whole manufacturing and
operating conditions, drawings, ability, data related to performance and technical support.
Acquisition: Acquisition of the company or business possessing the technology.
Joint ventures with the owners of the technology.
Self Assessment Questions
13. The technology package consists of three principal elements namely, _____________,
_________________, and _____________ systems.
14. The scope of the ___________ market can be widened with the help of technology transfer.
15. The manufacturers did not have a formal technology transfer agreement but had an
understanding with the ____________ suppliers of materials.
9.8 Summary
In this unit, we studied about the concept of technology transfer, wherein we studied about the
key factors included in technology transfer, and the issues occurring during the planning and
management of technology transfer, namely, technology transfer process issues, corporate
capability issues, and operating environment and NIS issues.
We discussed about different models of technology, including traditional, qualitative, and some
other famous models. In traditional models, we studied about the appropriability model that
emphasizes on promoting the use of research findings, dissemination model that signifies the
distribution of technology and innovation, and the knowledge utilisation model that focuses on
the effective utilisation of knowledge. In qualitative models, we studied about the Bar Zakay
model, Behrman and Wallender model, Dahlman and Westphal model, Schlie, Radnor, and
Wad model, and the Chantramonklasri model.
In other famous models, we studied about the bridging agencies, research and diffusion model,
and the problem solver model.
Thereafter, we discussed about the modes of technology transfer, namely, passive mode, semi-
active mode, active mode, and horizontal and vertical technology transfer. We also discussed
about the dimensions of technology transfer, such as time, and so on. Then, we studied about
the features of technology package, such as, indivisibility, consumer participation, non-
traceability, and difficulties in standardization. We also studied about the routes of technology
transfer, such as licensing or franchise, suppliers of materials and parts, equipment supplier,
acquisition, and so on.
9.9 Glossary
Term Description
Negotiation
A discussion or communication held between
individuals to settle or agree with, as per the satisfaction
of both individuals, especially in business matters.
Linear biasness
The average of all the differences between estimation
and observation over the verification sample.
Monopoly
An enterprise that has a sufficient control over a
particular product or a market and manipulate prices.
Indivisibility Dependence between transferor and transferee.
9.10 Terminal Questions
1. Define technology transfer.
2. Explain the models of technology transfer and their uses.
3. Describe technology transfer modes.
4. Explain the dimensions of technology transfer and features of technology package.
5. Explain the routes of technology transfer.
9.11 Answers
Self Assessment Questions
1. Technology transfer
2. True
3. Different
4. International technology transfer
5. Transferee
6. True
7. Passive, active
8. Active
9. Turnkey
10. Transferred, diffused
11. Western
12. Different culture
13. Product design, production technique, management
14. Corporate
15. Foreign
Terminal Questions
1. Refer section 9.2 Transfer of Technology.
2. Refer section 9.3 Models of Technology Transfer.
3. Refer section 9.4 Technology Transfer Modes.
4. Refer section 9.5 Dimensions of Technology Transfer and section 9.6, Features of
Technology Package.
5. Refer section 9.7 Routes of Technology Transfer.
9.12 Case Study
ABC Company-technology transfer process
ABC Company is part of a multi-site, continent-wide organisation, offering
its customers the chance to attain a complete range of chemical and
developed solutions from one single dealer. This ranges from rapid Active
Pharmaceutical Ingredients (APIs) supply for preclinical use to large-scale
production of intermediates and APIs. A competent technology transfer
process is the key for a successful transfer either from the customer to ABC
Company or amongst the ABC Company sites.
With the process of the ABC Company, high potency plant in India,
expertise in the technology transfer process will be of considerable
advantage to ABC Company customers.
Technology Transfer Process
Complex, multi-step processes under both Good Manufacturing Practice
(GMP) and non-GMP have been positively transferred. For transfer outside
Switzerland, a specialist team follows a three-stage method:
1. Initiation - the options and objectives are agreed upon by all parties
planning of technology transfer major plan, explanation of responsibilities,
as well as planning and transfer of technical material;
2. Piloting - the process is tested in the lab and in small manufacture runs
and broadly revised agreement with regulatory and quality standards; and
3. Sign-off - the jointly agreed process is accepted by all parties
production against conventional group guidelines.
A vital component in successfully transferring technology developments
across language and social obstacles is common communication involving
their experienced staffs.
Flawless explanations of the responsibilities of the technology transfer team
members during the transfer process lessen the time and effort needed for
this dire step in the positive scale-up of intermediates or APIs.
Cost and Feasibility Aspects
For a Japanese client, a multi-stage manufacture process for a non-GMP
intermediate was performed at ABC Companys Manchester site and then
transferred to India in six months. A chemist from Manchester held the
allocation on-site. There, the production now runs in 300 kg sets to a five
metric ton drive. An additional volume growth to run a 28 metric ton drive is
scheduled for the end of 2008 in India. The transfer was compelled by the
scale of production.
Questions:
1. Give a brief introduction about ABC Company.
2. Describe the technology transfer process handled by ABC Company.
3. Explain the cost and feasibility aspects of ABC Company for the
Japanese client.


OM0018-Unit-10-Technology Assessment
Unit-10-Technology Assessment
Structure:
10.1 Introduction
Objectives
10.2 Technology Choice
10.3 Technology Assessment Process
10.4 Technology Leadership and Followership
10.5 Technology Concepts
Technology acquisition
Meaning of innovation and creativity
Innovation management
10.6 Summary
10.7 Glossary
10.8 Terminal Questions
10.9 Answers
10.10 Case Study
10.1 Introduction
Previous unit familiarised us with the transfer of technology. In the previous unit, we studied
about the different models, modes, and dimensions of technology transfer, features of
technology package, and the routes of technology transfer.
This unit will familiarise us with the concept of technology choice. In this unit, we will study about
the process, that is, different phases of technology assessment process. We will also have a
discussion on technology leadership and followership. We will also study about different
technology concepts used in an organisation, such as technology acquisition, innovation and
creativity, and innovation management.
This unit will enable us to understand the process to carry out technology assessment.
Objectives:
After studying this unit, you should be able to:
Describe technology choice.
Discuss about technology assessment process.
Explain technology leadership and followership.
Define technology acquisition, innovation, creativity, and innovation management.
10.2 Technology Choice
Let us start our discussion with the concept of technology choice used to assist in the success
of an organisation.
Choice of technology has significant involvement in growth and productivity of an organisation.
The use of technology is always related to an objective. Because we can use different types of
technologies to realise an organisations goals, but the issue of choice arises. The effective
choice depends on previously decided measures for a technologys conference specified
requirements. In addition, it depends on the ability to identify and evaluate opportunities in
different technologies. The expected result is that the organisation will go for the most
"appropriate" technology (AT) in this situation.
The technology choice in the framework of society and its creation is the idea of imaginary
assumptions and are the key sources of meaning in social and cultural life. Imaginary
assumptions can be considered as conscious or unconscious symbolic representation of human
actions in the creation of meaningful and sense making ideas. Symbolic representation
proposes implications which require perceptions of not only the real or rational, but also an
additional imaginary component. This eventually comes from the original ability of positing or
presenting oneself with things and associations that do not exist and have never been given in
any depiction. The social world is, in every situation, constituted and expressed as a function of
such a system of implications. These implications exist after they have been formed, in the
method of what we call the actual imaginary or the imagined. These imaginary designs play an
important role in modelling the choice of symbolic representation constituted by the world, and
especially the choice of its organisational symbolism as well as the ends to which it supports
functionality.
In the perspective of technology choice, we can say that imaginary implications are the result of
both rational technology based economic behaviour and complex imaginary struggles that
emerge at various points and in many shapes by providing archives of meaning about the
content of technology and its application. These implications and dominant interests are
reflected in the shape and functioning of technology in imaginary practice. This is an imaginary
field which individuals and institutions create in order to maintain and show representations
and projections of possible alternative realities and ideas of possible fate related to the content
and application of a technology. Because of this balance between the assumed, the real and the
imaginary components of these implications, the technology and its choice encloses not only the
preferred technology based economic implications of the technology itself, but also the
engraved imaginaries of technology in society, work, and institutions. For example, the
acquirement of certain technologies can simultaneously provide verification of membership of
certain social groups, indicate cherished relationships and include imaginaries about knowledge
practices, expertise and relations to other actors by encouraging new aspects of subjectivity.
Self Assessment Questions
1. The concept of _____________ deduces access to information on alternative technologies
and the capability to assess these efficiently.
2. Imaginary implications can be apprehended as conscious or unconscious
________________ of human actions in the creation of meaningful and sense making ideas.
3. The technology choice in the structure of society and its institutions is the idea of real
implications as the key sources of meaning in social and cultural life. (True/False)?
10.3 Technology Assessment Process
As we are discussing about the technology assessment, and in the previous section we have
discussed about the technology choice, so we will now discuss about the process of technology
assessment.
We can say that the process of technology assessment comprises of recurring cycles of
planning, data gathering, and reporting results. We can classify these three cycles into nine
steps, as given in the figure 10.1.
Technology assessment has been defined as a form of policy research that assesses short-term
and long-term results of the application of technology.
Instructional technology assessment involves recurring cycles of planning, gathering data, and
reporting. It is good to plan the technology assessment at the same time we coordinate the
technology introduction, so that we can take necessary steps such as collection of baseline
data. Figure 10.1 explains the technology assessment process.

Figure 10.1: Technology Assessment Process
1. Description of technology and context: In the first step of technology assessment, we
must describe the technology we are going to use, in terms of the function or intention or
purpose of the technology, its possible affects, and the resources that are required.
2. Identification of stakeholders and their requirements: In the second step of technology
assessment process, we identify the stakeholders, and their requirements, that is, their needs.
Identification of their needs will help us to aim attention at the technology assessment process,
so that we can get good results.
3. Identification of the purpose of assessment: This is the third step of technology
assessment process. In this step, we identify the purpose of the assessment of technology. This
will help us in determining the procedure of conducting the assessment.
4. Identification of the intended uses of the assessment: In this fourth step of technology
assessment process, we identify the intended uses of the assessment. We can define intended
uses as the particular ways in which the results of the assessment will be applied.
5. Creation of an assessment plan: This is the fifth step in the process of technology
assessment, in which, we create a plan for the technology assessment. This plan is an
elaborated description of the procedure of implementation of the assessment, which comprises
of the identification of resources existing for the implementation of the plan, information to be
gathered, method(s) to be used for research, description of the roles and responsibilities of the
stakeholders those were identified in step 2, and time duration for the accomplishment of the
tasks.
6. Data gathering: This is the sixth step in the process of technology assessment. In this step,
we gather data as per the assessment plan. Data gathering comprises of the indicators, sources
of the data to be gathered, and methods to use, information quality and quantity, and the
relevance in which the data gathering occurs.
7. Analysis of data: After gathering the data as per the assessment plan, analysis of that data
takes place. This analysis of data covers the identification of patterns in the data, either by
isolating the significant findings (analysis) or by combining information sources to reach a larger
understanding (synthesis), and making decisions about the procedure to organise, divide,
interrelate, compare, and display information. We guide these decisions by the questions being
asked, the types of data existing, and input from the stakeholders.
8. Making conclusions and recommendations: After analysis of gathered data, we made
conclusions and recommendations wherever needed. Whatever conclusions we made,
connected to the proof gathered and verified against agreed-upon standards set by
stakeholders. And, the recommendations we made are the actions for consideration that are
based on the conclusions we made, but go beyond simple verifications about efficacy or
interpretation of the proof gathered.
9. Reporting results: This is the final step in the process of technology assessment. In this
step, we report the results of the assessment. We must consider some factor while reporting the
results. These factors are:
Creating a report content for the audience.
Describing the aim of the study and its limitations.
Listing both the strengths and weaknesses of the technology.
You must note that the first five steps are covered under the planning cycle, sixth step is
covered under the data gathering cycle, and the remaining three steps are covered under the
reporting results cycle.
Self Assessment Questions
4. Technology assessment has been defined as a form of policy research that examines short-
term and long-term ____________ of the application of technology.
5. Instructional technology assessment involves recurring cycles of planning, gathering data,
and reporting. (True/False)?

Activity 1:
Suppose that you are the manager of a company and the company is going
to conduct a technology assessment process. What steps would you follow
to effectively implement the process?
Hint: Analysis of data.
10.4 Technology Leadership and Followership
After discussing about the process of technology assessment, we will now discuss about
technology leadership and followership.
The most important issue an organisation must address in technology strategy is whether to
look for technological leadership. The concept of technological leadership is relatively clear as
an organisation strives to be the first to introduce technological changes that support its basic
strategy. Sometimes, all organisations that are not leaders are viewed as technological
followers, including organisations that ignore technological change on the whole. Technological
followership should be a meaningful and dynamic strategy, in which a firm unambiguously
chooses not to be first on innovations.
Even as technological leadership is sometimes considered in terms of product or process
technology, the issue is much broader. Leadership can be developed in technologies involved in
any value activity. We will focus our discussion at the strategic choice between revolutionary
innovation in any value activity and waiting for others to revolutionise.
Organisations tend to view technological leadership mainly as a vehicle for achieving
demarcation, while acting as a follower is considered the method for achieving low cost. If a
technological leader is the first to implement a new lower-cost process, then the leader
becomes the leading low-cost producer in the market. Or, if a follower can learn from the
leaders mistakes and modify product technology to meet the needs of customers better, the
follower can become the market leader. It is also possible to have more than one technological
leader in an industry because of the various technologies involved and the different types of
competitive advantage required.
The organisations can choose to be a technological leader or follower in a significant technology
on the basis of three factors:
Sustainability of the technological lead: The extent to which an organisation can hold its
leadership over competitors in a significant technology.
First-mover advantages: The advantages an organisation has from being the first to
implement a new technology.
First-mover disadvantages: The disadvantages an organisation suffers by moving first rather
than waiting for others.
All three factors cooperate with each other to determine the best choice for a particular
organisation. Large disadvantages of being a first mover may eliminate the interest of taking the
leadership role even if an organisation can sustain its technological lead. On the other hand,
first-mover advantages may transform an initial technological lead into a sustainable competitive
advantage in another place though the technological lead itself disappears. First-mover
advantages and disadvantages take place most often in the perspective of technological
choices, but their importance for competitive strategy formation goes beyond technological
strategy. They answer the most prevailing question of how timing transforms into competitive
advantage or disadvantage and into entry and mobility obstacles.
Where there are leaders there must be followers. This common-sense fact is strangely ignored
by much of the management content. It is generally said that we are all leaders, because we all
have to take up leadership roles at certain times. Similarly, we are all followers at certain times.
Even at the most senior levels in firms, there are situations when it is crucial to exhibit the skills
of followership which are:
To listen politely to someone elses idea, and understand it.
To offer useful suggestions skilfully without undermining the other person.
To accept a brief, even when you do not fully understand the whole framework.
To take directed action in collaboration with others.
Excellent followership is necessary to business success, especially at senior and middle
executive levels. The job of followers is to make the work easier for someone to lead.
In case you might have observed that actually sometimes the process is reversed. In large
organisations we frequently notice that, people making it difficult for someone to lead. Following
are the observations:
Absence: Nobody can lead if the team itself is not there. In industry, this often means that the
project team members fail to give assurance, and are engaged in another job.
Concealment: The leaders can make good decisions only when they have the information
they need. As well as disguising material data, such as unspent budget, an uncooperative
follower will mislead with their own opinions and concerns, and so prevent the leader from
handling real potential issues.
Inaction: A leader always acts through the help of others. This only works if the followers do
what they are supposed to do. It occasionally happens that people say yes in the conference
room, and then go out and do some other job. This makes leadership more difficult. A skilful
follower communicates sincerely, so that a leader can act on the basis of full information.
So, it is evident that the skills of followers are also very essential. In a busy corporate world, a
skilled follower balances the inconsistent demands of line management and project
management, and work and personal life, so that the follower is present and dedicated when
required by the team. This ability of followers to stabilise and focus is a talent that makes
leadership possible. This talent is specifically important in a business where someone might
have several managers, is a part of several project teams and needs to manage personal
commitments too.
Self Assessment Questions
6. Technological followership should be an insignificant and inactive strategy in which a firm
unambiguously chooses not to be first on innovations. (True/False)?
7. Sometimes all organisations that are not leaders are viewed as ________________,
including organisations that ignore technological change on the whole.
8. A skilful follower communicates ____________, so that a leader can act on the basis of full
information.
Activity 2:
Suppose that you are in a multi-national company. You are working on a
new project under your project manager. What are the skills you should
develop and follow to succeed in the organisation?
Hint: Listen politely.
10.5 Technology Concepts
In the previous section, we studied about technology leadership and followership which helped
us to understand the importance of leaders as well as followers. Now we will study about the
technology concepts used in an organisation.
The quality of life sustained by a society is directly and positively related to the level to which
people understand and efficiently use existing technology, as well as innovatively develop new
technologies, while considering the key scientific, financial, social and environmental aspects.
But in order to address the need for technology concepts for technological literacy in modern
society, technology education must be more than the concepts and learning of handicraft skills,
as was practised. It means that a more hypothetical component must be added to the practical
dimension that already exists. In other words, not only skills, but also concepts of technology
need to be trained and learnt. Here, we have to differentiate between two levels: one is the
general concepts of the nature of technology (concepts of technology) and a second level
dealing with the hypothetical concepts that are used in technological action (concepts in
technology).
Recognising the role of non-realistic aspects in technology does not mean denying the fact that
theoretical concepts also have a significant role. Though, it is clear that conceptual knowledge is
a crucial component in technological design and problem solving processes. Studies in design
methodology have revealed that design processes are a combination of knowledge about
concepts and process knowledge such as technical, situational and strategic knowledge. In
addition, the understanding of our technological world is also a necessary component of
technological knowledge.
10.5.1 Technology acquisition
We will first discuss about technology acquisition.
Internal technology acquisition is the outcome of technology development efforts that are
instituted and controlled by the organisation itself. Internal acquisition requires the existence of a
technological facility in the organisation. This facility could vary from one expert that
understands the technological application effectively to manage a project conducted by an
outside research and development (R&D) team to a full-fledge R&D department. It also includes
the less popular process of seizing implicit knowledge which means understanding and
codifying knowledge that already exists within the organisation, but is not properly understood or
widely used.
Internal technology acquisition alternatives have the benefit that any development becomes the
special asset of the organisation. In addition, the resulting technology will be modified to meet
the companys need. However, internal development also has problems. The development of
technology usually takes more time than acquiring and implementing previously existing
technology from external sources. Internally-evolved technologies usually are costly than those
acquired externally. This is mainly because the development costs are often disregarded
against the application for which it was originally developed. Therefore, those selling
technologies usually do not have to recover the full production costs in their selling price. And, it
is also a fact that the organisation may not have the capability to develop or even manage the
development of a technology internally.
