Unit 1 Introduction To Science and Technology: Structure

Technology Management Unit 1
Unit 1 Introduction to Science and Technology

Structure
1.1 Introduction
Objectives
1.2 Defining Science
1.3 Technology
Types of technology
Technology portfolio
Technology for survival and growth
1.4 Transformation of Science into Technology
Science and Technology (S&T) policies of the organisations
Innovation in Science and Technology
Globalisation of technology
1.5 Summary
1.6 Glossary
1.7 Terminal Questions
1.8 Answers
1.9 Case Study: Impact of Technology on Amazon.com
1.1 Introduction
From the industrial revolution in the late eighteenth century to the mass
production of modern consumer goods and Information Technology (IT)
revolution, technology has greatly influenced all spheres of life. Technology
plays decisive roles in a corporate environment and determines the
competitive positioning of an organisation. Walmart has extensively used
technology in all aspects of its retailing business such as managing
inventory, managing supply chain and transportation, sharing real-time
information with all of its retail stores, building relationship with vendors, and
Sikkim Manipal University B1979 Page No. 1

receiving payment from customers. This explains the cost-leadership

position of Walmart in the retail industry.
Similarly, there are numerous other organisations that have failed to catch
up with technological changes and derive the benefits of technological
innovations. Due to this, these organisations could not achieve a
competitive position in the market. For instance, the major problems with
Public Sector Undertakings (PSUs) in India are falling productivity and
efficiency due to lack of technological upgradation (Jadhav, D. (n.d.).
INDUSTRIAL POLICY SINCE 1956).
Technology plays a very important role in the competitiveness, efficiency,
and productivity, thus, adopting and managing technology is crucial for the
overall success of an organisation. Adopting technology involves careful
selection of innovative technological applications, preparation of a roadmap
of adopting new technology, and management of the adaptation process.
Managing technology involves development of adequate infrastructure for
the smooth function of the technological applications and maintenance.
In this unit, we will define science, which lays the groundwork for the
development of technology. Next, we will elaborate on the meaning of
technology, and along with it, we will discuss the types of technology,
technology portfolio, and the technology used for survival and growth.
Towards the end, we will discuss the transformation of science into
technology. Here, we will discuss the various Science and Technology
(S&T) policies of an organisation, innovations in S&T, and globalisation of
technology.
Objectives
After completing the unit, you should be able to:
 define Science and Technology
 explore the relationship between Science and Technology
 define technology portfolio

 identify the types of technology
 describe technological development in an international environment

1.2 Defining Science

Science is the foundation of all technological innovations. For instance, the
technology of sharing information across different departments in an
organisation is based on the science of electromagnetic waves. Fig. 1.1
shows an electromagnetic wave along with the sharing of information from
an information hub:
Fig. 1.1: Electromagnetic Wave and Sharing of Information

In simple words, science can be defined as the systematic study of nature.
There are numerous definitions of the word ‘science’. According to
Webster's New Collegiate Dictionary, science is the "knowledge attained
through study or practice," or "knowledge covering general truths of the
operation of general laws, esp. as obtained and tested through scientific
method [and] concerned with the physical world."

NOTE:
The word ‘science’ comes from the Latin word ‘scientia,’ meaning
knowledge.
Therefore, science is a systematic study of the structure and behaviour of

the physical and natural world. Science also intends to establish the cause
and effect relationship of diverse phenomena. Science leads us to a better
understanding of system and helps us live in harmony with nature. Science
explains various natural phenomena such as gravitational force,
propagation of light and sound, and generation of electricity. Scientific
knowledge of the present is the result of accumulation of scientific
knowledge for thousands of years.
The application of science is known as technology. Therefore, all
technological innovations, starting from mobile phones to the Internet, are
based on scientific knowledge.
Development of scientific knowledge depends on the extent of systematic
research in a particular society. Historically, societies that emphasised
scientific research have been in a better position of building civilisations.
There is various historic evidence of scientific knowledge in ancient Egypt,
Greece, and India.
In present day societies, universities and research institutes are the main
centres of scientific research. Funding is a major constraint in scientific
research. However, various private business organisations all over the world
significantly contribute to funding in scientific research. Note that systematic
knowledge fuels technological innovations, which in turn, facilitate business
and improve the living standards of the society as a whole.
Self Assessment Questions:

1. The word ‘science’ is derived from the Latin word ________.
2. Science studies the structure and _____ of the natural and the
physical world.
3. Technology refers to the application of science. (True/False)

Activity 1:
It is said that science is a systematised body of knowledge, which leads to
invention. Do you think that there is a relationship between science and
art? Discuss.
Objective of the activity: to help you understand the concept of science
and its relationship with art
1.3 Technology
As mentioned earlier, technology refers to the application of science. For
example, organisations use various technologies such as computing and
networking. These technological applications are the result of accumulated
scientific knowledge. Therefore, we can say that while technologies are the
“how” of doing something, science is the “why” of something.
There are obviously different ways of doing things. A computer code can be
written in different programming languages, but ultimately the programme
has to meet the required objective. Technology gives a competitive edge to
do things faster and cost-effective ways to achieve our objectives. Manually,
we can do many things, and by adopting suitable technologies, we can
achieve a higher level of efficiency and cost effectiveness. For example, an
earth mover (a machine used for digging) can do a job faster and in an
efficient way, as compared to that of manual labour. Generally, manual
workers suffer from physical and mental fatigue. This deficiency can be
addressed to a large extent by using special machines.
However, there are areas where human skills cannot be replaced by
machine usage. For example, in the tea industry, human skill is vital for
harvesting tea leaves. This is because appropriate skill is required to identify
tender leaves and reject mature leaves. Such expertise cannot be replaced
by machines.
Exhibit 1.1: Technology Transfer

Technology transfer or Transfer of Technology (TOT) refers to the
process of transferring skills, knowledge, technological methods,
manufacturing processes, and facilities among different institutes,

organisations, and even countries. Technology transfer ensures that

technological innovations can be accessed by a large number of users.
These users can further exploit these technologies and develop new
products, processes, or applications. Technology transfer is a significant
means of transferring technology from developed to developing
countries. Today, many leading Multi-National Companies (MNCs),
such as General Electric (GE) and Du Pont are developing partnerships
with some of the premiere institutions in India, such as Council for
Scientific and Industrial Research (CSIR), for technology transfer and
knowledge networking. These types of networking are beneficial for
organisations for Research and Development (R&D) and the institutions
for funding.
Source: V. Venkatesan, L. (2013). Technology transfer in India.
Exhibit 1.2: Cancer Research Technology and Teva

Pharmaceuticals form R&D alliance for R&D DNA Damage
Response Drugs
Monday 16 September 2013
“Cancer Research Technology Ltd. (CRT), Cancer Research, the UK’s
technology development arm, and Teva Pharmaceutical Industries Ltd.
(NYSE: TEVA) have signed a multi-project alliance agreement to
research and develop first-in-class cancer drugs that modulate DNA
damage and repair response (DDR) processes in cancer cells.
DDR plays a key role in protecting cancer cells from the damaging
effect of chemotherapy – creating an in-built antidote to the toxic effects
of the anti-tumour drug. As the cancer cells that are best able to repair
the DNA damage caused by the cancer treatments survive, they
replicate, naturally selecting for the mutation with enhanced repair
capability – leading to recurrence and resistance to treatment.
Cancer Research UK and CRT, have created a world-class hub of
expertise in DDR-related basic, translational, and clinical research,
which is leading the field; building the understanding that will hopefully
enable ‘smarter’ use of this very interesting approach in the

development of new treatment options.

Based on Cancer Research UK's extensive network of leading UK
universities, and its five cancer research institutes (Gray Institute,
Oxford; Cancer Research UK Cambridge Institute; London Research
Institute; Paterson Institute, Manchester; and the Beatson Institute,
Glasgow), this hub will provide the foundations for CRT's and Teva's
work towards developing novel therapies based on DDR-related targets
for the treatment of cancer.
“For cancer patients, it is important that we maintain the momentum of

progress that has been made in oncology in recent years" said Dr.
Michael Hayden, President, Teva Global R&D and Chief Scientific
Officer. “Cancer Research UK, CRT, and their outstanding academic
partners, are a driving force in the improved understanding of cancer
and its treatment. This research collaboration will build on our
understanding of how cells repair DNA damage, help us identify
possible points of therapeutic intervention, and lead us onto a pathway
to improve clinical outcomes for cancer patients."
The alliance provides Teva with the opportunity to research and develop
selected and differentiated novel treatments targeting DDR processes.
With a focus on mechanisms and molecular targets related to the
emergence of therapeutic resistance in cancer cells, the partnership
also opens up the potential to expand the clinical utility and therapeutic
effectiveness of Teva’s current portfolio of oncology chemotherapeutic
agents. This approach builds on Teva’s growing focus on personalised
medicine throughout its R&D pipeline, and specifically within its
oncology portfolio………”
Source: Cancerresearchuk.org (2013). Cancer Research Technology and Teva Pharmaceuticals form
R&D alliance for R&D DNA damage response drugs : Cancer Research UK.
1.3.1 Types of technology

Technologies can be broadly classified as product-based technologies and
process-based technologies.

Product-based technology is a derivative of science and it focuses on the

application of the product. In other words, this type of technology results in a
tangible product that can be used by consumers. Product-based
technologies tend to focus on the design aspects as well as the functional
aspects.
Fig. 1.2 shows some examples of product-based technologies:
Mobile Automobile Jet Engine E-book Reader

Phones
Electronic Cigarette
Fig. 1.2: Showing Some Product-based Technologies
NOTE:
Principles of Product Designing: In product designing, the major

designing areas are for design and functional design. Form design refers
to the external look of a product (such as shape and surface), whereas,
functional designing refers to the internal working of the product.
Process-based technologies are the technologies that are not for final
consumption but to facilitate production or a transaction. Process-based
technologies are invisible to the customers. These technologies are based
on utilities and functionalities. For example, Electronic Data Interchange
(EDI) is an example of process-based technology. It is a method of
computer-to-computer exchange of information between a retailer and a
vendor. This data can be related to purchase orders, invoices, defective
products, and products received. In Fig. 1.3, you can see the exchange of
business information between a vendor and a trading organisation through
EDI:

Fig. 1.3: Showing Exchange of Information Using EDI

(Source: http://www.ariany.com/Applications.aspx?AppId=11)
1.3.2 Technology portfolio

In simple words, technology portfolio refers to the set of different
technologies used in an organisation. Organisations keep on acquiring new
technologies and discarding older technologies. At any given point of time,
an organisation uses multiple technologies. Some technologies are acquired
from outside and some are developed indigenously. Indian organisations
acquire a lot of technologies from Western countries. The reason is simple;
it takes a lot of time and money to develop new technologies.
Let us look at a scenario. A few years back, Reliance Infocomm bought the
CDMA (Code Division Multiple Access) technology and built a huge
customer base. Next, they acquired GSM (Global System for Mobile
Communications) technology and added it to their portfolio. This was to
counter the existing competitors and grab the market through GSM
technology. Airtel was already using GSM technology at that time. However,
entry of Reliance and Tata into the market reduced its market share.
Therefore, we can see that acquiring newer technology enables increasing
the technology portfolio. Thus, various technology organisations, such as
Google and Facebook, keep acquiring newer technologies and other
technology organisations to increase their portfolio and grab higher market
share.

Exhibit 1.3: “Facebook Buys Instagram For $1 Billion, Turns

Budding Rival Into Its Standalone Photo App”
Facebook acquired mobile photo sharing apps Instagram for
approximately 1 billion USD. Instagram has an inbuilt community of
photographers and photo lovers that is increasingly dominating the digital
photo sharing space. At the time of the acquisition, Instagram had 27
million registered users. Therefore, it was more of a social network of its
own, rather than a photo-sharing app. The acquisition would increase the
technology portfolio of Facebook and give it a competitive position vis-à-
vis other technology giants such as Amazon, Apple, and Google.
(Source: TechCrunch (2013). Facebook Buys Instagram For $1 Billion, Turns Budding Rival Into Its
Standalone Photo App | TechCrunch.)
However, increasing the technology portfolio does not always ensure

success for organisations. New technology should bring synergy in the
organisation.
NOTE:
It is the role of the technology manager to manage the technology portfolio

of an organisation. A technology manager finds out the right mix of
technology, so that operations go smoothly and achieve the required level
of production for a competitive position in the market.
1.3.3 Technology for survival and growth

Adoption of technology is no more just an option but a compulsion for the
organisation. In a competitive market, every organisation competes to
increase market share. To attract and retain more customers, organisations
need to provide superior products and services, increase customer
satisfaction, connect to customers, and build customer relationships.
Technology plays crucial roles in all these aspects of an organisation. Most
production processes have been automated, so that productivity can be
increased manifold and manual errors can be eradicated. Technology
ensures better quality assurance, which in turn increases customer
satisfaction.

Technology also enables organisations to have a better insight into the

needs and preferences of customers. IT has revolutionised data collection,
sharing of information, and analysing information. Business analytics
techniques enable organisations to find meaningful insight from the huge
amount of data collected by organisations. Therefore, today competition
among organisations is based on their technological capabilities.
Exhibit 1.4: Role of IT in Business

IT helps in performing various activities in business, such as:
Sharing Information: IT helps in integrating the various areas of
business. This helps in smooth information sharing among different
functions of an organisation. IT solutions, such as Enterprise Resource
Planning (ERP), help in integrating different organisational functions and
sharing of information.
Demand Forecasting: As you know, the main aim of a retailer is to fulfil
the requirements of consumers in an effective manner. To do so,
organisations need to collect information related to current tastes and
preferences of consumers, the existing stock, buying habits of
consumers, etc. This information helps them to balance the demand for
products with their supply by making accurate forecasts. All this is
possible with the help of IT.
Inventory Management: It involves maintaining an adequate level of
inventory including raw materials, work in progress, and finished
products. Efficient management of inventory helps in avoiding situations
like under stocking and overstocking. To do so, organisations make use
of IT, which helps in providing inventory-related information from time to
time.
24/7 Customer Support: Most organisations provide 24/7, real-time
access to consumers. One can easily get in touch with customer support
executives by dialing a toll free number. To provide better and fast
services to consumers, online retailers use Interactive Voice Response
(IVR) technology. This technology allows computers to identify the caller,
based upon the pre-recorded information, voice, or dialogue.
Some other important roles of IT in business include customer
relationship management, facilitation in payment transactions, and e-
commerce.

After the liberalisation of the Indian economy in the year 1990, competition
in the Indian market has increased manifold. This is because many well-
established players have entered the Indian market. In such a scenario, the
survival of Indian organisations would depend upon how fast they can adopt
newer technology and innovate to provide better products and services. For
instance, when many multinational banks entered India in the late 1990s,
most processes in Indian banks were manually done with pen and paper.
However, these foreign banks were using computing technology and wire
transfer of funds. Gradually, Indian banks adopted these technologies.
Today, hardly any bank can survive in the market without modern
technological facilities such as computing, ATM, and electronic fund
transfer. Therefore, technology is very crucial for the survival as well as the
growth of organisations.
Exhibit 1.5: Some Technological Trends Driving Business

Smart technology has revolutionised the business world. It has not only
empowered businesses and consumers but also blurred boundaries
among the industries. Old business models have been eliminated, and
new business models have emerged. The following are some of the
trends in technology that will drive businesses in the coming years.
Competition based on analytics
Customer information is becoming increasingly available to business
organisations. The number of embedded censors collecting information
has rapidly increased over the last few years. In addition, because of
increasing use of social media, consumers are sharing more information
about themselves. According to market research firm IDC, the amount of
digital information created each year will increase to about 35 trillion by
2020. More and more organisations will take help of business intelligence
to analyse this huge amount of information and compete accordingly.
Smart mobility will change the interaction of people
Smart portable devices, such as tablets and smart phones, which connect
to the Internet, have become a very important part of our lives. According
to IDC, sales of smartphone surpassed that of PCs in the last quarter of

2010 itself. Smart mobility is reducing direct interaction among people. In

addition, smart mobility has also changed the way organisations collect
data about consumers. New business models are also emerging to
leverage the business potential of smart mobility.
Smart mobility: technology-enabled options driving transformation
Source: EY
Boundaries getting blurred
Digital technology has hugely blurred boundaries across geographies,
economies, industries, products, and to a great extent, between private
and business life. Increase in smart devices induces organisations to
search for newer revenue models such as mobile commerce and mobile
payment systems.
Cloud computing
Cloud-based technologies have finally started to take off. According to the
consultancy firm Gartner, by 2016, all Forbes` Global 2000 companies
will use public cloud services. This will bring revolutionary changes in the
current hardware, software, and database markets.
Cloud computing will also transform businesses and business models,
decreasing costs of IT services, increasing flexibility, and lowering risks.

4. Technology follows ___principle. It moves from higher potential to
lower potential.

5. ______ refers to the process of transferring skills, knowledge,

technological methods, manufacturing processes, and facilities
among different institutes, organisations, and even countries.
6. What are the different types of technology?
7. In simple words, ____________refers to the set of different
technologies used in an organisation.
Activity 2:
Conduct research to make a list of at least five process-based
technologies. You can take help of publicly available sources such as the
Internet.
Objective of the activity: to help you identify different types of
technology
1.4 Transformation of Science into Technology

Science is a body of knowledge that is accumulated as more and more
natural phenomena are understood by scientists. Science becomes
technology only when such knowledge is applied to develop a product or
service that provides a solution to any problem or provides utility. However,
technological progress is also motivated by the necessities of human
society. You might have heard the proverb, “necessity is the mother of
invention.” Human necessities force us to find solutions of our problems. For
example, the need for faster transportation led men to invent wheels to
horse carts to trains to the aeroplane.
Similarly, often we hear of discovery of new drugs for diseases such as
AIDS and cancer. These inventions are the result of scientific knowledge.
However, in spite of having scientific knowledge, it is not always possible to
develop products and services because of resource constraints. India has a
large amount of petroleum reserves in various parts of the country.
However, due to resource constraints, we have not been able to exploit the
reserve. As a result, India needs to import 80% of its petroleum
requirements. On the other hand, innovation in oil exploration is decreasing
the import requirements of the US.

Organisations spend billions of dollars in R&D for new drugs, software

products, faster and safer jet engines, or mobile phones with more
sophisticated applications. There are always risks of these R&D projects
becoming unsuccessful. In such cases, organisations suffer huge amounts
of loss that cannot be recovered (also called ‘sunk cost’).
Exhibit 1.6: “Apple's R&D Expenses Surge 33%, on Pace to Top $4

Billion This Year
Apple's research and development related expenses have grown by 33%
this year and are on pace to top $4 billion in the fiscal year of 2013, as the
company toils away on different "surprises" in its top-secret labs.
Apple spent an additional $278 million on R&D expenses in the recently
concluded March quarter; the company revealed this week in a filing with
the US Securities and Exchange Commission, as discovered
by AppleInsider. Compared to the same period in 2012, it is an increase
of 33%.
R&D expenditure for the first six months of Apple's fiscal year of 2013 is
now up to $530 million year over year, which is also a 33% increase from
the first six months of fiscal year of 2012. At this pace, expenditure will
grow by more than $1 billion this year alone.”
(Source: Appleinsider.com (2013). Apple's R&D expenses surge 33%, on pace to top $4 billion this
year.)
Therefore, organisations need to consider a number of factors, such as

viability of the scientific knowledge of turning it into a useable technology,
costs, and market demands of such technology. When there is high demand
for a particular technology, it becomes commercially viable for organisations
to invest in its R&D, product development, and services. For example, in
India there was very less demand for water purifiers even a decade ago.
However, increasing disposable income of the middle class population of
the country has increased the demand of various water purifying products.
As a result, a number of organisations are entering into the water purifying
market to develop more innovative solutions.

Fig. 1.4 shows the various water purifying products in the Indian market:
Fig. 1.4: Water Purifying Products in India

Increasing pollution and environmental degradation has increased the
demand for environmentally-sustainable products and services. These
products and services are also called ‘green products’. Worldwide
organisations are investing in R&D projects for alternative energies and
developing products that have the least environmental effects. Therefore,
you can see that technological innovations depend on a number of factors,
as discussed.
1.4.1 Science and Technology (S&T) policies of the

organisations
S&T policy is a roadmap that organisations want to follow so that the
company can innovate. In addition, these policies provide a clear
understanding to the employees about the goals and objectives of the
organisation. New technologies create resistance among employees, for
example, when computers were being introduced in different public sector
organisations and government offices in India, employees had a fear that
these machines would make many jobless. Therefore, there was initial
resistance from the employees towards computerisation.
However, after a few years, when the benefits of computerisation were
evident, employee resistance disappeared. S&T policy can eradicate
confusions among employees by establishing clear guidelines regarding the

technology usage policies of the organisation. Organisations need to

establish steering committees to set the S&T policies.
1.4.2 Innovation in Science and Technology

Innovation is the main driving force in S&T. Innovation means applications
of new solutions to meet new requirements. Innovation is what keeps
organisations growing and achieving a higher level of success. Innovations
become indispensable in a highly competitive market. This is because
innovation keeps organisations ahead of their competitors. For instance,
previously, the social networking site, Orkut, was quite popular, and it had a
large number of users. However, Facebook came with more innovative
interfaces and functions. As a result, Facebook has become almost
synonymous with social networking.
Exhibit 1.7: Technological Innovation in XRS

XRS Corporation provides mobile trucking intelligence services to
transportation organisations. Recently, the company has been named a
finalist in the Mobile Technologies category for the 2013 Tekne
Awards by the Minnesota High Tech Association (MHTA). The award is
given to organisations showing technological innovation and leadership.
Beginning in March 2013, XRS provides a mobile platform for
compliance and fleet optimisation. The platform can run a number of
certified mobile devices and is capable of automatically transmitting
vehicle and operator data through the cloud to a fleet management
dashboard.
According to Jay Coughlan, chairman and CEO, XRS Corporation,
“We are thrilled to be honoured as one of the state’s top technology
innovators by the Minnesota High Tech Association,. “When we
debuted the XRS mobile platform earlier this year, we knew we were
pioneering an entirely new approach to trucking intelligence.
Recognition as a finalist for the prestigious Tekne Awards confirms that
we are leading our industry towards more widespread adoption of
mobile technology.”
Source: Ccjdigital.com (2013). XRS recognised for technology innovation.

Innovation is not only fuelled by the requirement of providing a new solution.

Innovation is required to reduce costs and time, provide more convenience,
reduce environmental effects, etc. For example, India is overly dependent
on coal-based electricity. India has a huge reserve of coals. Therefore,
producing coal-based electricity is not a major problem in India. However, it
is a major source of emission and air pollution.
Therefore, global communities have been putting pressure on India to
reduce the use of coal-based electricity. India needs a major innovation to
reduce its dependence on coal and find out economically viable alternative
energies such as solar and wind energy.
1.4.3 Globalisation of technology

If the world is a global village, technology is the common thread that
connects all. We have already mentioned earlier that technology generally
diffuses from developed nations to developing nations. Technology transfer
enables developing countries to receive technology from developed nations.
Globalisation facilitates in faster diffusion of technology. This is because,
when organisations from the developed markets, such as Europe and North
America, enter developing markets, such as Africa and south Asia, these
organisations transfer a lot of technologies to the local organisations and
communities. For example, we mentioned earlier how the entry of foreign
banks in India helped in the computerisation of Indian banks.
Global organisations follow various entry modes such as joint venture and
franchising. In a joint venture, a global player generally enters into
partnership with a local player to set up a joint operation. In franchising, a
global player allows a local player to use its trademarks and other rights in
lieu of fees. In both the cases, the local players get access to newer and
more sophisticated technologies, which in turn is adopted by other local
players as well. For example, when Bharti group entered into a joint venture
with Walmart in India, the former got access to the various technological
know-how of Walmart such as its highly efficient supply chain and inventory
management system. McDonalds extensively adopts franchising for global
expansion. The company shares various techniques and methods with the
franchisees. This leads to wider adoption of technology.

Today, the influence of globalisation on technology diffusion is quite evident

in India. Today, a large number of Indian businesses use modern
techniques and technology applications such as ERP, business intelligence,
and manufacturing automation.

8. Sunk costs are recoverable in the future. (True/False)
9. Technological innovations are fuelled by human necessities.
(True/False)
10. Environmentally sustainable products are also known as
_____________ products.
Activity 3:
Conduct research to make a list of at least five ‘green’ products available
in the Indian market.
Objective of the activity: to help you identify the green products
available in the market
1.5 Summary
Let us recapitulate the main points discussed in the unit:
 Technology plays a very important role in the competitiveness,

efficiency, and productivity. Adopting and managing technology is crucial
for the overall success of an organisation.
 Science is the foundation of all technological innovations.
 Science is a systematic study of the structure and behaviour of the

physical and the natural world.
 The application of science is known as technology. Therefore, all
technological innovations, starting from mobile phones to motor cars,
are based on scientific knowledge.
 TOT refers to the process of transferring skills, knowledge, technological
methods, manufacturing processes, and facilities among different
institutes, organisations, and even countries.

 Technologies can be broadly classified as product-based technologies

and process-based technologies.
 A technology portfolio refers to the set of different technologies used in

an organisation.
 Organisations need to consider a number of factors, such as viability of
the scientific knowledge while turning it into a useable technology, costs,
and market demands of such technology.
 S&T policy is a roadmap that an organisation wants to follow, so that the
organisation can innovate.
 The role of creativity and innovation is the main driving force in S&T.
Innovation means application of new solutions to meet new
requirements. Innovation is what keeps organisations growing and
achieving a higher level of success.
 Globalisation facilitates in faster diffusion of technology.
1.6 Glossary
Let us have an overview of the important terms mentioned in the unit:
Electromagnetic Waves: These are the waves of energy consisting of an
electric field, which moves in the upward direction, and a magnetic field,
which moves in the horizontal direction.
Information Hub: It is a storehouse of information that shares information
with different computers or devices.
ERP (Enterprise Resource Planning): It is an information system that
controls and integrates all the business functions of retailers.
Business Intelligence: It is a set of theories, methods, processes,
systems, architectures, and technologies for transforming raw data into
meaningful patterns.
EDI (Electronic Data Interchange): It is a method of computer-computer
exchange of information between a retailer and various other parties.
IVR (Interactive Voice Response): It is the technology used to
automatically communicate with humans through the use of voice.

Electronic Fund Transfer: It refers to the electronic transfer of funds from

one account to another. Such transfer may occur within a financial
organisation or between different financial organisations.
GSM (Global System for Mobile): It is a global standard for mobile
communications.
CDMA (Code Division Multiple Access): It refers to a particular access
method in mobile communication.

1. What do you mean by science?
2. What do you mean by technology?
3. What are the different types of technology? Define the types.
4. Elaborate on technology portfolio.
5. What do you mean by S&T policies of organisations?
6. What is the role of innovation in S&T?
7. How can you relate globalisation with technology diffusion?
8. What are the roles of IT in business?
1.8 Answers
Self Assessment Questions

1. Scientia
2. Behaviour
3. True
4. Diffusion
5. Technology transfer
6. Product based technology and process based technology.
7. Technology portfolio
8. False

9. True
10. Green
Terminal Questions
1. Science is the foundation of all technological innovations. Refer to
section 1.2 Defining Science for details.
2. The application of science is known as technology. Refer to section 1.3
Technology for details.
3. Technologies can be broadly classified as product-based technologies
and process-based technologies. Refer to section 1.3.1 Types of
technology for details.
4. Technology portfolio refers to the set of different technologies used in
an organisation. Refer to section 1.3.2 Technology portfolio for
details.
5. S&T policy is a roadmap that an organisation wants to follow, so that
the organisation can innovate. Refer to section 1.4.1 Science and
Technology (S&T) policies of the organisations for details.
6. Role of creativity and innovation are the main driving forces in S&T.
Refer to section 1.4.2 Innovation in Science and Technology for
details.
7. Globalisation facilitates faster diffusion of technology. Refer to section
1.4.3 Globalisation of technology for details.
8. Some of the roles of IT are sharing information, forecasting demand,
and managing inventory. Refer to section 1.3.3 Technology for
survival and growth for details.
1.9 Case Study: Impact of Technology on Amazon.com
“Ultimately, we're an information broker. On the left side, we have lots of

products; on the right side, we have lots of customers. We are in the middle
of making the connections. The consequence is that we have two sets of

customers: consumers looking for books and publishers looking for

consumers. Readers find books or books find readers." - Jeff Bezos,
founder of Amazon.com
The world’s largest online retailer, Amazon.com, Inc. is a multinational e-
commerce organisation, headquartered in Seattle, Washington. This online
retail giant was setup by Jeff Bezos in 1994. The organisation was named
after the biggest river on earth, Amazon. Earlier, Amazon.com started as an
online book store. However, gradually, it diversified into countless other
products such as DVDs, CDs, MP3, computer software, video games,
electronics, apparel, furniture, food, and toys. Within a span of 16 years, the
organisation obtained a remarkable response in global markets. In 2010,
Amazon earned a revenue of around USD 34.204 billion.
In the beginning, Amazon did not have its own delivery network. Therefore,
products were delivered to customers after receiving orders through the
post office by Jeff Bezos in his family car. In the year 1995, Amazon opened
its first virtual store with more than 1.1 million titles. In 1997, Amazon went
public on NASDAQ by raising more than USD 50 million. By December
1998, the online retail store reached the market value of USD 5.5 billion.
Amazon.com was formed after a combination of the most innovative ideas
of Jeff Bezos and implementation of an advanced IT infrastructure and ERP
system. Jeff Bezos, the founder of the organisation, did not have any prior
experience in the online retail business. However, he realised the huge
business potential in selling books online. Jeff Bezos had a notion that an
online book store can accommodate a large number of titles, as compared
to any other physical store. Apart from this, an online bookstore enables
customers to order any book of their preference.
Since its inception, Amazon strived to be user-friendly, easy to navigate,
and offer the highest possible discounts to customers. Therefore,
Amazon.com not only sells books, but also offers relevant information about
books. Extraordinary customer service has helped the organisation in
acquiring and retaining millions of customers over a very short period of
time.
In addition to online bookselling, Amazon has adopted numerous innovative
business ideas. The organisation also started syndicate selling, under which

customers can browse other websites through Web links available at

Amazon’s website. Amazon receives a commission each time a sale is
made from other websites. Today, it has become a premier bookseller on
various popular websites, such as AOL.com, Excite.com, Yahoo!, AltaVista
Search Network, Prodigy Shopping Network, @Home Network, GeoCities,
iVillage, Quicken.com, ABCNew.com.
In addition, Amazon enabled independent and relatively smaller publishers
and authors to go global without making a large amount of investment. The
key success factors of Amazon.com involve:
 Achieving higher customer satisfaction
 Delivering accurate information about products to customers

 Enhancing the visibility of products on the Internet
 Using advanced technology for providing better customer support
 Expanding operations by developing partnerships with other online

retailers and content providers
 Implementing database marketing and data warehousing
 Maintaining customer database for future references
 Using RFID (Radio Frequency Identification) in stores and executing

EPOS (Electronic Point Of Sale)
 Upgrading iOS application for mobile retailing
 Promoting products through social networking sites

Amazon launched a Web auction service website by the name Amazon.com
Auctions. However, the site was not able to compete with eBay, the largest
auction site in the world. After the failure of the auction site, Amazon
launched zShops in 1999. In 2000, Amazon launched a service named
Amazon Marketplace. Later, it launched several other businesses such as
Pinzon, Amazon MP3, and Amazon Fresh. Amazon forayed into film
production with 20th Century Fox by producing “The Stolen Child.” Presently,
Amazon has separate websites in various countries, such as Canada, the
UK, Germany, France, Italy, Austria, Japan, and China, offering different

products. Today, customers can easily buy books or any other products
from this retail store using mobile Internet.
Questions:
1. Considering the Amazon.com case study, discuss how technology can
create global business opportunities.
2. Apart from selling books, Amazon today sells various other
commodities at a discounted price. What are the key success factors
considered by the company in its endeavour?
References and Suggested Readings

 Gehani, R. 1998. Management of technology and operations. New York:
J. Wiley.
 Khalil, T. (2000). Management of technology. 1st ed. Boston: McGraw-
Hill.
 Dorf, R. (1999). The technology management handbook. 1st ed. Boca

Raton, FL: CRC Press.
E-References
 Brenner, M. (2012). SAPVoice: Technology and The Power of Small
Business To Drive Innovation And Jobs. [online] Retrieved from:
http://www.forbes.com/sites/sap/2012/04/10/technology-and-the-power-
of-small-business-to-drive-innovation-and-jobs/ [Accessed: 17 Sep
2013].
 Deloitte.com (2013). Deloitte | Information Technology Innovation Case
Studies | Deloitte Consulting LLP. [online] Retrieved from:
http://www.deloitte.com/view/en_US/us/Insights/Browse-by-Content-
Type/Case-Studies/Technology-Case-Studies/ [Accessed: 17 Sep
2013].
 Ey.com (2013). Six global trends shaping the business world - Rapid
technology innovation creates a smart, mobile world - EY - Global.
[online] Retrieved from: http://www.ey.com/GL/en/Issues/Business-
environment/Six-global-trends-shaping-the-business-world---Rapid-

technology-innovation-creates-a-smart--mobile-world [Accessed: 17 Sep

2013].
 Inc.com (2013). 10 Tech Innovations to Help Your Business | Inc.com.
[online] Retrieved from: http://www.inc.com/ss/10-tech-innovations-help-
your-business#9 [Accessed: 17 Sep 2013].
 Searchcio.techtarget.com (2013). What is business technology
management (BTM)? - Definition from WhatIs.com. [online] Retrieved
from: http://searchcio.techtarget.com/definition/business-technology-
management [Accessed: 17 Sep 2013].

Unit 2 Technology Management

Structure
2.1 Introduction
2.2 Technology Management
Technology management at national level
Technology management at firm level
2.3 Management Techniques for Harnessing Technology
Assessment of available technologies
Strategic Management of Technology (SMOT)
Strategic Technology Management System (STMS)
2.4 Summary
2.5 Glossary
2.7 Answers
2.8 Case Study: Radio Frequency Identification (RFID) at Walmart
2.1 Introduction
In the previous unit, you studied about the concept of science and
technology. In addition, you also studied about the various types of
technologies, technology portfolio, and the transformation of science into
technology. In this unit, you will study about the assessment and
management of technology.
Walmart is the largest retailer in the world in terms of revenue. The main
reason behind the success of the organisation is its commitment towards
providing goods at low cost to the customers. The cost leadership position
of the company was achieved mainly by effective management of
technology. Walmart has one of the most sophisticated logistics and supply

chain system, facilitated by innovative technology. Effective adoption and

management of various technologies are very crucial for the success of any
organisation. For example, until a few years ago, social media was a word
unheard of. However, today, there is hardly an organisation that does not
promote its products or services through social media.
Similarly, online e-commerce is a recent technological innovation that has

revolutionised the field of business. Therefore, as you can see,
technological innovation is an important factor that changes the business
environment. Organisations that cannot adopt and exploit newer
technologies, cannot succeed in a highly competitive and globalised
business environment. Can you imagine an organisation, operating at
present, without installing computer systems? Therefore, organisations
need to periodically assess the technological capabilities and technological
requirements, and install and maintain more effective technologies to gain
competitiveness.
In simple words, technology management refers to the planning,

development, implementation, and assessment of technological capabilities
in an organisation to fulfill the business objectives of an organisation. This
unit elaborates on the concept of technology management. In addition, it
explains the applications of management techniques for harnessing
technology. Next, you will study about technology management at the firm
level and the national level. The unit also elaborates on an assessment of
available technologies. Some of the other concepts discussed in the unit are
Strategic Management of Technology (SMOT), Strategic Technology
Management System (STMS), and the conceptual framework of technology
management.
Objectives
After completing the unit, you should be able to:
 discuss the concept of technology management

 describe implications of technology management at the firm level and

the national level
 explain how available technologies are assessed

 describe Strategic Management of Technology and Strategic
Technology Management System
 discuss the conceptual framework of technology management
2.2 Technology Management

Technology management can be defined as a process of planning,
organising, selecting, and controlling technological resources to maintain or
increase the capability and efficiency of an organisation. According to
the Association of Technology Management and Applied Engineering,
technology management is, “the field concerned with the supervision of
personnel across the technical spectrum and a wide variety of complex
technological systems.”
Therefore, we can see that technology management is one of the most

important factors for the success of an organisation. Technological
innovations have brought revolutionary changes in the intra-firm and inter-
firm business practices. Some of the results of technological changes
include changes in product and services attributes (as a result of the
changes in production technology); changes in the production mechanism
or service creation and delivery process (as a result of change in the
process technology); and change in the management of supply chain
through advancement of information technology. For example, rapid
transformation in information technology has enabled organisations, such as
Walmart, to achieve a high level of efficiency in its supply chain. Fig. 2.1
shows the highly efficient supply chain flow of Walmart:

Fig. 2.1: Supply Chain Flow of Walmart

Technology management involves management of application and
operation of these rapidly changing technologies.
Technology management is not only conducted by organisations but also
nations. This is because nations also need to plan, develop, and implement
technological capabilities to enhance their industrial capabilities and achieve
economic goals. Let us now study about the management of technology at
the national level as well as the organisational level.
2.2.1 Technology management at national level

At the national level, technology management plays a crucial role in the
overall economic development of a nation. For example, developed
countries, such as the USA and the UK, have effective technology policies,
and the government in these countries plays proactive roles in the

development and acquisition of technology. Naturally, business

organisations in these countries have more access to better and more
efficient technology. In addition, similar to business organisations, nations
also face a number of challenges, for example, pressure of increasing
population, greater health risks, changing demographics, depleting natural
resources, and dwindling farmlands. Such challenges can only be
addressed with the help of visionary technology policies and innovative
technologies. For instance, the challenge of energy security can be
addressed with the help of unconventional energy technologies such as
solar energy and wind energy.
Following are some of the important areas of technology management at
the national level:
 Adopting a top-down approach of identifying critical technologies that

need to be developed in medium and long-term time scales
 Developing efficient technology strategy for a country (internalisation vs.
externalisation of strategy)
 Forecasting changes in technology
 Appropriating adoption of new technology
 Developing and promoting ‘green’ technology
 Planning and developing a technology portfolio for a country
 Ensuring sustainable economic development and facilitating in
knowledge management
 Developing policies and setting rules regarding foreign technology
collaborations and technology adoption and transfer
 Managing diffusion and absorption of technology
 Managing performance of adopted technology
 Auditing the impact of technological change on health, environment, and
society
 Understanding and integrating a complete chain of technology
management, comprising market factor, finance factor, business factor,

government factor, technology transferor, and technology receiver

factors.
Exhibit 2.1 Technology Management in India: A News Report

India among top 3 countries in KPMG technology innovation
survey
Thu, Jul 18, 2013
Mumbai: Technology executives worldwide believe that the US, China,

and India are the top three countries with the potential to drive
technology breakthroughs that will have a global impact in the next
four years, according to the 2013 Global Technology Innovation survey
released by the consultancy firm, KPMG, on Thursday.
The US and China had tied for the top spot in the 2012 survey.
However, this year, 37% of the respondents said the US shows the
most promise for disruptive breakthroughs, while China ranked second
with 24%, and India came third with 10%, followed by South Korea
(7%), Japan (6%), and Israel (6%). Moreover, India ranked second in
becoming the leading innovation centre for the world, third in the list of
the most promising countries for disruptive breakthrough, and the
fourth-most friendliest technology innovation country.
In the April-June quarter, KPMG surveyed 811 business executives
from organisations focused on the technology space. Of these, 34%
were in the Americas, 37% in the Asia Pacific, and 30% in Europe,
Middle East, and Africa. The index is based on tech leaders in each
market, rating their country on 10 success factors, including talent,
infrastructure, incentives, and capital.
On the basis of availability of talent, development of disruptive
technology breakthroughs, mentoring and access to innovation
network (founders, CEOs, etc.), access to alliances or partnerships,
supporting ecosystems (law firms, venture capitalists or VCs), access
to capital, education system, ability to drive customer growth, and

government incentives, India ranked number one with an index score

of 72, followed by Israel with 71; while the US came in third with 65,
and China was fourth with 64 in the technology confidence innovation
index.
“In the field of technology, India’s farsightedness and focus on
innovation have helped it to seize the third spot in the 2013 Global
Tech Innovation Index. That is not all. India’s topping the Confidence
Index is a confirmation of business leaders’ faith in the country’s
technological capabilities. Despite several concerns on data privacy
and local technological infrastructure, the outlook for the sector is
largely positive. The government can assist the technology sector by
enabling easier access to capital through investor friendly policies and
strengthening IP protection laws,” said Pradeep Udhas, head of
markets, KPMG, India.
Cloud computing and mobile technology are expected to continue to
gain momentum as the most disruptive technologies in consumer and
business markets over the next three years, according to the Global
Technology Innovation survey.
Technology leaders also expect biometrics and data analytics
technologies to develop, the survey said.
“Cloud computing and mobility have the potential to redefine the Indian
IT landscape. With the Indian government emerging as one of the
biggest drivers of the cloud, the opportunities for this are going to be
limitless. Moreover, with over 800 million mobile subscribers, mobile
applications can help in increasing financial inclusion for a large part of
the untapped population. The booming start-up scene in the country is
helping in the development of exciting cloud and mobile platforms, and
in the coming years, this will, I believe, lead to the emergence of world-
class Indian product firms,” said Udhas.
(Source: http://www.livemint.com/. 2013. India among top 3 countries in KPMG technology
innovation survey. [online] Available at:
http://www.livemint.com/Industry/r6N1pw1LVz1D8fYDUcWBDL/India-among-top-3-in-KPMG-
technology-innovation-survey.html [Accessed: 1 Nov 2013].)

In India, the Science and Technology Policy, 2003, was developed to

achieve economic development and uplift the standard of living of the
people of India. In recent years, various leading technology organisations,
such as GE, Microsoft, Google, and Apple, have set up Research and
Development (R&D) centres in India.
2.2.2 Technology Management at Firm Level

Technology management at the firm level refers to the due importance
given to develop and adopt technologies for running business activities. For
example, e-mail technology is used for communication among the
stakeholders of the business. This is done to improve the pace of
communication and reduce the cost of communication. Technologies are
becoming important strategies to adopt at the right time in the right direction.
It is, no doubt, a risky affair, and a firm needs to take a calculated moderate
risk in the technology road map.
Management of technology in an organisation includes the following areas:
 Planning and developing the technology strategy of the organisation
(technology leadership or followership)
 Managing the organisation`s technology portfolio
 Knowledge management i.e. creating and sharing organisation-specific
technological knowledge and intellectual property
 Implementing new technology

 Managing technology absorption and transfer
 Integrating technology and successful commercialisation
 Managing technological changes

 Advancing R&D and linking it to the financial objectives of the
organisation
2.2.3 Management techniques for harnessing technology

Technology is the result of the constant innovations of an organisation.
There are basically two different views on introducing innovative technology.
According to the first view, it is better to buy from outsiders, introduce the

necessary changes, and reap the benefits at the earliest. The other version
is developing technology in-house and using it for its operational excellence.
If it is really good and working then it can be shared with other organisations
for monetary and non-monetary benefits.
Regardless of which view is given more importance, management
techniques play an important role in harnessing technology. Some of the
important management techniques employed in harnessing technology
include planning, decision-making, executing, and controlling. An
organisation cannot implement any new technology without considering
numerous factors, for example, the costs involved, returns on investment,
requirements of skill sets, and organisational goals. Thus, technology
management requires rigorous planning. Similarly, technology management
involves decision-making regarding the selection of right technological
product and application. Execution of a technological project is another
significant aspect of technology management. You will study about the
various aspects of application of management techniques in technology
lifecycle in the later units of the book.

1. Technology management at the _________ level refers to the due
importance given to develop and adopt technologies for running
business activities in an organisation.
2. Technology management is conducted only at the organisational
level. (True/False)
3. Mention some of the management techniques used for harnessing
technology.
Activity 1:
Conduct research to find out the names of at least five business
organisations, which are renowned for their technological innovations.
You can take help of publicly available sources such as the Internet.
Objective of the activity: To make you aware of technological
innovations in different organisations.

2.3 Assessment of Available Technologies

Assessment of existing technology is the first step of technology
management. An organisation can adopt and implement new technology
only when it is aware of its own technological capabilities. In addition, the
organisation also needs to assess the various technologies available in the
market. For example, previously, the State Bank of India (SBI) did not have
many modern banking facilities such as ATM and wire transfer. However, in
the wake of liberalisation in India, the organisation assessed its
technological capabilities vis-à-vis other competitors. It implemented a
Business Process Re-engineering Programme (BPR) to improve its
technological capabilities. Let us study about the various aspects of
assessment of existing technologies in the next sections.
Exhibit 2.2 Flipkart Improves Peak Web Performance and Customer

Experience with Virident's FlashMAX
Following its launch in 2007, Flipkart grew rapidly and is now India's
largest online retailer. While Flipkart's explosive growth was clearly a
business success, its data centre infrastructure lagged behind and was
unable to handle peaks in traffic. According to Burzin Engineer, director of
engineering at Flipkart, “Our website performance was unpredictable
under load, and during peak load, our MySQL database replication
lagged. MySQL slaves would never catch up. We needed to re-create the
slaves with a backup and restore to get the slaves back in sync. This got
to the point where it was happening every couple of days.”
In addition, Flipkart's typical MySQL databases were stored on three
servers with six 15K 146G hard disk drives (HDDs) per server. MySQL
servers were running at less than 50% of CPU utilisation because of the
storage I/O bottleneck. Flipkart needed a solution that would solve the
problem quickly. Amod Malviya, Vice President of engineering, heard

about Virident and acquired its FlashMAX solution, based on his

recommendation and Virident's 45-dayfree trial offer. After a quick lab
test, it was clear that FlashMAX was the solution to Flipkart's database
and website performance problems. Burzin replaced most of Flipkart's
15K HDDs in the MySQL server with Virident FlashMAX PCIe SSDs. “The
problem was solved quickly,” Burzin said. “FlashMAX allowed us to focus
on our core business, instead of on database tuning and administration.”
FlashMAX completely eliminated the I/O bottleneck caused by the HDDs.
“After installing FlashMAX, our web performance was outstanding right
through the peak performance periods,” Burzin said. “We had been
thinking about replacing the MySQL servers, but they now have sufficient
unconditional peak performance to meet our needs.”
Virident's FlashMAX cards performed much better than the former disk
arrays, but more importantly, for Flipkart, they improved the integrity of its
site. “When the slave MySQL servers were so far behind, we would
deliver out-of-date information to our customers. With Virident, our
customers always receive the most up-to-date information,” said Burzin.
Power consumption in the data centre is always a concern for any
organisation. This is especially true in India, which struggles to deliver
sufficient power. Burzin said, “FlashMAX enabled us to improve our I/O
performance by 10 times with approximately half the power.” Before
deploying FlashMAX, Flipkart had eight 15K HDDs in a RAID 10 to meet
its performance and reliability requirements. FlashMAX now delivers more
than 10 times the performance with the same reliability through a RAID 5
running on the FlashMAX board. According to Burzin, “The money we
save on power and cooling alone further justifies our Virident investment
and could easily pay for the cards over their lifetime.”
(Source: http://www.virident.com/default/assets/File/FlipKart-Case-Study-120612.pdf)
2.3.1 Strategic Management of Technology (SMOT)

Strategic management refers to a management technique designed to
achieve certain predefined goals. Therefore, as the name suggests, SMOT
involves technology planning, understanding technological requirements,
analysing technological trends and breakthroughs, assessing values of

technologies, and sourcing technologies to achieve organisational goals. In

the Flipkart example, you studied how the company addressed the
challenges faced by it with the help of innovative technology
implementation.
Technology is very important from two perspectives. One is for operational
excellence and another one is as a safety shield to protect from competitors.
In many developing countries, organisations are adopting technology
developed in technologically advanced countries. In this process, these
organisations need to decide how to develop technology and implement the
same. Initially, it can be assimilated, but in the long run, it becomes more
sensible to develop people and R&D infrastructure to develop technologies
and to have assured sustainability. They also need to watch the
environment and have close scanning of technological developments.
2.3.2 Strategic Technology Management System (STMS)

STMS is a long-term approach that emphasises systematic management of
technology. STMS recognises the life cycle of technology from birth to
decline. STMS involves the following stages, as depicted in Fig. 2.2:
Technology Creation
Technology Monitoring
Technology Assessment
Technology Transfer
Technology Acceptance
Fig. 2.2: Technology Life Cycle

These stages are explained as follows:
1. Technology Creation: Involves development and creation of new
technology. The activities involved in this stage are:

 Innovation
 Support and commitment from the top management
 Development of a supportive organisational culture
2. Technology Monitoring: Includes assessing newer technologies and
keeping a track of technological trends. The main activities involved in
this stage are:
 Analysing competitive technologies to assess their competitiveness
 Building information system to monitor technological trends
 Creating interface with the customers and the suppliers
3. Technology Assessment: Involves forecasting technological trends,
linking technology with business performance, assessing the impact of
technology on business goals.
4. Technology Transfer: It involves the transfer of adoption of technology
from the internal sources in the organisation or implementing
technology in the production system from the R&D facility.
5. Technology Acceptance: It involves developing supportive
organisational culture and structure, ensuring management
commitment, and justifying the technological impacts.
6. Technology Utilisation: It involves effectively managing projects to
maximise utility.
7. Technology Maturity: It involves analysing the maturity of technology,
in terms of efficiency and effectiveness, market stability, return on
investment, and market share.
8. Technology Decline: At this stage, a particular technology or the
products and services associated with it becomes obsolete. For
example, typewriters.

4. SMOT refers to _____.
5. Mention the first step of the technology life cycle.

6. _____ involves developing a supportive organisational culture and

structure, ensuring management commitment, and justifying the
technological impacts.
2.4 Summary
 Technology management refers to the planning, development,

implementation, and assessment of technological capabilities in an
organisation to fulfill the business objectives of an organisation.
 Technology management is one of the most important factors for the

success of an organisation.
 At the national level, technology management plays a crucial role in the

overall economic development of a nation.
 Technology management, at the firm level, refers to the due importance

given to develop and adopt technologies for running business activities.
 Some of the important management techniques involved in harnessing

technology involve planning, decision-making, executing, and
controlling.
 Assessment of available technology is the first step of technology

management.
 SMOT involves technology planning, understanding technological

requirements, analysing technological trends and breakthroughs,
assessing values of technologies, and sourcing technologies to achieve
organisational goals.
2.5 Glossary
E-commerce: It is a system of commerce facilitated by information
technology.

Liberalisation: It refers to reduction in restriction regarding cross-border

financial transactions.
Supply Chain: It is a function of an organisation that facilitates in
procurement of goods.
Revenue: It refers to the total sales proceeds of an organisation.
Cost Leadership: It refers to the strategic position of an organisation that
allows it to provide goods at the lowest price to customers.

1. Define technology management.
2. Why is technology management important?
3. Write a note on the application of management techniques for
harnessing technology.
4. Elaborate on technology management at the firm level.
5. Why is technology management essential at the national level?
6. What is strategic management of technology?

7. What do you know about STMS?
8. Elaborate on the steps of a technology lifecycle.
2.7 Answers

1. Firm
2. False
3. Planning, decision-making, and executing.
4. Strategic Management of Technology.
5. Technology Creation
6. Technology Acceptance

Terminal Questions
1. Technology management refers to the planning, development,
implementation, and assessment of technological capabilities in an
organisation to fulfil the business objectives of the organisation. Refer
to section 2.2 Technology Management for details.
2. Technology management is one of the most important factors for the

success of an organisation. Refer to section 2.2 Technology
Management for details.
3. Some of the important management techniques involved in harnessing

technology involve planning, decision-making, executing, and
controlling. Refer to section 2.2.3 Management techniques for
harnessing technology for details.
4. Assessment of the existing technology is the first step of technology

management. Refer to section 2.3 Assessment of Available
Technologies for details.
5. At the national level, technology management plays a crucial role in the

overall economic development of a nation. Refer to section 2.2.1
Technology management at national level for details.
6. SMOT involves technology planning, understanding technological

requirements, analysing technological trends and breakthroughs,
assessing values of technologies, and sourcing technologies to achieve
organisational goals. Refer to section 2.3.1 Strategic Management of
Technology (SMOT) for details.
7. STMS is a long-term approach that emphasises systematic

management of technology. Refer to section 2.3.2 Strategic
Technology Management System (STMS) for details
8. The stages of the technology life cycle are technology creation,

technology monitoring, technology assessment, technology transfer,
technology acceptance, technology utilisation, technology maturity, and
technology decline. Refer to section 2.3.2 Strategic Technology
Management System (STMS) for details.

2.8 Case Study: Radio Frequency Identification

(RFID) at Walmart
Walmart is an American multinational corporation that deals in the retail

business with large chains of discount stores and warehouse stores.
According to the Forbes Global 2000 list, it is the 18th largest public
corporation in the world.
In the 1980s, when the whole world was fumbling with the idea of bar
coding, Walmart implemented it in reality. The company installed RFID
readers at several points such as at the back of the building, at the receiving
docks, near the garbage compactors, and between the backroom and the
retail floor. The goods, which are shipped to the stores with RFID tags, are
recorded once at their arrival. Without opening the packaging, they come to
know what is inside it, just by waving the scanner at the boxes. It is even
possible to know the whereabouts of the goods, which reduces loss during
shipment. When goods are brought to the sales floor, the tags are read
again, and they are read finally in a box crusher.
The software records all the details related to the items sold and the number
of cases brought to the sales floor. Thus, it helps in generating information
about the items that exhaust in the shorter period from the shelves. A list of
items is generated automatically, which need to be taken away from the
backroom to restock the store shelves. Walmart has developed a handheld
RFID reader to reduce the amount of time spent at the backroom.
A retail link extranet has also been established with all the suppliers of
Walmart to share data from all RFID read points, so that within 30 minutes,

suppliers come to know about the movement and the location of their
goods.
Walmart relies on this technology for managing inventory more effectively,

reducing errors at the time of data entry and lowering human labour cost at
the distribution centre.
RFID helps Walmart in the following ways:
 Conducting receipt and shipment of goods faster
 Tracking movement of inventory effectively
 Saving the shopper’s time
 Predicting the demand of a product
 Avoiding an out-of-stock situation
 Boosting sales
 Making the availability of the right product at the right time at the right
place or store
A few limitations of RFID are as follows:

 Sometimes the tags do not function properly.
 Accurate reading of rates on some items can be in doubt.
 Reading through liquid or metal creates problems.
 There is an increase in expenditure.
In spite of all the benefits of RFID, the customers of Walmart fear the
possibility of violating their privacy; however, Walmart tries that RFID tags
do not collect any additional data about customers.
“Sanford C. Bernstein & co., a New York investment research house,
estimates that Walmart could save nearly $8.4 billion per year when RFID is
fully deployed throughout its supply chain and in stores.” Thus, it is
understandable why Walmart focuses so aggressively on pursuing RFID
technology.

Questions:
1. With the help of the case study, explain why technology management is
important for an organisation.
2. What are the advantages and disadvantages of RFID? Relate to the
context of Walmart.

J. Wiley.

Hill.
E-References
 http://www.livemint.com/ (2013). India among top 3 countries in KPMG
technology innovation survey. [online] Retrieved from:
http://www.livemint.com/Industry/r6N1pw1LVz1D8fYDUcWBDL/India-
among-top-3-in-KPMG-technology-innovation-survey.html [Accessed: 1
Nov 2013].
 Inc.com (2013). Technology. [online] Retrieved from:

http://www.inc.com/technology [Accessed: 1 Nov 2013].
 MIT Sloan Management Review (1990). Managing Technology as a

Business Strategy | MIT Sloan Management Review. [online] Retrieved
from: http://sloanreview.mit.edu/article/managing-technology-as-a-
business-strategy/ [Accessed: 1 Nov 2013].
 Nif.org.in (2013). National Innovation Foundation - India | in support of

grassroots innovations. [online] Retrieved from: http://www.nif.org.in/
[Accessed: 1 Nov 2013].
 Unknown. (2013). Untitled. [online] Retrieved from:

http://www.infosys.com/infosys-labs/publications/Documents/managing-
technological-innovation.pdf [Accessed: 1 Nov 2013].