External technology acquisition is the process of procuring technology developed by others for
use in the organisation. External technology acquisition generally has the benefit of decreased
cost and time to carry out, and lesser risks. Nevertheless, almost all technologies available from
external sources were originally developed for various other applications. Thus, outside
acquisition normally must comprise an aspect of adaption to the acquiring organisations
application. The acquiring organisation must understand that this adds extra costs, time, and
risks to the project.
External acquisition can take the shape of licensing, buying equipment with embedded
technology, investment in a collaboration which has a technology development function, or even
the acquisition of an organisation that has the required technology. The selection of the external
acquisition channel generally depends on the channel that has the required technology
accessible. Supposing the technology is available from different sources, the choice becomes a
corporate decision where costs and advantages of each choice are compared and the best
overall alternative is selected. It is significant to take into account all the factors before making
this decision. The importance of fairly elusive things like long-term relationships and public
reputation must be considered along with more technical issues like the robustness of the
technology to the requirement, quality issues, function, and price.
10.5.2 Meaning of innovation and creativity
Businesses, for-profit and non-profit, are facing radical transformations like never before.
Several driving forces to this transformation included a speedily broadening market, and
increasing competition, diversity among consumers, and the existence of new types of
technology. We can say that creativity and innovation are the main components to the success
of a business, especially during strategic planning, and when developing new products and
services. Creative knowledge and innovation are mostly helpful during strategic planning and in
product and service management.
We can define innovation as the process by which a value is made and given to a community of
users in the form of a new solution. We can also use innovation to explain a new product or
service, which is the result of the innovation process, which delivers value to a community. In
either case, the key elements of the definition are originality and value delivery.
We will now briefly discuss about four kinds of innovation, which are:
Architectural innovation: Innovation of this kind discusses the foundation ingredients of
product and process and creates the technical and marketing plans that will guide successive
development.
Market place innovation: Innovation of this kind opens up new market opportunities with the
help of existing technology, the effect on production and technological systems being to
preserve and strengthen established designs.
Regular innovation: Innovation of this kind entails change that is created on established
technical and production capability and that is applied to existing business and customers. The
effect of these changes is, to establish existing skills and resources.
Revolutionary innovation: Innovation of this kind disturbs and provides established technical
and production capability outdated, but yet it is useful to existing business and customers.
Creativity, comparatively, is the ability to imagine new concepts. It is important to remember that
creativity does not bear the burden of value creation that innovation does. On the basis of this
reason, it is not suggested that concepts are displayed for merit, in brainstorming sessions.
This allows the brainstorm expert the unlikely comfort of asserting success in generating many
creative ideas, even when the result is deficient of value.
If implementation is setting an idea into practice, creativity is the generation of the idea in the
first place. Creativity is an important part of innovation as it is the point of exit. One of the big
concerns for many organisations is how to create more and better ideas and how to become
more innovative. Let us have a look at some features of creativity.
As opposed to common belief, creativity is the act of generating an idea and is an essentially
individual act. It is the development of an idea and its execution where the team is required.
Creativity has little implications with the inspiration out of things. Creativity is not something
where a person who has never worked in that area suddenly gets an excellent idea. Creativity is
based on a concept to a particular structure of knowledge. The existing structure of knowledge
is as crucial as the original idea. In fact, creative people spend their whole lifetime acquiring and
cultivating their knowledge base be it music, mathematics, arts, sports, and design.
However, creativity may be well-organised; it depends much more on natural motivation, on
people being enthusiastic, motivated and knowledgeable.
10.5.3 Innovation management
Let us now briefly discuss about innovation management.
We can define innovation management as the process of managing processes in innovation.
We can use it for creating and executing both product and organisational innovation. Without
suitable processes, it is not possible for R&D to be effective. Innovation management comprises
of a set of tools that allow managers and engineers to work together with a common knowledge
of goals and processes. The main priority of innovation management is to make the
organisation able to respond to an external or internal opportunity, and use its creative
capabilities to introduce new ideas, processes or products. Significantly, innovation
management is not referred to R&D. In fact, it involves employees at every level in contributing
creatively to an organisations development, production, and marketing. By applying suitable
innovation management tools, management can activate and deploy the creative efforts of the
whole work force towards the constant development of an organisation. The process can be
seen as an evolutionary combination of organisation, technology and market by recurring series
of activities such as search, choose, implement and capture.
Innovation processes can be stretched to any extent through development. A pushed process
depends on existing or newly invented technology, that the company has access to, and tries to
find cost-effective applications to use this technology. A pulled process tries to search areas
where customers requirements are not fulfilled, and then concentrates development efforts to
find solutions to those requirements. To succeed with the help of either method, knowledge of
both the marketplace and the technical problems are required. By creating multi-functional
development teams, comprising of engineers and marketers, both problems can be solved. The
lifecycle of new products is gradually getting shorter as increased competition forcing
organisations to reduce the time to market. Innovation executives must therefore reduce the
development time, without sacrificing quality or meeting the requirements of the customers.
Self Assessment Questions
9. Which are the two levels of technology concepts?
10. Internal acquisition requires the existence of a _______________ in the organisation.
11. The development of technology usually takes less time than acquiring and implementing
previously existing technology from external sources. (True/False)?
12. Creative knowledge and innovation are mostly helpful during ____________ and in Product
and Service Management.
13. Which type of innovation defines the basic composition of product and process and
establishes the technical and marketing plans.
14. The lifecycle of new products is gradually getting shorter as increased _____________
forcing organisations to reduce the time to market.
Activity 3:
Assume that you are the manager of a company. The company has come
up with a new product. What innovation management processes you would
follow to check the viability of the product?
Hint: Pushed process
10.6 Summary
In this unit, we understood the concept of technology choice, which provides access to
information on changing technologies and the capability to measure them efficiently. We also
analysed the different technology assessment phases involved in the proper functioning of an
organisation. Technology assessment is a type of strategy research that examines short-term
and long-term consequences of the application of technology. This unit also enabled us to
understand the concepts of technology leadership and followership. It is a true fact that where
there are leaders, there must be followers. Technology leadership goes beyond managing the
day-to-day logistics of a strategic tech planning process. Followers need to remember that their
mindset and behaviour affect the quality of their leaders performance. Followership requires a
lot of skill, knowledge, patience, and initiative. Appropriate action by followers often increases
the leaders ability to enable others to perform his or her work. Sometimes, though, followers
must find means to reduce the leaders power for the betterment of the organisation. Deciding
on the appropriate course of action may be both difficult and risky for the follower.
We also studied different technology concepts, such as, technology acquisition, innovation,
creativity, and innovation management. Technology acquisition can be a complex, time taking
process that requires thoughtful strategic planning. Due to improper planning, organisations
define technology solutions that dont fully align with their requirements or select uncertain,
untested solutions. We generally use the words "creativity" and "innovation" identically, but it is
not right. Creativity is about coming up with ideas while innovation is about bringing ideas to life.
Innovation is related to performance and growth through improvements in efficiency, profitability,
quality, competitive placement and market share. It normally adds value by changing old
organisational customs and practices.
10.7 Glossary
Terms Description
Appropriate technology
Appropriate technology (AT) is technology that is
designed with special consideration to the
environmental, ethical, cultural, social and
economical aspects of the community it is intended
for.
Technology transfer
Technology transfer is the process of sharing of
skills, knowledge, technologies, methods of
manufacturing, samples of manufacturing and
facilities among governments and other institutions
to ensure that scientific and technological
developments are accessible to a wider range of
users.
Symbolic
representation
Something visible that by association or convention
represents something else that is invisible.
First-mover advantage
First-mover advantage or FMA is the advantage
gained by the initial occupant of a market segment.
10.8 Terminal Questions
1. Briefly describe the concept of technology choice.
2. List and explain the steps involved in technology assessment process.
3. Write a note on technology leadership and followership.
4. Briefly explain the technology concepts.
5. Explain the meaning of innovation and creativity.
6. Write a short note on innovation management.
10.9 Answers
Self Assessment Questions
1. Technology choice
2. Symbolic representation
3. False
4. Consequences
5. True
6. False
7. Technological followers
8. Sincerely
9. Concepts of technology and Concepts in technology
10. Technological facility
11. False
12. Strategic Planning
13. Architectural innovation
14. competition
Terminal Questions
1. Refer section 10.2 Technology Choice.
2. Refer section 10.3 Technology Assessment Process.
3. Refer section 10.4 Technology Leadership and Followership.
4. Refer section 10.5 Technology Concepts.
5. Refer section 10.5 Technology Concepts.
6. Refer section 10.5 Technology Concepts.
10.10 Case Study
Company Profile
ABC Company is one of the leading suppliers of electric and gas energy
and equipments in the United States. The company engages in the
production and allocation of electric energy; and the allocation and
transportation of natural gas. As of December 2009, it supplied electric and
gas service to approximately 525,634 and 233,941 retail customers. ABC
Company also offers steam services, and many other energy-related
products and services to customers. The company was established in 1917
and is based in Texas, USA.
Challenge:
ABC Company has nearly one million electric customers in Texas,
Minnesota, and Illinois. For decades, ABC Company has used a feeder
monitoring system from XYZ to track power distribution for load analysis,
fault detection, and other internal purposes. The system employs 967
meters, which communicate via radio transceivers over power line carrier
(PLC). The transceivers interact with one of 27 gateway sites in a 9600-
baud peer-to-peer network, with the help of packet radio technology.
Gradually, meters began failing and replacement parts were needed.
Unfortunately XYZ, the original manufacturer, was acquired by some other
company, leaving ABCs system without a clear source of support. There is
one other confusing factor, that is, the fact that the meters use PLC
technology to interact directly with the radio. Most new meters are serial. A
recent serial interface or any other way to interact with the radio
transceivers was required.
Solution:
Alliant turned to another company MNP for help developing requirements
and reviewing technology. One output was a Telecommunications
Assessment document that was elaborated and systematic. As ABC
formed a team to address the issue, the manager of Technology
Development, suggested the project could benefit from the principles of the
MNP architecture. That architecture is part of an international industry
initiative to develop frameworks for the next generation of energy delivery.
An early member of the MNP consortium, ABC contracted with MNP
consultants for help and training.
MNP used the following technology assessment methods to solve the
issue:
1. Use cases which capture the requirements.
2. Technology Assessment Methodology, which maps those requirements
to available technology.
3. Systems engineering, this translates the findings from the first two steps
into a design for the entire system.
The Technology Assessment Methodology also discusses requirements not
generally included by use case scenarios. It provided a framework to show
which technologies matched up with functional and non-functional
requirements.
Benefits:
Some time back, advantages have leaned heavily on vendor fact sheets
and informal, subjective opinions to select their technology path. There was
no established, exact technique to assess the alternatives. MNPs
Technology Assessment Methodology steps into that gap. First, it takes the
confusion out of the process. Second, the resulting evaluations become
valuable in many ways. In spite of the deferment, the process of evolving
requirements and executing a technology review has served useful
purposes. The MNPs Technology Assessment Methodology also helps
when developing a nice to have list with which to approach vendors.
Questions:
1) What was the problem faced by the ABC company
(Hint: Failure of support system)
2) How did the company overcome the problem?
(Hint: MNPs Technology Assessment Methodology)


OM0018-Unit-11- Managing Technology Based Innovation
Unit-11- Managing Technology Based Innovation
Structure:
11.1 Introduction
Objectives
11.2 Innovation and Technology
Innovation Technology relationship
Technological innovation and management
11.3 Process of Technology - Based Innovation
11.4 Measures of Innovative Performance
Factors
Principles
Measures
11.5 Characteristics of Innovative Work Environment
11.6 Key Areas of Management Focus for Productive Innovation
11.7 Measures for Building High-Performing Innovative Technology- Based Organisations.
11.8 Summary
11.9 Glossary
11.10 Terminal Questions
11.11 Answers
11.12 Case Study
11.1 Introduction
By now we are familiar with the different concepts covered under technology assessment, such
as, technology choices, leadership and followership, and also technology acquisition. We also
studied the meaning of innovation and creativity and an important concept of technology
assessment, namely, innovation management.
In this unit, we will discuss about innovation and technology and their relationship. We will also
discuss about management of technology-based innovation, and how it is implemented in an
organisation. We will also analyse the different phases of the process of technology-based
innovation. In this unit, we will illustrate the various measures of innovative performance and
also the characteristics of innovative work environment. And, finally we will analyse the
measures for building high performance innovative technology based organisations.
This unit will enable us to understand the relation between technology and innovation, and
between technology-based innovation and management.
Objectives:
After studying this unit, you should be able to:
Explain innovation and technology.
Describe the process of technology-based innovation.
Analyse the measures of innovative performance.
Illustrate the characteristics of innovative work environment
List the key areas of management focus for productive innovation.
Analyse the measures for building high-performing innovative technology-based organisations.
11.2 Innovation and Technology
We have already discussed about technology and innovation in the previous units. On the
basis of previous discussions, we can say that technology and innovation are measured as two
separate items, but in reality they work together. Technology comprises of the methods,
processes, and systems used to convert resources into products, and innovation is the change
in technology. Note that when technology and innovation collaborate they give rise to
technology-based innovation called as technological innovation which is widely used in the
corporate world.
The success of a technological innovation depends on the diffusion of the innovation to those
who can use it effectively. We can define diffusion as the spread of a new idea such as product,
technology, service, or method from the moment of its invention or creation to its eventual
adoption by an increasing number of users, in different situations. The diffusion process is
complete, when:
Adequate numbers of customers are using the innovation to pay back the amount used to
develop it.
It starts making profit.
Technology diffusion promotes process of technology transfer by taking innovation on broader
scale, for better returns to the owner or supplier of technology.
Today, organisations must increase their capabilities for technology development and
innovation, thus, allowing the constant creation of additional customer value. Many
organisations have introduced technology management, to exploit the results of advancement of
technology in the most productive way, to offer more competitive products and services to the
market. The management of technology focuses on maximising the cost-effectiveness of
investments in technology development and eventually contributing to those organisations
value.
11.2.1 Innovation Technology relationship
The importance of new technologies and innovations for competitiveness and growth is a
platitude among managers, policy makers, and researchers. However, not all new technologies
and innovations are successful. Given the various technological opportunities and types of
innovations from which organisations can potentially choose, it is desirable to know which
innovative activities and technologies are most clearly related with improved competitiveness
and growth. Perhaps, understanding of the factors that make the success of new technologies
and innovative activities is more important than anything else.
We can develop a hypothetical structure that helps in analysing the relationship between
technology, innovation, and organisational performance. The performance significance of new
technologies, such as information and communication technologies (IT), are mediated by
innovative activities that result from the adoption of these technologies. Moreover, the
performance parameters can vary across different types of innovation, depending internally of
any organisation and market-specific factors. This hypothetical structure serves as a guide for
the experimental investigation and understanding its results. The experimental part of the
innovation compares the performance of innovative and non-innovative companies. We can
evaluate performance in terms of turnover growth, employment development, and productivity.
We can classify innovative activities as:
Product innovations or process innovations that are related to Internet-based technologies.
Product innovations or process innovations that are not related to the use of Internet-based
technologies.
We can define the process or product innovation as the introduction of a good product or
service that is latest or significantly developed with respect to its features or intended uses.
From the above discussion, we are clear about the relationship between innovation and
technology. Let us now study how technology-based innovation is related to management.
11.2.2 Technology-based innovation and management
The challenge of management in business organisations is to develop and remain competitive
in the market. This enables the organisations to meet their objectives, which can be profit
generation, growth, increased market share, or increased employee compensation and job
security.
Organisations can be successful in market competition when they offer the latest, better, and
cheaper products and services that their customers need, and that their competitors cannot
provide. Competitive advantage can be defined as the ability to design and deliver things more
cheaply and better, or to design new products. It consists of two dimensions. First, relative
dimension can be referred as the competitive advantage derived from the activities of
organisations compared to those of their competitors. Second, absolute dimension says that
there has to be a market for what the organisation does. Technological innovation has an
important job both in improving productivity and developing new products and services, and in
providing relative and absolute advantages. Undoubtedly, as we move towards what is called
the knowledge economy, technological innovation will become the main priority for competition
in the twenty-first century. The management of technological innovation (MTI) is, therefore, an
essentially important activity.
MTI involves managing something which is extremely complicated and risky. In addition to the
fundamental complications of many products, a key portion of complexity lies in the systemic
nature of current industrial production activity. Technology-based innovations such as
aeroplanes, cars, buildings, home banking or personal music systems, are made up of various
component systems. Computers, for example, comprise central processing units, operating
systems, applications software, hard drives, memory cards, power supplies, and
communications devices. Integrated Services Digital Networks (ISDN) involves the participation
of telephone companies, satellite suppliers, microwave vendors, local area network providers,
and value-added network operators. The incorporation of these often highly complex systems is
an important MTI task.
Self Assessment Questions
1. The success of a ______________ depends on the diffusion of the innovation to those who
can use it effectively.
2. The experimental part of the innovation compares the performance of innovative and non-
innovative companies. (True/False)?
3. The management of technology focuses on maximising the ________________ of
investments in technology development and eventually contributing to those organisations
value.
Activity 1:
Suppose you are working in a software company. Identify a latest
innovation developed and incorporated by the company and also analyse
its advantages and disadvantages.
Hint: Good productivity.
11.3 Process of Technology - Based Innovation
In the previous section, we studied about the relationship between innovation and technology,
and technological innovation and management. In this section, we will study the different
phases of technological innovation process.
We can define the technological innovation process is a complicated set of tasks that converts
the concepts and scientific knowledge into reality and the real-world applications, that is, useful
products and services. The process requires the unification of inventions and the technologies
which already exist, for bringing innovations to the world market.
We can classify the process of technological innovation into eight phases as given in the figure
11.1.

Figure 11.1: Technology-Based Innovation Process
Let us briefly discuss these eight phases.
1. Basic research: This is the first phase of the process of technological innovation. In this
phase, a basic research is done for increasing our basic understanding of the nature laws. We
can say that this research is a process of knowledge generation over long time duration.
2. Applied research: After basic research, applied research takes place. In this phase,
research is done for dealing with one or more problems of the society and solving them. For
example, conduction of research for the development of medicine for a particular known
disease. We can say that we gain more knowledge systematically on the basis of existing
knowledge. If the applied research is successful, we can develop and implement technology
comfortably.
3. Development of technology: This is the third phase of the process of technological
innovation. We can define it as a human activity, in which, we transform our knowledge and
concepts into hardware, software, or services. This phase may include demonstration of
practicability of a concept, verification of concepts of designs, or creation and testing of a
prototype.