 Cognizantcommunication.com (2013). Technology and Innovation. [online]

Retrieved from: https://www.cognizantcommunication.com/journal-
titles/technology-a-innovation [Accessed: 1 Nov 2013].
 Stmi.nus.edu.sg (2013). Strategic Technology Management Institute -

Strategic Technology Management Institute. [online] Retrieved from:
http://www.stmi.nus.edu.sg/ [Accessed: 1 Nov 2013].
 The Brookings Institution (2013). Center for Technology Innovation. [online]

Retrieved from: http://www.brookings.edu/about/centers/techinnovation

Unit 3 Implications of Technology Management

Structure
3.1 Introduction
Objectives
3.2 Creation of Employment, Wealth, and Well-being
3.3 Long-wave Cycle
3.4 Evolution of Production Technology and Product Technology
3.5 Summary
3.6 Glossary
3.8 Answers
3.9 Case Study: Implications of Managing Information System in
Frito-Lay
3.1 Introduction
In the previous unit, you studied about technology management at the firm
level and the national level. In addition, you studied about the methods of
assessing available technologies. In this unit, you will study about the
implications of technology management.
Have you ever thought why countries, such as the USA and the UK, are so
technologically advanced, whereas, in India, basic technological facilities
are not easily available, for instance, 4G mobile technology or high-speed
Internet? Also, there are organisations, such as Apple and Google, which
are well-known for their technological innovations; whereas, lack of modern
technology is one of the main reasons behind the losses suffered by various
public sector organisations in India. This is because of the difference in
technology policies and capabilities in different nations and organisations.
As studied in the previous unit, technology management is an integral part
of modern organisations and nations. At the national level, technology

management creates national technological capability, which in turn

provides the industrial and economic strength of a country. On the other
hand, technology management at the firm level provides a competitive
advantage to a firm over its competitors. Therefore, as you can see,
effective technology management has important implications. For instance,
consider any contemporary industry; you will notice that the leading players
in that particular industry have a technological edge. In the retail industry,
Walmart has a great technological advantage. For instance, Walmart was
the first retailer to introduce Radio Frequency Identification (RFID). In
addition, it has a highly automated supply chain and inventory system,
which provide it with a great competitive advantage. This is the reason why
Walmart is a leading retailer in the world.
In this unit, you will be familiarised with the diverse implications of
technology management. In the beginning, the unit elaborates on the
creation of employment, wealth and, well-being. Next, you will study
evolution of production, product, and process technology. Towards the end,
the unit elaborates on important factors affecting technology management.
Objectives
After completing the unit, you will be able to:
 describe the implications of technology management
 discuss how technology management helps in creation of employment,
wealth, and well-being
 discuss long economic cycle
 explain the evolution of production, product, and process technology
 list important factors involved in technology management
3.2 Creation of Employment, Wealth, and Well-being

Employment generation and wealth creation in a country depend upon the
level of economic development in the country. Economic development
greatly depends upon the technological development of a country. For
instance, countries with the highest Gross Domestic Product (GDP), such
as the USA, Japan, China, and Germany, are also technologically the most

developed countries. Technology development increases production and

productivity, which in turn create employment and wealth. For instance,
before the industrial revolution in the Western countries, production
activities were conducted manually. However, machines replaced manual
labour after the industrial revolution. This technological advancement
brought revolutionary changes in the economies of these countries.
Various economists have emphasised the role of technology in economic
development. For instance, German economist Joseph Schumpeter
emphasised the role of technological innovation in economic growth.
According to him, technological innovation helps in production efficiency,
expansion of market, and creation of wealth.
According to the economists, Boskin and Lau (1992), there are three main
sources of economic progress in a country. These are as follows:
Enhanced capital: Capital refers to the produced goods and services that
help in the production of other goods and services. Therefore, it includes
buildings, machineries, etc.
Technical progress: It refers to the technological innovations that increase
efficiency and productivity. For example, previously in banks most record-
keeping activities were conducted manually in paper. However, after
computerisation, banking transactions have been greatly simplified.
Technical innovation at the macro-level provides a competitive advantage to
a country over others. This competitive advantage helps in creating wealth
and employment. For example, because of technical capability, Japan has a
competitive advantage in manufacturing over countries such as India.
Labour: It refers to the human efforts put into the production of goods and
services. Skill is the most important determinant of the usefulness of
labourers in creating employment and wealth. Labourers need to possess
the required skills, such as technical skills and communication skills, to
excel in their jobs.
These capitals are the result of technological progress. Technology helps in
the expansion of economy and job creation, because new technology
initiates a new cycle of production, which requires a skilled labour force. For
example, communication technology spurred the growth of the production of
various communication devices, for example, mobile phones, networking

devices, tablet computers, etc. Boom in the software industry in India has
created a demand for millions of skilled workers in the software industry.
According to a National Association of Software and Services Companies
(NASSCOM) (Nasscom.in (2012). Indian IT-BPO Industry |) report, the
Indian software industry was expected to add 2,30000 jobs in the Financial
Year 2012-13.
Exhibit 3.1: Joseph Schumpeter on Technology and Economic

Development
It is by means of new combinations of existing factor of production,

embodied in new plants and, typically, new firms producing either new
commodities, or by a new, i.e. united method, or for a new market, or by
means of production in a new market. What we, unscientifically, call
economic progress means essentially putting productive resources to
uses hitherto untried in practice, and withdrawing them from the uses
they have served so far. This is what we call “innovation” (Schumpeter,
1928)
Schumpeter suggests economic growth with the help of endogenous
innovations in products and production techniques. Here, the term
‘endogenous’ refers to the types of innovations that arise out of
Research and Development (R&D) activities of profit-seeking
organisations. Schumpeter prescribes evolution of capitalism and
production systems through “creative destruction”. It refers to
elimination of old technologies and introduction of more innovative
technology. According to him ‘‘Economic progress, in capitalist society,
means turmoil. And . . . in this turmoil competition works in a manner
completely different from the way it would work in a stationary process,
however perfectly competitive. Possibilities for gains to be reaped by
producing old things more cheaply are constantly materialising and

calling for new investments. These new products and new methods
compete with the old methods not on equal terms but at a decisive
advantage that may mean death to the latter’’ (Schumpeter 1942, 42).
(Source: http://world-economics.org/434-growth-in-open-economies-schumpeterian-models.html)

1. Countries with higher GDP tend to have more ethnical capability over
other countries. (True/False)
2. ______ refers to the produced goods and services that help in the
production of other goods and services.
3. German economist Joseph Schumpeter emphasised the role of
_______ in economic growth.
Activity 1:
With the help of the Internet, find out the top five countries in terms of
GDP and prepare a brief report on their technological capabilities.
3.3 Long-wave Cycle

Note that improvement in productivity is an indicator of economic growth
and improvement in the standard of living of the people. New and innovative
technologies drive economic expansion in the long-term. This different stage
of economic expansion, spurred by economic growth, is known as long-
wave cycle or long economic cycle. In other words, long economic cycle
refers to the different stages, such as expansion, stagnation, and recession,
through which economic expansion takes place.
After the industrial revolution, economic expansion was followed by a major
depression almost every fifty years. Soviet economist Kondratieff observed
this fluctuation and attributed them to the long-wave effect. Therefore, this
cycle is also known as the Kondratieff Wave. Fig. 3.1 shows a Kondratieff
Wave:

Fig. 3.1: Showing the Kondratieff Wave

Economist Mensch (1979) observed that a basic new technology started at
the beginning of each cycle. According to the economist, Betz (1987), the
long-wave occurs because of the interaction among new technology,
business opportunities created by the new technology, and over-building of
capital after the decline of the new technology.
According to Betz, the long-wave cycle follows the following sequence of
events, as shown in Fig. 3.2:
Scientific discovery creates a base of technological innovation
New products are created through technological innovation
New markets and industries are created as a result of these products
The new markets get expanded as a result of expansion of production
At the maturity level of the technology, excessive production capacity is built.
Excessive capacity increases business loss and unemployment
Economic turmoil in the financial market leads to depression
New technology emerges to expand the market
Fig. 3.2: Stages of Long-wave Cycle


4. The different stages of economic expansion spurred by economic
growth are known as_______.
5. According to the economist ______, the long-wave occurs because of
the interaction among new technology, business opportunities
created by the new technology, and over-building of capital after the
decline of the new technology.
3.4 Evolution of Production Technology and Product

Technology
Technology was in a very nascent stage before the industrial revolution.
Most production activities in this period used to be conducted manually.
However, the industrial revolution introduced new machineries, steam
engine, factories, and other production systems.
In the late 19th century, Frederic Taylor introduced his theory of scientific
management. This theory stated that work should be designed by the
management and executed by the workers. In addition, Frederic Taylor also
suggested a standard time for better control over the production process.
The concept of assembly line and specialisation of workers was introduced
by Henry Ford in the 1900s. According to these systems, productivity and
efficiency increase through the standardised production of a few items.
In the 1990s, Frank and Gilbreth introduced the concept of Motion Study.
This approach is intended to reduce unnecessary movements of goods in
factories. This method was first introduced in the construction industry and
later in manufacturing.
At present, development of material technology, information technology,
robotics, communication technology, and genetic engineering are some of
the areas of technological innovation.
Similar to the production processes, product technology has also gone
through revolutionary changes over the past few decades. Innovations in
product technology had a profound effect on the standard of living of people.

Innovative products have also fuelled economic growth and increased the
level of income of people.
The industrial revolution significantly increased the number of products
available in the market. Earlier, only the basic necessities were fulfilled.
However, modern organisations try to identify and create newer needs and
design products to fulfil those needs of people. For instance, innovation in
communication and information technology gave rise to various devices
such as mobile phones, tablet computers, and laptops.
Besides information technology, development in various other fields, such
as bio-technology, genetic engineering, and medical science, has given rise
to a number of innovative products.
Exhibit 3.2: Mass Production Vs. Customised Production

There are mainly two types of production techniques followed by
manufacturers, mass production and customised production. In mass
production, the focus remains on reducing the average cost of production.
In addition, in mass production, a producer provides homogenous
products to customers. For example, production of soft drinks by cola
companies is an example of mass production. In mass production,
applications of technology are directed at reducing the cost and reducing
product variability.
In customised production, products are manufactured, keeping in mind
personalised preferences of customers. For example, the production of
high-end cars is an example of customised production. In customised
production, application of technology is directed towards adding value to
products and meeting the exact requirements of customers.

6. The theory of scientific management was introduced by _______.
7. Frank and Gilbert introduced the concept of assembly line and
specialisation. (True/False)

Activity 2:
Prepare a list of production technologies that have revolutionised
manufacturing in the last decade. You can take help of publicly available
sources such as the Internet.
3.5 Summary
 Technological advancement brought revolutionary changes in the
economies of countries such as the UK, the US, and other Western
countries.
 Employment generation and wealth creation in a country depend upon
the level of economic development of the country.
 According to the economists, Boskin and Lau (1992), there are three
main sources of economic development in a country. These are
enhanced capital, labour, and technical progress.
 New and innovative technologies drive economic expansion in the long-
term. These different stages of economic expansion, spurred by
economic growth, are known as long-wave cycle or long economic
cycle.
 In the late 19th century, Frederic Taylor introduced his theory of scientific
management. This theory stated that work should be designed by the
management and executed by the workers.
 Similar to the production processes, product technology has also gone
through revolutionary changes over the past few decades. Innovations in
product technology had a profound effect on the standard of living of
people.
3.6 Glossary
GDP (Gross Domestic Product): It is the measure of the total monetary
worth of the goods and services produced in a country in a year.

Economic Growth: It refers to the incremental production of goods and

services in an economy.
RFID (Radio Frequency Identification): It refers to an automatic

identification system that uses devices capable of identifying radio
frequency to track products.
Assembly Line: It is a series of workers and machines in a factory, where a

particular item under manufacturing is progressively assembled.

1. How does technological innovation help in wealth creation?
2. What is the long economic cycle?
3. What are the stages of the long-wave cycle?
4. Write a note on the evolution of production technology.
5. What do you know about the evolution of product technology?
3.8 Answers

1. True
2. Capital
3. Technological innovation
4. Long-wave cycle
5. Betz (1987)
6. Frederic Taylor
7. False
Terminal Questions
1. Technological innovation helps in creating a new production cycle that
leads to more wealth creation. Refer to section 3.2 Creation of
Employment, Wealth, and Well-being for details.

2. New and innovative technologies drive economic expansion in the long-

term. This different stage of economic expansion, spurred by economic
growth, is known as long-wave cycle or long economic cycle. Refer to
section 3.3 Long-wave Cycle for details.
3. According to Betz, the long-wave cycle consists of eight stages. Refer
to section 3.3 Long-wave Cycle for details.
4. Technological innovation greatly revolutionised production technology
over the years. Refer to section 3.4 Evolution of Production
Technology and Product Technology for details.
5. In addition to production technology, product technology also went
through revolutionary changes in the last few decades. Refer to section
3.4 Evolution of Production Technology and Product Technology
for details.
3.9 Case Study: Implications of Managing Information System

in Frito-Lay
An efficient information system improves the efficiency of transaction data

processing and helps in better decision-making by providing all levels of
management with easy access to information and knowledge. This case
shows how an enterprise-wide information system provides competitive
advantage for an organisation.
Every day, thousands of sales people of Frito-Lay use hand-held computers
for tracking more than 15 million products, sold from the shelves and
vending machines of Frito Lay. In this process, a vast quantity of data is

produced, which in turn flows to the data centres in the Frito Lay
headquarters in Texas.
It is combined with other data into a gigantic database used to generate vital
market information on Frito-Lay's snack food empire. This vast database is
updated daily, funneling up-to-the-minute sales figures into comprehensive
financial, historical, and competitive data. The database integrates more
than twenty gigabytes of sales information; the equivalent of 47 million
pages of typed data. It monitors every move of the 4 1/2 billion packages of
Frito-Lay snacks sold each year through 40 manufacturing facilities, 1900
warehouses, 200 distribution centres, and 400,000 stores across the nation.
Robert Beebe, CEO of Frito-Lay, says "What we have here is incredible
access to almost real-time information on every aspect of our business.
Take any market; we know more about what is going on in the snack
category there than the regional competitor, who only operates in that
market. We know how much shelf space he/she has, his/her share of
displays, his/her share of the market, his/her actual pricing, and we know it
for his/her competitors too. That is a mighty powerful competitive tool."
With the hand-held computer, a Frito-Lay salesperson can key in orders for
each customer on-the-spot; then print out a sales receipt, with tax,
discounts, and promotions, and no errors. They link-up with the mainframe
computer at headquarters each night to upload the day's data and download
information for the following day's route. Such enhancements to Frito-Lay’s
Transaction Processing Systems (TPS) are estimated to save from 30 to 50
thousand man-hours of paperwork every week. However, a greater
advantage is the power of the uploaded data places in the hands of Frito-
Lay's management.
In logistics, the use of the standardised reports generated by the
Management Reporting System (MRS) has permitted Frito Lay to
consolidate four hundred sales routes. This ability to better control the use
of company resources has allowed Frito-Lay, with a leaner sales force, to
increase sales volume dramatically. The scheduling of deliveries has been
improved, so that "stales" -- products which have exceeded their shelf-life --
are almost totally eliminated, thereby improving product quality and

eliminating wastage. Even the packing cartons used to ship the product are
monitored to insure their return, reducing environmental waste and saving
millions of dollars in packing costs.
In telemarketing, the new technology has enabled Frito Lay's direct sales
force to target thousands of new account prospects, which are too small to
justify a route salesperson's time. In the store, salespeople use the system
to show the effect of reallocation shelf space for greater profits. Frito-Lay
provides retailers with its profit-vision programme, which can be used to
analyse all of the store's sales, to see how that store measures up against
market performance. Profit-Vision allows the retail stores to improve
inventory and category management, and to identify growth and promotion
opportunities. Frito-Lay can use this information too.
Frito-Lay's Chief Information Officer (CIO) says "I think the real benefit of
this system is the energy it brings across the entire company. It really
tightens the link between every function involved in making, distributing, and
selling the products. When your database allows you to respond so quickly
to changes in the environment, it becomes not just a management tool but a
requirement for survival in the 90's."
For instance, it helps to locate potential problems in maintaining sales levels

and market share. A senior manager noticed that the sales of Tortilla Chips
were slipping in certain southwestern market areas. Drill down capabilities in
the Executive Support System (ESS) helped him to discover that the stores
most affected were located in ethnic Hispanic neighbourhoods. Cash
register data, collected by the Profit Vision software, led to the discovery
that a competitive product, which was flavoured and packaged to appeal to
regional tastes, was stealing Frito-Lay's customers. Frito Lay used that
information to create a new product line, which gained back its market
share, then went on to generate new snack food sales throughout the nation
with its new product.
The Frito Lay MIS can also help Frito-Lay reduce the costs of supplies. For
example, a Decision Support System (DSS) for purchasing helps track the
prices of corn. When low prices are forecasted, Frito-Lay can locate
potential markets, which might be able to gain market share through

aggressive pricing. The corn can be purchased, trucked to the appropriate

manufacturing facilities, which increase production of corn chips to supply
the product promotion sales. Purchasing, marketing, and production
processes are integrated smoothly through the use of these enterprise-wide
information systems.
Production and logistical processes are also aided at some manufacturing

facilities through the use of Expert System software, a special type of
decision making tool. Known as PAX (Packaging Application Expert), the
expert system is used to automate the production scheduling process for
the chips as they come out of the food processors for packaging, 2,350
pounds an hour, by helping workers deal with variations such as seasoning,
size, and mode of distribution. According to the knowledge engineer in
charge of the PAX, "Consistency in the scheduling process provided by PAX
lets us do logistical planning for the warehouse and trucks. We can
schedule seven days out instead of only 24 to 48 hours." That helps insure
timely delivery to the retail outlets.
The main advantage of the information system of Frito Lay is centralisation
of information that allows regional managers to access the database and
software. According to the director of marketing in Frito Lay, the information
system helps in collecting and executing hundreds of business ideas.
Therefore, the company calls this policy to be directed decentralisation.
The director of marketing also adds, "What it really means is that we can
give hundreds of middle managers their freedom and the knowledge of the
database to make the necessary tactical decisions to generate a lot of local
marketing initiatives and execute them. Meanwhile, we at headquarters
retain the necessary controls but are free to really focus on strategic
direction such as creating new snack product lines and expanding into new
territories."
(Source: Ehcweb.ehc.edu (2013). >CASE STUDY IN USING MIS FOR COMPETITIVE ADVANTAGE.
[online] Retrieved from:
http://www.ehcweb.ehc.edu/faculty/ljcumbo/MISCASES2/MIS%20and%20Competitive%20Advantage.ht
m [Accessed: 8 Nov 2013].)

Questions:
1. What are the benefits of an information system at Frito-Lay?
2. How does an information system help in timely delivery of products in
retail outlets?

J. Wiley.
Hill.
E-References
 Nasscom.in (2012). Indian IT-BPO Industry | NASSCOM. [online]

Retrieved from: http://www.nasscom.in/indian-itbpo-industry [Accessed:
14 Nov 2013].
 http://www.livemint.com/ (2013). India among top 3 countries in KPMG

technology innovation survey. [online] Retrieved from:
http://www.livemint.com/Industry/r6N1pw1LVz1D8fYDUcWBDL/India-
among-top-3-in-KPMG-technology-innovation-survey.html [Accessed: 1
Nov 2013].
 Inc.com (2013). Technology. [online] Retrieved from:

http://www.inc.com/technology [Accessed: 1 Nov 2013].





http://www.infosys.com/infosys-labs/publications/Documents/managing-
technological-innovation.pdf [Accessed: 1 Nov 2013].
 Cognizantcommunication.com (2013). Technology and Innovation.

https://www.cognizantcommunication.com/journal-titles/technology-a-
innovation [Accessed: 1 Nov 2013].

 The Brookings Institution (2013). Center for Technology Innovation.

http://www.brookings.edu/about/centers/techinnovation [Accessed: 1
Nov 2013].

Unit 4 Technological Innovation

Structure
4.1 Introduction
Objectives
4.2 Technological Innovation
Types of innovation
Innovation process
Challenges of technological innovations
4.3 Invention and Innovation
4.4 Creativity and Innovation
4.5 Management of Innovation and Innovation Strategies
4.6 Summary
4.7 Glossary
4.9 Answers
4.10 Case Study: Technological Innovation in the Energy Sector in
the Middle East
4.1 Introduction
In the previous unit, you studied about the implications of technology
management. In addition, you studied about the evolution of product and
production technology. Let us move forward and study technological
innovations in this unit.
It was not long ago when sending a telegram was the fastest mode of
communication. Fixed-line phone replaced the telegram as the fastest mode
of transportation. Now, mobile phone is on the verge of replacing fixed-line
phones. In addition, smart phones and increasing number of applications
have made mobile phones a one-stop solution for all communication needs.

This revolution in communication technology is the result of technological

innovation.
You may have heard the term ‘innovation’ in different contexts. In simple
words, innovation means doing something new and original. In the context
of technology, innovation refers to the new applications of scientific
knowledge to achieve various objectives such as creating wealth, increasing
productivity and efficiency, reducing cost, and improving the standard of life.
For instance, automation and robotics are some of the revolutionary
innovations in the field of manufacturing. Earlier, most manufacturing jobs
were conducted manually. Now, with the help of automation, productivity
and efficiency have increased manifold. Now, almost all spheres of human
life are benefitted by technological innovations. Starting from the weather
forecast, sales forecast, and customer relationship management,
technological innovations have improved the standard of life and
organisational productivity and efficiency.
In this unit, you will study about technological innovations and its
characteristics. In addition, the unit elaborates on the innovation process
and different types of innovation. Further, ideas and advantages of
technological innovations are discussed. Further ahead, the unit
differentiates between innovation and invention and relates creativity with
innovation. Later, the unit explains management of technological innovation.
Objectives
After completing this unit, you will be able to:
 discuss technological innovation
 describe the innovation process
 explain the constraints of innovation

 differentiate between invention and innovation
 relate creativity and innovation
 discuss different types of innovations

 explain how to develop innovation strategies and how to manage
innovation

4.2 Technological Innovation

“Innovation is the change that creates a new dimension of performance”
– Peter Drucker.
According to the Department of Trade and Industry, UK, innovation refers
to “the successful exploitation of new ideas”. In simple words, innovation
refers to the invention and successful commercial exploitation of their
invention.
Technological innovation is one of the ways of gaining competitive
advantage and survival in the cutthroat corporate world. There are
numerous cases in which a particular organisation gained a significant edge
over other organisations with the help of technological innovations. For
example, Sun Microsystems was one of the few companies that pioneered
Reduced Instruction Set Computing (RISC) that revolutionised the computer
industry in the 1980s. Similarly, Sony Walkman was a remarkable
technological breakthrough that established Sony as a household name in
the electronic goods industry.
Therefore, every organisation strives to have a foresight in technology i.e. to
predict the trends in technology and develop innovation strategies to gain
maximum benefit from the market. Following are some of the characteristics
of technological innovations:
 Innovation can be applied to products, services, processes, and

systems.
 Innovation leads to improvement.
 Innovation aims at adding more value.

 Innovations lead to organisational change.
 Innovation starts from an idea, therefore, innovation can come from any
source.
 Innovation involves significant risk and uncertainty.
 Innovation can be engineered in a company or organisation by instituting
a suitable ecosystem to foster innovations.

To develop technologically innovative products, organisations need to

consider the innovation process. Now, let us study the innovation process in
the subsequent section.
Exhibit 4.1: Top 5 Medical

Technology Innovations
With the background of healthcare reform and introduction of medical

device tax, medical technology organisations in the USA have started
focusing on cheaper, faster, and more efficient medical devices.
Recently, the Food & Drugs Administration (FDA) started a new
Medical Device Innovation Consortium (MDIC) to simplify designing
and testing of novel devices. Annually, industry observers, such as
the Cleveland Clinic, identify the most innovative medical technology
trends. Following are the five most promising medical technologies:
1. Cutting Back on Melanoma Biopsies: Earlier, patients needed
to go through unnecessary biopsies to detect melanoma, a
dangerous skin cancer. However, MelaFind optical scanner, a
new handheld tool helps in analysing skin morphology. This
provides additional information to doctors to cut back the number
of unnecessary biopsies.

2. Electronic Aspirin: At Autonomic Technologies Inc., a new

technology is under research, which will reduce the pains suffered
by patients in migraines and cluster headaches.
3. Needle-Free Diabetes Care: There is a constant need of drawing

blood and taking insulin for diabetes patients. Therefore, constant
needling heightens the risk of infection. Echo Therapeutics is in
the process of developing a technology to replace needling with a
patch.
4. Robotic Check-ups: iRobot Corp. and InTouch Health have

jointly developed a RP-VITA Remote Presence capable of
checking up patients.
5. A Valve Job with Heart: Edwards Life Sciences (Irvine, CA) has
developed the Sapien transcatheter aortic valve, which would
serve as an alternative to the rigorous operation of an open-heart
surgery.

(Source: Asme.org. 2013. Top 5 Medical Technology Innovations - ASME. [online] Available at:
https://www.asme.org/engineering-topics/articles/bioengineering/top-5-medical-technology-
innovations)
4.2.1 Types of innovation

Innovation can be classified into different categories. In terms of offerings,
there are three types of innovations:
 Product innovation
 Services innovation
 System innovation
In product innovation, either additional value is created in the existing
products or new products are introduced in the market to capitalise on
technological knowledge. For example, in the 1990s, Xerox introduced new
Xerox copiers by applying artificial intelligence capable of predicting a
possible break-down of the machine. Therefore, the new and more
innovative machine helped in saving time and resources of users (Brown,
1991).
Services innovation, involves improving the existing service by introducing
new ideas or various technological agents such as sophisticated software in
service delivery. For instance, earlier, air travellers had to book their tickets
from the offices of the respective airlines. However, the Internet revolution
has made it possible to book air tickets online from anywhere.
In system innovation, numerous components of a system are improved for
the overall efficiency and effectiveness of a system. For example, different
components in a communication system are networks, modems, computers,
optical fiber, etc. Innovation in these components results in an overall
improvement of the entire system.
On the basis of flexibility, there are two types of innovations:
Open innovation: It is more flexible to environmental feedback. In other
words, in open innovations, an organisation does not have a specific final

product in mind. The concept is subject to change at various stages of

research.
Closed innovation: In closed innovation, the end product is defined at the
beginning. There is very less flexibility for environmental feedback in the
research stage.
In terms of scope, there are two types of innovations:
Incremental innovation: In incremental innovation, an existing product,
service, or system is improved. For example, dual-SIM mobile phone is the
result of incremental innovations in the single-SIM mobile phone.
Radical innovation: In radical innovation, an old technology is made
obsolete by the introduction of a new technology. For example, a mobile
phone is the result of radical innovation on land-line phones. This is also
called “disruptive innovation”.
4.2.2 Innovation process

In the earlier units of the book, you have studied that technology is the
implementation of scientific knowledge. For instance, the Internet is one of
the most revolutionary innovations of recent times. In the invention of
Internet, Advanced Research Projects Agency (ARPA), a US government
agency, funded university researchers to study the nature and functions of
electronic signal propagation, logical computing, and information to develop
a computer-to-computer communication technology. This knowledge was
further used to develop the Internet. Therefore, broadly, an innovation
process can be categorised into three stages, as follows:
 Acquiring scientific knowledge of the natural laws
 Applying scientific knowledge to develop technology
 Marketing the technology

This process is depicted in Fig. 4.1, as follows:

Research
Invent
Commercialise
Fig. 4.1: The Innovation Process
The steps in the process are elaborated as follows:
Research: In this step, scientists study the laws of the nature. Knowledge of
natural laws is gained through the process of scientific discovery. For
instance, the first step in the invention of television was how to convert
pictures into electronic signals and then send electronic signals through
cables.
Invent: Technologists use the knowledge of science to develop products
and services that can resolve various human problems. For example,
knowledge of X-ray led to the invention of X-ray machines, which help in
detecting various defects in human bodies.
Commercialise: In this step, a new technological product is introduced in
the market place and sold to customers. For instance, the iPod was a
revolutionary product, which was extremely successful in the market
because of its sleek design and excellent functionalities.
Exhibit 4.2: Technological Innovation in the News

Technological innovations by Xolo, Apple, and LG
In what seems like a genuine phenomenon today, fast-paced
technological innovation and evolution have no limits. In about a couple
of decades, we have evolved from a huge PC to a hand held gizmo,
computing similar functions and a much faster, swifter, and better
speed.
The hand held devices, which today have taken the name of
smartphones and tablets, are on the rise. If facts are to be seen, then

a report reveals the findings of a study that there are 51 million

smartphone users in urban India today, an 89% increase from 2012,
when there were just 27 million users. The study also reveals that the
biggest spike is in the youngest age group (college students) between
16 to 18 years, where numbers have gone from 5% in 2012 to 22% this
year, a four-fold increase. Also Indian vendors shipped 93 lakh
smartphones in the last quarter (July-September), compared to 35 lakh
units in the same period last year.
“Growth in India's smartphone market is driven by consistent
performance by local vendors that accounted for more than half the
total smartphone market in Q2. These vendors have been scaling up
operations, owing to rising migration of the user base from feature
phones to smartphones," said Manasi Yadav, a senior market analyst
with IDC India.
Citing this growing appetite and taste for innovation, corporates all over
are leaving no stone unturned in bringing out something new to the
world. For years, the credit of bringing innovation into reality was given
to the legendary Steve Jobs, Apple Inc., which brought out the concept
model of an iPod, then iPad in 2010, and now iPhones with
extraordinary features and specifications.
Following this trend, other brands too have gone into product innovation
and design, and the result is evident from the South Korean LG
Electronics’ latest 6-inch curved screen smart phones. This latest
invention of a curved screen is logically explained to be a better fit to
consumers in terms of comfort in handling the device and the visual
qualities. The LG G Flex has been unveiled and will soon be launched
in the local Korean markets to gauge consumer response. LG's move
comes as a response to stiff competition in the smartphone market,
wherein the Korean giant Samsung recently launched its Galaxy Note
3, which too sports a slightly curved visual left-right experience to users.
Not lagging behind are Indian brands, which are also striving to tap the
potential Indian market and Xolo's LT900, which would be launched as
a 4G-data capable smartphone. While international brands, such as LG
and Samsung, have not launched the 4G version of their latest

smartphones in India, Indian handset brand Xolo could be the first in

launching this device to Indian users, according to a report by GSM
Arena.
It is expected that the Xolo LT900 smartphone will be powered by a 1.5
GHz Qualcomm Snapdragon S4 processor, and feature a 4.3-inch HD
IPS OGS display with a pixel density of 341 ppi, and an 8-megapixel
rear camera with BSI sensor. Meanwhile, adding fuel to the competitive
spirit, Google is also rumoured to launch its much awaited Nexus 5 in
the coming month, loaded with astounding features.
(Source: CoolAge. 2013. Technological innovations by Xolo, Apple and LG. [online] Available at:
http://www.coolage.in/2013/10/29/technological-innovations-by-xolo-apple-and-lg/)
4.2.3 Challenges of technological innovation

A successful innovation can bring significant financial success to an
organisation. However, there are various challenges that make a
technological innovation a difficult process. Following are some of the
challenges of technological innovations:
Uncertainty: According to a survey, only 2 out of 10 innovations become
successful in the market (Mansfield, 1981; Cooper & Klein-Schmidt, 1990;
Van de Ven, 1986; Rosenberg, 1994). There are numerous instances in
which a particular technology failed to induce consumers to buy the
products. Fig. 4.2 depicts the list of technological innovations that failed in
the market:
Intellivision: A video game console developed by Mettel
Laserdisc: First home video format introduced in 1978
Betamax: A video cassette magnetic tape recording format
Quadrophonic Sound: An innovative sound system
Digital Audio Tape (DAT): Cassettes for audio recording introduced by Sony in 1987
The Apple Newton PDA: A Personal Digital Assistant (PDA) produced by Apple
Fig. 4.2: Technological Innovations

Constraints: For most organisations, budget is a major constraint in the

process of innovations. The process of development of a new technological
product requires a significant amount of funds. Therefore, organisations that
do not have sufficient funds cannot invest in technological innovations.
Following are some of the other challenges in technological innovation:
 In many instances, high commercialisation cost discourages
organisations to invest in Research & Development (R&D) activities.
 Innovation requires skilled and talented manpower, which is not easily
available.

1. Sun Microsystems was one of the few companies that pioneered
__________, which revolutionised the computer industry in the
1980s.
2. In _______, innovation involves improving the existing service by
introducing new ideas or introducing various technological agents
such as sophisticated software in service delivery.
3. Mention the three steps in the innovation process.
4. In _________ innovation, an old technology is made obsolete by the
introduction of a new technology.?
Activity 1:
Make a list of at least five innovations in the information technology
industry in the last decade. You can take the help of publicly available
sources, such as the Internet.
4.3 Invention and Innovation

In the context of technological innovation, we need to differentiate between
two words, invention and innovation. In simple words, invention is the
creation of a new technology. Therefore, invention can be a new product, a
process, or a production system. Television, computers, and mobile phones
are some important inventions. Inventions follow scientific knowledge.

However, there is a time lag between the scientific discovery and the
invention of products and services, on the basis of the scientific knowledge.
Innovation refers to creating a product or service that is new to an
organisation and the consumers. In other words, innovation involves utilising
or commercialising a new technology or extending a new technology in the
fields of products, services, and systems. For instance, the mobile phone is
not a new technology any more. However, various mobile phone companies
keep innovating by providing differentiated functions and user utility for their
products.
Therefore, in simple words, invention is the creation of a new product,

service, or process. On the other hand, when an invention is
commercialised, it becomes an innovation.
Therefore,
Invention = Innovation – Commercial Exploitation
On the other hand,
Innovation = Invention + Commercial Exploitation
Innovations and inventions are strongly interrelated. However, invention is

an event; whereas, innovation is a process. According to Bright (1969),
technological innovation includes, “The initiation of the technical idea, the
acquisition of necessary knowledge, its transformation into usable hardware
or procedure, its introduction into society, and its diffusion and adoption to
the point where its impact is significant.”

5. ____refers to creating a product or service that is new to an
organisation and the consumers.
6. There is a time lag between the scientific discovery and the invention
of products and services, on the basis of the scientific knowledge.
(True/False)

4.4 Creativity and Innovation

Innovation refers to creating values for customers or satisfying any needs of
customers with the help of scientific knowledge. Creativity drives innovation.
Creativity is the capacity of a human brain to think and bring out new ideas,
new solutions, new processes, new art, etc., whereas innovation is the
physical process of carrying out or realising creative ideas. Creativity
involves combing two or more ideas to arrive at a new idea. For instance,
the concept of assembly line, introduced by Henry Ford, was a result of
creativity. Earlier, the production process was not standardised. In addition,
the process involved unplanned movement of parts within the production
facility for different stages of production. Henry Ford introduced the
assembly line by introducing standardised production, and reducing the
movement of the parts within the facility.
Note that certain organisations, such as Google and Apple, tend to be more
creative than their competitors. Clearly, creativity is the result of
organisational culture and environment. Therefore, organisations that want
to develop innovative products and services need to have a creative
environment.
According to Jain and Triandis (1990), a creative environment involves the
following characteristics:
 Allowing employees to work in their areas of interest
 Allowing employees to network and communicate with others
 Encouraging employees to take moderate risks

 Tolerating failures and non-conformities

 Providing rewards and recognitions

7. Creativity involves combing two or more ideas to arrive at a new idea.
(True/False)
8. Mention some of the characteristics of a creative environment.
Exhibit 4.3: Concurrent Engineering

In the initial stages of the innovation process, the main focus of
organisations remains on developing and commercialising new products.
Therefore, in this stage, little attention is paid towards process innovation.
This approach was suitable earlier, because rate of technological change
was slower. However, in the present market, the rate of technological
change is very high. Therefore, organisations have less time to develop
and commercialise new products. In such situations, the concurrent
engineering approach or the simultaneous engineering approach is more
suitable. In this approach, product and process innovation proceeds at
the same time. Therefore, in this approach, there is a continuous
interaction between product innovation and process innovation.
4.5 Management of Innovation and Innovation Strategies

Though innovation is a natural extension of scientific knowledge,
organisations need to plan and direct the innovation process to maximise
gain from a technological innovation. Organisations need to innovate to stay
competitive in the market. For example, various innovations in mobile
phones by Samsung helped it capture a substantial market share in India
from Nokia.
To manage innovations, organisations need to conduct a structured and
innovative analysis of the market, as well as the internal capabilities of the
organisation. Distinctive innovations have different aspects. For example,
certain innovations focus on providing value propositions (say, Apple iPod),
whereas other innovations aim at competing with the products of
competitors.
Development of innovation strategies and management of innovation
involves three aspects:

Competency: It refers to the internal capabilities of an organisation. Every

organisation has certain areas of strength and weakness. It is very difficult
for a technologically mediocre organisation to become highly innovative in a
short period of time. An organisation needs to carefully assess its
capabilities to build a creative environment that fuels innovation. For
example, organisations, such as Apple and Google, focus on attracting
talented employees from all over the world and invest huge amounts of
money in R&D.
Strategy: This involves aligning the innovation to fulfil the strategic
objectives of the organisation. Therefore, strategy involves careful planning
and resource allocation to fuel innovation. Professor Kastelel suggests that
there should be a 70/20/10 split among improving existing products and
processes, looking for adjacencies, and searching out completely new
markets (Satell, G. 2013. How to Manage Innovation).
Management: This involves executing the innovation strategies and
monitoring the progress of the strategy.

9. Professor ______suggests that there should be a 70/20/10 split
among improving existing products and processes, looking for
adjacencies, and searching out completely new markets.
10. The internal capabilities of an organisation are known as _________ .
4.6 Summary
 Innovation means doing something new and original. In the context of
technology, innovation refers to the new applications of scientific
knowledge to achieve various objectives such as creating wealth,
increasing productivity and efficiency, reducing cost, and improving the
standard of life.
 Technological innovations are one of the main sources of competitive

advantage and survival in the corporate world.

 Organisations strive to have a technological foresight i.e. to predict the

trends in technology and develop innovative products and services to
gain maximum benefit from the market.
 The innovation process involves three stages, research, invent, and
commercialise.
 The main challenges to innovations are uncertainty and constraints.
 Creativity drives innovation. Creativity involves combing two or more
ideas to arrive at a new idea.
 In simple words, invention is the creation of new technology or services,
on the basis of scientific knowledge. Innovation refers to creating a
product or service that is new to an organisation and the consumers.
 In concurrent engineering, product and process innovation proceeds at
the same time.
 To manage innovations, organisations need to conduct a structured and
innovative analysis of the market, as well as the internal capabilities of
the organisation.
 Development of innovation strategies and management of innovation
involves three aspects, competency, strategy, and management.
4.7 Glossary
Automation: It refers to mechanisation of organisational processes.
Robotics: It is a branch of technology dealing with design, construction,
and operations of robots and related computer systems.
Competitive Advantage: It refers to a strategic position gained by
organisations that makes them achieve superiority over other organisations.
Electronic Signal: It refers to a signal generated through electronic means.

1. Describe innovation.
2. What are the implications of technological innovation?

3. Mention some of the characteristics of innovation.

4. What are the different types of innovation?
5. Write a note on the process of technological innovation.
6. What are the challenges of technological innovations?
7. What is the relation between invention and creativity?
8. Elaborate on management of innovation.
4.9 Answers

1. Reduced Instruction Set Computing (RISC)
2. Services
3. Research, invent and commercialise
4. Radical.
5. Innovation
6. True
7. True
8. Allowing employees to work in their areas of interest, allowing
employees to network and communicate with others, and providing
rewards and recognitions.
9. Kastelel
10. Competency
Terminal Questions
1. Innovation means doing something new and original. Refer to section
4.2 Technological Innovation for details.
2. Technological innovations are one of the main sources of competitive
advantage and survival in the corporate world. Refer to section 4.2
Technological Innovation for details.
3. Innovation leads to improvement and aims at adding more value. Refer
to section 4.2 Technological Innovation for details.

4. Innovation can be classified into different categories. In terms of

offerings, there are three types of innovations: product innovation,
service innovation, and system innovation. Refer to section 4.2.1 Types
of innovation for details.
5. There are broadly three stages in the innovation process, acquiring
scientific knowledge of the way nature works, applying scientific
knowledge to develop technology, and marketing the technology. Refer
to section 4.2.2 Innovation process for details.
6. A successful innovation can bring significant financial success to an
organisation. However, there are several challenges, such as
uncertainty and complexity, because of which technological innovation
becomes difficult. Refer to section 4.2.3 Challenges of technological
innovations for details.
7. Creativity drives innovation. Creativity involves combing two or more
ideas to arrive at a new idea. Refer to section 4.4 Creativity and
Innovation for details.
8. Development of innovation strategies and management of innovation
involves three aspects, competency, strategy, and management. Refer
to section 4.5 Management of Innovation and Innovation Strategies
for details.
4.10 Case Study: Technological Innovation in the Energy Sector

in the Middle East
Energy sectors in the Middle Eastern countries are the foremost centres of
innovation in the world. There is a strong coordination between the
government and the private sector to bring innovative technology and
increase productivity throughout the region. Technological innovations
greatly help in unlocking new oil and gas resources in these countries. This

not only helps in meeting the growing energy demands of the world, but the
revenue generated by oil and gas also helps in creating economic and
social development in the Middle Eastern countries.
The demand for energy is continuously rising due to the growing population
and an improved standard of living. According to a forecast by Shale, in the
next seven years, the additional energy demand in the world will be
equivalent to the entire energy system of China. Therefore, the
governments of Middle Eastern countries are taking a long-term view to take
advantage of the increasing demand and bring economic and social
advantages. In addition, the governments in these countries also recognise
the role of technological innovations in the energy sector.
There are a number of technological innovations that have tremendous
effects on the day to day operations of the energy sectors in these
countries. For example, the technology called Well, Reservoir, and Facility
Management (WRFM) helps in unlocking trapped energy resources,
reducing wastage, and optimising the lifecycle of a field by integrating
surveillance, production, and predictive technologies. This technique had a
tremendous result at the Fahud oil field in northern Oman. The rate of
decline in production is reduced to almost zero from 8% in the last three
years in the field.
Another innovative technique used in the energy sector is Enhanced Oil
Recovery (EOR). It helps in reopening and managing the wells that were
closed in the past. In the oil and gas industry, the typical recovery rate is
about 35% of the oil from reservoirs. The rest of the oil and gas are trapped
inside the rocks. Different methods, such as injecting gas or chemicals, or
heating, can increase the returns of the oil. According to experts, just 1%
increase in the global hydrocarbon recovery will raise the reserve of
conventional oil by 88 billion barrels, which are virtually equivalent to three
years of annual production. There is a huge scope of implementing such
technology in the Middle East.
Questions:
1. On the basis of the case study, discuss how technological innovation
helps in increasing productivity in the energy sector.
2. On the basis of the case, relate innovation with a supportive
environment.


J. Wiley.
Hill.
E-References
 Asme.org. 2013. Top 5 Medical Technology Innovations - ASME.

[online] Available at: https://www.asme.org/engineering-
topics/articles/bioengineering/top-5-medical-technology-innovations
 Forum, S. (2013). The Internet Of Everything: Where Technology And
Innovation Meet To Make The World A Better Place. [online] Retrieved
from: http://www.forbes.com/sites/skollworldforum/2013/11/14/the-
internet-of-everything-where-technology-and-innovation-meet-to-make-
the-world-a-better-place/ [Accessed: 15 Nov 2013].
 Grasty, T. (2013). The Difference Between ‘Invention’ and ‘Innovation’ |
Idea Lab | PBS. [online] Retrieved from:
http://www.pbs.org/idealab/2012/03/the-difference-between-invention-
and-innovation086/ [Accessed: 15 Nov 2013].
 LiveScience.com (2013). Tech. [online] Retrieved from:
http://www.livescience.com/technology/ [Accessed: 15 Nov 2013].
 Tutor2u.net (2013). Invention and Innovation. [online] Retrieved from:
http://www.tutor2u.net/business/production/invention-and-innovation.htm
 Tutor2u.net (2013). Invention and Innovation. [online] Retrieved from:
http://www.tutor2u.net/business/production/invention-and-innovation.htm
 Zeenews.india.com (2013). Australia, India to share technological
innovation. [online] Retrieved from:
http://zeenews.india.com/news/science/australia-india-to-share-
technological-innovation_889222.html [Accessed: 15 Nov 2013].

Unit 5 Paradigms of Technology Management

Structure
5.1 Introduction
Objectives
5.2 Technology Paradigm and Issues
5.3 Guiding Principles of Technology Management
5.4 Management Paradigms and Technology
5.5 Summary
5.6 Glossary
5.8 Answers
5.9 Case Study: Implementation of CRM in DfES
5.1 Introduction
In the previous unit, you studied about the various aspects of technological
innovation. In this unit, you will study about technology management
paradigms. In simple words, paradigm refers to a reference frame or a
framework. For example, managing the financial aspects of an organisation
requires consideration of certain financial principles such as maintaining a
certain capital structure. Similarly, technology management requires
consideration of a certain framework.
Technology management paradigm refers to the fundamental principles and
frameworks of managing technology. The technology management
paradigm, prevalent in a particular time, is influenced by technological
innovations.
Technology management paradigms need to adapt to the changes in the
business environment and the competitive scenario in the market. An
organisation needs to consider a number of factors, such as the business
environment and resources, to change technology management paradigms.

For instance, advancement in information technology created a new

paradigm in technology management. In addition, technology also
influences the management paradigms prevalent in organisations at a
particular time.
The unit elaborates on the main issues in technology management. Next, it
discusses the guiding principles of technology management. In addition, you
will also study the relationship between management paradigm and
technology. Towards the end, the unit describes the essential conditions for
the management paradigm.
Objectives
 describe the issues in technology management
 discuss the guiding principles of technology management

 explain management paradigms and technology
 discuss the conditions for a new management paradigm
5.2 Technology Paradigm and Issues

Technology management is a complex field. The high level of competition in
the market, along with the increasing need to innovate, adds to the
complexity of technology management. Therefore, adjusting to the changing
needs, organisations need to continuously search for new paradigms of
technology management. Here, a paradigm refers to a framework for
effectively managing technology. With the changing needs of the market,
technology management paradigms of an organisation should also undergo
vital changes. For example, advancement of information technology has
created a new paradigm in technology management. Therefore, information
technology has become the principal field of technological innovations. In
addition, because of high competition, technology life cycles have reduced.
Consequently, organisations face the challenge of how to fine-tune and take
an available technology or a suite of technologies to a cost-effective
marketable product within a reasonable time. Therefore, organisations need

to expedite Research and Development (R&D) and focus on continuous

innovation.
Changing technology management paradigms require a thorough analysis
of organisational capabilities and external opportunities and threats. In
addition, they also require consideration of certain fundamental issues.
Following are some of these fundamental issues:
Resources: Technological resources in an organisation play a crucial role
in developing a new management paradigm. Technological resources
include materials, methods, systems, intellectual assets, software, and
skilled people. Changing management paradigms require the right
assessment of the resources, identification of resource gaps, and
acquisition of resources.
Exhibit 5.1: Changing Trends in the Industry

The following table shows the changing trends in the industry:
Factor Traditional New Trends

1. Technology Long life cycle Short life cycle
life cycle
2. Innovations Less number of Continuous
innovations innovations
3. Competition Less competition, no High competition,
cooperation emergence of an
alliance with the
competitors
4. Market Predictable and local Unpredictable and
market global market
5. Production Mass production and Customised
large lot production production and small
lot productions
(Source: Management of Technology by Tarek Khalil)

Performance Assessment Methods: Change in technology paradigms

requires the accurate assessment of the performance of the existing
systems and resources. There is a need to assess the influence of the latest
technology on the overall performance of an organisation.
Traditional performance assessment methods are not always suitable for
the changing needs of technological innovations. Therefore, there is a
constant need for updating and seeking out suitable performance
assessment methods. Certain important performance measurement needs
arise out of the measure of performance of technology and measures of
benefits of the R&D activities.
Alliance Versus Rivalry: In recent years, alliances among organisations to
innovate and jointly operate the market have emerged as alternatives to
extreme rivalry among organisations. This is because, intense competition
does not allow organisations to make optimum utilisation of their resources.
Therefore, organisations need to find out answers to various questions,
such as:
 Will alliances with other competing players be more profitable
alternatives to in-house R&D?
 How should an alliance be structured with the competitors to
successfully negotiate the benefits out of the alliance?
 Will it be more profitable to form an alliance with the large organisations
or the small organisations?
For example, in 2011, Nokia entered into a strategic alliance with
software giant Microsoft to deliver smartphones based on the Windows
mobile platform. This alliance marks the end of an era in which java-
based smartphones dominated.
NOTE:

Traditionally, IBM, Apple, and Motorola have been rivals in manufacturing

and selling of personal computers and parts. Apple launched its Apple II
PC in the 1980s. The product was a great success in the market. IBM
responded by launching its own personal computer. However, IBM did not
have the technological capabilities to develop PCs on its own. Therefore, it
had to rely on various other companies such as Intel (for microprocessors)
and Microsoft (for the operating system). By 1990s, Intel became the
dominating player in microprocessors and Microsoft in operating systems.
This dominance of Intel and Microsoft posed threats to IBM and Apple. As
a result, in 1991, IBM, Apple, and Motorola established a joint venture
called Somerset. This new joint venture allowed IBM, Apple, and Motorola
to share resources and costs, and jointly conduct R&D activities.
Business Environment: Every organisation needs to operate in a certain

business environment. The external environment creates opportunities as
well as poses numerous threats, for example, threats of competitors. These
opportunities and threats influence the strategies of organisations. In
addition, any technological innovation has various societal implications. For
example, social networking sites attract mixed reaction from diverse
stakeholders in a society. Therefore, the success of a new technology or
technology paradigm hugely depends upon the level of acceptance of the
technology in the society.
Integrating Technology and Strategic Plans: Technological planning

involves selecting the appropriate R&D project, deploying resources, and
maintaining the timeliness for the successful completion of the R&D
activities. In addition, technological planning involves selecting the
technology to be included in the production process and deciding whether
the technology will be developed internally or procured from external
sources. The strategic plan of an organisation must address each of these
decisions.

Exhibit 5.2: ERP Implementation in IBM
International Business Machines, popularly known as IBM, is a US-based

organisation. It deals in manufacturing and sales of computers and
computer peripherals. IBM is one of the top ten organisations in the USA,
in terms of profit earnings. Being the personal computer supplier to
consumers, it realised that more customisation of services is required,
and for the sake of the same, it installed a configure-to-order enterprise
system. This system facilitated information supply in all the divisions of
IBM, throughout the world.
This system is an online network of communication. Whenever a
customer places an order for a PC, it allows them to choose their specific
configuration. For example, if a customer in England places an order,
he/she would be allowed to configure it in their own choice through the
organisation’s website. This system has a great real-time approach of
information processing. For a customer, it is very easy to place such an
order, while the functions the system runs are a bit complex. This order
passes to IBM’s order fulfilment division, located in the United Kingdom,
and its e-commerce division, located in Boulder and Colorado. It updates
in the ERP and production management division, located in Raleigh,
North Carolina. The sales team, located in Southbury, is also reported

with it. The New York base product database is also updated at the same
time. After updating all the divisions involved in this inward sales process,
the order placement information gets back to the customer. The journey
of this order placement also begins functional processes at each division
to provide value-added services and on-time delivery.
Such systems of configure-to-order have also been adopted by other
market leaders such as Dell and Apple.
Third Parties and Technological Change: Various third party regulations,

such as judicial decisions and regulatory actions, influence the decisions of
organisations in perusing and implementing new technology. For instance,
the intellectual property laws of different countries influence how different
organisations can adopt technologies developed by other organisations.

1. Traditional performance assessment methods are not always suitable
for the changing needs of technological innovations. (True/False)
2. Changing technology management paradigms require a thorough
analysis of organisational capabilities and external opportunities and
threats. (True/False)
3. In the new technology paradigm, technology life cycle has become
longer. (True/False)
4. The joint venture conducted by IBM, Apple, and Motorola, in 1991,
was known as ______.
Activity 1:
Conduct research to find out at least three instances of alliances among
rivals in the field of technologies. You can take help of publicly available
5.3 Guiding Principles of Technology Management

Principles act as a guiding force in the management of any operation. For
instance, to execute the marketing activities of an organisation, certain

principles should be followed. These principles are value creation, fulfilment

of consumer needs, etc. Similarly, a new technology paradigm requires
definite guiding principles. Betz et al. provide the following eight guiding
principles of managing technology, as depicted in Fig. 5.1:
Agility
Responsive
Innovation
ness
Guiding
Quality Integration
Principles
Value
Teaming
Creation
Fairness
Fig. 5.1: Guiding Principles of Technology Management

These principles are elaborated as follows:
Value Creation: It should be the main intention of the new technology
paradigm of an organisation. Value creation creates demand for the
products and services, which in turn increases the profitability of an
organisation. For example, various new operating systems of smartphones,
such as an Android, provide different values to customers. Customer value
is one of the most important differentiating factors among different
competing technologies.
Quality: This is closely related to value creation. Quality helps in creating
competitiveness for an organisation. A new technology must enhance
quality of the goods and services produced by an organisation. For
example, assembly line and automation have significantly reduced
variations among products in a manufacturing facility.

Responsiveness: It refers to the ability of an organisation in responding to

the changes in the external environment. Responsiveness helps an
organisation in coping with external challenges and taking benefits of
opportunities. In a highly competitive market, an organisation needs to have
high technological responsiveness to stay competitive. For example, in the
mobile phone segment, innovation is very rapid, and mobile phone
manufacturers are launching products with improved features and functions
at very short intervals. In such a market scenario, high responsiveness
helps a competitor in maintaining market share.
Agility: This refers to the flexibility of a system in producing a wide variety
of products and facilitating communication among separate departments.
Variations in products help in providing a wide choice to customers.
Innovation: This refers to the introduction of new technological applications
to achieve competitiveness and increase profitability. For instance, the
mobile phone is an innovation in communication technology. Similarly, the
tablet computer is an innovation in portable computing.
Integration: This refers to close coordination among the diverse technology
portfolios of an organisation and also harnessing multiple technologies,
which are ready and available.
Teaming: Integration of diverse technologies and managing life cycles
requires high levels of competence, skills, and training. Therefore, a highly-
efficient team is required to innovate and manage technology.
Technologically innovative organisations, such as Apple and Google, attract
highly-skilled employees to fuel innovation.
Fairness: It refers to the ability of an organisation in providing equal
benefits to all the stakeholders of the organisation.

5. _________creates demand for the products and services, which in
turn increases the profitability of an organisation.
6. Responsiveness refers to the ability of an organisation in responding
to the changes in the external environment. (True/False)

5.4 Management Paradigms and Technology

Technology greatly influences the management paradigms prevalent in a
particular period. For instance, the invention of the steam engine during the
industrial revolution brought revolutionary changes in the textile industry.
The invention turned a cottage industry into a factory organisation of mass
production. Another major shift in management paradigm occurred in the
middle of the nineteenth century, when the concept of interchangeable parts
was introduced in the production of goods.
Frederic Taylor`s scientific management was another paradigm shift that
occurred in the 19th century. The central idea of scientific management was
that all operational activities can be scientifically organised and analysed.
The introduction of the assembly line by Henry Ford was another major shift
in management paradigm, which occurred in the 1920s.
Next, after the Second World War, a major paradigm shift occurred in the
focus on quality of production. Japanese organisations, such as Toyota,
were the pioneers of various quality management techniques, Quality
Circles, and continuous quality improvement. These quality management
techniques were facilitated by automation and other technological
innovations.
The next major management paradigm shift occurred with massive
applications of computing and communication technology in the public and
private domain. Computerisation brought revolutionary changes in the
productivity and efficiency of diverse sectors such as banking,
transportation, and education. In addition, internal functions of
organisations, such as operations, accounting, and controlling, could be
executed more efficiently with the help of innovative technologies.
In the late 20th century, technological innovation became a major focus on
nations as well as corporates. Innovation helps in economic growth and
efficient utilisation of resources. In addition, innovation keeps organisations
to remain competitive. Emphasis on technological innovation has increased
the pace of technological change and commercialisation of technology.
At present, the prevalent management paradigm is highly influenced by
information technology and communication technology. Easy access to

information and ease in communication have triggered the emergence of

flatter organisations. In addition, technological innovations have brought
more complexities to the management of production systems. For example,
traditionally, production of machine tools depended on two major
technologies, metallurgy and mechanical machinery. However, automation
has added another technological dimension, electronic control, to the
production of machine tools. Even though the rate of change in technology
in metallurgy and mechanical machinery is slow, the rate of technological
change in electronic control is very rapid. This adds to the complexities of
the production process.

7. Scientific management was introduced by ___________.
8. At present, the prevalent management paradigm is highly influenced
by information technology and communication technology
(True/False)
5.5 Summary
 The technology management paradigm refers to the central principles
and frameworks of managing technology.
 Technology management is a complex field. High level of competition in

the market, along with the increasing need to innovate, adds to the
complexity of technology management.
 Changing technology management paradigms require a thorough
analysis of organisational capabilities, external opportunities, and
threats. In addition, they also require consideration of certain
fundamental issues.
 Technological resources in an organisation play a crucial role in
developing a new management paradigm.
 Change in technology paradigms requires accurate assessment of the
performance of the existing systems and resources.