4. Implementation of technology: After the development of technology, we implement the
technology. For implementation of a technology, we perform a set of tasks related with the
introduction of a product into the market. This phase includes the first functional use of a
concept or a product by the society. It brings about the tasks which are related to assurance for
the successful introduction of developed product or service (including cost, and considerations
related to the environment).
5. Production: In this phase of technological innovation process, we perform a set of tasks
(manufacturing, production control, logistics, and distribution) related to the broad
transformation of the design concepts into products and services.
6. Marketing: In this phase, we perform a set of activities for assuring that the consumers
accept the technology. This set of activities include the evaluation of the market, strategy for
distribution, promotion of the product and services, and judging the behaviour of consumers.
7. Expansion: This is the seventh phase of technological innovation process. This phase
includes the strategy and performance of tasks that assures the expansion of the technology in
terms of its usage, and the supremacy of the technology in the market. Expansion is dependent
on the methods of exercising the technology and on the system used for the technology
marketing.
8. Improvement and enhancement: This is the final phase of the technological innovation
process, and is related to the improvement and enhancement of technology. It includes carrying
out a set of tasks related to the maintenance of the technologys competitive edge. It brings
about improvisation of the technology, development of new applications of the technology,
improvisation of quality of the technology, reduction of technology cost, and meeting the
customers needs. Improvement and enhancement of technology increases the life of
technology.
Self Assessment Questions
4. Expansion is dependent on the methods of exercising the technology and on the system used
for the________________.
5. Which stage includes demonstration of practicability of a concept, verification of concepts of
designs, or creation and testing of a prototype?
6. Name the final phase of the technological innovation process.
11.4 Measures of Innovative Performance
As we are now familiar with the technology-based innovation, and different phases of its
process, we will now study different measures of innovative performance.
The innovation activity of an organisation is a key driver of competitiveness and economic
development. Though the process occurs at an organisation level through skilful management,
a companys innovation performance can be improved by correct policy measures conducted in
a business-friendly atmosphere. Thus, the identification of the policy options and instruments
available to improve the innovative capabilities of organisations is an important component of
any strategy to support better living standards.
The establishment of an environment encouraging the innovation activity of an organisation,
calls for the management of a number of policies and the related public investment that will
assist in shaping the soft and physical infrastructure as well as the administrative structure in
which the private sector operates. The national innovation system offers a conventional and
business situation that supports the creation and requirement for knowledge as well as its
diffusion and incorporation into business activities.
Ultimately, the most effective influence of technological innovation on business is market
opportunity. Businesses will innovate when they consider innovation as a significant business
opportunity. This means that organisations can both identify and understand how to make use
of the innovation-driven market. Policies can also provide help to businesses in recognising
innovative business opportunities. Innovation by companies also requires good investment to
commercialise innovative market opportunities. Capital needs to be carried to innovating
companies in an efficient manner to make the innovation process self-reliable.
11.4.1 Factors
Let us now discuss the key factors driving the innovative activities of organisations.
Investment in education that is relevant to business: Educational institutions require
connection with business and evolve courses that are related to the operational process that
make up national innovation systems.
Support to investment in R&D by both government and business: Governments can
encourage private R&D investment by allowing the financial structures to cater the necessary
packages to businesses.
Business investment in innovation strategies: This can be encouraged by both relevant
education and concessions to influence companies so that they appreciate the need to change.
Appropriate management training programmes can support this process.
Providing support and solutions for organisations: Specific policy measures are
encouraged to address the issues of SMEs and to provide a favourable environment for such
organisations to engage in the marketing of innovative business opportunities.
Establishing strong and self-sustained industry and education linkages: Public policy is
a key element for motivating the cooperative efforts of all relevant stakeholders in the innovation
process.
Policy needs to steer the development and support of the soft and hard infrastructure
that feeds innovative companies: Careful importance should be given to strategy and
developing innovation support institutions and the related industry support programmes.
Public-Private Partnership: Collaborative efforts by public and private sector are an efficient
and useful way to develop innovation support mechanisms.
11.4.2 Principles
The innovative performance in an organisation is guided by a set of principles which help the
organisation to succeed in business.
Let us study the principles that guide innovative performance.
Innovation data compilation efforts should build on the way organisations assess the
effectiveness of their innovative activities.
Data collection should be communicative rather than being based only on theory. Also, the
burden on organisations should be minimised as much as possible.
While developing effective ways to quantify innovation in the business priority should be given
to the measurement of impact of rules and regulations on innovation. Some regulatory policies
may exclusively support innovation. Other policies may have the unintended consequence of
inhibiting innovation. Enhanced data on innovation are critical for evaluating the impact that
regulatory policies have on innovation.
Due to the nature of innovation and, in particular, the mutual nature of the innovative process,
there needs to be acceptance of qualitative and subjective measures. For example, measuring
the resources invested in and the results of collaboration may be very significant but also very
difficult, especially if such collaborations are informal or if the benefits are subject to spillovers.
Innovation measurement should not be stagnant, it should be continuously updated.
Measurement is a step by step process that needs to be considered not as a project but as an
ongoing dialogue. Learning and improvement are to be obtained from each stage of the
process. As new innovation data are compiled, they should be filtered and continually re-
evaluated for their cost- effectiveness and ability to push out the boundary of knowledge about
innovation and its impact on the economy. The government needs the support of the researcher
community in order to achieve this in a timely manner.
Innovation measures should be analysed at the enterprise, organisation, industry, national,
international and where possible, regional Ievels. Enhanced data on innovation should allow
industry and sector-specific analysis, recognising that innovation demonstrates itself differently
in different parts of the economy. Especially, international comparisons would help explain why
different countries are experiencing different economic growth rates.
A conventional approach should be taken to any new data compilation efforts by recognising
compromise between costs and potential benefits and considering resource and regulatory
issues. The execution of project trials to measure the costs and benefits of new data collection
efforts is encouraged. The costs of new data compilation include both direct program costs and
the cost burden imposed on possible survey respondents.
11.4.3 Measures
There are several issues for measuring the performance related to both new products and
services:
First, innovation effectiveness is an area of constant concern as senior managers are always
involved in assessing their companys innovation performance. At the same time, most
organisations do not have a systematic or standard method of securing either investments in, or
returns from, innovation. Consequently, measurement of innovation performance tends to be
informal in most companies, with considerable variation in measures used every year.
As innovation performance is not measured in a systematic way, it has no significant role in the
performance evaluations of senior management. For example, most senior executives have a
business target for their department or company, and they are rewarded based on their ability to
achieve this target. The methods by which they achieve this growth, however, are usually
indefinite. Thus, all the development contributes equally, whether it is from acquisition or from
innovation.
The measures of innovative performance comprises of three categories which are discussed
here:
Results-based measures: It focuses on business results, such as sales or profits, stock price
or market valuation.
Process measures: It captures the activities that contribute to these business results, such as
number of projects in the planning, time to market, or percent of sales from new products.
Project measures: It looks at the returns and investments from particular innovation projects.
Measures which are known as time to cash or ROI are calculated on a project-by-project
basis.
Self Assessment Questions
7. The __________ activity of organisations is a key driver of competitiveness and economic
development.
8. The _________________ offers a conventional and business situation that supports the
creation and requirement for knowledge as well as its diffusion and incorporation into business
activities.
9. Time to cash belongs to which category of measures?
Activity 2:
Assume that you are the newly appointed manager of a company which
has not achieved any significant innovation from the past few years. You
are given the responsibility to identify the necessary innovation activities
the company needs to perform in order to be successful.
Hint: Business investment in innovation strategies.
11.5 Characteristics of Innovative Work Environment
In the previous section, we studied different measures and principles of innovative performance.
Now, we will discuss the characteristics of innovative work environment.
Innovation is essential for organisational long-term success and growth, particularly in dynamic
markets. If we take the current economic unrest and increasing global competition into account,
an organisations innovation ability is regarded not only vital for success, but often a basic
requirement for mere survival. The innovative potential of an organisation is confined in the
knowledge, skills, and abilities of its employees. The organisational customs and the Ievel of
support from leaders and managers play a vital role in enhancing employee potential and
motivation to innovate.
Creating a work environment that encourages creativity and innovation starts with an
understanding of two key characteristics of innovation. We mainly focus on adopting these two
main characteristics that contribute to an innovative environment. Let us briefly discuss these
two characteristics, the 2 Ps.
The 2 Ps: people and physical layout
The 2 Ps are not conceptual but simple and very real. They are tangible and not related to
terms like ethics, beliefs and attitude.
People: The trick is to hire nice people and not the people who have to be told, to be nice. But,
sometimes nice people can also fool you.
You need to have the right people in the right position in an organisation to encourage
innovation. However, this is the major problem for mainly the newly started companies. They
tend to hire friends from their MBA colleges or get fooled in the interview process.
The key to hiring the right people in your organisation is purely your inner instincts. Resumes
never tell the whole story, so you cant completely rely on resumes alone. References dont
disclose much either, because the former boss is bound to be nice, and many candidates can
answer your interview questions in a way that may indicate they are innovative even when they
are not.
There are some people who just like to be interviewed. They seem talented on outside, but after
few months youll find yourself with a sluggish liability. The best strategy is to create the right
questionnaire to screen for innovators, analyse every small detail in their resume, and most
importantly, go with your gut.
Physical layout: Most start-up company managers dont think strategically about their workplace
layout which is a big mistake if you are determined to create an innovative work environment.
A poor physical environment has a negative impact on employee attitude and employee
behaviour. Even worse, it can also result in bad opinion from potential customers.
It doesnt matter if youre a coffee shop owner or you run a government office. You need to
concentrate on the physical work environment and design it in a manner that gives you the
competitive edge youre searching for.
The bottom line is to clean up your office, polish it and make it professional.
Youll also find it easier to attract innovative employees who prefer to work in an environment
that is encouraging to creativity and big ideas.
Self Assessment Questions
10. Innovation is essential for organisational long-term success and growth, particularly in
________ markets.
11. Creating a work environment that encourages _________ and _________starts with an
understanding of two key characteristics of innovation.
12. Technology is essential for organisational long-term success and growth, particularly in
dynamic markets. (True/False)?
Activity 3:
Collect some information about the two characteristics of Innovative Work
Environment.
Hint: http://www.gaebler.com/Innovative-Work-Environments.htm
11.6 Key Areas of Management Focus for Productive Innovation
The previous section familiarised us with the characteristics of innovative work environment. Let
us now focus on the key areas of productive innovation management. Product innovation
research has developed substantially in the past few years. A significant level of knowledge has
been produced on various aspects of the field, so it is of interest to evaluate the state of the
ability reached by the scientific community in this field and the route it has taken.
Increasing global competition is compelling many manufacturing firms to look for methods to
become more innovative. On the other hand, improving the performance of a company in this
area is a real challenge. For example, UK companies are often scrutinised for having good
ideas but not deploying them successfully to market. Whereas in Germany, high labour costs
are reducing competitiveness, and innovation is seen as the solution to counter this. However, a
new study has found that entrepreneurs in both countries are facing remarkably similar issues.
Let us have a look at the five key areas of productive innovation management.
Innovation strategy. This includes understanding the function of innovation within a company,
deciding how to use technology and driving performance assessments through appropriate
performance indicators.
Creativity and ideas management. Showcasing good ideas, which fulfils customer
requirements, is crucial. Since innovation includes new products, services and processes, there
is a large space for ideas and therefore all employees should be a part of it.
Portfolio management. Once the ideas have been created, an effective process is needed, to
choose the best ones for implementation. Major organisations ensure that their innovation group
contains a proper balance of new products, systems, and business and service innovations.
Project management. The talent to quickly turn ideas into new products, services and
processes is essential. Fast introduction into market, high product value and tolerable
development costs are all typical goals for companies. The most common method of achieving
these objectives is to use cross-functional teams, but problems often occur. Nevertheless, post-
project reviews are hardly ever used to identify areas for improvement.
Human resource management. Considering all efforts of innovation management is the need
to develop a culture in which employees are encouraged to contribute to innovation.
Self Assessment Questions
13. Increasing global ____________ is compelling many manufacturing firms to look for
methods to become more innovative.
14. Once the ideas have been created, an effective process is needed to choose the best ones
for _______________.
15. Which key area of production innovation management includes showcasing good ideas,
which fulfils customer requirements, is crucial?
Activity 4:
Assume that you are the manager of a manufacturing company. In order to
remain competitive in the ever increasing global competitive market your
company has assigned you a task of searching new innovative areas where
the company can focus to achieve success.
Hint: Project Management.
11.7 Measures for Building High-Performing Innovative Technology-Based Organisations
We will now study the measures for building high-performing innovative technology-based
organisations.
International competition, shorter product lifecycles and increasingly challenging customer
satisfaction are creating significant problems for the creation of innovative organisations.
Thus, we can interpret innovation potential as a combination of parameters, internal and
external to the organisation, which are correlated to the organisations ability to continuously
innovate. Innovation capacity is therefore considered as a complex conception because it can
be influenced by factors internal and external to the organisation, such as leadership capabilities
and the level of industry innovativeness, respectively. As demands for innovation have
increased, new measures and drivers have also evolved, such as, government regulations,
sustainable development and a focus on speeding up new product development. They are
taking leading roles in assisting transformation of knowledge into new products, processes and
services. These three factors can have a role in the innovation capability of organisations.
Let us briefly describe the external factors that influence innovation.
Government regulation: Government regulation can provide organisations with opportunities
or Constraints, depending on the circumstance and how they approach it. Although government
regulation is not the only measure that can positively impact on the process of innovation, it is
nevertheless an essential one. Regulatory measures can influence innovation ranging from tax
to patent and copyright laws. However, the communications between environmental and e-
Commerce regulation, and organisation and industry innovation in these two areas are
examined.
Environmental regulation: An organisations sustainable development orientation (SDO)
shows the influence of and ability to influence environmental, political and social measures. An
organisations SDO can be defined as the degree to which the organisation customs and its set
of SD practices are capable and effective both in meeting financial, environmental and social
needs and in assisting the strategic course of the business, hence providing greater opportunity
for long-term greater business success. For example, strict environmental regulations in the
developed countries have been decisive in getting organisations to focus on sustainability.
Customers and competitors: Customers and competitors in a specific industry can influence
the innovation potential of organisations in that industry. For example, technologically advanced
customers may demand more innovative products and services. In addition, geographically
close competitors may be able to identify customer requirements and source mechanism more
quickly than isolated ones. As a result, customers and competitors may manipulate the
innovative potential of organisations.
After a brief discussion on the external factors, let us now discuss the internal factors that
influence innovation.
In general, past studies indicate that an organisations characteristics affect some relationships
commonly associated with innovation. For example, the positive relationship between R&D and
an organisations performance is stronger for organisations that provide high quality after-sales
customer service than for organisations that do not, and that this relationship is different for
growth-stage and developed companies. Therefore, in this section we analyse the literature on
the relationship between innovation and the organisational quality of size, strategy, structure,
technology management, and business knowledge, amongst others.
Organisational size: The relationship between organisation size and innovation is
complicated. The size is positively related to innovation but some measures, such as the type of
organisation and the stage of implementation, moderated this relationship. For example, size
was more positively associated to innovation in manufacturing than in service, and in benefits,
rather than in non-benefits. As per the above discussion, organisation size does not appear to
be related in the same way to all dimensions of innovation nor to all environmental management
practices. The relationship between company size and the companys ability to innovate seems
to be moderated by factors such as the measure of size, the scope of innovation, the type of
organisation, and the stage of implementation. However it is clear that large and small
organisations have different types of chances to innovate, and, hence it is possible to conclude
that size does matter to innovation potential.
Strategy: A business strategy addresses the limitation of how the company or its business
units can compete with other businesses and industries. In general, research has shown that
effective strategic management can help organisations to surpass their competitors. Strategic
management is defined as the set of managerial findings and activities that determines the
enduring performance of a corporation.
Finally, a clear innovative strategy that fits in with the overall organisations strategy, and the
clear understanding or definition of various factors of innovation should be related to innovation
capability.
Communication: Internal and external communications have been found to be associated to
innovation. External communication comprises knowledge of the environment outside the
organisation, communication with customers and suppliers, and the contribution of employees
with external professional activities and networks. Communications can be considered as the
capability of innovative organisations. Since effective internal and external communication
allows information to be shared by all stakeholders in the innovation process.
Self Assessment Questions
16. _______________ can provide organisations with opportunities or Constraints, depending
on the circumstance and how they approach it.
17. A ________________ addresses the limitation of how the company or its business units can
compete in its businesses and industries.
18. Internal communication comprises knowledge of the environment outside the organisation,
communication with customers and suppliers, and the contribution of employees with external
professional activities and networks. (True/False)?
11.8 Summary
In this unit, we studied about the relationship between innovation and technology. We also
learned that technology and innovation are measured as two different entities, but they work in
tandem. In this unit, we also discussed how the technology diffusion helps in technological
innovation by using the transfer of technology process. After discussing the concepts of
innovation and technology, we also understood the relationship between innovation and
technology. We also analysed that we can classify the innovation activities as the product or
process innovations, which are either related to internet based technologies or not internet
based. This unit made us understand the concepts of technology based innovation and
management.
In this unit, we categorised the technological innovation process into eight stages. We also
discussed the factors, principles and measures related to innovative performance. The
innovation activity of an organisation is a key driver of competitiveness and economic
development. An organisation should consist of an innovative work environment for the long
term success and growth of the organisation. We discussed the two main characteristics
required to achieve an innovative work environment which are the People and the physical
layout. Then, we analysed the key areas and the factors influencing the production innovation
and management. In the end, we discussed the various measures for building high performance
innovative technology based organisations.
11.9 Glossary
Terms Description
Platitude A thought or remark which is flat, dull, trite, or weak.
Articulate Expressed using clear and distinct voice.
Liability The state of being legally obliged and responsible.
Technology diffusion
It is the dissemination of technical information and
knowledge and the subsequent adoption of new
technologies and techniques by users.
11.10 Terminal Questions
1. Illustrate the relationship between innovation and technology.
2. Explain briefly the management of technology-based innovation.
3. Describe the eight phases of technology-based innovation management.
4. Prepare a list of the factors for innovative performance in an organisation.
5. Briefly explain the principles that guide Innovative performance.
6. What are the two main characteristics of innovative work environment?
7. What are the key areas of productive innovation management?
8. Briefly explain the factors influencing the high performance innovative technology based
organisations.