 In recent years, alliances among organisations to innovate and jointly

operate the market have emerged as an alternative to extreme rivalry
among organisations.
 The external environment creates opportunities, as well as poses
various threats, such as threats of competitors.
 A new technology paradigm requires certain guiding principles. These
are value creation, quality, responsiveness, agility, innovation,
integration, teaming, and fairness.
5.6 Glossary
Capital Structure: It refers to the composition of debt and equity in the total
capital of a business enterprise.
Microprocessor: It refers to a single integrated circuit on a computer that
incorporates the functions of the central processing unit.
Just-In-Time: It refers to a highly efficient production system in which
materials and equipment are delivered just before they are required,
reducing wastes.
Continuous Improvement: It refers to a technology management
technique that focuses on incremental improvement in quality.

1. Explain the technology management paradigm.
2. Mention the different issues that need consideration for changing the
technology management paradigm.
3. Write a note on alliance, as an emerging alternative to rivalry.
4. Elaborate on the guiding principles of technology management.
5. How does technological change create a shift in the management
paradigm?

5.8 Answers

1. True
2. True
3. False
4. Somerset
5. Value creation
6. Responsiveness
7. Frederic Taylor
8. True
Terminal Questions
1. The technology management paradigm refers to the central principles
and frameworks of managing technology. Refer to section 5.2
Technology Paradigm and Issues for details.
2. Some of these issues are resources, performance assessment
methods, alliance versus rivalry, and business environment. Refer to
section 5.2 Technology Paradigm and Issues for details.
3. In recent years, alliances among organisations to innovate and jointly
operate the market have emerged as alternatives to extreme rivalry
among organisations. This is because intense competition does not
allow organisations to make optimum utilisation of their resources.
Refer to section 5.2 Technology Paradigm and Issues for details.
4. Some of the guiding principles are value creation, quality,
responsiveness, agility, innovation, and integration. Refer to section 5.3
Guiding Principles of Technology Management for details.
5. Technology greatly influences the management paradigms prevalent in
a particular time. For example, the invention of the steam engine during
the industrial revolution brought revolutionary changes in the textile
industry. The invention turned a cottage industry into a factory
organisation of production. Refer to section 5.4 Management
Paradigms and Technology for details.

5.9 Case Study: Implementation of CRM in DfES
The UK Department for Education and Skills (DfES) needed to improve its
ability to share information with its external partners and internal customers.
DfES chose Capgemini to implement CRM solutions based on Microsoft
Dynamics CRM in a pilot project within the Corporate Services and
Development Directorate (CSDD).
Situation
The UK Department for Education and Skills (DfES) works closely with a
wide range of partners, including other government departments and Non-
Departmental Government Bodies (NDPBs), to address a wide range of
issues, developing policy and providing funding for the education sector. It
needed a solution that would enable it to address real business issues in the
light of recent government initiatives such as the Gershon efficiency review
of public sector efficiency.
It was clear that the DfES needed to develop its IT infrastructure to improve
efficiency and enable it to fully support front-line workers, while simplifying
administrative complexity and rationalising back office functions. However, it
was also clear that the cost of the project required to be controlled.
The department required help to improve management of relationships with
internal or external customers and to provide up-to-date, comparable, and
accessible information about their partners. This could lead to more
knowledge on the interaction with partners across departments, because
the solution would provide a systematic mechanism for all users to share
information and learn from each other. A further goal was to enable senior
management to report and compare consistent management information
across their areas of responsibility.
DfES understood the value of IT investment but also realised that the
solution needed to be cost-effective, both to implement and to manage in
the future. If possible, it needed to refresh, rationalise, and reuse the
department’s existing technology.
DfES has worked with Capgemini on a variety of projects, as part of a five-
year framework agreement that began in April 2002. Capgemini has

provided IT services and consultancy on areas including computer security,

IT architecture, software package evaluation, data management, and risk
management; and understands the issues faced by the department.
“DfES is a government department with 5,000 users,” said Paul Guest, head
of business applications at Capgemini’s Microsoft Business Unit. “It’s an
enterprise, and the CSDD is run as an enterprise IT department.” As such, it
needed an enterprise-standard CRM solution.
Solution
DfES opted to pilot the solution within the CSDD and sponsor teams, before
deploying it among other user groups. It chose Microsoft Dynamics CRM as
its core CRM solution, because it could be easily integrated with its existing
technologies, and easily maintained and adapted in-house. As an ‘out-of-
the-box’ solution, Microsoft CRM offered low up-front costs. The solution
could be customised to meet the needs of different user groups, minimising
the need for developing for specific requirements.
The solution was initially delivered in December 2004 for twenty users. The
number is currently expanding within the CSDD, with around 54 staff now
using the technology. The pilot scheme is due to be reviewed in December
2005, when a decision would be made regarding a wider rollout.
Capgemini’s Paul Guest said that the integration of Microsoft CRM with the
DfES environment was straightforward. “All that was needed for the client to
access Microsoft CRM was the installation of IE [Internet Explorer] 6 Service
Pack 1 on the desktops, and Active Directory integration,” he said.
The Microsoft CRM server was installed in the appropriate native mode
domain. The Microsoft CRM server and the required SQL Server database
server were installed on a single server running Windows 2000 operating
systems for live and test environment. The Microsoft CRM Exchange E-mail
Router, which provides an interface between the Microsoft CRM system and
the Microsoft Exchange 2000 Server or the Microsoft Exchange Server
2003, was installed on a machine running the Exchange Server.
The ongoing flexibility of the solution will play a crucial role in controlling
costs. The Microsoft CRM architecture is based on a scalable enterprise
platform, which can be broken down into four logical layers, streamlining the
flow of data, while ensuring the solution to be easily scaled and adapted in-
house. The presentation layer contains the browser client and the Sales for

the Microsoft Outlook messaging and collaboration client. The latter uses a
rich Win32 (application programming interface) implementation natively
embedded in Outlook to provide a Windows-based user experience.
Beneath the presentation layer lies the application layer. This handles the
application logic, which revolves to a great extent around data validation.
The platform layer lies at the heart of the solution and controls access to
objects and the database. This layer raises events for workflow processes
and custom business logic implementations and provides a simple
mechanism to build vertical applications that interface with Microsoft CRM,
enabling in-house maintenance and development of the system.
Microsoft CRM is driven by metadata and is designed to abstract itself away
from implementation details that can often cause problems with upgrades
and extensibility. The Microsoft CRM architecture addresses this issue with
the database layer, which is the lowest layer. This layer abstracts the
underlying data storage details, for example, schema and data access from
the higher-level constructs of domain logic implementation and user
interface.
One of the major goals of the project was to improve information sharing
across DfES, so that stakeholders can have consistent, up-to-date
information about the department’s relationship with internal customers and
external partners. To enable this, Capgemini integrated Microsoft CRM with
the Plumtree portal PrismPlus technology, which was already in use for
DfES Intranet, by building a series of portal ‘gadgets’ and interfacing them
with the Microsoft CRM SOAP-based Web service application programming
interface. This made constituent Microsoft CRM objects accessible to users.
The speed and robustness of gadget development were increased by the
separation of presentation and business logic. This was achieved by
abstracting the code that interacts with Microsoft CRM from the code for the
presentation of PrismPlus Gadgets, enabling the development of a reusable
middle tier of the Microsoft CRM business logic. The C# based component,
DfESCRM.dll, contains a set of project-specific method calls to the Microsoft
CRM platform layer. This resulted in a traditional three-tier approach of
presentation (Prism Plus gadget), business logic (DfESCRM.dll), and data
access (platform) layer.
Account managers can use the solution to enter and maintain all
relationship details about their partners, including issues, contacts,

appointments, e-mails, and phone calls. The system enables the information
to be shared between account managers. Actions can be shared through
the workflow functionality, enabling account managers from across the
department, such as human resources and IT staff, to work on cases
together.
DfES works with many partners; the wider user community also needed
access to information about these partners. However, they did not
necessarily need an account management system. The integration of
Microsoft CRM with Plumtree enabled permissions-based sharing of
information throughout the user base, so that users could access the
relevant information securely.
The department is evaluating the pilot; however, there is a lot of interest
from a number of areas within the department in exploiting the benefits of
Microsoft CRM.
Benefits
The DfES Microsoft CRM pilot project is still in progress, but it has begun to
address several additional issues due to the goals set by the central
government. Information about partners is consistent, up-to-date, and
relevant, and is more easily shared. Users can work in collaboration to
capture and manage partner information and make decisions. Improved
search and analysis capabilities enable the delivery of better management
information about partner relationships. Each of these improvements
contributes to more efficient account management, either with internal or
external customers.
Business conditions are not fixed and a significant element of any IT
solution increases its ability to adapt and scale with them. One of the
concerns of the DfES was that costs could be controlled through the
ongoing ability to reuse, refresh, and rationalise the technology. Microsoft
CRM delivers a reusable, easily integrated system that can be developed
and maintained in-house at a lower cost than traditional CRM systems.
The relationship between Capgemini, Microsoft, and DfES implied that
Capgemini understood the way the department works and the specific
issues it needed to address to achieve a consistent and efficient CRM
system. The solution helps the department to manage its accounts more

effectively and share information across the department. DfES is able to

develop more planned and unified relationships with its partners.
Questions:
1. Why did DfES require implementing CRM?
2. How did implementing CRM solve the problem faced by DfES?

J. Wiley.
Hill.
E-References
 Automationworld.com. 2013. New Management Paradigms | Automation

World. [online] Available at:
http://www.automationworld.com/automation-team/new-management-
paradigms [Accessed: 26 Nov 2013].
 Csae.com. 2013. Technology & New Paradigms in Association
Management. [online] Available at:
http://www.csae.com/Resources/ArticlesTools/View/ArticleId/1637/Techn
ology-New-Paradigms-in-Association-Management [Accessed: 26 Nov 2013].
 Unknown. 2013. [online] Available at:
http://www.timeincnewsgroupcustompub.com/sections/110613_Cloud_C
omputing.pdf [Accessed: 26 Nov 2013].
http://mysteriousuniverse.org/2013/05/emerging-technologies-and-the-
paradigm-shifts-therein/ [Accessed: 26 Nov 2013].
https://faculty.fuqua.duke.edu/~charlesw/s591/Bocconi-
Duke/Bocconi/s6_Demand_View/Dosi%201982.pdf [Accessed: 26 Nov
2013]

Unit 6 Technology Life Cycle

Structure
6.1 Introduction
Objectives
6.2 S-curve of Technological Progress
6.3 Market Growth and Technology Life Cycle
6.4 Multiple-Generation Technologies
6.5 Product Life Cycle
6.6 Diffusion of Technology
6.7 Summary
6.8 Glossary
6.10 Answers
6.11 Case Study: Gartner Says the Natural Life Cycle of a Technology
Driven Company is Under 10 Years
6.1 Introduction
In the previous unit, you studied about paradigms of technology
management. The technology management paradigm is closely related to
changing technology. In this unit, you will study about another topic closely
related to changing technology, technology life cycle.
Life cycle refers to the various stages of an entity, from birth to death.
Therefore, technology life cycle refers to the various stages of a technology,
from its introduction to decline. For example, you would have observed how
typewriters have been replaced by computer word processors. Before the
advent of the personal computer, typewriters were used extensively.
However, the technology declined as a result of the increasing popularity of
computer word processors. Similarly, smartphones are replacing
technologically less advanced phones. A decade ago, more people used

desktop computers than laptops. However, because of more ease of use,

the market for laptops is still rising. Now, tablet computers, a new product in
this segment, are eating the market share of laptops. {PCs, T.
(2013). Tablets dominating tech market as consumers drop PCs | PCWorld.
[online]}. Therefore, each technology goes through various stages, from its
birth to its decline. The revenue received by organisations from a
technology is also different at different stages of its life cycle.
The unit begins with a description of the S-curve of technology progress.
Further, you will study market growth and technology life cycle. Other topics
covered in the unit are multiple-generation technologies, market interaction
and technology Product Life Cycle, and diffusion of technology.
Objectives
 discuss the concept of the S-curve of technological progress

 relate market growth with technology life cycle
 describe multiple-generation technologies
 discuss the concept of Product Life Cycle

 explain the concept of diffusion of technology
6.2 S-curve of Technological Progress

The S-curve of technological progress refers to the S-shaped curve of the
improvement in performance of any technology and its adoption rate. In
other words, when the performance parameters of a technology are plotted
in the y-axis against time on the x-axis, we get an S-shaped curve. For
example, if the improvement of the speed of aircrafts is plotted against time,
we get an S-shaped curve of the improvement of speed of aircraft. The
curve also depicts the rate of adoption of new technology and the
commercial benefits received from it. Fig. 6.1 shows an S-curve of
technology progress:

Fig. 6.1: S-curve of Technology Progress

This curve is also known as the technology life cycle.
As depicted in Fig. 6.1, the curve has the following four stages:
Embryonic stage: This stage starts from the Research and Development
(R&D) of a new product, with the introduction of the technology in the
market. Therefore, the stage involves innovation and introduction of the
innovation in the market for commercial gain.
At this stage, the adoption rate of technology remains very low. For
example, the adoption rate of tablet computers was not very high when the
product was launched the first time in the market. In addition, R&D requires
significant cost and involves risks of failure. Technology, such as self-driving
automobiles, is in the embryonic stage.
Growth: At this stage, the adoption rate of technology improves. In addition,
the performance level of the technology also improves. At this stage, an
organisation should focus on the rapid distribution to leverage the
advantage of the latest technology. For instance, Apple undertakes huge
promotional and distributional activities while introducing various
technologically innovative products such as iPod, iPhone, or iPad.
Maturity: At this stage, the adoption rate of the technology reaches the
highest point. In addition, the performance level of the organisation also
reaches a new height. At the maturity stage, the product is accepted by
maximum people. However, because of the entry of additional competitors,
the market gets saturated with similar products.

Decline/Aging: At this stage, a technology starts becoming obsolete and

vulnerable to replacement by newer technologies. For example, the
personal computer has reached its maturity in the market and is being
replaced by laptops and tablet computers.
Exhibit 6.1: Technology Adoption Life Cycle and Roger`s Curve

The adoption rate of technology is different in the different stages of
technology life cycle. Initially, the adoption rate is low, and eventually,
the adoption rate reaches a maximum height. In 1950, the academic,
Everett Rogers, studied this phenomenon of adoption of a new idea or
technology. Rogers came with the following bell shaped curve of
technology adoption in a different time period:
In the depicted curve, the innovators are the ones who adopt a new
technology at the earliest. Innovators are followed by early adopters,
early majority, late majority, and laggards. The percentages show the
proportion of a particular segment of consumers.

1. Mention the different parameters depicted in the S-curve.
2. What are the stages of the S-curve?
3. In which stage of the S-curve is the personal computer?
Activity 1:
Conduct research to find out at least three technologies that are in the
decline stage. You can take help of publicly available resources, such as
the Internet.

6.3 Market Growth and Technology Life Cycle

Income is generated only when a technology reaches the market. A
technology that is still under development cannot produce any income. A
technology needs to penetrate the market to earn the maximum gain. As a
technology matures, and its adoption rate increases, the market return of
the technology also increases. The market growth pattern is different in
different stages of the technology life cycle. Fig. 6.2 shows market growth
patterns in different stages of technology progress:
Fig. 6.2: Market Growth Patterns in Different Stages of Technological

Progress
In the Fig. 6.2, x–axis represents time, and y-axis represents the market
volume expected. Now, let us briefly discuss the six stages.
1. Technology development: At this stage, a new technology is not
recognised in the market, because the technology is still in the
development stage. Therefore, the technology provides no market
return. For example, until a new version of a Microsoft operating system
is launched in the market, it does not fetch any revenue from the market
at the development stage.

2. Application launch: At this stage, a new technology is launched in the

market, and users start adopting the technology. At this stage, an
organisation starts receiving returns from the market.
3. Application growth: At this stage, the adoption rate of a new
technological application starts increasing very rapidly. With growth in
the adoption rate, the revenue received from the technology also
increases.
4. Mature technology: At this stage, the market return of a technology
reaches its peak.
5. Technology substitution: At this stage, an old technology starts
getting substituted by a new one. For instance, landline telephones are
being substituted by mobile phones. Therefore, at this stage, the market
return of a technology also starts declining.
6. Technology obsolesces: At this stage, an older technology becomes
obsolete. Therefore, the market returns also become zero. For
example, the market returns from obsolete technologies, for example,
the typewriter, is almost nil.

4. In which stage of technology development is the revenue received
the highest from the market?
5. At the technology substitution stage, the market return of technology
starts declining. (True/False)
6.4 Multiple-Generation Technologies

Technology is like a system. A system consists of different sub-systems.
Similarly, a technology may consist several sub-technologies. Each of these
sub-technologies has its own life cycle. For instance, a computer system
consists of various software and hardware. Another example would be of a
microprocessor, which is an important sub-technology in a computer
system. There are various versions of microprocessors. Each new version is
technologically more sophisticated than the previous ones.

Therefore, we can see that a technology can have different sub-

technologies of different generations as its components. In other words, the
different sub technologies with different life cycles may be in the different
stages of their individual life cycle. For example, a microprocessor
developed by a company, such as Intel, goes through different generations
of changes and innovation. Innovations in each of these generations help in
boosting the productivity of the sub-technology (microprocessor), thereby
increasing the productivity of the technology (PC). Similarly, a jet engine is
made of various sub-technologies. Innovations in the sub-technologies in
different generations improve the overall performance of the jet engine.
Fig. 6.3 depicts this concept of multi-generational technology:
Fig. 6.3: Multi-Generational Technology

In certain cases, organisations re-launch the original technology after some
upgradation. For example, software organisations periodically upgrade the
software, on the basis of the latest R&D activities. This helps organisations
in keeping the technology up-to-date and meeting the changing needs of
consumers.
Exhibit 6.2: Growing Technological Generation Gap: A News Report

On the Internet, things change fast. What is popular one day, may be
gone the next. Remember when everyone was playing DrawSomething?
Or when MySpace was the dominant social network? The cycle has
grown so predictable that some analysts begin ringing death knells within
days of a successful product launch.
The quick-moving nature of the digital world means that younger users
come of age in a vastly different media environment than those who were
born just a few years apart. Those of us in our twenties will probably
remember the prevalence of AIM as a communication tool, while those
who are in college likely never used it. We probably remember the magic
of Facebook in its early years, while newer users treat it as a mere utility.
In 2010, the New York Times published an article on this subject entitled,
“The Children of Cyberspace: Old Fogies by Their 20s.” In it, tech
journalist Brad Stone writes:
“Now in their 20s, those in the Net Generation, according to Dr. Rosen,
spend two hours a day talking on the phone and still use e-mail
frequently. The iGeneration — conceivably their younger siblings —
spends considerably more time texting than talking on the phone, pays
less attention to television than the older group and tends to communicate
more over instant-messenger networks.”
In a recent essay on Medium, Branch co-founder, Josh Miller, describes
his fifteen-year-old sister’s response when asked about the social media
landscape among her friends. Her answer is surprising:
 Instagram is used for pictures of people, not places or things.
 Facebook is used infrequently, because its addictive nature makes
users feel poorly.
 Facebook Message is used in place of e-mail.
Tumblr is for photos only and is used by middle schoolers to define their
identity in a manner similar to MySpace ten years ago. Users tend to
abandon it when they enter high school.
Twitter is a non-entity to high schoolers.
This is all anecdotal and reflects one girl’s perspective of one clique at
one high school. History repeats itself, though, and these trends line up

with the predictable cycle. On the Internet, there is no such thing as “too
big to fail.” Think of the past: AOL’s foothold was secure. MySpace was
the unsurpassable king of social media. Delicious was a key component
of the digital ecosystem. Every great service will eventually fall from
grace.
The younger a person, the more pronounced the effects of these micro-
generation gaps. The New York Times continues:
“But [e-books, tablets, smartphones, and video chats] are also technology
tools that children, even 10 years older, did not grow up with, and I have
begun to think that my daughter’s generation will also be utterly unlike
those that preceded it. Researchers are exploring this notion too. They
theorise that the ever-accelerating pace of technological change may be
minting a series of mini-generation gaps, with each group of children
uniquely influenced by the tech tools available in their formative stages of
development.”
We have tied up so much of the human experience in transient things that
generation gaps now occur closer and closer. Even kids two years apart
will have grown up in completely different media environments; a middle
schooler, who spends much of their time on Tumblr, speaks a different
language than a high schooler, who uses mostly Facebook.
Throughout most of our history, technological shifts have happened
gradually and without much perceptible cultural disruption. Even an event
as massive as the invention of the automobile did not cause cultural
alienation — those who had not been in a car could still understand the
basic concept, and even the development of the road system and car
culture did not cause a full divide between “car people” and “non-car
people.” Anyone can get something from Kerouac’s On the Road, even if
they do not identify fully with the subculture that birthed it.
On the other hand, try explaining Facebook to someone who has never
used a computer, and you will have a much harder time. The generational
divide between my grandma and me, born about 60 years apart, is vaster
than that between a citizen of the Roman Republic and a farm labourer in
15th-century Britain.
Mass media changed everything, creating cultural gaps across time as

well as geography. The world moved more slowly before we had daily
mass communication, and it was safe to assume that each century would
be similar to the previous. Governments changed, tools were invented
and refined, but the human experience was always shaped by the same
basic forces. Now, as simple a decision as which apps we use can alter
our cultural affiliation within the greater digital society.
We should avoid falling into the classic Whippersnapper/Old-Fogey
Syndrome. It is natural for the older generations to yearn for the media
environment of their youth, and for the younger to assume that their
environment is superior due to sheer newness. A digital native might
thumb his/her nose at 90s nostalgia (I want my Tamagotchi back!), just as
a 90s kid might decry the addition of new Pokémon to the original 151.
Neither culture is necessarily better, but they are undeniably different.
The long-term effects of this phenomenon are unclear. The digital world is
still too new for us to have conclusive research on just about anything; we
are charting new territory. Much depends on whether technological
development is truly exponential — if so, these gaps will get more and
more frequent — or if it will eventually plateau. ….
(Source: Koschei, J. (2013). The Growing Technological Generation Gap - The Industry. [online]
Retrieved from: http://theindustry.cc/2013/02/12/the-growing-technological-generation-gap/ [Accessed:
10 Dec 2013].)

6. A technology may consist of several sub-__________.
7. Different components of a technological product may belong to
different generations. (True/False)
6.5 Product Life Cycle

A product development passes through a sequence of stages, such as the
introduction, growth, maturity, and decline. The sequence of stages is also
called Product Life Cycle (PLC). PLC influences the marketing strategy and
marketing mix of an organisation. The four stages of PLC are categorised
on the basis of revenue generated by the product. This concept can be
applied to a brand or to a category of product. The durations of the stages
may vary from a few days to several years.

PLC involves some marketing mix strategies, which can be better explained
with the help of the four Ps of marketing. A brief explanation of these four Ps
is as follows:
Product: This includes goods and services offered to the customers by
producers. In simple words, a ‘product’ implies the goods and services a
seller sells and a buyer purchases. It is the most visible element of
marketing. A product includes decisions of various factors, such as product
design, features, sizes, quality, and packaging.
Price: This implies the amount given by a buyer to the seller of a product or
service. The pricing strategy involves decisions about selling price,
discounts, and credit limits. The factors deciding price are the organisation’s
objectives, costs, competition, and customer demands.
Place: It involves a decision about the location of the product from where it
can be purchased. It focuses on the distribution of the product to the end
users in an organisation. Every marketer aims at finding the best distribution
channel for the product.
Promotion: It involves the use of communication tools to increase the
awareness of customers about the product. The tools of promotion include
advertising, sales promotion, direct marketing, public relations, and sales
force. These tools inform customers about the product and persuade them
to buy it.
Fig. 6.4 shows the different phases of the PLC:
Fig. 6.4: Different Phases of PLC

As you can see in Fig. 6.4, the stages in the PLC are quite similar to the
stages of the technology life cycle. Stages of PLC are briefly explained as
follows:
Introduction: At this stage, a new product is introduced in the market.
Organisations need to conduct promotional activities prior to the launch of
the product to create awareness and consumer demand. For example,
Microsoft undertakes huge promotional activities before launching any new
software product. At the introduction stage, public awareness about the
product remains low. In addition, the demand for the product also remains
low. Naturally, revenue received from the product remains low in this stage.
Let us take the example of CRT TVs. There was very low awareness about
the product when it was introduced in the market. Naturally, there were less
number of users in the initial years.
Growth: At this stage, the market share of a product starts growing at a
rapid speed. After the consumers are informed of the presence of a new
technology product, they start showing interest in the product. Naturally, the
revenue received from the product also starts growing. In the growth stage,
the main focus of an organisation should be the distribution channels. This
is because the products need to be made available to a maximum number
of people. The growth of CRT TVs continued in the 1970s till 1990s.
Maturity: In this stage, the product is accepted by a maximum number of
people. Therefore, the revenue received from the product also becomes the
maximum at this stage. CRT TVs reached maturity around the year 2000.
Decline: At this stage, a technological product starts becoming obsolete.
Towards the end of this stage, a product starts being replaced by newer
products. In the decline stage, the revenue received from the product starts
falling. At this stage, an organisation may upgrade the product to meet the
changing needs of customers. After the year 2000, the user base of CRT
TVs started declining, as other innovative technologies, such as LED and
LCD, arrived in the market.
Exhibit 6.3: Digital Move Expected to Hasten Demise of CRT TVs

Watchiranont Thongtep

The Nation, March 3, 2014

Leading television manufacturers forecast that the long era of Cathode
Ray Tube (CRT) TV will soon come to an end, after digital terrestrial
broadcasting comes into full effect.
"The CRT market is now around 15% of the total. This segment will begin
fading out a year or two from now. How quickly it fades depends on the
expansion of digital broadcasting upcountry," Jumpei Sugimoto,
marketing manager for home entertainment at Sony Thai, told The
Nation.
In fact, leading TV brands, such as LG, Sony, Samsung, and Toshiba,
have been closing down their CRT production lines for years and
retooling them for more cutting-edge TV screens, like LCD (liquid-crystal
display) and LED (light-emitting diode), to cater to increasing demand.
Takon Niyomthai, general manager of Toshiba Thailand, said his
company had not manufactured CRT televisions for the Kingdom since
2004 because of increased demand for LCD TVs. This followed its parent
company's transition towards digital TV in Japan.
"The last CRT models produced by Toshiba were the 14LCT, 21LZT and
29LZ5ST, but they are no longer available," Takon said.
Sugimoto said Sony Thai also ended production of CRT TVs about six
years ago.
Meanwhile, Nipon Wongsaengarunsri, head of home entertainment and
home appliances of LG Electronics (Thailand), said that although his
company decided to end the production of CRT TVs in the first quarter of
last year, it opted to import them for continuing demand in this country.
According to LG market research, sales of CRT TVs, in terms of units,
have been declining significantly in Thailand for several years. Of the 3
million television sets the industry, sold in 2011, CRT units accounted for
just 1.3 million or 43%. In 2012, total TV sales reached 3.1 million units,
but only about 985,000 CRT sets were sold, a 34% share. Last year, the
industry sold 2.9 million TV sets, of which only 500,000 were CRT units,
about 18%.
"We believe that demand in the CRT TV segment will not exist five years

from now," Nipon said.