11.11 Answers
Self Assessment Questions
1. Technological innovation
2. True
3. Cost-effectiveness
4. Technology marketing
5. Development of Technology
6. Improvement and enhancement phase
7. Innovation
8. National innovation system
9. Project measures
10. Dynamic
11. Creativity and innovation
12. False
13. Competition
14. Implementation
15. Creativity and Ideas management
16. Government regulation
17. Business strategy
18. False
Terminal Questions
1. Refer section 11.2.1 Innovation Technology Relationship.
2. Refer section 11.2.2 Technology-based innovation management.
3. Refer section 11.3 Process of Technology-Based Innovation.
4. Refer section 11.4 Measures of Innovative Performance.
5. Refer section 11.4 Measures of Innovative Performance.
6. Refer section 11.5 Characteristics of Innovative Work Environment.
7. Refer section 11.6 Key Areas of Management Focus for Productive Innovation.
8. Refer section 11.7 Measures for Building High Performance Innovative Technology based
Organisations.
11.12 Case Study
Company profile
Zenanet networks is a digital communication solutions manufacturer in
Brazil which provides solutions for several markets in the world by
developing and incorporating technologies in a convergent and flexible
way. Its headquarters is located in the city of Florianopolis, state of Santa
Catarina, Brazil.
Challenge
The company faced a lot of challenges through the benchmarking and
action plan proposal phases as well the implementation phase. The
Benchmarking phase was used to develop a Brazilian benchmarking
methodology for innovation management in small companies. But it
affected the companys performance and practice indexes since
benchmarking companies of different contexts present external variables
that sometimes are determinant factors for producing biased values. As a
result, a lot of problems were created in the action plan phase and
implementation phase. The company desperately needed a system that
can help manage all these phases.
Solution
The company introduced the Innovation Management Assessment System
to overcome these management issues. This system helped the firm to
understand their strengths and weaknesses as well as to establish action
plans in order to achieve higher performance. It facilitated the identification
of the causes that were preventing the company to reach higher
performance levels and the establishment of actions aiming to eliminate or
at least reduce those causes. The results after three years of
implementation substantiate the success of the model, when reached a
better visualisation and control over project development, improved
qualitative and quantitative information processing and specially, a greater
number of new developed projects and with market insertion.
Questions
1. What were the issues faced by Zenanet networks?
Hint: Benchmarking.
2. How did the new system helped them to overcome those issues?
Hint: Understand strengths and weaknesses.
OM0018-Unit-12-Product Technology
Unit-12-Product Technology
Structure:
12.1 Introduction
Objectives
12.2 Product Development
12.3 Role of Government in Technology Management
12.4 Technology Development and Competition
12.5 Managing Research & Development (R & D)
12.6 Intellectual Property Management
12.7 Summary
12.8 Glossary
12.9 Terminal Questions
12.10 Answers
12.11 Case Study
12.1 Introduction
By now, we are familiar with the concepts of innovation and technology and their relationship. In
the previous unit, we also understood the concepts of managing technology-based innovation
and its process. We analysed different factors, principles, and measures of innovative
performance. We learnt the different characteristics of innovative work environment. We also
learnt about the key areas of product innovation management, and the measures for building
high performing innovative technology based organisations.
In this unit, we will discuss about product development and new product development with their
different process stages. We will also analyse the role of the government in technology
management. Thereafter, we will study the relationship between technology development and
competition in an organisation. This unit will also familiarise us with the management of
Research and Development (R&D) in an organisation. And finally, we will discuss the
Intellectual Property Management.
This unit will enable us to understand how a product is developed in an organisation.
Objectives:
After studying this unit, you should be able to:
Describe the product development.
Explain the role of government in technology management.
Identify the link between technology, development and competition.
Discuss research and development management.
Explain intellectual property management.
12.2 Product Development
Let us start our discussion about product technology with product development.
We can define product development as the process of designing, evolving, and marketing a
new product or an idea or amending an existing product. The product can be new to the
marketplace or new to your company, or, an existing product that has been upgraded. In many
cases, a new product will be created and improved when extensive changes have been made.
We can say that product development is a broad field, where the organisations are engaging all
their resources to be successful in the market. It deals with the design, development, and
marketing of new products. We can also call it as New Product Development (NPD), which
includes developing systematic mechanisms for guiding all the processes involved in getting a
new product to market. We will now discuss about NPD process.
New product development process
We know that improving and updating the different product ranges available is essential for the
success for any organisation. But, failure to improve could result in a decline in sales and with
competitors moving ahead. The process of NPD is more important within an organisation. After
undergoing the stages of their lifecycle, the products will ultimately have to be replaced. The
new product development process comprises of eight stages.
Let us have a look at these eight stages of NPD process in figure 12.1.

Figure 12.1: New Product Development Process
1. Idea generation: This is the first stage of new product development, which needs collection
of ideas to be assessed as probable product options. For many organisations, idea generation
is a continuing process with assistance from both inside and outside the organisation. A lot of
market research methods are used to promote ideas, comprising running task groups with
customers, members of channel, and the companys sales team; encouragement to the
customer comments and feedback via toll-free telephone numbers and website forms; and
understanding the competitive product development process through secondary information
sources. A key research method used to develop ideas, is brainstorming, where open-minded,
artistic individuals, from inside and outside the organisation group together and share ideas.
The vibrant nature of group members sharing ideas, where one idea often leads to another idea,
can produce a wide range of possible products that can be further carried forward.
2. Screening: In this stage, the ideas created in stage 1 are critically measured by the
organisation people to separate the most attractive options. Based upon the number of ideas,
screening can be done in rounds, with the first round involving company managers judging the
viability of ideas, while consecutive rounds may employ more advanced research methods. As
the ideas are cut down to a few viable options, rough projections are made of an ideas
capability in terms of sales, production costs, profit generation, and competitors response if the
product is introduced. Feasible ideas are carried forward to the next stage.
3. Concept development and testing: With the ideas selected in stage 2, the company now
tries to get the initial feedback from clients, distributors and its own workforce. Generally, focus
groups are assembled where the ideas are showcased to a group, often in the form of
conception based presentations called as storyboards and not in actual operational format. For
example, customers are presented a concept board, showing the sketches of a product idea or
even a commercial showcasing of the product. In some instances, focus groups are exposed to
a trial demonstration of the ideas, which is a physical but usually not a working version of
product idea. During the meeting with customers, the company seeks data that may include:
opinion about the concept; level of interest in buying the product; frequency of purchase; and
price evaluation to determine how much customers are willing to spend to buy the product.
4. Business analysis: In this stage of the new product development process, the company has
reduced a conceivably large number of ideas down to few options. Now in Business Analysis,
the process is related to the market research as attempts are made to evaluate the feasibility of
the product ideas. The main purpose at this stage is to take useful estimates of market size,
operational costs and financial projections. Furthermore, the organisation must find out if the
product can be aligned with the companys overall mission and strategy. Most of the efforts are
directed at internal research, external marketing research, secondary research, and competitor
analysis. The internal research may include discussions with production and hiring personnel
and external marketing research consists of the customer and distributor surveys.
5. Product and marketing mix development: Ideas passing through stage 4, are given a
serious thought for development. Companies employ their research and development teams to
build an initial design or prototype of the idea. Companies also start to build a marketing plan for
the product. Once the design is ready, the company seeks customer input. In the concept
testing process, the customers are only presented the idea. In this stage the customer gets to
feel the real product as well as other features of the marketing mix, such as advertising, price
formulating, and distribution options. Positive customer reaction helps strengthen the companys
decision to introduce the product, and also provides other important information such as
estimated purchase rates, and the customer usage information. Negative customer response
indicates the need for changes to elements of the marketing mix. After the required changes are
made, the company may again have the customer test the product. Along with acquiring
customer feedback, this stage is also used to measure the viability of extensive, efficient
production for manufactured products.
6. Market testing: Products making it to stage 6 are ready to be tested as genuine products in
the market. For some instances, the company accepts the results obtained from concept
testing, and directly switches over market testing to launch the idea as a fully integrated product.
But, other organisations may take more input from a larger group before the commercial launch
of the product. The most general form of market testing is to make the product available to a
particular small segment of the target market, which is subjected to the full marketing effort. This
effort is similar to an already available product which they could purchase. As the consumer
products are generally sold at retail stores, the company must work hard to introduce the
product into the market for testing, by compelling distributors to buy and place the product on
their store shelves. In more competitive test markets, distributors may be paid a certain amount
of money if they agree to place the product in their stores to allow for testing. Another type of
market evaluation found with consumer products is where the customers are taken to a
laboratory store where shopping information are provided. Product interest can then be
evaluated on the basis of customers shopping response. In the end, several high-tech methods
to market evaluation, including virtual reality and computer simulations are provided. With virtual
reality technology, customers are subjected to a computer-generated environment, such as a
store, and are told to locate and select products. Computer simulations allow the customers to
be indirectly involved. In this case, certain variables are fed into a sophisticated computer
program and forecasts of a target markets response are measured.
7. Commercialisation: According to this stage, if market testing shows satisfactory results, the
product is ready to be introduced to a larger market. Some companies launch the product in
sequence, with different sections of the market getting the product on different times. This
enables the company to speed up production in a more controlled way, and to adjust the
marketing mix as the product is dispersed to new places.
Self Assessment Questions
1. A key research method used to generate ideas is _____________ where open-minded,
creative individuals from inside and outside the organisation group together and share ideas.
2. In which product development stage, a prototype of the idea is constructed?
3. For many organisations, _______________ is a continuing process with assistance from both
inside and outside the organisation.

Activity 1:
Suppose that you are the project manager of a company and your company
is planning to develop a new product. How would you go ahead to produce
a successful product for the company?
Hint: Business Analysis.
12.3 Role of Government in Technology Management
Previous section familiarised with the product development process. This section will familiarise
us with the role of government in technology management.
The role of government in technology is examined in todays global environment from the
standpoint of its contribution to the development of international collaboration in different
scientific and technical fields, reducing the repetition of effort and creating important
relationships.
However, government has to play an important role in encouraging research activities in key
areas not sufficiently covered by the industrial sector, and in creating positive relationships and
a productive environment for the utilisation of research results.
Generally, the role of Government in technology management may be summarized by providing
opportunities for talented people, to enhance their skills and abilities for the betterment of
knowledge and society.
Indeed a significantly more detailed testing is necessary to illustrate the structure of activities
undertaken by the Government to implement these functions. The facilities provided to the
talented people for development is not the exclusive privilege of the Government. It also has
been extensively practiced by many private organisations, as well as by many foundations and
individuals. In fact, it is the primary focus of most private organisations in their effort to survive in
a competitive environment.
However, as the value of technology management takes an increasingly important role in our
society, it becomes an obligation for the Government to be more involved in the structured
efforts for the development of these activities. The situation can be compared to the support of
talented craftsmen and artists in the ancient and renaissance civilizations. Since public funds
are used in implementing these functions, the Government must use fair, transparent and merit
oriented procedures.
Therefore, the main procedures for funding research and technology development activities are
given as follows:
Conduct specific studies for technology evaluation, international comparisons and estimation
in order to identify priorities and define road maps and milestones in specific research and
technology development field in order to reach certain objectives.
Carry out open invitations for proposal submission, expert evaluation and strategic selection of
the highest quality and most deserving proposals in high priority areas.
Tracking and evaluating of the improvement achieved in the selected projects and efforts to
realise the necessary action for the utilisation of the reasonable results are essential elements
of the process.
Direct funding for research and development in government research centres and institutes for
strategic areas and long term basic research activities.
Funding of international consortium in research and technology through open call procedures
and by direct support of specific functions.
Participation in International Research and Technology Organisations (like CERN, EMBL,
NATO).
From this discussion, we can conclude that government plays an important role on the
development of product technology too, by supporting the different processes used for product
technology development.
12.4 Technology Development and Competition
In the previous section, we discussed about the role of government in technology management.
So, we will now discuss about technology development and competition.
Technology is a key resource of absolute importance for corporate success and growth. It also
has huge significance for the welfare of national economies as well as international
competitiveness. Effective management of technology connects engineering, science, and
management fields, to address the issues involved in the planning, development, and execution
of technological competence to shape and achieve the strategic and operational objectives of
an organisation.
But the R&D part of the new technology development process plays a crucial role in idea
development, concept development, new process development, new manufacturing processes,
and many other fixed stages within the overall new technology/product development process.
Management of technology involves the managing of technical activities in a wide range of
functional areas including basic research, applied research, development, design, production,
manufacturing, or operations, testing, maintenance, and technology transfer. In the same way,
the concept of technology management is quite vast, since it focuses not only R&D, but also the
management of product, process, and information technologies. Technology Management is
actually the practice of integrating technology strategy with business strategy in the
organisation. This integration requires the planned coordination of the research, production, and
service activities with the marketing, finance, and human resource activities of the organisation.
Technological development is one of the key drivers of competition. It plays a major role in
industry framework change, as well as, in creating new industries. It also acts as a great
equaliser, degrading the competitive advantage of even well established firms and driving
others to a leading position. Many of todays big organisations grew out of technological
transformations that they were able to exploit. Among all the factors that can change the rules of
competition, technological change is the most eminent.
Despite its significance, the relationship between technological change and competition is
widely misinterpreted. Technological change tends to be considered as beneficial for its own
sake as any technological modification a firm can establish is believed to be good. Competing in
high technology organisations is widely recognised as being a ticket to success, while other
organisations that are low-technology are viewed with contempt. The recent success of
international competition, mostly based on technological innovation, has encouraged
organisations even more to invest in technology, in some cases uncritically.
Technological change is important, only if it affects competitive advantage and organisational
structure. Not all technological change is beneficial as it may damage a companys competitive
position and industry attractiveness. High technology does not promise profitability.
Undoubtedly, many high-technology companies are much less profitable than some low-
technology companies due to their adverse structures.
Any organisation involves a large number of different kinds of technologies, but some of them
dominate a particular process in the organisation. The importance of a technology for
competition is not a function of its scientific value or its eminence in the physical product. Any of
the technologies involved in an organisation can have a considerable impact on competition. A
technology is essential for competition, if it significantly affects an organisations competitive
advantage or industry structure.
Self Assessment Questions
4. Indeed a significantly more detailed __________ is necessary to illustrate the structure of
activities undertaken by the Government to implement these functions.
5. Despite its significance, the relationship between technological change and _____________
is widely misinterpreted.
6. Technological change tends to be considered as beneficial for its own sake as any
technological modification a firm can establish is believed to be good. (True/False)?
7. Name one of the key drivers of competition?
Activity 2:
Assume that you are the manager of ABC company. XYZ is another
company which has developed a new product similar to that of ABC. Now
in order to have the competitive advantage over XYZ, how would you go to
upgrade your product?
Hint: Using Technology Development
12.5 Managing Research & Development (R & D)
After analysing the relation between technology and competition, we will now discuss about the
management of R&D.
Research and Development also known as R&D, is typically the creation and execution of new
product ideas. The research part of R&D refers to the planning and examining stage of creating
a new product or upgrading an existing product. The development part involves the process of
designing and testing the effectiveness of the new product or product improvement.
Research and development management has transformed from the back office work to center
stage, to a leading force, becoming a key part of business success. Those days have passed,
when a good R&D manager required only technical knowledge. The need for growth, the search
for new ideas and new ways of doing things, and growing competitive pressures has changed
the R&D operation into one of the major strategic requirement. This new responsibility has
drastically changed relationships with other business operations, such as production, marketing,
and finance.
R&D management involves the process and methods used to control the amount of funds and
effort invested in research and development (R&D) projects. The key concepts used in R&D
management include supervising committees, cost management, project management and
product life cycle management. R&D management is generally viewed in the manufacturing,
scientific and product development sectors. Companies in these industries must dedicate
resources to research and development as part of a
long-term management strategy.
The first process of R&D management is to determine which projects to carry forward. For
example, a pharmaceutical company can evaluate the market for hair shampoo that fights
dandruffs and decide that there is adequate consumer interest in the product to make it
profitable. The R&D management team will then review the possibilities and inform the
scientists to explore the possible solutions.
The product development team presents the product manager with a project layout, complete
with the estimated cost and time required to develop the product. The product manager will
discuss the plan with the supervisor or R&D management committee. After review and approval,
the product development work can begin. Even though there are multiple stages of this process,
it ensures senior management assistance for all initiatives as well as a proper understanding of
the costs and the time line for each project.
Cost accounting is a key feature of any R&D management system. Under a cost accounting
system, every new project or activity is assigned to a cost center. All equipment, provisions and
material costs related to the project are charged to this account. In addition, employees monitor
the time spent on the project so that the remuneration and benefit costs also are charged to the
cost account. The reason for this type of accounting is to have a proper record of the amount of
money spent on a specific project at any point in time.
As a function of an R&D management system, project management processes are used to
create a time line, schedule resources and set goals. A clearly defined project has more
chances to be successfully completed than one with unclear requirements and no deadlines. A
project management plan gives a higher quality output in a shorter time frame.
Self Assessment Questions
8. The research part of R&D refers to the __________ and __________ stage of creating a new
product or upgrading an existing product.
9. R&D management involves the process and methods used to distribute the amount of funds
and effort invested in research and development (R&D) projects. (True/False)?
12.6 Intellectual Property Management
In the previous section, we discussed about the management of R&D. In this section, we will
discuss about intellectual property management.
Intellectual property is related to the ideas created in the mind, such as, innovations, content
and artistic creations, and symbols, names, pictures, and designs used in business. We can
classify intellectual property as industrial property, which comprises of patents, trademarks,
industrial designs, and geographic implications of source; and Copyright, which includes content
and artistic works such as novels, poems and plays, films, musical works, artistic works such as
drawings, paintings, images and sculptures, and constructive designs. A copyright includes the
rights of artists performances, producers of syllable in their recordings, radio broadcasting and
television programs.
Let us have a look at different categories of intellectual property management.
Patents: This category is related to the management of patents. We can define a patent as a
special license granted by the government of a country, to the owner of an invention, to create,
use, produce and market the invention, provided the invention satisfies certain conditions
prescribed in the law. Special license means that no one else can produce or market the
invention without the permission of the patent holder. This license is available for a limited
period of time. In spite of the possession of the license, the use or exploitation of the license by
the owner of the patent may not be possible due to other stringent laws of the country which has
granted the patent. These laws may relate to physical condition, safety, food, security, and so
on. Also, existing patents in the same field may also come in the way. A patent according to law
is a property right, and therefore, can be gifted, inherited, allocated, sold or licensed by others.
As the right is granted by the government, it can also be withdrawn by the government under
some very special conditions, even if the patent has been inherited or licensed or produced or
marketed by someone else. The patent right is regional in nature, and companies will have to
apply for separate patent petitions in countries of their interest, along with required amount, for
obtaining patents in those countries.