Toshiba Thailand said that it saw the same trend. However, even though
these organisations appear to be leaving the CRT TV segment behind,
they still provide after-sales service as usual.
Sony customers can directly contact their service centres, call the
company's information centres, or even arrange home service, Sugimoto
said.
Though people will be able to watch digital content on old-fashioned TV
sets by using a DVB-T2 set-top box with a new antenna, their viewing
experience will not be as good as that provided by LCD, LED, or OLED
(organic LED) TVs.
Sugimoto said that the TV-set market would grow along with the
availability of digital broadcasting nationwide. But the most critical driver
of this growth would be high-definition programming.
"HD content will be the key factor to grow the TV market. So, we hope
more and more content providers will deliver HD programmes to this
market. Just channelling more standard-definition programmes through
digital broadcasting signals may not attract our customers," he said.
(Source: The Nation. 2014. Digital move expected to hasten demise of CRT TVs - The Nation. [online]
Available at: http://www.nationmultimedia.com/business/Digital-move-expected-to-hasten-demise-of-
CRT-TVs-30228176.html)

8. _______involves the use of communication tools to increase the
awareness of customers about the product.
9. What are the different stages of a PLC?
6.6 Diffusion of Technology

In simple words, diffusion of technology refers to the adoption of a new
technology or technological system by the users through various channels.
According to Rogers (1995), diffusion is a process by which an innovation is
communicated over time, through certain channels to members of a social
system. The adoption rate of a new technology depends on the efficacy of

technology in solving some perceived problem. For example, various

educational technologies, such as programmed learning devices and
computer-assisted instructions, are expected to replace class-room
education.
Therefore, such technologies are gaining more acceptance by users.
Another example of technology diffussion is how laser technology got
diffused and gradually adopted in heathcare, manufacturing, fashion, and,
entertainment. In addition, laser technology is now used in various
consumer devices, such as DVD players, laser printers, and barcode
scanners. It is also used for laser surgery, skin treatment, and cutting and
welding materials in manufacturing. Some of the other usages include
military and law enforecement devcices for making targets and measuring
range and speed, laser light displays in entertainment, and in scientific
researches.
There are a number of factors that affect the adoption of technology by the
members of a social system. These factors are mentioned as follows:
 The degree to which the innovation is perceived to be offering better
advantage than the existing practice
 The degree to which the innovation is compatible with the values and
needs of users
 The degree to which the innovation is considered complex and difficult
to use
 The degree to which the innovation can be introduced on a trial basis,

before users must fully commit to its adoption
 The degree to which the innovation is seen and its results are observed,
by potential adopters
According to Rogers (1995), innovations, which have a greater competitive
advantage, compatibility, and are less complex, are more rapidly adopted by
users.

Fig. 6.5 shows diffusion curves of two technologies:
Fig. 6.5: Diffusion Curves

(Source: Rogers`s,1995)

10. According to _____ (1995), innovations, which have a greater
competitive advantage, compatibility, and are less complex, are more
rapidly adopted by users.
11. In simple words, diffusion of technology refers to the adoption of a
new technology or technological system by users through various
channels.
6.7 Summary
 Technology life cycle refers to the various stages of a technology, from
its introduction to decline.
 The S-curve of technological progress refers to the S-shaped curve of

the improvement in performance of any technology.
 The S-curve of technological progress involves four stages, embryonic,
growth, maturity, and decline.

 The adoption rate of technology is different in the different stages of a

technology life cycle.
 Income is generated only when a technology reaches its market. A

technology, which is still under development, cannot produce any
income.
 Similar to a system, a technology may consist of several sub-
technologies. Each of these sub-technologies has its own life cycle.
 A product development passes through a sequence of stages, such as
the introduction, growth, maturity, and decline. The sequence is also
called PLC.
 Diffusion of technology refers to the adoption of a new technology or
technological system by the users through various channels.
6.8 Glossary
Revenue: It refers to the total sales proceeds received by an organisation
from a particular product.
Innovators: These are more educated and risk-oriented consumers, who
are the first to adopt a new technology.
Early Adopters: These consumers are little less risk-oriented than the
innovators. Early adopters adopt a new technology after the innovators.
Laggards: They are risk-averse and the last consumers to adopt a new
technology.

1. Explain the S-curve of technological progress.
2. What are the stages of the technology life cycle?
3. Write a note on the Roger`s Bell curve.
4. What is the relation between market growth and technology life cycle?
5. Write a note on multiple-generation technologies.

6. Describe promotions.
7. What are the different stages of a PLC?
8. What do you know about the diffusion of technology?
6.10 Answers

1. Performance, adoption rate, and market return.
2. Embryonic, growth, maturity, and decline.
3. Decline stage
4. Mature technology
5. True
6. Technologies
7. True
8. Promotion
9. Product life cycle
10. Diffusion
11. Rogers
Terminal Questions
1. The S-curve of technology progress shows the change in performance,
adoption rate, and market return received from a new technology over a
period of time. Refer to section 6.2 S-curve of Technological
Progress for details.
2. The four stages of the technology life cycle are embryonic, growth,
maturity, and decline. Refer to section 6.2 S-curve of Technological
Progress for details.
3. It depicts the trend of adoption of a new idea or technology by
consumers. Refer to section 6.2 S-curve of Technological Progress
for details.

4. Revenue received from a technology is different in the various stages of

the technology life cycle. Refer to section 6.3 Market Growth and
Technology Life Cycle for details.
5. Multiple-generation technology refers to the technology that consists of
different sub-technologies from different generations. Refer to section
6.4 Multiple-Generation Technologies for details.
6. It involves the use of communication tools to increase the awareness of
customers about the product. Refer to section 6.5 Product Life Cycle
for details.
7. The different stages of the PLC are introduction, growth, maturity, and
decline. Refer to section 6.5 Product Life Cycle for details.
8. Diffusion of technology refers to the adoption of a new technology or
technological system by the users through diverse channels. Refer to
section 6.6 Diffusion of Technology for details.
6.11 Case Study: Gartner Says the Natural Life Cycle of a

Technology Driven Company is Under 10 Years
According to Gartner Inc., the life cycle of any organisation, not just
technology organisations, is being driven mainly by technology. In addition,
the company suggests that typically a technology-driven life cycle is of less
than 10 years.
According to Steve Prentice, vice president and Gartner Fellow, “Long-term
expansion cycles influence all businesses, and your major competitor in 10
years - if you survive that long - probably does not exist today.”
In the Gartner Symposium/ITxpo that took place during 10-14 November
2013 in Barcelona, Mr. Prentice analysed the future life cycles of various
technology organisations, including IBM Personal Systems Group, Nokia,
MySpace, Kodak, Borders, and HMV. The analysis shows that a leading
company in one wave rarely ever survives to dominate the next.
According to Mr. Prentice,“To compete in this environment, business
leaders must destroy and rebuild the very businesses they helped create.”
He also added, “Nokia’s metamorphosis is an example of embracing the

concept of destruction and reinvention, while the current business model still
remains a success. The divestiture of IBM Personal Systems Group to
Lenovo and subsequent changes in the company’s focus is another
example. Apple is another company, which almost came to extinction
several times over its life and then dominated the next technology wave
through significant changes to its operations.”
To survive and prosper beyond the first decade, a company requires to
continuously reinvent. However, the major difficulty with reinvention is
timing. Mr. Prentice said “The idea of ‘quit while at the top’ or to regenerate
may seem counterintuitive but may be the only winning strategy. It requires
total commitment from the board of directors and other stakeholders,
ongoing support from the workforce, but above all, the conviction of the
correctness of the course of the action being taken. The most challenging
aspect is the need to destroy or walk away from what appears to be
successful, but will rapidly turn into a crippling legacy, which prevents
regeneration.”
Smart machines, such as autonomous vehicles, intelligent personal
assistants, and advanced global industrial control systems cause
disruptions in the life cycles of organisations. According to Mr. Prentice,
“Over the coming years, we expect to see dramatic growth in the availability,
sale, and use of smart machines. We predict that smart machines will be the
most disruptive change ever brought about by IT.”
There is a vast potential and impact of new machines. These can empower
users and make them more effective. For example, a self-driving car was a
very futuristic idea even a few years ago. However, at present, it is a reality.
This is because various sub-technologies of a self-driving car, such as
collision avoidance, pedestrian detection, and automatic breaking, are
already available. Fully automatic trucks are already in commercial use in
the USA in limited numbers.
According to Mr. Prentice “Today, smart machines are usually the result of
brute force automation, but the next generation will exploit a variety of
techniques to not only learn but adapt to their environment. They will be
able to seek new information to deal with novel situations. The criteria for
‘smart’ will be continually rising in the coming years. If anything, smart

machines will strengthen the forces of consumerisation after the first surge
of enterprise buying commences,” concluded Mr. Prentice.
About Gartner Symposium/ITxpo

Gartner Symposium/ITxpo is the world’s most important gathering of CIOs
and senior IT executives. This event delivers independent and objective
content with the authority and weight of the world’s leading IT research and
advisory organisation, and provides access to the latest solutions from key
technology providers. Gartner’s annual Symposium/ITxpo events are key
components of attendees’ annual planning efforts. IT executives rely on
Gartner Symposium/ITxpo to gain insight into how their organisations can
use IT to address business challenges and improve operational efficiency.
Questions:
1. On the basis of the case, discuss the various dynamics of the
technology life cycle in organisations.
2. What do you think are the reasons behind the short life cycles of
organisations driven by technology?
(Source: WebWire (2013). Gartner Says the Natural Life Cycle of a Technology-Driven Company Is
Under 10 Years. [online] Retrieved from: http://www.webwire.com/ViewPressRel.asp?aId=182695#.Up-
Ax9IW1N8 [Accessed: 4 Dec 2013].)

J. Wiley.
Hill.

E-References
 Koschei, J. (2013). The Growing Technological Generation Gap - The

Industry. [online] Retrieved from: http://theindustry.cc/2013/02/12/the-
growing-technological-generation-gap/ [Accessed: 10 Dec 2013].

 Pcs, T. (2013). Tablets dominating tech market as consumers drop PCs

| PCWorld. [online] Retrieved from:
http://www.pcworld.com/article/2048650/tablets-dominating-tech-market-
as-consumers-drop-pcs.html [Accessed: 10 Dec 2013].
 WebWire (2013). Gartner Says the Natural Life Cycle of a Technology-
Driven Company Is Under 10 Years. [online] Retrieved from:
http://www.webwire.com/ViewPressRel.asp?aId=182695#.Up-
Ax9IW1N8 [Accessed: 4 Dec 2013].
http://unicomgov.com/files/6713/6323/5125/Technology-lifecycle-
Mgmt.pdf [Accessed: 4 Dec 2013].
 Roberts, E. & Liu, K. (2003). Ally or Acquire? Case Studies of Compaq
and Cisco as Additional Tests of the External Technology Life Cycle
Model. [online] Retrieved from:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=441342
http://myweb.ncku.edu.tw/~jeng/doc/tech/Ch2.pdf [Accessed: 4 Dec
2013].
 The Nation. 2014. Digital move expected to hasten demise of CRT TVs -
The Nation. [online] Available at:
http://www.nationmultimedia.com/business/Digital-move-expected-to-
hasten-demise-of-CRT-TVs-30228176.html

Unit 7 Technology and Business Strategy

Structure
7.1 Introduction
Objectives
7.2 Defining Strategy
7.3 Methods for Strategic Analysis and Decision Making
Strategic decision-making process
Features of strategic decisions
Issues in strategic decisions
7.4 Technology Strategy: Formulation and Direction
7.5 Technology, Business Strategy, and Core Competence
7.6 Summary
7.7 Glossary
7.9 Answers
7.10 Case Study: Flipkart.com, the Amazon of India
7.1 Introduction
In the previous unit, you studied about the technology life cycle. Now, let us
study about the role of technology in formulating business strategies of
organisations.
Why do some organisations build unprecedented market value with the help
of technology, when others fail to achieve the same? Today, almost every
organisation recognises the value of technology as a strategic tool to
achieve competitive advantage. However, the success of an organisation
depends upon how strategically it uses this tool. In addition, to gain
sustainable competitive advantage, an organisation needs to develop and

execute an effective IT strategy. In addition, the organisation should also

align its IT strategy to the overall business strategy.
In simple words, strategy refers to the action plan of an organisation to
achieve certain strategic goals. For example, providing merchandises at the
lowest cost is the business strategy followed by Walmart. A technology
strategy refers to action plans followed by organisations to leverage
technology to achieve a certain competitive position. For example, with the
help of innovative technologies, such as RFID (Radio-Frequency
Identification), Walmart has built one of the most advanced logistics
systems that helps the company in maintaining its competitive position.
In addition, technologically innovative companies, such as Google and
Apple, use technology in a strategic way to achieve market leadership in
their respective fields of business. On the other hand, some of the public
sector companies in India still rely on older and less efficient technology.
These companies cannot achieve superior efficiency and effectiveness,
because they cannot leverage technology as effectively. Therefore,
technology is an integral component in the formulation of business strategy
by an organisation.
In this unit, you will be acquainted with the concept of strategy. Further, you
will study various methods of strategic analysis and decision making.
Towards the end, you will study about technology strategies. Some of the
additional topics covered in the unit include technology, business strategy,
and core competence.
Objectives
 define strategy
 describe the methods for strategic analysis and decision making
 explain the strategic decision-making process
 describe the features of strategic decisions

 describe the issues in strategic decisions

 define a technology strategy

 explain the relationship between core competency and business
strategy
7.2 Defining Strategy

Igor Ansoff, known as the father of strategic management, established the
concept of strategy in the 1960s. A strategy can be defined as a plan of
action to achieve a set of pre-determined and specific goals. The word
‘strategy’ originated from the Greek word ‘strategia’, meaning a military
general. There is no definite meaning given to ‘strategy’, as various authors
have defined strategy in different ways.
According to Henry Mintzberg, “People use ‘strategy’ in several different
ways, such as:
 Strategy is a plan, a “how,” a means of getting from here to there.
 Strategy is a pattern in actions over time; for example, a company that
regularly markets very expensive products is using a “high end” strategy.
 Strategy is position, that is, it reflects decisions to offer particular

products or services in particular markets.
 Strategy is perspective, that is, vision and direction.”
According to Kenneth Andrews “Corporate strategy is the pattern of
decisions in a company that determines and reveals its objectives,
purposes, or goals, produces the principal policies and plans for achieving
those goals, and defines the range of business the company is to pursue,
the kind of economic and human organisation it is or intends to be, and the
nature of the economic and non-economic contribution it intends to make to
its shareholders, employees, customers, and communities.”
According to Johnson and Scholes, “Strategy is the direction and scope of
an organisation over the long term, which achieves advantage for the
organisation through its configuration of resources within a challenging
environment, to meet the needs of markets and to fulfil stakeholder
expectations.”

A strategy furnishes a platform for an organisation to perform in a better

manner and achieve a competitive edge. The concept of strategy can be
made clear by looking at its objectives, which are as follows:
 Providing direction and stability to the organisation

 Determining the long-term goals of the organisation
 Helping the organisation to prioritise the targets, on the basis of
organisational resources
 Facilitating the planning and execution of long-term, medium-term,
short-term, and day-to-day plans
 Facilitating the decision-making process

 Allocating resources to various departments, such as marketing, human
resource, finance, infrastructure, and operations, of the organisation
 Increasing organisational effectiveness by making judicious use of
organisational resources such as funds, human resources, technology,
and infrastructure
 Defining the code of conduct that lays down various rules and policies
for an organisation
Exhibit 7.1: Strategy in Dell Inc.
Dell Inc., one of the largest multinational IT corporations, has its

headquarters in Round Rock, Texas, USA. The product portfolio of
the organisation includes personal computers, data storage devices,
servers, computer peripherals, network switches, and software. Dell is

among the most successful organisations, established in the last thirty

years. It was set up in 1984 by Michael Dell, when he was just 19, and
a first year student at the University of
Texas, Austin. The organisation is an
example of how an innovative idea
can be turned into a successful and
sustainable organisation, with the
help of strategic management.
The organisation started with a capital
of just $1,000. Initially, Dell used to
sell the upgraded versions of IBM-
compatible PCs directly to customers. However, after a year of
operation, the organisation started selling PCs under its own brand
name. Within a very short span of time, Dell captured a significant
portion of the corporate PC market. The main reason behind the initial
success of the organisation was its direct sales model. Dell sold PCs
directly to the customers, bypassing distributors and retail sellers.
Customers could order the PCs directly by telephone. The direct sales
strategy of the organisation helped in reducing the costs substantially,
as well as customising products according to the needs of the
customers. The model also helped in fostering better customer
relations, which in turn aided in creating better products.
Dell did not compete directly with the more established players in the
PC market. The organisation always concentrated on the product
design and after-sales services. Dell achieved both the objectives by
eliminating all the intermediaries (such as the distributors and the
retailers). The reach and the scope of the direct sales model were
augmented because of the emergence of the Internet. Dell reaped the
first mover’s advantage in the Internet sphere by developing a website
in 1994. The direct sales model attracted a huge number of customers
from all over the world. The total sales of the organisation, as given by
Dell’s website (www.dell.com), grew to more than $50 million per day
in early 2002, up from $5 million per day in 1998.


1. _____ is known as the father of strategic management.
2. A strategy intends to achieve certain pre-defined goals. (True/False)
Activity 1:
Conduct research to find out the strategies of at least one technology
company of your choice. Discuss the strategies with your classmates. You
can take help of publicly available resources, such as the Internet.
7.3 Methods for Strategic Analysis and Decision Making

Strategic decision making generally pertains to the long-term future of an
organisation. Therefore, strategic decisions are very critical to the
achievement of an organisation’s overall objectives. Strategic decisions
entail a substantial expenditure of human and non-human resources.
Strategic decisions can be defined as the decisions that are concerned with
the external and internal environment in which an organisation operates and
organisational resources to meet the long terms goals of an organisation.
Therefore, strategic decisions aim at matching the organisational resources
with the external opportunities and threats faced by the organisation.
NOTE:
Strategic decisions are made by the top-level management of an

organisation. In addition, strategic decisions deal with the future; they
therefore involve significant risk.
Thus, the strategic decision-making process should be carried out very

conscientiously. The responsibility to take strategic decisions lies with the
top management of the organisation.
Growing competition and complexity of organisations have increased the
importance of decision-making at the top level. If the strategic decisions of
an organisation go wrong, the strategies fail to produce the desired results.
Therefore, effective strategic decision making is crucial to the success of an
organisation. Strategic decisions require extensive resources and a great

level of dedication from employees at all levels. Lower-level decisions of an

organisation are based on strategic decisions.
Exhibit 7.2: Difference Between Strategic, Administrative, and

Operational Decisions
Strategic Decisions Administrative Operational

Decisions Decisions
These are long-term These are short-term These are medium-
decisions. decisions. term decisions.
These are made while These are made almost These decisions are
planning for the future. daily. taken as and when
required. Operational
decisions are not
taken very frequently.
These advance the These decisions are These decisions are
mission and the vision taken in accordance to taken in accordance
of the organisation. the operational and with the strategic
strategic decisions. decisions.
7.3.1 Strategic decision-making process

There are various ways to carry out the process of strategic decision making
in an organisation. Some of the ways are shown in Fig. 7.1:
Intuitive Decision Making
Rational Decision Making
Behavioural Decision Making
Fig. 7.1: Approaches to Strategic Decision Making

The approaches to strategic decision making are discussed as follows:

Intuitive decision making: This implies the use of common sense to make
decisions. It can be an inner sense or voice of a manager that supports the
decision-making process. Intuitive decision making might involve creative
thinking to obtain alternate solutions to a problem. For example, the
decisions taken by managers on the basis of their previous experiences in
similar situations are intuitive decisions.
Rational decision making: This involves selecting the most logical solution
to the problem by gathering data and brainstorming. This type of decision
making uses a logical, ordered, and structured approach. For example, the
decisions taken after analysing the available information and weighing the
various options are rational decisions. Brainstorming can be followed here
also.
Behavioural decision making: This depends on the behaviour of humans.
Behavioural decision making involves active participation from employees in
decision making, to make a decision more effective and efficient. It also
leads to a sense of belongingness within the employees. For example,
brainstorming is a behavioural decision-making process. In brainstorming, a
group participates to provide solutions to a problem at hand.
7.3.2 Features of strategic decisions

As mentioned earlier, strategic decisions are long-term in nature. For
example, in the Dell case, we have seen that the direct model is a strategic
decision of the organisation. The model fulfils the vision of Dell. Therefore,
the administrative and operational decisions of the organisation are taken in
accordance with the strategic decision. As you can see, strategic decisions
involve future planning; these involve risks and complexity. Let us discuss
some of the other features of strategic decisions.
The main features of a strategic decision are as follows:
Integrating diverse functions in the organisation: It implies that strategic
decisions aim at coordinating the activities of different Strategic Business
Units (SBUs) to achieve organisational goals of quality, cost, revenue, and
innovation.

Considering the broad range of stakeholders: It implies that strategic

decisions affect the needs for various stakeholders such as customers,
shareholders, owners, managers, and government. The top management
develops strategies by taking into consideration the effect of its decisions on
stakeholders.
Concerning both efficiency and effectiveness: It implies that strategic
decisions aim at doing the right things in the right way. Strategic decisions
try to balance all the dimensions of work.
Other features of strategic decisions are as follows:
 Affects the long-term direction of an organisation
 Matches the organisation’s activities with the business environment
 Involves the operational decisions of the organisation
7.3.3 Issues in strategic decisions

Strategic decision making in an organisation is immeasurable and quite
difficult to perform, because it cannot be analysed and explained easily.
There are various issues in strategic decision making that may arise in an
organisation. Fig. 7.2 depicts the issues in strategic decision making:
Volatility in
Decision
making
Individual
Creativity in
versus Group
Decision
Decision
making
making
Issues in
Strategic
Decision
Making
Individual
Rationality in
Factors in
decision
Decision
making
making
Differnet
Criteria for
Making
Strategic
Decisions
Fig. 7.2: Strategic Decision-making Issues

Let us discuss the issues in strategic decision making in the following

section:
Rationality in decision making: It implies that a final decision should be
made from separate alternatives in such a way that the objectives of the
organisation are achieved in the best possible manner. A rational decision
should take into consideration all the aspects of the organisation such as
profitability issues, optimisation issues, and a consensus of all the members
of the organisation. Therefore, in case a rational decision does not consider
all the available information, the decision is not as effective. For example, if
an organisation fails to properly map its technological capabilities, it cannot
develop an effective technology strategy.
Creativity in decision making: It implies that a strategic decision should
be unique and different in nature. Creativity in the decision-making process
leads to explore the alternatives and achieving the objectives in an
exceptional manner. This is the reason top technology companies, such as
Google and Apple, emphasise a lot on acquiring creative individuals and
maintaining a creative environment.
Volatility in decision making: It implies that every problem may have
different solutions, depending on different perceptions of different
individuals. Thus, it can be inferred that the process of strategic decision
making involves volatility.
Different criteria for making strategic decisions: It implies setting
objectives for making decisions. The three major criteria in strategic
decision making are as follows:
 Maximisation concept: This implies maximising the returns.
 Pragmatic concept: It means setting objectives realistically and
optimally.
 Incremental concept: This implies moving towards achieving the
objectives through small incremental steps.
Individual factors in decision making: It implies that human factors, such
as age, knowledge, creativity, and perceptions, play a significant role in
strategic decision making. For instance, while taking social responsibility

decisions, individual values, such as culture and beliefs, form the most
important part.
Individual versus group decision making: This lead to differences in the
strategic decision making process. The strategic decisions taken by an
individual, such as a chief executive officer or a manager, differs from the
decisions taken by a group, such as a board of directors.
Exhibit 7.3: ‘I’s of Strategic Decision Making

Strategic decision making is a continuous process. However, there are
a number of models for generating strategy. Let us study the 6 Is of
strategic decision-making, as depicted in the following figure:
Identification of
problem
Imrovement Via Information

Feedback Processing
Strategic
Decision
Making
Indentification of
implementation
options
Isolting A choice
The 6Is are elaborated as follows:

1. Identification of the problem: At this stage, an organisation
identifies the problems for which the strategic decision needs to be
made. At this stage, a problem statement is prepared detailing the
nature and the scope of the problem.
2. Information processing: After identifying the problem(s), the
organisation needs to gather information regarding the problem and

other internal and external factors. Next, the collected information is

analysed to gain more insight into the problem.
3. Identification of options: At this stage, various available means of
solving the problem are identified. An organisation should focus on
identifying as many options as possible.
4. Isolating a choice: After identifying the options available to solve
the problem at hand, the appropriate option needs to be selected.
Various quantitative and qualitative methods can be applied to
isolate the choice.
5. Implementation: After the appropriate choice has been identified,
the goal is to implement the choice. First, an implementation plan
needs to be made. Thereafter, adequate resources need to be
provided to implement the plan.
6. Improvement via feedback: This step is conducted to ensure that
the implementation was as per the plan. This is done with the help
of measurable targets and feedbacks.

3. Operational decisions are ____-term in nature.
4. Strategic decisions are made by the _____-level management of an
organisation.
5. Strategic decisions match the organisation’s activities with the
business environment. (True/False)
6. ___________involves selecting the most logical solution to the
problem of gathering data.
7.4 Technology Strategy: Formulation and Direction

A technology strategy refers to the action plan adopted by organisations to
leverage technology to achieve a competitive position in the market.
Adoption of technology is no more only an option but a compulsion for the
organisation.

In a competitive market, every organisation competes to increase market

share. To attract and retain more customers, organisations need to provide
superior products and services, increase customer satisfaction, connect to
customers, and build customer relationships. Technology plays crucial roles
in all these aspects of an organisation. Most production processes have
been automated, so that productivity can be increased manifold and manual
errors can be eradicated. Technology has ensured better quality assurance,
which in turn increases customer satisfaction.
Formulation of a technology strategy involves deciding a number of factors
such as how to develop or acquire new technology, how much to invest in
Research and Development (R&D), how to gain technological capabilities to
achieve business goals, etc. Therefore, the following questions need to be
answered while formulating a technology strategy:
 Which technology is supportive for a product and market strategy?

 Which technologies produce a competitive advantage by creating more
value or cutting expenses?
 Which technologies support new market initiatives?
 Which technological successes can be exploited by the organisation?
 Is the R&D programme strong enough to develop the technological
capability that supports the product or market strategy of the
organisation?
 What are the different options of technology acquisitions (in-house
development, licensing, academic support) being considered?
Exhibit 7.4: A Sample Technology Strategy Template

Chair:
Date:
Name: _____________________________________
Business Name: _____________________________________
Q1.What are our top 5 business “pain” points?
Q2.What are our top 5 business “objectives”?

Q3.How do we plan to achieve these objectives?

Q4.What is in the way of achieving our imperatives?
Q5.What will we gain by leveraging IT capability across the business?
Q6.Who is our “customer”?
Q7.What is our current business model?
Q8.What are the strengths/weaknesses/gaps in this business model?
Q9.What are the strengths, weaknesses, opportunities, and threats facing
our business?
Q10. What is each product’s profitability by market and channel?
Q11. What are some of the key areas in which our competitors are better
than us? Is this “gap” of importance to our customer?
Q12. Can IT help achieve our business imperatives?
Q13. What will we gain by leveraging IT capability (selling,
manufacturing, buying or servicing) across the business?
Q14. Top 5 business trends? Which of these will affect us? How?
Q15. Top 5 technology trends? Which of these will affect us? How?
Q16. How much do we spend on it? (Is it the largest single investment?)
Q17. What is our technology Return On Investment (ROI)?
Q18. Does our organisation have a plan for technology?
Q19. Does our business plan include a technology plan?
Q20. Where is IT being used across our business?
(Source: IT Strategy Template. [online] Available at: http://www.cioindex.com/article/articleid/717/it-
strategy-template.)

7. A ___________refers to the action plan adopted by organisations to
leverage technology to achieve a competitive position in the market.
8. Formulation of a technology strategy involves evaluation of the
available options of technology acquisition. (True/False)

7.5 Technology, Business Strategy, and Core Competence

Technology has significantly transformed business strategy. Earlier,
organisations use to compete on the basis of product features and
functionalities. However, with rapid advancement in technology, competitors
can provide similar products. Therefore, organisations compete on the basis
of other factors, for example, service delivery and maintenance of customer
relations and providing customer support. As we discussed earlier,
technology makes a huge difference in providing service delivery and
maintaining a good customer relationship and support. Therefore, the main
focus of modern organisations remains on acquiring technological
capabilities that enable the organisation in meeting its business goals.
To beat competitors, an organisation needs to build certain unique
capabilities. For example, the unique capability developed by Motorola was
its wireless communication systems. Similarly, the unique capabilities of
Boeing are large-scale system integration and efficient design and
manufacturing. These unique capabilities of an organisation are known as
the core competence of the organisation.
Technology helps in building core competence, which in turn helps an
organisation in meeting its business goals. For example, low-cost
operations are one of the core competencies of Walmart. To achieve cost
leadership, Walmart has developed a highly-efficient and technology-
enabled logistics system. The application of innovative technology has
helped Walmart in achieving competitive advantage in the international retail
market. The organisation is well equipped with the latest technological
innovation, including security bar coding such as RFID.
In the 1980s, when the whole world was fumbling with the idea of bar
coding, Walmart implemented it in reality. The organisation installed RFID
readers at several points such as at the back of the building, at receiving
docks, near the garbage compactors, and between the distribution centre
and store floor. RFID technology helps Walmart stores in managing
activities involved in stock distribution and warehousing. With RFID codes,
the distribution centres of Walmart easily identify the content of cartons,
without opening packaging. RFID also helps Walmart’s distribution centres

to register all the details related to items sold and replenishments made on
the sales floor.
In addition, Walmart has also installed its own satellite network system. This
system facilitates information sharing among different stores, distribution
centres, and suppliers. The satellite network system has resulted in
substantial reduction in inventory cost of the organisation.
Therefore, as you can see, technology is the most crucial factor that
provides a competitive edge to an organisation.