Trademark: A trademark is a unique symbol or logo, which identifies certain commodities or
services as the ones manufactured or used by some other person or organisation. Trademarks
may be single or collection of words, letters, and numerals. They may also consist of pictures,
symbols, letters, three-dimensional designs, such as, shape and wrapping of goods, or colours
used as distinctive feature. Collective symbols are reserved by an alliance, whose members use
them to recognise themselves with a level of class. International Certification grades are
provided to companies for compliance with the defined standards (example ISO 9000.)
formulated by international institutes and governments. A trademark is given to the owner of the
mark by providing the exclusive right to use it for identification of goods or services, or to allow
others to use it in return for some considerable amount.
A Popular trademark related to any products or services, means a mark which has become a
part of a large segment of the public which uses such products or receives such services. It is a
special right given to the organisation with that mark, and which implies that no one else can
use that mark for any product or service. Other companies can only use the trademark of a
particular company, when they are using the products or services of that company.
Copyrights: Copyright is a right, which is given for creating an original content or theatrical or
musical or artistic work. Motion films, containing sound track and videos and recordings on
discs, tapes, perforated roll or other equipments come under copyrights act. Computer
programs and software are covered under intellectual works, and are protected in India under
copyrights. Copyright provides protection for the expression of an idea and not for the idea itself.
For example, many authors write textbooks on chemistry covering various topics like molecules,
heat, compounds and so on. Although these topics are covered in several other books by
different authors, each author will have a copyright on the book written by him / her, unless the
book is not a copy of some other book published previously. India is a member of the Berne
Convention, an international agreement on copyright. According to this standard, registration of
copyright is not an important requirement for protecting the right. Hence, it means that the
copyright on a work created in India, would be automatically and concurrently protected under
copyright, in all the member countries of the Berne Convention. The instant an original work is
created, the creator is automatically granted the copyright. Nevertheless, a definite record of the
date on which a work was created, must be kept. When a work is released with the consent of
the copyright owner, a notice of copyright may be printed on publicly distributed copies. The use
of copyright notice is elective for the protection of documents or books, and artistic works. But
still, it is a good idea to include a copyright notice.
Industrial design: An industrial design is the decorative or artistic aspect of an article. The
design can have three-dimensional characteristics, such as, the shape and composition of an
article, or two-dimensional characteristics, such as pattern and decoration. The design
characteristics should be incorporated to an object by any industrial process or any means
through which the features in the finished object are attractive.
Self Assessment Questions
10. Which are the two categories in which Intellectual Property is divided?
11. Special license means that no one else can produce or market the invention without the
permission of the ________ holder.
12. A trademark is a special license granted by the government of a country to the owner of an
invention to create, use, produce and market the invention, provided the invention satisfies
certain conditions prescribed in the law. (True/False)?
13. The design characteristics should be incorporated to an object by any ____________ or any
means through which the features in the finished object are attractive.
Activity 3:
Assume that you are a new author and you have come up with a new book
to publish. How would you prevent it from being copied or duplication by
someone else?
Hint: Copyright.
12.7 Summary
In this unit, we studied about the concept of product development and the different stages of
product development, from its conception to implementation. We also analysed the product
development is also called as New Process Development (NPD). All product development
undergoes a similar planning process. Although the process is a continuous one, it is essential
that companies check after each stage and evaluate whether the new product is worth further
investment.
We also discussed about the role of government in technology management. We analysed that
the government provides support and opportunities to talented individuals to develop their skills
and potential for the benefit of the society. In this unit, we also studied about the technology
development and its relation with competition in an organisation. Further this unit helped us to
understand Research and Development (R&D) and how it is managed in the organisation. We
analysed that it is mainly useful to scientists, engineers, project managers, and other technical
employees who intend to make a shift to management positions in an R&D environment, or who
want to develop their own leadership and followership skills. And, finally we discussed
intellectual property management, which helps an organisation to protect its innovations and
products from being stolen or copied.
12.8 Glossary
Terms Description
Concept
testing
Concept testing is the process of using quantitative and
qualitative methods to assess consumer response to a
product idea prior to the introduction of a product to the
market.
Integrated
Circuit
It is a microelectronic computer circuit incorporated into a
chip or semiconductor; a whole system rather than a single
component.
Marketing mix
A selection of products by a company from which a
customer can choose.
Prototype
It is a working model of a product or information system
usually built for demonstration purposes.
12.9 Terminal Questions
1. Define the concept of Product Development.
2. Explain the different stages in the New Product Development process.
3. Discuss the role of government in Technology Management.
4. Describe the relationship between Technology Development and Competition.
5. What is Research and Development (R&D), and how is it managed?
6. Explain the different categories of Intellectual Property Management.
12.10 Answers
Self Assessment Questions
1. Brainstorming
2. Product and Marketing Mix Development
3. Idea generation
4. Testing
5. Competition
6. True
7. Technological development
8. Planning and examining
9. False
10. Industrial property and Geographic implications of source
11. Patent
12. False
13. Industrial process
Terminal Questions
1. Refer section 12.2 Product Development.
2. Refer section 12.2 Product Development.
3. Refer section 12.3 Role of Government in Technology Management.
4. Refer section 12.4 Technology Development and Competition.
5. Refer section 12.5 Managing Research and Development (R&D).
6. Refer section 12.6 Intellectual Property Management.
12.11 Case Study
Company Profile:
ABC software Ltd. is a premier IT consulting and software services
company headquartered in Delhi, India, and offices in US, UK and
Singapore. It is a CMM level 5 company, with its main focus on innovation
and a worldwide onsite-offshore delivery model to provide the best return
on investments for their clients. Today, ABC software Ltd. is a USD 80
million company, and is growing rapidly.
Challenge:
The company was experiencing a rapid growth phase and needed fast
development of new product lines to accomplish growth targets.
Simultaneous NPD had to increase from 3 to 12 products without adversely
affecting current workflows. NPD needed complex, active coordination of
overseas sourcing, regulatory requirements, major clients and many people
to keep NPD flowing fast. There was insufficient time for conventional
approaches, such as, project management, where contributors have to
personally manage many actions. The company needed automatic
organisation of personal actions, and automatic real-time feedback and
reporting to all the employees. All NPD contributors needed to specifically
know 24 x 7 about their tasks, how their efforts contributed related to other
team members and current progress.
Solution:
After an extensive search for possible solutions, ABC software Ltd.
selected Databays hosted version to develop and implement their NPD
processes. The Web hosted version of Databay required minimal setup and
employees had 247 global Internet access. After half a days training on
the system and software tool, the leaders of all the functional areas
simultaneously developed the complete NPD template in one day. Databay
automatically administered the complex planning process and ensured that
NPD data was presented from each individuals standpoint. While the NPD
process was being executed, changes to the planned process were
automatically recorded. So, the template could be easily updated to
incorporate programmes learnt.
Result:
Growth targets of the company exceeded beyond expectations. Teamwork
has significantly improved because everyone knows individual tasks
without needing to constantly ask the team leaders. Databay automatically
manages complex and active coordination, feedback and reporting, so
team members are less strained because they have more time to do real
work.
Benefits:
Databay increased productivity to achieve otherwise impossible goals.
Templates of all the parts of the NPD process decreased the planning time
for upcoming products to minimum. Automatic management, feedback and
reporting reduced the pressure of having to remember to keep work in line
and everyone informed. 247 Internet access let Databay users participate
at a time and place that suited them. Ownership was improved so that
everyone could see the significance of their contribution to the result.
Questions:
1. What was the problem faced by ABC software Ltd. in the product
development process?
Hint: automation.
2. How did the company overcome this problem?
OM0018-Unit-13- Knowledge Based Technologies and Knowledge Management
Unit-13- Knowledge Based Technologies and Knowledge Management
Structure:
13.1 Introduction
Objectives
13.2 Knowledge Based Technology and Techniques
Knowledge based technology process
Tools and techniques
13.3 Role of Artificial Intelligence Techniques
13.4 Knowledge Management Techniques for Technology Management
Review
Conceptualise
Reflect
Act
13.5 Summary
13.6 Glossary
13.7 Terminal Questions
13.8 Answers
13.9 Case Study
13.1 Introduction
By now, we are familiar with the concepts of product development and the different stages
involved in a New Product Development Process. In the previous unit, we discussed the role of
government in Technology Management. We also studied the concepts of technology
development and its relationship with competition. We also discussed about the Research and
Development (R&D) management and its concepts. Also, we studied about the various
intellectual property rights and their management.
In this unit, we will study about the concepts of knowledge-based technology and the related
tools and techniques. We will also discuss the role of artificial intelligence techniques.
Thereafter, we will analyse the different knowledge management techniques for technology
management.
This unit will enable us to understand the techniques used in knowledge based technology and
knowledge management. It will also allow us to understand the role of artificial intelligence
techniques.
Objectives:
After studying this unit you should be able to:
Explain knowledge based technology and techniques.
Discuss the role of artificial intelligence techniques.
Describe knowledge management techniques for technology management.
13.2 Knowledge Based Technology and Techniques
Let us start our discussion with the meaning of knowledge- based technology.
We can define Knowledge-Based Technology (KBT) as an application, consisting of analytical,
and programming techniques and tools. Apart from the techniques and tools, KBT also includes
the process, in which those techniques and tools are applied, and the education, training,
organisational structure and infra-structure which support their use.
We can say that traditional software development technology refers to the procedures or
algorithms which uses and maintains accurately structured data. On the other hand, KBT gives
more importance to knowledge, and the new class of knowledge engineers is concerned with
elaboration of whole problem-domains.
Very few organisations provide clarity to the meaning of the term knowledge. There are
numerous ways in which knowledge can be expressed, but the principal form in use in modern
expert systems is called production rules or antecedent-consequent-rules. These are of the
form:
IF <antecedent-condition>
THEN <consequents>
An antecedent condition means a preceding condition or event.
Antecedents and Consequents are patterns that contain variables, such as, marked by
question-mark prefixes. Whenever a rule is considered, its variables have no values initially, but
they acquire values as antecedent patterns are matched to assertions.
For example: IF Applicant-Age < 18 & Parental-Consent-Received!= Y
THEN Loan-Eligibility = N
We can use this expression to state rules, which are fixed statements of defined relationships
between variables. Moreover, we can also use the expression to state heuristics, or rules of
thumb, which can be used as a guide, and are generally true. They are based on correlation or
perception, rather than on fundamental models. Heuristics correspond to limited knowledge
about the domain, whereas rules represent deep knowledge.
Representing knowledge as rules and heuristics has two basic advantages. The first advantage
is that both rigid knowledge and useful knowledge can be captured into the computer. The
second advantage is that knowledge that currently exists in the forms of rules, can be trapped in
that rules form, without having to be first converted by teams of analysts and programmers into
piles of data definitions and procedures.
13.2.1 Knowledge based technology process
Management requires a precise understanding of the process which KBT applications demand.
Let us have a brief discussion on a model of the development and use of KBT as it is typically
practised, as given in figure 13.1. It removes technical detail, but includes all key elements and
relationships.
Figure 13.1 explains the basic scheme for knowledge based applications.
As you can see in figure 13.1, in the Development Phase, knowledge is carved out from one or
more people who have specialised knowledge in the relevant domain. Such an individual is
typically referred to (in the paper) as an expert, but the more general term domain specialist is
less exaggerated and more general. The knowledge is usually represented in the form of
antecedent-consequent rules.
For some instances it is likely for the domain specialist to provide the knowledge to a
knowledge-base, but more usually a knowledge engineer traps it using some suitable
language and supporting software.
Afterwards, a user, without consenting to either the domain specialist or the knowledge
engineer, confers the knowledge-base. The user provides data about some event or
circumstances within the problem domain. The software takes assumptions, by applying the
rules present in the knowledge-base to the case-specific data and the typical, domain-specific
data. A result is provided to the user, in the form of a diagnosis, prediction,

Figure 13.1: Basic Scheme for Knowledge-Based Applications
recommendation, and decision depending on the nature of the application. In addition, the user
may request a clarification of the disagreement whereby the software reached its termination.
The scheme given in figure 13.1, also integrates three emergent areas of KBT, which are:
Knowledge acquisition initiated automatically, by analysing a set of extraordinary cases, either
to support the knowledge engineer, or to create the knowledge-base directly.
A general knowledge-base, such as, an encyclopaedia represented in a suitable form, or
generalised pattern-processing or associational knowledge. It encloses common knowledge or
common-sense, and may be used as a foundation upon which the domain-specific knowledge
may be built.
Natural machine-learning ability, in such a manner that the results of new cases are used by
the software to change the existing knowledge-base.
13.2.2 Tools and techniques
Let us now have a quick overview of tools and techniques of KBT.
As the field is new, the set of techniques and tools is described a bit differently. We can broadly
classify into three groups:
Knowledge acquisition: It refers to the extraction and formulation of knowledge derived from
existing sources, especially from experts. It includes the development of knowledge bases,
often by interviewing and observing domain experts and extracting rules from their behaviour or
statements. It includes rule initiation and other machine-learning models
Knowledge demonstration: The knowledge can be demonstrated through a variety of
models of semantic networks. For example, order-attribute-value triplets and frames, together
with production rules; inheritance; credible reasoning; and logic programming; and
Implication procedures: The implication procedures consist of information-driven forward-
chaining (Forward chaining is one of the two main methods of reasoning when using inference
rules and can be described logically as repeated application of the antecedent) and objective-
directed backward-chaining (Backward chaining is an inference method used in automated
provering of theorems, proof assistants and other artificial intelligence applications), intensity-
first and breadth-first search strategies, and non-monotonic reasoning.
These tools and techniques are quite different from those of traditional programming. Colleges
have been teaching few of them from a long time, but in most cases only as optional and
advanced subjects. The skills required to develop KBT-based software cannot be assumed to
be readily available. Like other new skills, they must be purchased or cultivate, and retained.
Self Assessment Questions
1. Traditional __________ development technology refers to the procedures or algorithms,
which uses and maintains accurately structured data.
2. The software takes assumptions, by applying the rules present in the knowledge-base to the
_____ data and the typical, ________ data.
3. Thus KBT contains an important continuity compared to traditional software development
technology. (True/False)?
Activity 1:
Suppose that you are working in a software company, and your company is
implementing Knowledge Based Technology, to improve the organisational
structure. What categories of techniques will you follow to successfully
implement KBT?
Hint: Knowledge Acquisition.
13.3 Role of Artificial Intelligence Techniques
As we are discussing about knowledge based technology in this unit, let us now discuss about a
knowledge based technology, namely, Artificial Intelligence.
We can define artificial intelligence as the creation and study of computer programs that
perform intelligent functions. Artificial Intelligence happens to be the ultimate goal of computer
programming. Currently, a lot of effort is going on, to make more intelligent computer programs
that are easier to use, even at the cost of simplicity and efficiency. We basically design
programs to solve problems. In this section, we will learn about, what it takes for a computer
program to work intelligently and discuss some uses for intelligent programs.
We can classify the different fields, in which the artificial intelligence techniques have been
applied to, as:
Common Tasks: A lot of real world tasks are so casual and seem unchallenging which means
they cannot attract much consideration by the manner they are carried out. It is hard to even
notice small problems, and draw systematic solutions. These so called simple problems are
actually very complex and need a high amount of knowledge. Some common tasks are:
Perception (vision and speech).
Natural language understanding, generation, and translation.
Common sense reasoning.
Robot control.
It has been tough to build computers that can generate and understand even parts of a natural
language like English. This is because language has developed as an effective means of
communication between intelligent beings. It seems as transmitting a bit of mental structure
from one brain to another under situations in which each brain contains large, highly similar
mental structures that provide a common perspective. This similarity in perspective helps in
generating and understanding highly condensed messages. Thus, natural language
apprehension is a highly complex process of encoding and decoding. In order to manufacture
computer systems that can understand natural language, both the situational knowledge and
the process for making effective implications are required. This is an important field, which still
fascinates a number of researchers.
Humans are able to successfully guide their situation and manipulate things such as light
switches and toy blocks. These tasks, although performed instinctively by humans, involve a
great deal of complication. When a machine is programmed to perform the same tasks, it is
observed that this requires most of the capabilities used in solving more intellectually
demanding problems. Research and development in robotics has helped to develop many AI
technologies for modelling states of the world, and transformations from one state to another
have also been researched.
Formal Tasks: A formal task focuses on handling large and complex domain space for
problem solving. Without Al involvement, it is difficult to solve such tasks. Finding a solution
from a vast area of knowledge sources and proving theorems, are examples of such formal
tasks. A few other tasks are:
Games (chess, backgammon, checkers, and so on).
Mathematics (geometry, logic, integral calculus, theorem proving).
Games can generate enormously large search spaces. These are huge and complex enough
which necessitates robust techniques for determining what alternatives to look at in the problem
space. These techniques are called heuristics and comprise a significant area of AI research. A
heuristic is an effective but potentially faulty problem solving strategy. The commonly referred
intelligence seems to inhabit in the heuristics used by humans to solve problems. Modern-day
successes in computer based game playing include world championships in backgammon and
chess.
Proving a mathematical theorem is an intensive mentally challenging task. It requires
understanding of hypotheses and involves judgment. This judgment is based on a large amount
of expert knowledge and an accurate guess as to which formerly proven theorem would help in
the present proof. This helps to divide the main problem into sub-problems to be worked on
independently. Several automatic theorem-proving software programs have been developed
that have this ability to a limited extent. The representation of intellectual techniques using the
language of predicate logic helps in comprehending the components of reasoning more clearly.
Many informal tasks, like making an error diagnosis, can be expressed with theorem-proving
problems. Hence, theorem proving is an important sub-part of AI.
Expert Tasks: Expert tasks are the tasks that involve specialised knowledge to provide expert
outcome in the specific area. The following applications fall under this category:
Engineering (design, fault finding, manufacturing, planning, and so on).
Scientific analysis.
Medical diagnosis.
Financial analysis.
One set of problems is related with specifying optimal schedules. A typical example is the
Travelling Salesman Problem, where the problem is to find a minimum distance route, starting
at one of several cities, going to other cities only once, and then coming back to the starting city.
The problem is to find a minimum cost path over the edges of a graph consisting of n nodes
such that each of the n nodes is attended only once. In such problems, the field of possible
combinations or sequences from which to select an answer is large.
Expert systems are automatic analysing systems. They provide expert judgements about
specialised areas. Expert systems have been built in such a way that they can detect and
correct faults in military systems, such as aircrafts and radars. They also scientifically classify
members of a particular species, recommend on possible chemical structures, find natural
resources, and diagnose diseases. There are two main components in the design of every
expert system. One is the expression of knowledge, and the other is utilising this knowledge to
get conclusions. Expression of knowledge is complex because expert knowledge can be
indefinite or uncertain. Usually, the knowledge is expressed as a large set of simple rules.
Knowledge is also expressed in structures called frames and scripts. Conclusions are generally
obtained through the method of rule based inference. Other forms of conclusion, such as
probabilistic conclusion, are also seriously being looked into.