9. At present, business strategy is a determinant of technological
capability. (True/False)
10. To beat competitors, an organisation needs to build certain unique
capabilities. What are these unique capabilities called?
7.6 Summary
 Strategy refers to the action plan of an organisation to achieve certain

strategic goals.
 A technology strategy refers to action plans followed by organisations to
leverage technology to achieve certain competitive position.
 A strategy furnishes a platform for an organisation to perform in a better

manner and achieve competitive edge.
 Strategic decisions can be defined as the decisions that are concerned
with the external and internal environment in which an organisation
operates and organisational resources to meet the long-terms goals of
an organisation.
 Some approaches of strategic decision-making are intuitive decision
making, rational decision making, and behavioural decision making.
 Strategic decisions are long-term in nature.

 The administrative and operational decisions of the organisation are

taken in accordance with the strategic decision.
 The main characteristics of strategic decisions are integrating various

functions in the organisation, considering a broad range of stakeholders,
and concerning both efficiency and effectiveness.
 Some of the issues in strategic decision making are rationality in
decision making, creativity in decision making, volatility in decision
making, and different criteria for making strategic decisions.
 Formulation of a technology strategy involves deciding a number of
factors such as how to develop or acquire new technology, how much to
invest in R&D, how to gain technological capabilities to achieve business
goals, etc.
7.7 Glossary
Competitive advantage: It refers to the areas in which a particular
organisation possesses a competitive edge over competitors.
Core competency: It refers to the unique capability of an organisation that
provides it with a competitive advantage.
Revenue: It refers to the total sales proceeds received from selling the
goods and services of an organisation.

1. Explain strategy.
2. What do you mean by a technology strategy?
3. Elaborate on the approaches of strategic analysis and decision making.
4. What are the features of strategic decisions?
5. Mention some of the issues in strategic decisions.
6. Relate a technology strategy with the core competency of an
organisation.

7.9 Answers

1. Igor Ansoff
2. True
3. Medium
4. Top
5. True
6. Rational Decision Making
7. Technology strategy 8. True
9. True
10. Core competence
Terminal Questions
1. Strategy refers to the action plan of an organisation to achieve certain
strategic goals. Refer section 7.2 Defining Strategy for details.
2. A technology strategy refers to action plans followed by organisations to
leverage technology to achieve certain competitive position. Refer
section 7.4 Technology Strategy: Formulation and Direction for
details.
3. Some of the approaches of strategic decision-making are intuitive
decision-making, rational decision-making, and behavioural decision-
making. Refer section 7.3.1 Strategic decision making process for
details.
4. Strategic Decisions are long-term in nature and made by the top-level
management. Refer section 7.3.2 Features of strategic decisions for
details.
5. Some of the issues in strategic decision-making are rationality in
decision-making, creativity in decision-making, volatility in decision-
making and different criteria for making strategic decisions. Refer
section 7.3.3 Issues in strategic decisions for details.

6. Successful organisations leverage technology to achieve competitive

positions in the market. Refer section 7.5 Technology, Business
Strategy, and Core Competence for details.
7.10 Case Study: Flipkart.com, the Amazon of India

"I think, we are a technology company that tends to do e-commerce …and
so, we have built in-house technology instead of sourcing it."
Sachin Bansal, Co-founder & CEO at Flipkart.com
Flipkart, also called as the Amazon of India, is one of the leading e-

commerce organisations in India. The organisation was started by Sachin
Bansal and Binny Bansal in October 2007.
Flipkart initially relied on word-of-mouth marketing through the social
networking sites to promote the company. Within a few months of its
foundation, Flipkart sold its first book, “Leaving Microsoft to Change the
World,” by John Woods. Within two years, through word-of-mouth, Flipkart
became one of the top 100 Indian sites and was credited for being India's
largest online bookseller, with over 7 million titles on offer. Flipkart broke
even in March 2008 and claims to have had at least 100% growth every
quarter since its founding.
The store started with selling books, and in 2010, branched out to selling
CDs, DVDs, mobile phones, cameras, and other electronic gadgets. So,
while a strong and intelligent technology helped in keeping the operating
cost low, customers were attracted by smart business strategies, like free
shipping and offering extremely low-cost books on the shelf, as a minimum-
risk purchase.

Flipkart is an innovative, hassle-free way of buying books, music, movies,

mobile phones, and games online in India. Taking online shopping to a
whole new level in the country, Flipkart sports an intuitive user-friendly
interface, competitive low pricing, simple payment methods, free shipping to
your doorstep, on-the-ball customer service, and of course, a mammoth
selection in the market that champions many of the websites selling stuff. It
provides a product description and reviews as well.
The company has efficiently leveraged technology to establish itself as a

leading online retailer in India.
Flipkart.com has designed a beautiful store front with balanced color and
quick tabs. The site is very simple to browse, and the procedure for e-
shopping is very simple. We can easily find the required product from
flipcart.com by using the categories, or directly searching it by using the
search tab, which can be seen right at the top of the page.
Flipkart’s current model is based on a partnership with local book vendors,
who keep updating the inventory. The process is being automated for
efficiency. There are around 3.5 million books in its database. They use an
ERP system for building systems for fulfilment operations, end-to-end. The
number of different business flows that need to be dealt with here is a major
challenge for any pure-play e-commerce business. Ever increasing users
and data add to challenges. Systems need to be capable of handling huge
amounts of structured data, working with large complex code bases with
software that can scale with the number of users and data.

The tagline of Flipkart reads online megastore. The founders’ business

opportunity was to do better than their competition in terms of service.
Hence, their main mission was to focus on customer service. As a start-up
company with ambitions in the e-commerce domain, they had to select a
category that could facilitate getting started quickly. The low transaction size
helped induce customer trials. With their strong technology background,
they could keep the initial costs low.
One of the foremost technological innovations in Flipkart was development
of its payment gateway PayZippy. Initially, the company developed the
gateway as a part of its B2B services; however, recently the company made
it a B2C service. PayZippy allows customers to save their card details on
the website.
According to Mekin Maheshwari, head-payments and digital media,
Flipkart, “With PayZippy, we have actually reduced the time taken for
making online payments by 50%. We are expecting at least 150,000
customers to sign up for this service within the first month, and our target is
to get 1 million customers by next June.”
Questions:
1. How did Flipkart.com create its competitive advantage with the help of
technology?
2. With the help of the case, explain the role of technology in surviving in a
competitive marketplace.

J. Wiley.


Hill.

E-References
 Blogs.forrester.com (2013). Enable business strategy through

technology innovation. [online] Retrieved from:
http://blogs.forrester.com/charlie_dai/13-07-25-
enable_business_strategy_through_technology_innovation [Accessed:
24 Dec 2013].
 Nigel Fenwick, F. (2013). 4 steps in developing a business technology
strategy. [online] Retrieved from: http://www.cio.co.uk/insight/strategy/4-
steps-in-developing-a-business-technology-strategy/ [Accessed: 24 Dec
2013].
 Satell, G. (2013). 4 Ways Technology Is Transforming Business
Strategy. [online] Retrieved from:
http://www.forbes.com/sites/gregsatell/2013/06/15/4-ways-technology-is-
transforming-business-strategy/ [Accessed: 24 Dec 2013].
 Why Flipkart is a tech company first and then an e-comm firm. [online]
Available at: http://www.firstpost.com/tech/how-is-flipkart-making-the-
tech-company-tag-work-1298145.html [Accessed: 26 Dec 2013].
 Bibliography: CIO Portal. 2013. IT Strategy Template. [online] Available
at: http://www.cioindex.com/article/articleid/717/it-strategy-template
[Accessed: 27 Dec 2013].

Unit 8 Role of Planning in Technology Management

Structure
8.1 Introduction
Objectives
8.2 Concept of Strategic Planning
8.3 Technology Planning
8.4 Technology Forecasting: Concept and Methods
8.5 Critical Technologies and Technology Maps
8.6 Technology Audit and Audit Models
8.7 Summary
8.8 Glossary
8.10 Answers
8.11 Case Study: Technology Audit
8.1 Introduction
In the previous unit, you studied about technology and business strategy of
an organisation. Now, let us discuss the role of planning in technology
management.
Vision group is an educational institute based in New Delhi. The group is
looking forward to expand its network of institutes to other cities in India. To
achieve this, the group needs to prepare a list of technologies that would be
required to manage the institutes and deliver course curriculum. Vision
group also requires a technology plan for the acquisition and management
of technologies. Technology plan can be developed by forecasting the
future technological trends. In addition, the group also needs to conduct an
audit to find out the technologies available in the market, with the
competitors and itself.

It is difficult to achieve any goal without proper planning. The same is valid
in the case of technology. Attaining technological expertise require proper
planning by organisations. In addition, organisations need to forecast the
future trends in technologies and create plans to acquire (either develop in
house or acquire from other organisations). Finally, organisations need to
conduct a technology audit to ensure all the technologies as planned are
available with the organisation.
In this unit, you will be acquainted with the concept of technology planning.
Next, it describes the relationship between technology planning and
technology life cycle. In addition, you will study about the concept and
techniques of technology forecasting. Some of the additional concepts
explained in the unit include critical technologies, technology map, and
technology audit and technology audit model.
After studying the unit, you will be able to:
 discuss the concept of strategic planning
 explain the concept of technology planning

 explain the concept of technology maps
 discuss the concept and methods of technology forecasting
 discuss technology audit and technology audit model
8.2 Concept of Strategic Planning

The process, which defines the strategy and direction of an organisation, is
known as strategic planning. It makes decision on resource allocation of
capital and people to monitor the defined strategy. Strategic planning can be
understood as the overall planning that helps in the effective management
of any process. It provides a clear image of what you are doing and where
are you going as an organisation. It also assists the organisation in
understanding, what it wants to achieve and how to go about achieving it. In
short, it is visionary, conceptual and directional in nature.

Strategic planning helps the organisation in answering the following

questions as depicted in Fig. 8.1:
What capacities do we have?
What problems are we facing?
What difference do we want to create?
What critical issues are waiting for response?
Where should we allocate our resources?
Fig. 8.1: Strategic Planning – Answers the Questions

Answering these questions helps in concentrating on the following issues as
depicted in Fig. 8.2:
What do we For whom do How do we

do? we do it ? excel ?
Fig. 8.2: Issues resolved through Strategic Planning

Strategic planning refers to a management tool that helps an organisation to
plan its desired future. It requires efficient use of people, money and other
resources in an organisation. The term strategic planning, also known as
corporate planning, includes a comprehensive planning process to achieve
long-term goals of the organisation.
According to Peter Drucker, “Corporate planning is a continuous process of
making entrepreneurial decisions systematically and with the best possible
knowledge of their futurity, organising systematically the efforts needed to
carry out these decisions, and measuring the results against expectations
through organised systematic feedback.”

According to Hussey, “Corporate long range planning is not a technique; it

is a complete way of running a business. Corporate planning is a way of
keeping the company’s eyes open”.
You should know that there is a difference between a strategy and strategic
planning. A strategy is defined as what an organisation would be; whereas,
strategic planning helps in detailing how an organisation would get there.
The features of strategic planning are as follows:
 Deals with the future decisions of an organisation Aligns long-term plans

with short-term plans
 Assists in developing strategic intent and action plans of an organisation
 Identifies new areas of investment for the organisation
 Ensures rational allocation of resources
 Develops forward thinking approach as it encourages forward planning
in an organisation
 Assists in benchmarking and monitoring the performance
 Creates ground for change
 Explains the business to others to inform, motivate, and involve
Strategic planning is a multi-step process, which covers the following points
as depicted in Fig. 8.3:
Vision
Mission
Values
Objectives
Strategies
Goals
Programs
Fig. 8.3: Points Covered in Strategic Planning Process

Now, let us discuss these points in the following section.

a. Vision: This refers to the long-term goal of an organisation. It presents
the impending situation and defines the image of the organisation in
that situation. The basic purposes of vision are to guide, control and
inspire the organisation in such a way that it helps in attaining the
desired goal. The vision answers the question of “what do we want our
organisation to be?” For instance, the vision of KPMG is “be a leader of
all the markets we participate”. Vision of Ford is “become the main
company of the world in products and services of the car”.
Technological capabilities play a crucial role in achieving the visions of
the company.
b. Mission: This refers to a statement that describes; how an organisation
is going to attend to the needs of the society, by providing high value
services and products to their clients. It also describes how it is
planning to give an increasing level of profitability to its shareholders
and developing the professional competence to their employees. For
example the mission of KPMG states, “transform the knowledge into
value to benefit the clients and the capital markets.” The mission
statement of Ford says, “We are a global, diverse, family with a proud
inheritance, providing exceptional products and services.”
c. Values: This refers to define the organisation’s belief and rules by a
framework of references that inspire and control the management of the
organisation. For example the values of KPMG state the following
points:
 We are leaders of our examples
 Team work
 Respect to people
 Analyse facts
 Honest and open communication
 We involve with the community
 What is more: we act with integrity

d. Objectives: This refers to the key elements that state the business
objective in terms of results. The organisation wants to achieve in the
medium or long term. The objectives cover topics such as profitability,
growth, technology, offerings, and market. The objectives should show
the core motives of running the business and discuss how the
organisation is going to fulfill the expectations and requirements of the
employees and the investors.
e. Strategies: This refers to the rules and guidelines; an organisation
follows to achieve its mission and objectives. Strategies are built on
strengths by resolving the weaknesses, exploiting the opportunities and
evading the threats. Strategies include planning on various matters
such as acquisition, growth, diversification, and other functional areas.
f. Goals: This refers to achieving the organisation objectives by
implementing strategies through time-based measurement techniques.
For example, to achieve a specific percentage of growth in sales in four
years. The goals may cover the factors such as products, finances,
profitability, utilisation, efficiency and the market size. Goals should be
measurable, reliable, time-bound, specific and attainable.
g. Programs: This refers to the set of key strategies, which are scheduled
out as final elements for the implementation of the plan. These cover
resources, purposes, time-scale, targets, funds and goals.
All these mission, vision, objectives, values, strategies, goals, and programs
are interlinked and go steady with each other.
There are various tools, which are helpful in strategic planning such as
SWOT analysis, GE/McKinsey matrix or COPE analysis. The analysis
needs to be executed at external and internal level. Markets, competition,
labor market, supplier market, technology, economy, and the governing
environment, all these make external environment for any organisation and
study of these factors is very necessary as it helps in formulating customer
strategy. Strategic planning is very important as it helps in developing a way
that can be transformed in action plans that create a sense and are
executable to others.
Strategic planning works primarily as a tool for creating the process of
strategy making. It focuses on collecting information, future thinking, and

understanding the current strengths and weaknesses. Thus it acts as

thinking process and helps in sensitising the decision making process to
make effective strategies.
In today’s competitive environment, proper strategic planning processes are
needed, for the execution of the strategic plan, evaluation of the progress,
and make adjustment wherever it is necessary to stay on the correct
pathway. The steps involved in the strategic planning process are as
depicted in Fig. 8.4:
Strategy
Mission & Environmental Strategy Implement Evaluation
Objective Scan Formulation & Control
ation
Fig. 8.4: Steps in a Strategic Planning Process

Now, let us briefly examine these steps in the following section.
a. Mission and Objective: The mission and objective of any organisation
help in serving the purpose of the forward looking visionary goals that
guide the quest of future opportunities.
b. Environmental scan: The environmental scan includes three major
constraints, such as internal analysis of the organisation, micro
environmental analysis and macro environmental analysis. The internal
analysis consists identifying the strengths and weaknesses of the
organisation and external analysis discloses the opportunities and
threats related to the organisation and relative industry. The
comprehensive study of strength, weaknesses, opportunities, and
threats is known as SWOT analysis.
The micro environmental analysis includes the analysis of customers,
suppliers, entry barriers, substitute products, and industry rivalry;

whereas the macro environmental analysis includes the analysis of

political and legal, economic, social, and technological aspects.
Environmental scan informs an organisation of its technological
capabilities vis-à-vis its competitors.
c. Strategy formulation: Strategy formulation uses the information from
the environment scan and develops a game plan in terms of strategy to
gain sustainable profitability and develop competitive advantage over its
rival.
d. Strategy implementation: The strategic implementation refers to the
application of the resources, program, and functions to achieve the
organisational objectives. Generally, people who formulate the strategy
are different from those who implement it. Thus, proper care is needed
to communicate and execute it. A good strategy may also fail, if it is
misunderstood by managers. For instance, the higher-level
management may plan for the implementation of an organisation-wide
enterprise system; however, if the personnel involved in implementation
do not understand the requirements of management, the technology will
not yield desired results.
e. Evaluation and control: The evaluation and control define the
parameters, which are to be measured. Then it consist targeting values
for those parameters so that it could perform measurements. The next
step includes comparing of measured results to the pre-defined
standards and making necessary changes accordingly.

1. _______ refers to a statement that describes; how an organisation is
going to attend to the needs of the society, by providing high value
services and products to their clients.
2. Strategic planning works primarily as a tool for creating the process of
strategy making. (True/False)
3. The process, which defines the strategy and direction of an
organisation, is known as______.
4. Vision deals with the future strategies of an organisation. (True/False)

5. Which of the following is not a tool of strategic planning?

a. SWOT analysis
b. GE/McKinsey matrix
c. COPE analysis
d. Mission statement
Activity 1:
Make a group of your friends and discuss the concept of strategic
planning. Then prepare a short note on the concept of strategic planning.
8.3 Technology Planning

In simple words, technology planning refers to the roadmap created by an
organisation to acquire technology to gain certain technological capabilities
and competitive advantages. In other words, technology planning involves
assessing existing technology infrastructure, determining the technology
needs, identifying available resources, and establishing a time line for
implementing the plan. Various technological needs of an organisation may
include buying new software or software updates, customising the existing
software to meet the needs of the customers, providing training to staffs on
any specific software, replacing or customising database, establishing
computer networks, developing online marketing programs, and establishing
various security measures.
According to TechSoup technology planning refers to "the process of
determining how your organisation can best use technology to further your
mission. The process of technology planning involves assessing your
existing resources, defining your needs, and exploring solutions.”
According to Steele (1989), technology planning is very important in the
corporate level as well as the Strategic Business Unit (SBU) level of an
organisation. Therefore, successful organisations, such as Google, Apple,
GE, GTE, and NEC consider technology planning is a vital activity that
enables them to provide superior value to the customers.
In a typical organisation, technology planning involves the following steps:

 Conducting a scenario analysis in the organisation

 Setting clear and realistic goals
 Creating a road-map to achieve the goals

 Executing the plan
Fig. 8.5 shows generic steps in the formulation of a technology plan:
Fig. 8.5: Steps in Formulation of Technology Plan
Exhibit 1: A. Porter: Framework for technology planning:

1. Forecast the technology: This is the starting point of technology
planning. Project both internally owned technology and that available
in the marketplace over the planning period.
2. Analyse and forecast the environment: Identify the key factors in
the organisation’s environment, potential states of the environment,
key uncertainties, major threats (especially competition) and
opportunities.
3. Analyse and forecast the market/user: The development of a
requirement analysis that identifies the current needs of major
customers determines the likelihood that these needs will change and

specifies explicit demands that these needs make on the

organisation’s products or services. The tools of market research and
impact assessment will complement each other. However, analytical
tools, no matter their sophistication, will never be adequate. It is
imperative that this step includes direct contacts with potential
customers. Real quality is the fulfillment of customer requirements
and desires (Crosby, 1979), and the best way to know those is to get
closer to them.
4. Analyse the organisation: Delineate the major assets and problems;
develop a catalog of available human and material resources; and
assess recent performance against stated objectives. Understanding
the strengths and the weaknesses of your organisation is critical and
cannot be overemphasised. This may be a great time to involve
external consultants to avoid the errors that arise when members of
an organisation assess themselves.
5. Develop the mission: Specify critical assumptions; establish overall
organisational objectives and specific target objectives for the
planning period; and specify criteria by which to measure the
attainment of those objectives. This step will provide the central focus
of the organisation and should include as many participants as
possible. Organisations have a much better chance of success which
each member understands and feels a sense of ownership in the
mission.
6. Design organisational Actions: Create candidate actions; analyse
and debate them; develop a consensus strategy limited to a few key
actions, possibly attendant on several key contingencies. This is
another excellent time to apply the tools of impact assessment.
7. Put the plan into operation: Develop timely sub-objectives, if
appropriate; specify action steps, schedule, and budget; develop
tracking mechanism; and specify control mechanisms in case
performance falls below established standards. During this step,
monitoring can be very useful. Technological market places are
dynamic, and each firm must maintain a knowledge base of changes
and customer reactions to them.
(Source: A. Porter et al., Forecasting and Management of Technology. © 1991, John Wiley and Sons
Inc.)

Fig. 8.6 depicts the steps involved in Information technology planning.
Fig. 8.6: Steps in Information Technology Planning

(Source: Schellenberg, M. 2014. Cronos Technology Corp. [online] Available at:
http://www.cronostechnology.ca/SysPlanning.asp [Accessed: 10 Jan 2014)

6. In simple words, ______refers to the roadmap created by an
organisation to acquire technology to gain certain technological
capabilities and competitive advantages.
7. Technology planning does not involve identifying the existing
technological resources. (True/False)
8.4 Technology Forecasting: Concept and Methods

Technology forecasting is the first step in technology planning. In simple
words, forecasting refers to the technique of anticipating a future scenario.
In a very dynamic market scenario, organisations continuously focus on
forecasting the technological trends in the future.

NOTE:
According to Ralph Lenz, U.S. Air Force technology forecasting pioneer,

"Technology forecasting may be defined as the prediction of the invention,
characteristics, dimensions, or performance of a machine serving some
useful purpose."
So why is technology forecasting needed in the first place? Analysing critical

emerging technologies and their implications helps organisations in making
decisions regarding:
 Prioritisation of R&D activities.
 Planning development of new products.
 Making various strategic decisions, such as technology acquisitions,

technology transfer, technology licensing, and joint venture.
 Adapting the existing systems with the changing technology critical
functions for the government of a nation.
Apart from business organisations, technology forecasting is also a critical
function of the government of a country. Technology forecasting helps a
government in devising effective public policies by analysing the
implications of emerging technologies. For example, development of
information technology prompted the Government of India to launch a
project of issuing Unique Identification Number (also called as
Aadhaar Number) to the people of India.
Organisations that can forecast well can seize the future market
opportunities better than the competitors. For examples, organisations that
could forecast the revolutionary development in the information technology
have the fast mover`s advantage to cash in the opportunities in the market.
It should be noted that organisations use a number of techniques to forecast
future technological trends. The traditional forecasting techniques analyse
the past trends and project the past trends into the future to forecast.
However, the inherent weakness in these techniques is that future may not
always behave like the past. The future state of technology depends on
various social and environmental factors and the market conditions. For
example, earlier technology forecasters had predicted that nuclear power

technology would follow the typical S-curve pattern of technology

development. However, environmental concern and the market conditions
changed the growth pattern of nuclear technology.
Following Fig. 8.7 demonstrates the uncertainties involved in future
technology trends:
Fig. 8.7: Probable Future Trends in Technology

An effective technological forecast should have the following characteristics:
 It should be credible and have utility for the organisation
 It should be based on accurate information
 Clearly defined methods should be used in forecasting
 The assumptions should be clearly defined and supported

 The level of confidence of the forecast should be mentioned
Following are some of the major techniques of technology forecasting:
Intuitive forecasts: This method relies on the experience of the experts.

This is why the method is also known as “Asking the Expert”. This method
forecast future technological trends on the basis of past trends.

Consensus methods: This method relies on many experts rather than

one as in the case of intuitive forecasts. In this method, a panel of experts
gives their opinions about future technological trends. This method is
frequently used by the government of departments of various countries. For
example, the US Department of Defense applies the methods in various
projects, including its Strategic Defense Initiative Program.
Delphi method: This method was developed by the Rand Corporation to
eliminate the biasness of the panel in the consensus method. In this
method, a panel of experts arrives at a consensus regarding technology
trends, but the bias in the consensus is eliminated with the help of a series
of questionnaires.
Application of a Statistical Model: This method is based on a series of
observations and data collection. In the statistical model, data is collected
and the trend in the data is identified to forecast future technology.
Structural Modeling: In this method, a mathematical or analytical model of
the technology-generation process is developed. In the beginning, the key
elements of technological progress are identified, the functions of those
elements are identified, and the relationship among the elements is
established.
Fig. 8.8 The structural modeling process:
Fig. 8.8: Structural Modeling


8. Technology forecasting is the ____ step in the technology planning
process.
9. Technology forecasting also plays a critical role in developing public
policies of the government. (True/False)
10. Which of the following technology forecasting method is known as
“Asking the expert”:
a.Intuitive forecast
b.Consensus method
c. Delphi method
d.Structural modeling
8.5 Critical Technologies and Technology Maps

In order to develop an effective technology forecast, an organisation needs
to be aware of undergoing changes in the current technological scenario. It
also requires environmental scanning to identify the critical emerging
technologies. Therefore, organisations need to develop technological maps
to navigate through the existing promising technologies and identify the
future critical technologies. Development of technology maps is required in
the macro/national level as well as the micro/organisational level. For
example, US have established National Critical Technologies Panel that
would identify critical emerging technologies affecting national security and
economic development. The chairman of the panel Mr. William Phillips
stated in the first biennial report that“, We most recently have been
reminded by the spectacular performance of US and coalition forces in the
Persian Gulf, of the crucial roles that technology plays in military
competitiveness. It is equally clear that technology plays a similar role in the
economic competitiveness among nations”.
Similar to the nations, in organisations also technology forecasters and the

R&D managers may develop a map of the relevant emerging technology.
Betz ( 1987) introduced technology push and market pull in mapping the

areas which rapid technological change may happen. He developed a

technology map in the 1980s in the following six areas:
1. Devices
2. Components
3. Processes
4. Systems
5. Materials and Resources
6. Services
Following table 8.1 shows the technology maps of some of the devices in
the 1980s as prepared by Betz (1987):
Table 8.1: Technology Map
Device Technology Push Market Pull
Computers 1. Parallel Processing. 1. Market segments in
2. Graphics and three the computer market:
dimensional display mainframes,
minicomputers,
3. Advanced software
microcomputers.
and user-friendliness
2. Applications in
business and office
systems,
manufacturing
systems, scientific
systems, home
entertainment, and
personal computers.
Robots 1. Control and 1. Automobile

manipulation ability 2. Electronics
2. Flexible and efficient 3. Aerospace and
manufacturing with the defense
help of tools,

Device Technology Push Market Pull

materials, scheduling,
and handling.
3. Integration of the
production and sales
system.
Lasers 1. Frequency and power 1. Transmission and fiber

of lasing techniques optics
2. Laser Tools 2. Circuitry and optical
logic devices
3. Holographic imaging
and measurement
4. Laser tools and
weapons
(Source: Betz, 1987)

11. ____ introduced technology push and market pull in technology
mapping.
12. Technology map is developed only at the national level. (True/False)
8.6 Technology Audit and Audit Model

The term audit means verification. In technology audit, an organisation
verifies if all the technologies as planned are available to the organisation.
As you studied earlier, the capability of an organisation in implementing
technological change is crucial to the success of its business operations.
Therefore, it has become a necessity for organisations to build, nurture and
protect technology skills and complement them with management skills.
Technology audit helps an organisation in gauging the level of technological
capabilities of an organisation and its preparedness to act according to the
technological forecast.

Therefore, technology audit seeks to answer the following questions:

 Which all technologies are relevant from the perspective of company?
 Which technological developments should be accelerated?

 In which all areas should the R&D be prioritised?
 How important are the technologies which are already applied?
 Which technologies will support the future product development plan of

the company?
 How can companies use their technologies more efficiently?
A typical technology model involves the following activities:
 Analysing the internal technologies, methods, products, and services of

an organisation to find out its strengths and weaknesses.
 Identifying the external technologies.
 Identifying areas in which technology gap exists and new technology

need to be acquired.
 Analyse the time-to-market timings of the company and identify any
scope of improvement.
 Conduct a technology push and market pull analysis.
 Review the state of R&D in the company and check whether the system
is adequate to support future product development plan of the
organisation.
 Identify if there is an inconsistency among the core technologies, R&D,
and the marketing activities.
 Review if the partnerships, joint ventures, technology sharing

agreements etc. is in line with the organisational strategies.
 Analyse the corporate structure and any possible communication gap.