Self-Assessment Questions
4. Which task focuses on handling large and complex domain space for problem solving?
5. Artificial intelligence is the ________ and _________ of computer programs that perform
intelligent functions.
6. A heuristic is an effective but potentially faulty ________________ strategy.
7. The representation of intellectual techniques using the language of __________ logic helps in
comprehending the components of reasoning more clearly.
8. Expression of knowledge is easy because expert knowledge can be indefinite or uncertain.
Usually, the knowledge is expressed as a large set of simple rules. (True/False)?
Activity 2
Prepare a lecture on the Artificial Intelligence technology.
13.4 Knowledge Management Techniques for Technology Management
After studying the role of AI techniques, we will now study about the knowledge management
techniques for technology management.
Knowledge Management requires technologies to assist the new strategies, processes,
methods and techniques to effectively create, distribute, share and apply the best knowledge,
any time and any place, across groups, across several organisations, particularly its clients,
customers, partners, suppliers and other important stakeholders.
The main technologies are communication and collaboration technologies that are web-enabled
for internet and intranet purpose, as well as mobile technologies, including PDAs (Personal
Digital Assistant a handheld device that combines computing, telephone/fax, Internet and
networking features), PCs (Personal Computer a small digital computer based on a
microprocessor and designed to be used by one person at a time), cell phone and video-
conferencing. New technologies that act as intelligent systems and assistants to search,
summarise, conceptualise and identify standards of information and knowledge, are rapidly
coming up.
We have a set of management activities engaged in dealing with an object, which is the focus
of knowledge management. This instantly defines two important aspects of knowledge
management, a knowledge management level and a knowledge object level. A simple
distinction between these two is depicted in figure 13.2 and is reasonably standard from a
control theory point of view.
Figure 13.2 depicts the levels in knowledge management

Figure 13.2:Levels in knowledge management
We will now briefly discuss about the key methods and techniques of Knowledge Management
for Technology Management.
13.4.1 Review
Though the Review activity is accepted as a starting point, this does not necessarily mean that
in practice every KM cycle has to begin at this point. We can classify the review activity into two
sub-activities, which are monitoring performance and evaluation of the performance, as
explained below.
Monitor Performance: Monitoring the performance of an organisation from a knowledge
management point of view requires that the appropriate monitoring procedures are in position
and operational. These procedures are based on the kind of measures taken previously while
reviewing and must be modified according to them.
But, not only development plans must be monitored, an eye must also be kept on the
knowledge store of the organisation. Particularly, it is important to study the external
environment for new events that may have impacts on the manner the organisation is dealing
with knowledge.
You can see this in figure 13.3, which shows the incoming arrows that will influence the
implementation of the knowledge management cycle.

Figure 13.3: Knowledge Management Cycle
(We have discussed and are discussing this diagram throughout this section).
Evaluate Performance: We must evaluate the performance, in reference to the original
objectives of the results from the implemented improvement plans. This is very complicated,
because the relation between actions and results is quite often fragile, especially when the time
spent between implementation of the action, and occurrence of results is substantial. But, even
if one is not concerned to finding the precise fundamental relations between actions and results,
the important point is to have an idea where the organisation is moving strategically. We can
describe these strategies at two levels:
Fundamental strategies feed the driving forces behind the organisation.
Knowledge management strategies, concentrating more to where the organisation is heading
with its knowledge store.
Both strategic aspects can be used to evaluate the current performance of the organisation
against high levels goals. How to complete this evaluation depends on the nature of the subject
is to be evaluated. In principle, common methods and techniques for conclusion support or
program evaluation can be used.
13.4.2 Conceptualise
This is another technique of knowledge management. Let us have a look at some of the
concepts related to this technique.
Inventory: One of the key factors for effective knowledge management is, to get an image of
the knowledge in the organisation. This leads to finding answers to the questions related to
knowledge. You can see the fundamental structure that we will use for dealing with these
questions in figure 13.4, which shows the key aspects of inventory.

Figure 13.4: Key Aspects of Inventory
The first and principal question we have to answer is the recognition of knowledge assets.
However, this is not an easy job because, as already seen above, knowledge assets are hardly
visible. This requires the choice of an appropriate description level for knowledge assets.
Analysis of strong and weak points: We can do the analysis of strong and weak points in
various ways, by using different methods. Let us briefly study about two such methods, namely,
Bottleneck analysis, and strengths (S) weaknesses (W) opportunities (O) threats (T) (SWOT)
analysis.
Bottleneck analysis: However, before using this method, you need to pay attention to
certain generic bottlenecks that often occur in organisations. This analysis is essential
because most bottlenecks are not easily identified, particularly not by those who are strictly
involved in using knowledge assets.
SWOT analysis: This method includes the analysis of strengths and weaknesses of a firm
and the opportunities and threats it is facing. It is a widely used method. In the perspective of
knowledge management, we can use it for two different objectives:
o Setting the high level goals for the organisation.
o Analysing the knowledge store of the organisation from the perspective of one or more of
those goals.
The first crucial step is to define these goals clearly. When there are more number of goals, it is
easier to perform a SWOT analysis for each goal separately. Combining too many goals
together will baffle the analysis, particularly when SWOTs are generated and evaluated by
different people. In order to make their judgment comparable they need the same outline of
reference. The procedure of determining SWOTs can be different, ranging from rigorous
sessions lasting for one or several days to individual interviews with knowledgeable candidates.
13.4.3 Reflect
The main objective of the Reflect phase is to create improvement plans that have a
considerable chance of success, when executed in the Act phase (converting improvement
plans into operational plans). Though this seems to be a bit of academic quibbling, but there is a
significant distinction between an improvement and an improvement plan here. In order to
realise an improvement, those actions must be undertaken which will have to consider
organisational and other obstacles. In practice, there will be extensive trials between the
description and selection of improvements, and the description and selection of improvement
plans. In the improvement, the importance is given to increasing the value of knowledge
resources for the organisation, while in the improvement plan, risks become more important. Let
us have a look at some phases of reflect.
Define and select improvements: The Conceptualise phase of reflect generates a set of
bottlenecks, issues, chances, and defects for which improvements must be recognised. In
addition, not all improvements can be achieved at the same time or some may be too
expensive. Hence, they have to get a priority rating. This recognition process is of highest
importance, and it is absolutely critical to keep the analysis of problems and bottlenecks apart
from the description of improvements until this stage. Many alleged improvements came to
misery, simply because they were described before an appropriate conceptualise stage had
been implemented. Among all the errors that can be made, the worst ones are solving the
wrong problem and choosing the wrong solution. Particularly, when IT is involved, these
dangers appear large. Another blunder is, to think that improvements can be easy, single
measures. As managing knowledge is a difficult task, and knowledge is deeply rooted in the
functions of the organisation, it is seldom the case that something simple will bring big profits.
Define and select improvement plans: After improvements have been selected, it is
necessary to convert them into operational plans. Most of the times, this will result in starting
one or more new projects. These projects requires that attention must be given some factors,
which are:
Time scale (start date, end date).
Budget (amount of money that the project has available).
Deliverables (what is the project going to deliver and when).
People and other resources (inputs to the project).
Quality planning and control (who keeps track of the quality of the products).
Responsibilities (who takes care of what, who is the project leader).
As each of these factors will be implemented differently depending on the situation, not much
can be said about them. Nevertheless, the risks involved in running improvement plans must be
carefully analysed.
Risks can be analysed by a simple scheme that combines the probability of occurrence of a risk
with the estimated brutality of the impact of the risk on one or more quality characteristics of the
improvement plan. Usually, risks with a high probability of happening and a severe impact must
be taken seriously. An improvement plan prone to several risks should be reconsidered, even if
the expected profit from it is large.
13.4.4 Act
The Act phase of the cycle in figure 13.3 deals with the actual running of the improvement
plans. In the conceptual structure, running of the improvement plans is not a part of knowledge
management. It belongs to adjoining areas that have their own methods, techniques and tools
for support. Some of these are:
Human Resource Management: Many improvements will have instant consequences for
people in the company. For example, payment schemes, training, promotion, recruiting of staff,
and movement of personnel, and so on.
Information Technology: Another major improvement technique is information technology. It
offers all kinds of methods that can be used to improve the knowledge store, such as,
knowledge based systems, data base systems, machine learning, workflow systems, and group
decision support systems. For creating these applications, organisations have their own
methods and techniques. For example, in knowledge based systems the complete Common
KADS methodology is available, making knowledge engineering results available for the
organisations.
Organisation development: Most of the times, we must reconsider the way of organising,
and the way of functioning. Business Process Reengineering is an important technique in this
area, but others can be found in the theory. Business Process Reengineering (BPR) involves
the fundamental rethinking and radical redesign of business processes to accomplish dramatic
improvements in crucial contemporary measures of performance such as cost, quality, service
and speed.
Self Assessment Questions
9. Which are the two sub activities of Review?
10. The monitoring must be evaluated in reference of the original __________ of the results
from the implemented improvement plans.
11. One of the key factors for effective knowledge management is to get an image of the
____________ in the organisation.
12. After improvements have been selected it is not necessary to convert them into operational
plans. (True/False)?
13. The main objective of the Reflect phase is to create improvement plans that have a
considerable chance of success when executed in the Act phase. (True/False)?
Activity 3:
Prepare a lecture on how the review, conceptualise, reflect and act phases
are implemented.
13.5 Summary
In this unit, we understood the concept of knowledge based technology (KBT) and also the
different knowledge based programming techniques and tools.
We analysed that KBT may have been in conception in research laboratories for many years,
but as a usable technology it is still very new. Knowledge-Based Technology has a lot of
potential to support the activities of managers in many organisations.
In this unit, we studied about the role of artificial intelligence techniques and the different fields
in which the artificial intelligence techniques have been applied to. We studied that the artificial
intelligence techniques are basically applied to three fields, namely, common tasks, formal tasks
and expert tasks.
After discussing the role of artificial intelligence techniques, we studied about the different
knowledge management techniques for technology management. We analysed that the
Knowledge Management (KM) includes a range of strategies and techniques used in an
organisation to recognise, develop, represent, share, and enable adoption of observations and
experiences. We also studied about some techniques of knowledge management, such as,
review, conceptualise, reflect, and act.
13.6 Glossary
Terms Description
Business intelligence
Business intelligence (BI) refers to computer-based techniques
used in spotting, digging-out, and analyzing business data, such as
sales revenue by products and/or departments or associated costs
and incomes.
Business Process
Reengineering
It is referred as the analysis and design of workflows and processes
within an organisation.
CommonKADS
CommonKADS is the leading methodology to support structured
knowledge engineering in an organisation.
Heuristics
It refers to experience-based techniques for problem solving,
learning, and discovery.
Knowledge engineering
KE is an engineering discipline that involves integrating knowledge
into computer systems in order to solve complex problems normally
requiring a high level of human expertise.
Non-monotonic reasoning
It is a type of reasoning, where additional information may
invalidate conclusions.
Problem domain
A problem domain is the area of expertise or application that needs
to be examined to solve a problem.
Semantic networks
A semantic network is a network which represents meaningful
relations among concepts.
13.7 Terminal Questions
1. Briefly describe the knowledge based technology process.
2. What are the tools and techniques of knowledge based technology?
3. Discuss the different fields, where artificial intelligence techniques have been applied.
4. Briefly explain the review technique of knowledge management.
5. List the knowledge related problems in bottleneck analysis.
6. Categorise the steps involved in a SWOT method of analysis.
7. Describe the reflect technique of knowledge management.
13.8 Answers
Self Assessment Questions
1. Software
2. Case-specific and domain-specific
3. False
4. Formal tasks
5. Creation and studying
6. Problem solving
7. Predicate
8. False
9. Monitor performance and Evaluate performance
10. Objectives
11. Knowledge
12. False
13. True
Terminal Questions
1. Refer section 13.2 Knowledge Based Technology and Techniques.
2. Refer section 13.2 Knowledge Based Technology and Techniques.
3. Refer section 13.3 Role of Artificial Intelligence Techniques.
4. Refer section 13.4 Knowledge Management Techniques for Technology Management.
5. Refer section 13.4 Knowledge Management Techniques for Technology Management.
6. Refer section 13.4 Knowledge Management Techniques for Technology Management.
7. Refer section 13.4 Knowledge Management Techniques for Technology Management.
13.9 Case Study
Company profile
ABC bank is Indias one of the largest bank with total assets USD 73 billion.
The bank has a network of 1883 branches and about 4356 ATMs in India
and presence in 10 countries. ABC bank offers a wide range of banking
products and financial services to corporate and retail customers through a
variety of delivery channels and through its specialised subsidiaries in the
area of investment banking, life and non-life insurance, venture capital and
asset management.
Challenge:
ABC bank believes that building a learning organisation is critical for being
competitive in products and services and meeting customer expectations.
Hence, ABC bank felt a need to create and generate the culture of
knowledge sharing. The need was triggered by mass migration of workers
from their treasury moving towards the then greener pastures of the IT
sector. Whenever an employee moves, he does not leave behind him
documented information about the job or client that he was associated with.
This causes a lot of botheration for the new incumbent. A new employee
spends most of the time trying to build a foundation and begin his work.
Some employees have interacted via emails and have never seen each
other. So there was an urgent need to bring all the employees on a single
platform to build a common relationship.
Solution:
The ABC bank People Share program was started to create and generate
a culture of knowledge sharing. The People Share program was floated in
the companys intranet and it eventually became a part of the intranet.
Awareness was generated by sending emails to all employees and by
putting banners on the intranet site. In order to sustain interest in the site,
efforts were made to acknowledge the contributions made by the users.
Every month the top three contributors are selected on the basis of the
contributions made in the last three consecutive months. A personal corner
exists on the People Share, whereby one can save searches or track
ones level of involvement on the People Share or count K-cash points or
update personal profile. The expertise that is mentioned in the profile helps
in tracking people in an expert manner. The people tracker can also track
people on the basis of names, or departments or areas.
Result:
After the complete integration of the People Share program in the intranet
of the company, employees were able to monitor their performances and
contributions in the company. People Share helped the employees to
know each other in a better way and to cultivate a healthy atmosphere in
the company. Trackers within People Share helped the new incumbent to
the job to brief himself about the background of the client or the business in
hand. It also allowed the people to interact with the CEOs and CFOs in a
formal meeting which is announced beforehand.
1. What was the major challenge faced by ABC Bank?
Hint: Employee migration.
2. How did ABC Bank overcome this problem?
Hint: People Share.
OM0018-Unit-14- Human Aspects in Technology Management
Unit-14- Human Aspects in Technology Management
Structure:
14.1 Introduction
Objectives
14.2 Integration of People and Technology
14.3 Factors Considered in Technology Management
Organisational factors
Psychological factors
14.4 Organisational Structure and Technology
14.5 Summary
14.6 Glossary
14.7 Terminal Questions
14.8 Answers
14.9 Case Study
14.1 Introduction
In the previous unit, we studied about the knowledge based technologies, the role of artificial
intelligence techniques, and knowledge management.
In this unit we will study about integration of people and technology, wherein we will study the
relationship between people and technology. We will also discuss about some factors
considered in technology management, wherein we will discuss about some organisational and
some psychological factors. We will also see how an organisational structure affects technology
management or you can say how an organisational structure is related to technology
management.
This unit will enable us to understand the relation of people and technology.
Objectives:
After studying this unit, you should be able to:
Explain integration of people and technology.
Describe factors affecting technology management, including organisational factors and
psychological factors.
Explain organisational structure.
14.2 Integration of People and Technology
Let us start our discussion with the relation between people and technology, that is, integration
of people and technology.
We all are familiar with the term technology. We also know that technology is playing an
important role in all the spheres of our lives. There is a close relation between us and the
technology. It is us who apply knowledge to create goods, offer services, and improve our
duties of precious and finite resources. The use of technology depends on us, that is, whether
we use the technology constructively or destructively. The technology management is an
interdisciplinary field that brings together science, engineering, and management knowledge
and practice as shown in figure 14.1.

Figure 14.1: Representation of Interdisciplinary Technology Management
In our daily lives, technology has become very common and important. We do not even see it
often. Thus people have become less interested in knowing the technology or not even ready to
look below the surface of technology. All the modern technologies are designed in such a way
that we do not have to acquaint ourselves with their working in order to operate them.
Centuries ago, horse drawn wagon was a family vehicle, which was simple and straightforward
enough that anyone who saw it could easily understand how it worked. The present family
vehicle, that is, the car, is so complicated that its parts can only be analysed and serviced with
the support of diagnostic equipments that are computer-operated, and other specialised
devices. Because of this complicated understanding, most of us do not even try to understand
the working of the technology.
More specialisation of society has taken place because of the complexity of technologies. As a
result of this, all of us know more about fewer things. People turn into plumbers, electricians,
appliance repairmen, cable TV installers, telephone workers, and other specialists. They provide
service or repair our technical devices, because we do not have enough time to learn everything
we need to know, to take care of them. A doctor or a professor or an engineer or a bus driver,
all of us have some specialised knowledge, but even we tend to learn only as much about
technology as we need, to do our jobs, and may be to maintain a reduced level of technical skill
in our personal lives.
There has been a drastic shifting of the population from rural to urban areas and sub-urban
areas, gradually people have become less technologically self-sufficient. Increase in the
computerisation and automation at the workplace have made it possible for less workers to
manage more machines, thus reducing the number of people who work with machines, in
actual.
The tools and other tangible objects existing in our environment are not just the objects we work
with and upon, because they have meaning for us, including emotional importance. We respond
intellectually and emotionally to the meaning physical objects such as cars, clothes, mobile
phones, hills, mountains, and others, have for us. For example, car is a tangible object, that is, a
social object, which has a generalised tendency (that could take the form of respecting those
who own big cars), to act which is common to a number of people.
Self Assessment Questions
1. The technology management is an interdisciplinary field that brings together ________,
_________, _________, and _________.
2. All the modern technologies are designed in such a way that we have to acquaint ourselves
with their working in order to operate them. (True/False)?
3. More specialisation of society has taken place because of the _______.
Activity 1:
Consider yourself as a manager of an organisation. List out the points what according to you are
appropriate which link the workers and available technology, at your organisation.
14.3 Factors Considered in Technology Management
In the previous section, we studied about integration of people and technology; let us now
discuss about some factors that are considered in the technology management.
Let us first have a look at some crucial factors affecting technology management.
Factor 1 Presence of resources: Highly qualified staffs are the available resources of a
company who are like sophisticated equipment. Financial resources and available raw material
should be exploited properly by an organisation so that is has competitive advantage over its
competitors. Akio Morita
[1]
said There is nothing special about success of Japanese
Companies. In Japanese Companies, workers are treated as Gods. This shows that workers
should be kept contented with regards to salary, facilities like workers quarters, hospitals,
schools for children of workers, transport facilities, and others.
Factor 2 - Maintain good relation with competitors: Fierce competition for superior market
share is not the only way to earn profit. Sometimes friendship or alliance can be made with
competitors, to start a new joint venture. They can put their resources together and good quality
work can be done. For example, France and England entered into a joint venture to produce
Concorde super aeroplane.
Factor 3 - Maintain business environment: There should always be a favourable business
environment. There should be good social, political, economic and legal environment. The
environment has the capability to make or spoil the business. Public interests should be
safeguarded. For example, a proposal by India Uranium Union was made to build Uranium
mines in Nalgonda district of Andhra Pradesh. Since uranium is radioactive element and
exposure to uranium can cause cancer, people opposed the proposed uranium project and
sought the courts interference. The court ordered Government not to build uranium mines.
Factor 4 Management and project planning: A new product is produced by the joint efforts
of several scientists, engineers, lot of raw materials, lot of funds, and so on. For example, a dam
construction needs joint efforts of many people and many organisations. A lot of money has to
be invested. Hence, we have to correctly plan the projects. We can save crores of rupees, even
if one day is saved. Hence, we have to optimise resource utilisation techniques and apply
operation research techniques.
Factor 5 Development and training of workers: There are so many engineers who do not
know the recent advances in computers, communications and numerically controlled machines.
The Japan has established an award to signify the business quality called the Deming award.
This award is given every year by Japanese company which delivered quality products and to
encourage the business people. There are Indian awards associated with business quality
similar to Japanese award, such as, IMC Ramakrishna Bajaj National Quality Award, Rajiv
Gandhi National Quality Award, and Golden Peacock National Quality Award.
14.3.1 Organisational factors
Let us now analyse the organisational factors, one of the main factors affecting the technology
management.
We can classify organisational factors into two types, which are:
Internal organisational factors: The internal organisational factors include organisational
structures, policies, financial practices, political and managerial leadership style, the effect of
unions on the employee and the employer, the increased use of technology, other kinds of
analytical and managerial tools.
External organisational factors: The external organisational factors refer to
intergovernmental relations, judicial systems, citizen involvement, private and absolute interests,
the media, and other external elements of the organisation.
14.3.2 Psychological factors
In the previous section, we discussed about organisational factors; let us now discuss about
psychological factors.
The answers to the questions about technology how often the technology is used, who uses
technology, when is the technology used, how do users interact with it when it is available, and
what factors such as physical, social, psychological, and others influence the use of technology
are still not completely known. The personality systems describe how we are likely to behave
and react in our daily lives.
The degree of difference in experiences with technology can create barrier that emphasises
differences among the people. Technology is often underused and poorly integrated. The type
and amount of technology use differs among organisations all over the world. Hence the
psychological factors such as attitude, confidence level, and motivation influence participation,
interaction with technology helps an individual to overcome the issues related to technology.
Self Assessment Questions
4. Who are the available resources of a company who are like sophisticated equipment?
5. The two types of organisational factors are _______, and _______.
6. The main psychological factors are ________, _______, and ________.
Activity 2:
Assume that you are an employee of a software company. Maintain a diary to write down every-
days work style especially the psychological effects. Also, prepare a list of organisational
factors affecting technology management.
14.4 Organisational Structure and Technology
In the previous section, we studied about factors affecting technology management; let us now
discuss about organisational structure.
We can define an organisational structure as the hierarchy of an organisation and how the
component of this hierarchy works together, to accomplish the organisations objectives. We
identify the manner and limit to which roles, authority, and responsibilities are delegated,
managed, and
co-ordinated, and how information passes between levels of management, by organisational
structure. For example, there are staffs reporting to their manager, few staffs reporting to
another manager other than their manager, or few staffs who directly report to CEO. This
depends on the complexity of the structure of the organisation. All these groups of people have
their own assigned unique duties to perform, which contribute to main goals of the organisation.
The organisational structure depends on the objectives of the organisation, and the strategy that
is selected to achieve them. Generally, we illustrate the organisational structure with the help of
organisational chart. The organisational chart is nothing, but a visual depiction of how an
organisation plans for responsibility, authority, and information to flow within its structure.
The organisational structure dates back to the beginning of commerce. During that time,
merchants declared structure, an important aspect in distinguishing talents among workers in
order to promote talented individuals. The idea of organisational structure has progressed into a
range of divisions to enhance organisation functions through co-operation.
The significance of organisational structure is to make employees understand their responsibility
and tasks to achieve goals of the company by creating a clear outline of functions. Every
structure provides a unique reporting method to manage an organisations functions by
influencing employees to work at their best.
The organisation owners should consider the purpose of the organisation and determine what
matters most, which positions are important for success and which positions are not so
important for the organisation growth. After evaluation, the organisation structure should be
reconfigured for better results.
Organisational structure establishes how functional a company is in developing, pursuing, and
executing goals required for growth. Without the right organisational structure or a series of
commands, a company loses its foundation through organisational disagreement.
The process where the managers alter the organisational structure is said to be, that the
managers are involved in organisation design. Let us have a look at the elements of
organisation design, which are:
Work specialisation: It is the degree to which the jobs in an organisation are classified into
individual tasks. It is related to the division of labour concept. The employees perform the tasks
that are relevant to their specialised function. If the work is less, then it can be done efficiently.
Chain of command: It is the consecutive line of authority, which links top level to low levels of
the organisation, and shows who reports to whom. It is associated with two principles unity of
command, and scalar principle.
Departmentalisation: It is the basis, by which we group the tasks together.
Centralisation: In centralised organisational structure, only the top layer management has the
power of decision making, and all the departments and division are controlled by the top-level
management.
Decentralisation: In decentralised organisational structure, the decision making power is
given to managers who are close to action and the divisions have altering levels of self-rule.
Span of control: It refers to the number of employees who can be efficiently administered by
a manager. According to the traditional view, the number of employees was seven per manager;
but nowadays, the number has increased to thirty per manager.
Formalisation: It is the degree to which we standardise the tasks within an organisation, to
the extent to which rules and behaviour guides the employee behaviour.
In technologically active organisations, the installation of gate-keepers, the encouragement of
internal entrepreneurship, and the increase of joint ventures in both research and development,
and production have significant consequences for organisational structure. We should address
all of them sensibly. The organisational structure should not be a barrier to communicate with
top-level management, but it should be flexible. The organisational structure interacts closely
with the technological pasture of an organisation and gives a collection of topics for reflection by
modern managers.
Technology is given the top priority in any corporate environment. An old organisational
structure is refreshed or changed by the companies which are interested in re-engineering.
Organisational structure which has the ability to foster innovation is very much necessary by the
management of technology. The organisational structure should also ensure the effective use of
technological assets.
Impact of information technology on organisational structure
A firm may use any type of organisational structure. Technology assists the progress in
communication among the different job positions throughout that organisational structure.
Technology is used by all the parts of the firm, and there are many departments in an
organisation, where there are many technology experts working as employees. Information
technologies have reduced the costs incurred in managing the information in an organisation,
which in some cases has decreased the management of intra firms, and performance of tasks,
such as, research. Advancement of technology has taken place, videoconferencing permit
members of different teams from various departments to work together irrespective of their
departments. Thus, we can say that technology makes departments able to communicate
easily.
Self Assessment Questions
7. Define organisational structure.
8. When managers alter the structure they are engaged in what is called ___________.
9. In decentralised structure only the top layer management has decision making power.
(True/False)?
10. What is formalisation?
11. The organisational structure is developed to create a barrier to communicate with the top
level management. (True/False)?
12. Work specialisation is related to the _______ concept.
Activity 3:
Suppose you are appointed as a manager in a software company. Prepare a pictorial
representation of organisational structure for your organisation indicating the hierarchy.
Hint: The top level tasks includes MDs task of the organisation.
14.5 Summary
This unit familiarised us with the concepts of integration of people and technology which shows
the relation of humans and technology. We analysed that technology and people are related to
each other, and the technology is affecting our lives positively. We also analysed that there was
a time when most of the functions required many workers, but today due to the advancement of
technology, the same functions can be performed by few workers.
We also studied the factors which affect the technology management, wherein we studied about
the organisational and psychological factors which affect the technology management. We
analysed that the organisational factors should be well-maintained, as they are entirely
dependent on the organisational policies, practices, relations between staff and other important
links; else if the organisational factors are not good it may hinder the growth of the organisation.
We also analysed that the psychological factors, especially the psychological factors related to
staff should be observed. And it is the top level managements duty to expose the staffs into a
good learning and motivating environment, and also provide favourable facilities. This helps to
build the staffs mentally well. Thus, they will perform well and their good performance will lead
to the achievement of organisations goals.
We also discussed about organisational structure, which is a formal system of job relationship,
and which helps us to co-ordinate employees to achieve organisations goals effective tool to
manage operations. We analysed that it is the duty of the management of an organisation to
establish a good organisational structure which helps the organisation to grow higher. We also
analysed that the technology influences the organisational structure. If the technology is of high
quality, ultimately the organisational structure is of good quality.
14.6 Glossary
Term Definition
Labour of concept
According to this concept, the work is divided and sub-
divided into separate jobs, and later assigned to
specific individuals.
Scalar principle
It is the management principle which states that
subordinates at each and every level should follow the
chain of command and should interact with their
seniors only through the immediate or intermediate
senior.
Unity of command
It is the management principle which states that each
person should report to only one manager.
14.7 Terminal Questions
1. Briefly discuss about integration of people and technology.
2. Explain the factors affecting technology management.
3. What are organisational factors?
4. Briefly explain psychological factors.
5. Explain organisational structure.
14.8 Answers
Self Assessment Questions
1. Science, engineering, management knowledge, and management practice.
2. False.
3. Complexity of technologies.
4. Highly qualified staffs are the available resources of a company who are like sophisticated
equipment.
5. Internal organisational factors, external organisational factors.
6. Attitude, confidence level, motivation.
7. The hierarchy of an organisation and how the component of this hierarchy works together, to
accomplish the organisations objectives is called organisational structure.
8. Organisation design.
9. False.
10. It is the degree to which the tasks within an organisation are standardised to the extent to
which employee behaviour is guided by rules and procedures.
11. False.
12. Division of labour.
Terminal Questions
1. Refer section 14.2 Integration of People and Technology.
2. Refer section 14.3 Factors Affecting Technology Management.
3. Refer sub-section 14.3.1 Organisational factors.
4. Refer sub-section 14.3.2 Psychological factors.
5. Refer section 14.4 Organisational Structure and Technology.
14.9 Case Study
ABC Company is an organisation, which offers parcel delivery service. The
organisation grew as one of the largest operators of transport, to become a
successful provider of health care products and services. The company
improved its visibility in the marketplace to reflect its broad, national health
care and logistics operations. A series of problems occurred after the
appointment of a new manager. The manager was replaced by another new
manager, because of wrong review and misguided strategy the company
became poor. And the company became worse as the problems were not
fixed, and due to bad performance. The company sold the hospital business
and could concentrate on its main business without diverting.
Issues:
The problems are mainly due to wrong management structure
implementation. The First major issue was centralised management, where
the decision making is focussed on a single point in the organisation, which
is usually the top-level management. Though the centralised management
is vital, the results of centralisation are secluded which makes the
employees to feel separated.
The second problem was that the company planned to cut costs. This
resulted in a negative public reaction, and therefore the public avoided
going to the companys hospital. Hence the revenues obtained by the
company reduced to a great extent. And also negative relationships grew,
even with the staff.
The third problem was due to cultural clash that was present in the
company. The cultural clash created many problems.
The fourth problem occurred because the manager focussed more on the
interest of companys stakeholders. The company should have focussed
both on stakeholders and the employees.
Significance of balancing centralisation and decentralisation:
With respect to the issues associated to management of hospitals, the
manager observed the significance of balancing centralisation and
decentralisation. There should be a balance of centralisation and
decentralisation, which is vital to the effects of the people care and the
efficiency of its methods as in the management of hospitals. Some studies
suggest that there are two different notions enclosed in the decentralisation
concept. The first notion refers to the hierarchical levels at which decisions
are made. The second notion refers to the extent to which various levels
take part in the decision making process. Path analysis exhibited that the
decentralisation produced good positive impacts on autonomy,
organisational commitment, and satisfaction of job, and affected
commitment through autonomy and job satisfaction.
Though the decentralisation of hospital management would incur additional
cost, it relates to the effectiveness of the hospital. This also relates to the
fulfilment of hospital staff that directly interacts with patients. Thus
decentralisation adds cost and increases companys profits at the same
time. Both centralisation and decentralisation have some advantages and
disadvantages. Hence the balance of centralisation and decentralisation
level should be maintained though they are both multidimensional concepts.
Importance of structure and culture in the field of organisational
effectiveness:
The organisational effectiveness means that the company is capable to
successfully operate and produce profit, by using any available resource.
Yet, the organisation effectiveness is a complex problem, as it is not easy to
describe effectiveness. It cannot be described, since effectiveness can have
various meanings and it has no definite definition. The four approaches
provided to assess organisations effectiveness are approach to achieve
goal, approach to systems, approach to strategic constituencies, and
scorecard to be balanced.
The structural features of the organisation sometimes include the extent to
which the organisation is centralised or decentralised, which can be
calculated either as the stage at which decisions are taken, or by the
number of stages in the hierarchy. The organisational processes, like
innovative human resource management practices and methods to help
communication, conflict resolution, and participation are also important.
Both the structural features of company, and organisational that is the
companys processes are at the organisational level of analysis, because
both of these can be reduced to the behaviour of individuals. Both are
logically prior to the social psychological variables that describe the
experience of working in a specific area. The structural features of the
company and the processes together employs partially, identify the
experiences of staffs such as job content and morale, and contribute to
organisational results, such as difficulties in hiring and keeping workers.
We should observe and note an organisational culture, which receives
change and good working relationships among key staffs easily and nicely.
Clinical governance requires changes that are cultural approaching
directness, involvement, strengthen the staff economically, partnership, and
association. The organisational arrangements in hospitals generally restrict
processes, instead of improving them.
Also, the divisions were ragged apart because of their difference in
opinions. The companys effectiveness could enhance if the companys
culture is linked with the organisations strategy, environment and
technology. The companys culture will also help the company to cope with
the frequently changing environment that the company is in. Thus all the
companies should focus on constantly changing their culture to adapt to
their environmental changes. ABC Company understood that they should be
more people-oriented than profit-oriented, because profit-oriented culture
creates many problems that affect the company and people-oriented culture
which emphasises care and quality as they are in the hospital division.
Inference:
This study found out the problems and reasons for the ABC Companys
present problems, analysed the importance of balancing centralisation and
decentralisation within the companies and we also saw the importance of
structure and culture to organisational effectiveness. The problems that the
company faced were due to the incorrect structure and strategies of the
company due to the managers wrong diagnosis. The failure to implement
an ideal organisational structure and culture caused the company problems
like staff separation, reduced effectiveness levels and also the drastic drop
in its share price. All these problems would keep bothering the company
until correct restructure of the company is being implemented.
Questions
1. What are the challenges faced by the company?
2. What is the significance of balancing centralisation and decentralisation
structure?
3. Briefly explain the contribution of structural features of the company.
4. Explain the role of organisational processes.
OM0018-Unit-15-Social Issues in Technology Management
Unit-15-Social Issues in Technology Management
Structure:
15.1 Introduction
Objectives

15.2 Social Issues
15.3 Technological Change and Industrial Relations
Implementation of rationalisation and automation in India
Impact of technological change
15.4 Technology Assessment and Environmental Impact Analysis
Environmental impact analysis process
Guidelines on the scope of EIA
Issues in preparation of EIA report
Elements of the environmental problem
15.5 Summary
15.6 Glossary
15.7 Terminal Questions
15.8 Answers
15.9 Case Study
15.1 Introduction
In the previous unit, we studied about the human aspects in technology management. We
discussed about the integration of people and technology, organisational and psychological
factors affecting the technology management, and the relationship between organisational
structure and technology management.
In this unit, we will discuss about the social issues in technology management. We will also
study about the technological change and industrial relations. We will also study about the
technology assessment and environmental impact analysis.
This unit will enable us to understand the social issues in technology management.
Learning objectives:
After studying this unit, you should be able to:
Enlist the social issues.
Explain technological change and industrial relations.
Explain technology assessment and environmental impact analysis.
15.2 Social Issues
Let us start our discussion with the social issues in technology management.
The advancements in science and technology have always been associated with the social
issues. Whether technology has contributed to the question about a specific problem, or has
been its cause, new scientific discoveries and technologies never get away from inspection.
Every field of venture must come to provisions with the social implications of these
advancements. Similarly, anyone researching on a topic of social significance cannot overlook
the science or technology, if present, that plays a part in it. In our modern culture, these effects
are felt more intensely than ever.
Let us have a look at some of the social issues related to technology in specific areas.
Survival: In a high technology society, most of the people gain the ability to destroy
civilization. This poses a question, how can a technically advanced society live itself? If the
technology does not have a persistent ethical code to which its people almost commonly
subscribe, and an effective means of detecting and policing breaches, maybe it cannot.
Computers: One of the significant contributions of technology is the Computer. Many are still
in the state of confusion whether they are good or bad. It depends on the way we use it.
Internet: As we all know that computer and internet has become one of the basic
requirements for us. Internet can be used for both constructive and destructive purpose. It is
universally accessible technology.
Work: All of us should think about the answer to the question how does a less specialised
society offer everyone of us with job? The problem solvers will always have work. But only the
type of the problems they solve will alter. For example, robotics guarantees that there will be
few unskilled or repetitive jobs in the fourth civilisation. But they will not take over complete work
until and unless we design them to do so. All these concerns provide a professionalising of work
and not its elimination.
Artificial intelligence: There is an interesting question regarding the use of technology, will
humans develop their own evolutionary successors in the form of intelligent machines?, and
can we analyse the human brain and duplicate it? the answer to the second question might be
yes, if the mind were no more than the brain. If this is done, again the purpose behind it should
be for a noble cause.
Environment: It is very important to be concerned with the environment. Technology helped
the humankind to discover the nuclear power which both a boon and bane to us. The products
and wastes while generating nuclear power is harmful for the environment.
Due to technological development many issues are arising, issues related to social and human
welfare, urban and regional challenges, and education and employment. Let us have a look at
the issues related to socio-demographic and technology change:
Problems associated to an aging population, and also the implementation of new socially
oriented technologies.
Surveys indicating varying demographic arrangement and the position of technical education.
Effect of new technologies on human behaviours.
Self Assessment Questions
1. The advancements in science and technology have always been associated with ____.
2. In a high technology society, most of the people gain the ability to destroy civilization.
(True/False)?
3. In our modern culture, ____ effects are felt more intensely than ever.
Activity 1:
Assume that you are a well-versed with computers and internet. Write down the advantages and
disadvantages of the internet.
15.3 Technological Change and Industrial Relations
In the previous section, we studied about some social issues related to technology
management; let us now study about technological change and industrial relations
Change is particularly disturbing, if it occurs rapidly, thus those affected must adjust soon, as it
affects employment. In the workplace, change gives economic security, sense of self-worth,
and a connection of social interactions.
We can define industrial relations (also called as labour relations) as the relations between not
only the employers and the trade unions, but also the government with the objective of giving
description of the policies.
At present, due to rapid and sweeping changes in the workplace, our lives become complex and
unsettled. We are living in the information technology environment, and feel ourselves becoming
engaged into a complex network that defines description, cannot be achieved by borders or
firewalls, and looks to have boundless probabilities for invention, transmission, and explanation.
Modern technologies are both thrilling and frightening, bringing problems along with great
promise.
In the sixties, two technological changes were systematically introduced in our industrial system,
namely, rationalisation, and automation.
Rationalisation: We can define rationalisation as a general modification or change in the
control and structure of the industrial activities. We can apply the techniques of rationalisation to
not only the materials and processes, but also to the men involved in the process of production.
Automation: We can define automation as a technological change, in which the technology
only manages or controls the operations.
15.3.1 Implementation of rationalisation and automation in India
Let us now discuss the implementation of rationalisation and automation in our country.
Our economy operates on different stages of technology together, jet planes and animal driven
carts being at two ends the band. Industrial production drives on with machines, hand tools, and
other automated and electronic devices.
In the fifties, the requirement for rationalisation and automation in our industry was felt. After the
Second World War, old fashioned machines were used without any repair or replacement in
many industries. In European and Asian countries, the benefits of working of modern mills and
factories showed the importance of advanced technology to the Indian industries. This prompted
Indian industrialists to modernise their machines. The requirement of rationalisation in our
country was felt to raise the production efficiency in a highly competitive global market. This also
paved way to take up exports, especially, in cotton and jute textile industries. Availability of
labour in many industries was another factor responsible for the implementation of
rationalisation process, especially in coal industries, which were highly expanded during war to
offer additional production. After the war the owners could not save their labour force. These
factors together led to the implementation of rationalisation.
There was opposition on the part of workers when rationalisation was implemented. Few
safeguards were laid out for the workers by the labour ministry and the planning commission.
Yet the workers complained that the employers in establishing the scheme did not stick on to
these safeguards.
The approach to rationalisation was made clear in the second five-year plan. The rationalisation
was to be tried only when it did not lead to unemployment. If it was implemented, it was to be
discussed with the workers. And it was to be prompted only after improving the working
conditions and ensuring a share of the profit to the workers.
15.3.2 Impact of technological change
Let us have a quick overview of the impact of technological change on industrial relations.
Technological change has a great impact on industrial activity. Its impact on employment is one
of the important economic aspects of automation. Installing a huge number of automatic
machines at the same time generates severe problems of unemployment. This is because by
presenting automation, the number of employees for the same output is reduced. In our country
one of the growing problems is unemployment and underemployment. The path of technological
change, just like other characteristics of industrial life, is influenced by many features of the
general situation in which it takes place. The basic features consist of the reaction of the
representatives of management and trade union, towards a particular change project, the
relation between these two sides and the effect of that relationship on the result of the change.
The significance of the industrial relations context has been given by many well-known figures.
A statement was made after a study was conducted in a steel industry, it states, the social
factors are assessed which encourages or discourages technical change; it was determined that
one of the most vital factors of these was the organisation of management-union relations
[1]
. It
was also shown that the unions and their members would accept technical change, and co-
operate in implementing it, given that certain conditions are fulfilled. Among these conditions,
one of the important conditions was the complete credit of the union and its role, the approval of
approved principles related to the restructuring of employees and the re-absorption of the
redundant, and the conservation and enhancement of the conditions and rewards of those
relocated. Hence, it is clear that changes in the technology might produce a bargaining situation
in which wages, conditions of employment, worker selection and organisation of work come up
for reconsideration. The strategies adopted by the bargaining parties should therefore form a
part of the analysis of the effects
[2]
. For example, it may be the instance that some will state their
power by making themselves necessary or by taking a strategic position, while others will fall
back on the other means of resistance. The effects of a change are, largely on the result of the
power poses of the parties, and the way they make use of the situation.
Self Assessment Questions
4. The most important of the social factors was the structure of ____.
5. Changes in the technology might produce a bargaining situation in which _____, ______,
____, and _____ come up for reconsideration.
6. Modern technologies are both thrilling and frightening, which does not bring problems.
(True/False)?
7. What is rationalisation?
8. Technological change where the technology only manages or controls the operations is
called _____.
Activity 2:
Suppose a technological change has taken place in an industry near to your house. Prepare a
list of the positive and negative impact of the technological change on industrial relations.
15.4 Technology Assessment and Environmental Impact Analysis
In the previous section, we studied about technological change and industrial relations; let us
now study about technology assessment and environmental impact analysis (EIA), which is also
called as the environmental impact assessment.
Technology should become self-evident that each technology assessment should answer the
question does this technology intrude in any way upon the problem areas of technology? If so,
is the impact beneficial or, if it not, can the technology be altered so as to make a more positive
contribution to the solution of a problem? And if that is not possible, can the negative impact be
used in a better way? Or should the technology be dropped?
The effects of activities that are not addressed for in the common area of transactions need to
be considered in the decision making processes. All these effects should be identified,
assessed, and evaluated against the economic advantages rising from a given activity. Here,
the environmental impact assessment is considered to be the vital process as they provide a
way to humankind to consider the effects of their activities on the environment.
There is economic development because of the association of natural resources and technology
maintained by us and designed for us. It is us who are in the centre for development. Hence it is
said that all human activity whether it is economic, social, or anything else is basically to fulfil
the requirements of us through modifying and using environmental resources.
15.4.1 Environmental impact analysis process
We can define environment impact analysis or assessment as an activity to identify, predict,
interpret, and pass information about the impact of an activity on humans health and well-being.
The following are the EIA process steps:
1. The first step is to make a fast examination of the basic environmental resources land, air,
and water. This is done at a macro level where the project is to be located. The scanning is
performed to evaluate the amount of fragility and exploitation of the resource base. The project
and regional environment is then related.
2. The second step is to separate the project zone.
3. The third step is to identify, assess, and define all the environmental attributes.
4. The fourth step is to rank environmental resources by their fragility, significance and quality.
5. The fifth step to carry out review on every aspect of effects of the proposed project on the
identified individual environmental resources available in the project zone.
6. The sixth step is to categorise the effects in a systematic order.
7. The seventh step is to prepare remedial plans for diminishing negative effects.
15.4.2 Guidelines on the scope of EIA
The following are the guidelines to be present in the EIA report:
The project proposed action should be described. The description includes a statement of its
purpose, and a description of all related technical information to offer a clear and complete
understanding of the proposed action. This also includes various materials, resources, and
others involved.
The connection of the proposed activity to the land use plans, policies and controls in the
affected area or the project should be provided. It is required to understand the affected
environment.
The important aspects which should be considered in detail are the possible impacts of the
proposed project on the environment.
Any possible negative environmental effect that cannot be avoided and addressing how each
avoidable impact will be diminished.
The connection between local short term uses of humans environment and the maintenance
of and improvement of long term production.
Irreversible and irretrievable commitments of resources are indicated.
Alternative actions to the proposed action are indicated, includes actions which are not present
in the authority.
15.4.3 Issues in preparation of EIA report
The following are the issues reported to have been come across while carrying out and making
the EIA. Few issues cannot be solved. If there are no alternatives, the analyst as to take the
issues as they are. The issues are:
Determine the environmental impact: This is the main concept in EIA. This is a very
complicated process. At the beginning, the environmental impact and the changes in the
environmental attributes should be clearly distinguished. The determination of environmental
impact includes the impacts on environmental attributes have to be found out, the impact on
attributes have to be measured, and to show the total impact on environment the impacts on
attributes should be aggregated.
Identify the impact: There is infinite number of attributes to be evaluated. This is because any
property of the environment is considered to be an attribute. Hence the number should be
minimised to get finite manageable number. Therefore, redundant, duplicative, tough to
measure, and unclear attributes can be discarded. This infers that few attributes which are
tough to measure can still be examined.
Properties of the base: Conditions before the activity The type of the impact is determined
using the conditions of the environment living prior the project. To assess the properties of the
base is an important factor.
Character of attributes: The impacts are the effects on the actual distinct attributes of the
environment. Nature does not respect humans discrete categories. The actual impact might be
the effect of changing severity on a range of interrelated attributes. The problem is one of
finding out and assessing the source condition effect to solve for remedial measures.
Amount of impact: All the impacts should be converted into common unites. But this is not
possible. Because it is tough to define impacts in common units. And also the computations of
some impact are difficult.
Aggregation issue: The problem of how to aggregate all impacts arises after measuring the
project impacts on different individual attributes. This includes depicting the different impact
measures in common units, which is tough.
Indirect impacts: These are secondary impacts on environment. They should be considered
specifically in association to the infrastructure investments that prompts secondary effects. The
secondary effects are in the form of related investments and altered outline of social and
economic activity. This induced growth shows changes in the natural conditions. Likewise, there
can also be important secondary impacts in the biophysical environment.
Accumulating impacts: The accumulation means the similar activities distributed over in an
environment making beach, hotels, resorts, mines, and others. One activity can produce a small
effect on environment. Yet, a set of similar activities can produce a large cumulative effect on
particular aspects of environment. The question of how to deal with these cumulative effects
rises. Thus it is advised to perform an EIA on huge programmes instead on a series of small
actions. EIA for a specific geographical area can be prepared where a set of similar activities
are present.
Reporting results: The result should be shown in an easy and clear way to understand the
total impacts of an activity from a short review. It is preferred to show the impacts on a summary
sheet in a matrix form.
15.4.4 Elements of the environmental problem
While speaking of problems related with the use of technology, natural environment is the first
thing we think about. Let us look at the main elements of the problem.
Air pollution
The well known greenhouse effect is caused by carbon-dioxide. The combustion of fossil-fuels
produces carbon-dioxide. That is done by methane which is escaped from natural gas, and by
propellant and refrigerant gases, the chloro-fluoro carbons (CFCs). If the concentration of these
gases in the atmosphere increases, then the average temperature of the earth also increases.
This results in climatic changes.
The ozone layer is being destructed. The ozone layer is around 24 km above the earth. This
acts as a protective shield against the ultraviolet radiation. The ozone layer is depleting because
of the CFC gases. The exposure to ultra violet radiation causes skin cancer. Hence, the layer
should be protected by limiting the generation of CFCs.
A number of effects caused by increased amount of gases like nitrogen oxide, acid rain,
carbon monoxide, and presence of pollutants, such as, burnt elements of fuel and soot. The
outcomes range from occurrence of smog, an increased incidence of bronchitis, asthma, and
others to damaging effects on trees and forests.
Water pollution
Air pollution eventually turns into water pollution. The major effects are caused by two aspects
Waste products let out from factories, farms, and homes. Waste products include high
amounts of nitrates, heavy metals like lead or cadmium, phosphates, various types of toxic
chemicals, and others. These have many effects, such as, Alzheimers disease, health risks to
infants, and many others. Sometimes toxic chemical spills or oil spills may happen. The aquatic
life is seriously affected, and their interdependent living things are also affected. The coastal
waters are polluted due to inefficiently treated sewage. When the fish and other edible animals
are consumed, they lead to severe health hazards.
Fertilizers used in agriculture eventually get washed into water bodies. The presence of
nutrients in the water results in the growth of algae and a reduction of oxygen causes death of
fishes. The chemicals in water bodies affect severely the aquatic life and also the use of water.
The availability of clean water for human purposes has become very problematic. Thus we have
to carefully handle resources, with good sewage treatment so that water can be re-used after
primary utilisation for secondary purposes like irrigation. Desalination of sea water is another
way to get fresh water. But this needs huge energy, unless it is carried out in an intelligent way
by combining semi-permeable membranes and solar energy.
Other types of pollution
The major factor of pollution is trash. We are sinking in rubbish from unwanted packaging,
unwanted batteries, unwanted oil, unwanted machinery, and so on. This indicates huge
problems of safe disposal as some of the trash is toxic and polluting, and poses to be
hazardous when it percolates into ground water. It is becoming tough to find space to live, and
tough to use old sites for constructing or recreation because they have so much toxic elements.
A simple solution lies in recycling instead of throwing away, but there are serious technical and
economic issues to be overcome. Some trash can be burnt and the heat generated usually
methane can be extracted, which is a useful product. Few small beginnings with both the
reduction and utilisation of trash have been made.
There are comparatively harmless nuisances, like what has been stated noise pollution. Noise
pollution is caused by noisy vehicles and machines, and is a question to make better by
technical means. Modern aircrafts noise is less compared to the noise from older aircrafts.
Noise pollution is intensified by low acoustic quality of buildings, and standards can be
improved. Noise pollution is also caused by extremely noisy music and motorcycles.
Traffic pollution is caused due to increasing number of vehicles. Traffic contributes to air
pollution, sometimes causes death and injury taking away so many lives. The solutions to these
problems are very much required use public transport by reducing the use of personal
vehicles for only one person, and others.
The corrosion of soil occurs because of the use of heavy machinery, mono-cultures of crops,
lack of organic fertilisers, and overuse of chemicals. Soil becomes compacted and poor and
significant amounts get blown away by the wind. This is called dust pollution.
Rainforests are being destructed by humankind for their personal use. Rainforests are the
home to many known and unknown species of flora and fauna, animals, and also people. The
plants include medicinal plants which are of high significance. Those are the homes to people
who have stayed there since the beginning of humankind. The use of technology has greatly
accelerated forest clearance; however, there are no technical answers to the problem of the
disappearing forest.
Self Assessment Questions
9. Air pollution eventually turns into ________.
10. While speaking of problems related with the use of technology ________ is the first thing we
have to consider.
11. What is dust pollution?
12. There is no need to state the avoidable negative environmental effects in the EIA report.
(True/False)?
13. What is the sixth step in the EIA process?
Activity 3:
Consider that you are a manager of a company. How will you bring about changes to reduce the
pollution within your organisation?
(For example, do not use printer often to save paper, or reuse the single sided paper for
printing.)
15.5 Summary
This unit familiarised us with the concept of social issues related to technology management. It
is us who can control the affects directly or directly and be benefited to the maximum.
We also studied about technological change and industrial relations. In this we saw how the
advancements in technology changed the industry including relations with staff, competitors,
and others which helped the industry to grow higher.
We also discussed about technology assessment and environmental impact analysis. We learnt
that not only humankind is affected by technology but also all the living-organisms are affected
to a great extent. We have to take the initiative to safeguard all the living creatures on this
planet.
15.6 Glossary
Term Definition
Acoustic quality
The ability or a characteristic to absorb or control
sound is called the acoustic quality
Desalination
It is a process of removing dissolved salt and other
minerals from seawater to obtain freshwater.
Organic fertilizers
An animal or plant product or by-product is used as
fertilizer. This includes manure, seaweed, compost,
and so on.
Semi-permeable
membrane
A membrane which allows only certain molecules to
pass through it is called semi permeable membrane.
15.7 Terminal Questions
1. What are social issues?
2. Explain technological change and industrial relations.
3. Discuss the technology assessment and environmental impact analysis.
4. Enlist the issues involved in the preparation of EIA report.
5. Explain air pollution, water pollution, and other pollution in detail.
15.8 Answers
Self Assessment Questions
1. Social issues.
2. True.
3. Technological.
4. Management-union relations.
5. Wages, conditions of employment, worker selection and organization of work.
6. False.
7. Rationalization is defined as a general modification or change in the control and structure of
the industrial activities.
8. Automation.
9. Water pollution.
10. Natural environment.
11. Soil becomes compacted and poor and significant amounts get blown away by the wind.
12. False.
13. The sixth step of the EIA process to categories the environmental effects in a systematic
order.
Terminal Questions
1. Refer section 15.2 Social Issues.
2. Refer section 15.3 Technological Change and Industrial Relations.
3. Refer section 15.4 Technology Assessment and Environmental Impact Analysis.
4. Refer sub-section 15.4.3 Issues in Preparation of EIA Report.
5. Refer sub-section 15.4.4 Elements of the Environmental Problem.
15.9 Case Study
With the evolution and development of information and communication
technology communities, relationships, and cultures have been severely
affected, particularly as an effect of the growing availability and speed of
communication platforms. As people include all the evolving technologies
into their life they gradually tend to lose contact with their social life, cultural
values, and traditional society. In this study, it is shown that social activities
are logically personified in a cultural background. A traditional social activity
of ABC Country tea drinking is considered as the study to show ample
cultural features of this activity. Because these features combine with and
influence peoples social lives, developing a deeper understanding of this
relationship could serve to enrich computer-mediated communication or
interaction designs in the future. In this study, numerous user experience
investigation methods are implemented in exploring Tea drinking custom of
ABC Country, and, founded on the findings, an enhanced cultural model is
planned to show the cultural significance of this activity. Also, numerous
design suggestions for software related to social contact and cultural
tradition are provided.
Introduction
In ABC Country, the quick growth of information and technology, the
Internet, and others has acted a specific and significant role in peoples
social lives. The ease of access to different rising communication media, as
well as the speed of communication that these provide, has changed not
only peoples cultural and local living contexts but also their interpersonal
relationships. These developing technology devices and applications both
support new platforms for communication and offer numerous possibilities
for an unparalleled increase in social interactions. At that time, these
connections have occupied on various types and characteristics with
diverse means. There is now an array of new social communities, virtual
and physical. In this research, we will see that social activities are naturally
rooted in a cultural context. Yet, social hints, cultural values, and features of
traditional society are not normally considered in the search of developing
new technologies for social contact. For this reason, a study of a traditional
social activity in ABC Country is provided with the idea of finding the
abundant cultural features of this activity. An understanding of these
features, which combine with and impact peoples social lives, could
provide to improve computer-mediated communication or information
designs in the future.
Cultural Dimensions of Technology Development
Cultural differences directly impact decision-making, when it points to the
determined target of globalization for several marketable software and
online applications. Cultural liking have become one of the most major
concepts and emphases of technology development, as it gradually goes
away from topics of usability to topics of accomplishing customers cultural
and social necessities. In the next stage of technology development, it can
be estimated that the most vital concern will be to understand the needs of
customers all over the world, with respect to dissimilarities in behaviour,
customs, and language.
Questions:
1. What are the challenges faced by the cultural community?
2. Name the differences that directly influence the target of globalization for
software and online applications.