Fig. 8.9 depicts the generic steps in Technology Audit
Fig. 8.9: Generic Steps in Technology Audit

(Source: Dissemination of Innovation and Knowledge Management Techniques, Dr. Vassilis Kelessidis)

13. _____helps an organisation in gauging the level of technological
capabilities of an organisation and its preparedness to act according
to the technological forecast.
14. Technology audit includes a review of various joint ventures and
technology sharing agreements. (True/False)
8.7 Summary
In this unit, you have studied:
 Strategic planning refers to a management tool that helps an

organisation to plan its desired future. It requires efficient use of people,
money, and other resources in an organisation.
 A strategy is defined as what an organisation would be; whereas,

strategic planning helps in detailing how an organisation would get
there.

 Vision refers to the long-term goal of an organisation. It presents the

future situation and defines the image of the organisation in that
situation.
 Mission refers to a statement that describes; how an organisation is

about to attend the needs of the society, by providing high value
services and products to their clients.
 Strategy formulation uses the information from the environment scan

and develops game plan in terms of strategy to gain sustainable
profitability and develop a competitive advantage over its rival.
 Technology planning refers to the roadmap created by an organisation

to acquire technology to gain certain technological capabilities and
competitive advantages. It involves assessing existing technology
infrastructure, determining the technology needs, identifying available
resources, and establishing a time line for implementing the plan.
 Technology forecasting is the first step in technology planning. In simple

words, forecasting refers to the technique of anticipating a future
scenario.
 Some of the major techniques of technology forecasting are intuitive

forecasting, consensus methods, Delphi method and the statistical
model.
 Organisations need to develop technological maps to navigate through

the existing promising technologies and identify the future critical
technologies.
 Technology audit helps an organisation in gauging the level of

technological capabilities of an organisation and its preparedness to act
according to the technological forecast.
8.8 Glossary
Audit: It refers to an inspection of the accounts of an organisation by an
independent body.

Mission: This refers to a statement that describes; how an organisation is

going to attend the needs of the society, by providing high value services
and products to their clients.
SWOT analysis: It is the acronym of strengths, weaknesses, opportunities,
and threats. SWOT analysis is conducted to review the organisational
strengths and weaknesses vis-à-vis the external opportunities and threats in
the market.
GE/McKinsey matrix: It refers to a nine cell portfolio matrix developed by
McKinsey & Company to screen the GE`s portfolios of strategic business
units.
COPE analysis: It is a technique used to determine the scope of growth of
various products and market opportunities.

1. What do you mean by strategic planning? Discuss.
2. Explain technology planning. What are its advantages?
3. Discuss the concept of technology forecasting.
4. What are the techniques of technology forecasting?
5. What do you mean by critical technologies and technology maps?
Discuss.
6. What are the benefits of technology audit?
8.10 Answers

1. Mission statement
2. True
3. Strategic planning
4. True.
5. d.

6. Technology planning
7. False
8. First
9. True
10. a. Intuitive forecast
11. Betz (1987)
12. False
13. Technology audit
14. True.
Terminal Questions
1. Strategic planning refers to designing the long term goals of an
organisation. Refer to section 8.2 Concept of Strategic Planning for
details.
2. Technology planning refers to the roadmap created by an organisation

to acquire technology to gain certain technological capabilities and
competitive advantages. Refer to section 8.3 Technology Planning for
details.
3. Technology forecasting refers to the process that intends to anticipate

future technological developments. Refer to section 8.4 Technology
Forecasting: Concept and Methods for details.
4. Some of the techniques of technology forecasting are intuitive

forecasts, consensus methods, Delphi methods, and structural
modeling. Refer to section 8.4 Technology Forecasting: Concept and
Methods for details.
5. Organisations need to develop technological maps to navigate through

the existing promising technologies and identify the future critical
technologies. Refer to section 8.5 Critical Technologies and
Technology Maps for details.

6. Technology audit helps an organisation in identifying its technological

position vis-à-vis its competitors. Refer to section 8.6 Technology
Audit and Audit Models for details.
8.11 Case Study: Technology Audit
The case deals with technology audit in a school district.
Background: Certain mid-sized school district (residing 11,000 students)

aggressively acquired and deployed technology. Some of these
technologies include installation and modernisation of Wide Area Networks
(WAN), structured cabling, data network, video network, and computers.
Problem: The district intended to conduct a “health check” for the hardware,
software, network infrastructure, and other IT methods and procedures. The
objective of the school district was to verify whether the installed
technologies were in line with the technological plan of the district and
helped in delivery of the curriculum. In addition, the district wanted to be
advised on reducing costs, and improving processes. Lastly, the district
wanted to develop a forward-looking technology plan focused on future
technology implementation. Therefore, the management of the district
decided to get a technology audit performed in the district.
Audit: The Head of Department of the district finalised the questionnaire to

be used in the audit process. In addition, the individuals to be interviewed
were also finalised. The district would have a holistic view of the

technological situation in the district after analysing the filled up

questionnaire.
The audit report exposed certain violations of standards that occurred

during the implementation of various technologies. These included
violations in the fire stopping , fire suppression and security norms. In
addition, certain violations threatened the integrity and survivability of the
networks. At this point, the district appointed Wright & Hunter Technology
Review and Audit to come with necessary recommendations. The
technology audit firm came with a number of recommendations to
streamline the organisational structure, and improve communication.
Results Achieved: The district followed the organisational re-structuring

plans as recommended by As Wright & Hunter. The original plan required
restructuring of the technology support and staff development departments.
In addition, the operating costs could also be reduced with the least amount
of service degradation as possible. Finally, the recommendations of the
audit firms regarding the development of technology plans were also
implemented.
Questions:
1. With the help of the case, discuss the importance of technology audit in
an organisation.
2. In addition to the questionnaire method, what are the additional
techniques that the school district could use for the audit process?

J. Wiley.
Hill.

E-References
 Innovation.lv. 2014. InnoSupport: Supporting Innovation in SMEs.
[online] Available at:
http://www.innovation.lv/ino2/publications/leonardo_manual/en/www.inn
osupport.net/webhelp/wso/index.cfm@fuseactionlearnl_id3615pl_id3553
.htm.
 Sei.cmu.edu. 2014. A Framework for Software Product Line Practice,
Version 5.0. [online] Available at:
http://www.sei.cmu.edu/productlines/frame_report/tech_forecast.htm.
 Azed.gov. 2014. Technology Planning – Technology Plan Approval.
[online] Available at: http://www.azed.gov/educational-
technology/technology-plans/.
 Anonymous. 2014. [online] Available at:
http://www.azed.gov/educational-technology/files/2011/06/tech-plan-
process-flowchartrevised9-13rev.pdf
 Usac.org. 2014. Step 1: Technology Planning - Schools and Libraries
Program - USAC.org. [online] Available at:
http://www.usac.org/sl/applicants/step01/

Unit 9 Technology Transfer and Acquisition

Structure
9.1 Introduction
Objectives
9.2 Technology Transfer
9.3 Types of Technology Transfer
9.4 Technology Acquisition
9.5 Methods of Acquiring Technology
9.6 Summary
9.7 Glossary
9.9 Answers
9.10 Case Study: Brazil, Thales Alenia Space Ink Satellite, and Tech
Transfer Contracts
9.1 Introduction
In the previous unit, you studied about the role of planning in technology
management. Now, let us study some other important topics in technology
management: technology acquisition and technology transfer.
As we discussed earlier, technology refers to the application of scientific
knowledge for practical purposes. Therefore, a product used by the
consumers (for say a mobile phone) or a production technique (for say
automation) used for manufacturing goods are examples of different
technologies. In simple words, technology transfer refers to the process of
transferring technological knowledge and methods from one user to other
users. Organisations that do not have access to the latest technologies can
enter into technology transfer contracts with other organisations to get
access to new technologies.

Similarly, a nation can also share its technological capabilities with other
nations through technology transfer agreements. For instance, you might
have heard about India`s technological collaboration with various countries,
such as Russia, the USA, Israel, and the UK, in the fields of defense,
telecommunication, space research, infrastructure development, etc.
Another instance is of Brazil and France entering into a technology transfer
agreement in the field of air defense (elaborated in Exhibit 9.2 of this unit).
Technology acquisition refers to the process through which an organisation
acquires technologies that are not available to the organisation. For
instance, if a certain organisation does not have advanced networking
system, it can buy the technology from the supplier of such technologies. An
example of technology acquisition is Sony Corporation buying the license of
the transistor from AT&T in the 1950s to use the technology in its various
products.
In this unit, you will study the concept of technology transfer. Next, the unit
elaborates on the types of technology transfer. Some of the other topics
discussed in the unit are technology acquisition and the methods of
technology acquisition.
Objectives
 discuss the concept of technology transfer
 describe the different types of technology transfer

 explain the concept of technology acquisition
 discuss the methods of acquiring technology
9.2 Technology Transfer

Before discussing technology transfer, let us first define technology. In
simple words, technology refers to the practical applications of scientific
knowledge. Technology includes all the knowledge, products, processes,
tools, methods, and systems that are employed to create goods or provide
services. Therefore, we can say that technology is the means by which
various human needs are satisfied. For example, a mobile phone, which is

manufactured with the help of scientific knowledge, is an example of

technologyproduct.
Generally, we think of technology in terms of hardware, such as machines
and computers, and advanced electronic gadgets. However, technology
encompasses a lot of elements in addition to machines. Technology also
includes software and human skills. Moreover, technology includes
technical skills and know-how.
In plain words, technology transfer refers to the process by which
technological skills, knowledge, manufacturing methods, etc. are handed
over by an organisation to another organisation. Technology transfer
ensures that technological development and knowledge are available to a
wider base of users, who can further exploit the respective technology.
Technology transfer is also known as Transfer of Technology (TOT) or
technology commercialisation.
NOTE:
Jain and Triandis (1990) define technology transfer as “a process by which

science and technology are transferred from one individual or group to
another that incorporates this new knowledge into its way of doing things.”
According to the National Aeronautics and Space Administration (1965),

technology transfer is “the process of providing the technology developed
for one organisational purpose to other organisations for other potentially
useful purposes”.
The practice of technology transfer started in the year 1945. American
President Franklin D. Roosevelt prepared an influential report, “Science:
The Endless Frontier,” in which he emphasised the importance of
technology in the economy. During World War II, the need for technological
advancement in the military was also recognised. Therefore, naturally, the
US government increased spending on government-sponsored research.
However, the facilities available to the government were not sufficient to
accommodate the R&D (Research And Development) projects to fulfil the
needs of the US military. Therefore, the government started contracting with
qualified organisations, universities, and non-profit organisations to develop

technology and transfer to the US military. Gradually, business

organisations also started adopting the practice to avail its benefits.
Let us consider an example of technology transfer. Recently, the Bicycle
Research and Development Organisation (BRADO) signed a Memorandum
of Understanding (MOU) with the China Bicycle Association (CBA) for the
transfer of technology of superior bicycles and alloy parts of bicycles
(Indianexpress.com. 2014. MoU signed for technology transfer - Indian
Express. [online] Available at: http://www.indianexpress.com/news/mou-
signed-for-technology-transfer/1207445/). This technology transfer
agreement enables BRADO to introduce new technology in India, such as
lightweight bicycles.
Therefore, you can see that technology transfer enables organisations,
institutions, or even countries to access and exploit new technologies. In
case of business organisations, technology transfer enables an organisation
to achieve competitive strength by getting access to innovative technology
from organisations in the same industry or a different industry. For example,
recently Ocera Therapeutics, an American biopharmaceutical company,
entered into a technology transfer deal with the Roche Group, a healthcare
company based in Basel, for the rights of Ocera`s Macrocyclic Template
Chemistry (MATCH) discovery platform. As part of the settlement, Roche
Group made a one-time payment to Ocera of USD 4 million. According to
Ocera CEO, Linda Grais, "We are excited that we have found a good home
for this technology where it may benefit the Roche Group and ultimately
patients, while we focus our efforts on clinical development of OCR-002, our
product candidate for the treatment of hepatic encephalopathy, a serious
liver disorder".
NOTE:
Nowadays, many organisations, universities, and government

organisations set up their own office of Technology Transfer Office (TTO),
also known as ‘Tech Transfer’ or ‘TechXfer’, to identify the research areas
having potential commercial interest and the strategies to exploit the
areas.

There are varied processes of commercially exploiting researches. For

example, it can include licensing or joint ventures to share the risks and
rewards of introducing new technology in the market. Other processes, such
as spinouts, are followed when the host organisation does not have the
necessary skills and resources to develop technology.
Exhibit 9.1: Technology Transfer in News
Mexico City, Jan 15 (EFE): Mexican state oil company Petroleos

Mexicanos, on Wednesday, signed a technology-transfer agreement with
four domestic shipbuilders and Spain's Barreras.
Pemex said in a statement that the goal of the accord was "to share
experiences with the aim of boosting the capabilities of Mexico's
shipbuilders and auxiliary industry."
The agreement was signed by Barreras, which is Spain's largest private
shipbuilder and is 51% controlled by Pemex, and Mexican shipbuilders
Talleres Navales del Golfo, Servicios Portuarios, Fundiciones Rice, and
Servicios Navales Industriales.
During the signing ceremony, Pemex CEO, Emilio Lozoya, reiterated his
company's commitment to revitalising Mexico's long-stagnant shipbuilding
sector by promoting the construction of new vessels at competitive prices.
This effort is evidenced by Pemex's fleet-renewal programme, which calls
for the construction of 22 ‘minor-fleet’ vessels, such as tugs, barges,
lighters, and specialised multipurpose vessels, in coordination with the
Navy Secretariat, the statement said.
"As part of this important initiative, 10 units will be built by Mexican
shipyards with the support of the domestic auxiliary industry," Pemex
added.

Pemex officially took control of the Hijos de J. Barreras shipyard in Vigo,

a city in the north western Spanish province of Galicia, on Dec 16.
Pemex and Barreras closed their investment deal on Nov 26, with the
Mexican oil giant purchasing a 51% stake in the Spanish shipyard for 5.1
million euros ($6.9 million).
(Source: Shipbuilders, M. 2014. Mexico's Pemex signs technology-transfer accord with shipbuilders.
[online] Available at: http://latino.foxnews.com/latino/news/2014/01/15/mexico-pemex-signs-technology-
transfer-accord-with-shipbuilders/)
Now, let us discuss the steps in a technology transfer process.

The steps involved in a generic technology transfer process are depicted in
Fig. 9.1:
Fig. 9.1: Process of Technology Transfer

Formal disclosure of the invention: In this step, an organisation or
institution formally discloses the invention of any new technology. The
timing of the formal disclosure of an invention depends on a number of

factors such as potential loss of patent due to disclosure and the

commercial potential of the invention.
Protection: In this step, the discovery is protected by patent. Securing a
patent may require supply of certain technical details regarding the
operations and applications of the technology.
Marketing: After a technology is protected by patent, it can be introduced in

the market for commercial gain. In this phase, various other business
organisations and government agencies may show interest in the
technology and enter into a technology transfer agreement.
Licensing: In this stage, interested parties can enter into licensing

negotiations to gain access to the technology. In licensing, the licensee gets
to use the technology in lieu of certain license fees.
Now, let us consider some of the important benefits of technology transfer,

which are as follows:
 Technology transfer helps in the maximum exploitation and development

of a technology by sharing it with a wider user base.
 Technology transfer leads to commercialisation of technology, which in

turn benefits the parties involved in the development of the technology.
In addition, commercialisation of technology also helps the consumers in
gaining access to newer technologies to meet their needs.
 Technology transfer reduces the R&D burden of the government,

thereby, allowing them to invest more in the prosperity of citizens.
 Technology transfer also reduces wastage of time and resources by

reducing duplication of research across sectors.
 Technology transfer provides organisations with opportunities to

collaborate and build partnerships.
 Technology transfer also provides economic incentives to various

parties to exploit technologies, especially in the areas involving high risk
of failure.


1. ______ refers to the process by which technological skills, knowledge
manufacturing methods, etc. are handed over by an organisation to
another organisation.
2. Technology transfer is also termed ‘technology commercialisation’.
(True/False)
3. Which of the following is not a step of technology transfer?
a. Formal disclosure of the invention
b. Protection
c. Marketing
d. Joint venture
Activity 1:
Conduct research to find out at least three examples of technology
transfers in India. You can take help of publicly available resources such
as the Internet.
9.3 Types of Technology Transfer

In the previous section, you studied that in technology transfer, technology
is transferred from the supplier of technology to the receiver of technology.
There are different modes of technology transfer, depending on the
capacities of the involved parties, technology gap, and availability of
technical information. Technology transfer basically started with government
agencies outsourcing their R&D activities to private organisations. However,
eventually, private organisations also started entering into agreements to
share technologies for better exploitation. In addition, organisations that
have presence in diverse geographical locations may transfer technology
from one geographical location to another. Moreover, different countries
may enter into agreements to share technology in various sectors, for
example, space research, defense, communication, and public utilities.

Fig. 9.2 depicts the major categories of technology transfer:
International Technology Transfer
Regional Technology Transfer
Cross Industry Technology Transfer
Inter-Firm Technology Transfer
Intra-Firm Technology Transfer
Fig. 9.2: Major Categories of Technology Transfer

Now, let us discuss the abovementioned categories of technology transfer in
detail:
International technology transfer: This type of technology transfer takes
place across the national boundaries of countries. For example, the
technology transfers from developed countries to the developing countries.
Exhibit 9.2: International Technology Transfer in News

French president pledges 100% technology transfer to back Dassault F-
X2 bid
Janet Tappin Coelho, Correspondent, Rio de Janeiro - IHS Jane's
Defense Industry
12 December 2013
French President, François Hollande, took advantage of an official visit to
Brazil during the week of 9-13 December to re-open discussions on the
sale of the Dassault Rafale, in a bid to secure the contract for supplying
36 F-X2 aircraft to the Brazilian Air Force.
In doing so, Hollande reiterated France's commitment to transfer 100% of

the technology, including the Rafale's source codes, which were referred
to as the ‘digital heart’ of computer programmes that control the aircraft
and its related systems.
An entourage from the French manufacturer, which included the
president, Eric Trappier, arrived prior to the French president's visit on a
10-day tour, which included meetings with officials from the Ministry of
Defence, the commander of the Brazilian Air Force, and committees for
Foreign Affairs and Defence.
(Source: Janes.com. 2013. French president pledges 100% technology transfer to back Dassault F-X2
bid - IHS Jane's 360. [online] Available at: http://www.janes.com/article/31549/french-president-pledges-
100-technology-transfer-to-back-dassault-f-x2-bid.)
Regional technology transfer: This type of technology transfer takes place

from one region of a country to another region. For example, technology
transfer from the state of Gujarat to the state of Bihar in India is an example
of regional technology transfer.
Cross-industry technology transfer: This type of technology transfer
takes place between two separate industries or sectors. For instance,
transfer of technology from the space research sector to the
telecommunication sector. Consider an example; in the 1950s, the high-
temperature and high-pressure extrusion of plastic resins in the chemical
industry was adapted by General Foods Corp. to manufacture pet foods.
Similarly, desalination of wastewater by reverse osmosis in the chemical
industry was adopted in the food industry for dewatering of cheese.
Inter-firm technology transfer: This type of technology transfer takes
place between two organisations. For instance, the technology transfer
between Ocera and Roche Group is an example of inter-firm technology
transfer.
Intra-firm technology transfer: This type of technology transfer takes
place between two different divisions of an organisation or two different
branches located in different geographical locations. For instance,
technology transfer between the Delhi branch of a bank to a rural branch of
the same bank is an example of intra-firm technology transfer.


4. Regional technology transfer takes place from one region of a country
to another region. (True/False)
5. Cross-industry technology transfer takes place between two
organisations. (True/False)
6. ________takes place between two different divisions of an
organisation or two different branches located in different
geographical locations.
Activity 2:
Make a group of your friends and discuss the various categories of
technology transfer.
9.4 Technology Acquisition

In simple words, technology acquisition refers to the process through which
an organisation gets access to new technologies that provide competitive
strength. An organisation may not always have the best technology
available to it. In such cases, it needs to find ways to acquire technology
from an external source or develop technology in-house. The technology
gap is identified with the help of a technology audit. In addition, technology
forecasting plays important roles in technology acquisition.
Consider this example; technology giant, Google, acquired Motorola Mobility
in 2012 to get access to the technology of the latter`s communication
devices. The deal helps Google to combine its software and Motorola
Mobility`s hardware to enhance innovation communication technology and
mobile computing.
An organisation needs to answer the following questions to initiate the
technology acquisition process:
 Which technologies are in place in the organisation?
 Which technologies are available with the competitors in the market?

 Which technologies, if acquired, would be beneficial for the

organisation?
 Should new technology be developed in-house or acquired from

outside?
 What are the technology trends?
 What are the product development plans of the organisation?
NOTE:
Technology acquisition checklist: It refers to a series of check points

that needs to be considered throughout the process of acquiring new
technology. Following are the main components of the checklist:
Acquisition analysis: It involves identifying the reasons behind the

acquisition, the size of the transaction, and the level of senior
management commitment.
Pre-negotiation: It involves developing a team of experienced and

technical people to find the details of the technology being acquired.
Negotiation: It involves finalising the terms of conditions of the

technology transfer agreement.
Contract administration: It involves ensuring that the negotiated items

are actually received.
Now, let us consider the steps involved in a technology acquisition process.

The steps involved in a typical technology acquisition process are as
follows:
1. Screening the existing technologies in the organisation through
technology auditing
2. Identifying the technology gap
3. Prioritising the existing technologies in the market with respect to
relevance, commercial significance, adaptability, transfer flexibility,
costs, and the competitive dynamics of the technology

4. Determining the timeline of the implementation of the new technology

5. Selecting the right mode of acquisition

7. ______refers to the process through which an organisation gets
access to new technologies that provide competitive strength.
8. Technology gap in an organisation is identified with the help of
________.
9.5 Methods of Acquiring Technology

An organisation or a country can acquire technology from numerous
sources and through various methods. However, these methods depend on
a number of factors such as the urgency of the organisation in acquiring the
technology, the available resources and skills of the organisation, and the
required expenses. For instance, if an organisation possesses the required
resources and skilled workforce to develop a technology, and if the need of
the technology is not very urgent, it can develop the technology in-house
with the help of internal R&D. On the other hand, if the need of a technology
is very urgent, and the organisation does not have the necessary technical
skills to develop the technology, it can buy it from other organisations. Some
of the most recognised methods of technology transfer are shown in
Fig. 9.3:
Joint Development without Forming a JV Company
Participating Joint Venture by Forming a JV Company
Using Internal R&D
Contracting Out for R&D
Licensing in for Technology
Fig. 9.3: Technology Acquisition Methods

Now, let us briefly discuss the abovementioned technology acquisition
methods:

Joint development without forming a JV: In this, two organisations

participate in an alliance to jointly develop a technology without forming any
JV. For example, in 2011, Microsoft and Nokia entered into such an
agreement to jointly develop smartphone on the Windows platform.
Participating joint venture by forming a JV company: In this method,
two organisations join their skills and resources to develop and exploit
technology. For example, IBM, Motorola, and Apple entered into a joint
venture to develop the Power PC chip.
Using internal R&D: In this method, an organisation uses its internal
resources to develop the technology in-house. However, to use internal
R&D, an organisation needs to have technically competent manpower and
strong financial background. Some large companies, such as GE, GM,
AT&T, and Du Pont, have their own R&D laboratories to support in-house
technology development.
Contracting out for R&D: In this method, an organisation contracts out its
R&D activities to another organisation. This reduces R&D expenses of an
organisation. Therefore, this method is affordable for organisations with a
relatively low budget. This method was particularly prevalent towards the
end of the cold war, when many military-oriented R&D centres became non-
operational. These centres had the manpower and technical capabilities of
technology development. Therefore, many organisations outsourced their
R&D activities to these centres.
Licensing in for technology: This method allows an organisation to buy a
license of a technology owned by another organisation. For example, in the
1950s, Sony Corporation bought the license of the transistor from AT&T.
Sony exploited the technology to use it in different products. Licensing of
technology is a widespread practice in the service industry. For example,
fast food chains, such as Burger King and McDonalds, franchises their store
to other interested parties. Through these franchising contracts, the
franchisees also get to use the technologies available with the franchisors.
Some of the limitations of licensing are as follows:
 Licensing can be costly.

 Licensing increases the exposure of the licensor, thereby, increasing the

risk of breach of confidentiality.
 In licensing, the use of the technology by the licensee is subject to the

licensing agreement.

9. The association of IBM, Motorola, and Apple for developing a Power
PC chip is an example of licensing in for technology. (True/False)
10. Through these franchising contracts, the ____also get to use the
technologies available with the ________.
9.6 Summary
Let us recapitulate the main points in the unit:
 In simple words, technology transfer refers to the process of transferring

technological knowledge and methods from one user to other users.
 Technology transfer ensures that technological development and
knowledge are available to a wider base of users, who can further
exploit the technology.
 Technology transfer enables business organisations to achieve
competitive strength by getting access to innovative technology from
organisations in the same industry or a different industry.
 Different types of technology transfer include international technology
transfer, regional technology transfer, cross-industry technology transfer,
inter-firm technology transfer, and intra-firm technology transfer.
 The steps involved in a technology transfer process are formal
disclosure of the invention, protection, marketing, and licensing.
 Technology acquisition refers to the process through which an
organisation gets access to new technologies that provide competitive
strength.
 The steps involved in a technology acquisition process are screening the
existing technology, identifying the gap, prioritising the available

technologies in the market, determining the timeline of the

implementation of the new technology, and selecting the right mode of
acquisition.
 Some of the most recognised methods of technology transfer are

participating in a joint venture, using internal R&D, contracting out for
R&D, and licensing in for technology.
9.7 Glossary
MOU: This stands for Memorandum Of Understanding and is a legally-
enforced agreement between different parties entering into a business
venture.
Networking system: It refers to a communication system enabled by
computers systems.
Franchising: It refers to a business practice in which an organisation uses
another organisation`s business model, intellectual properties, and
trademarks for a fee.
Spin out: It refers to a type of corporate restructuring in which a corporation
breaks off a part or department to form a new corporation.
Timeline: It is a graphical representation of the happenings of different
events at different points in time.
Franchisee: This is the party in a franchising agreement, which purchases
the right to use the trademarks, associated brands, and other proprietary
knowledge, in lieu of fees paid to the franchisor.
Franchisor: It refers to the party in a franchising agreement that sells the
rights to use its trademarks, associated brands, and other proprietary
knowledge, in lieu of fees paid to the franchisor.
Joint venture: It refers to a business agreement in which the involved
parties agree to develop a new entity to run certain business operations for
a specified time and under specified terms.


1. Discuss the concept of technology transfer. Provide examples.
2. Explain the steps involved in the process of technology transfer.
3. What are the benefits of technology transfer? Provide an example.
4. List and explain the different types of technology transfer.
5. What do you mean by technology acquisition? List the steps involved in
technology acquisition process.
6. What are the different methods of acquiring technology?
9.9 Answers

1. Technology transfer
2. True
3. d.
4. True
5. False
6. Intra-firm Technology Transfer
7. Technology acquisition
8. Technology audit
9. False
10. Franchisees, franchisors
Terminal Questions
1. Technology transfer refers to the process by which technological skills,
knowledge, manufacturing methods, etc. are handed over by an
organisation to another organisation. Refer to section 9.2 Technology
Transfer for details.

2. The steps involved in a technology transfer process are formal

disclosure of the invention, protection, marketing, and licensing. Refer
to section 9.2 Technology Transfer for details
3. Technology transfer helps the maximum exploitation and development
of a technology by sharing it with a wider user base. Refer to section
9.2 Technology Transfer for details.
4. Different types of technology transfer are international technology
transfer, regional technology transfer, cross-industry technology
transfer, inter-firm technology transfer, and intra-firm technology
transfer. Refer to section 9.3 Types of Technology Transfer for
details.
5. Technology acquisition refers to the process through which an
organisation gets access to new technologies that provide competitive
strength. Refer to section 9.4 Technology Acquisition for details.
6. Different methods of acquiring technology are participating in a joint
venture, using internal R&D, contracting out for R&D, and licensing in
for technology. Refer to section 9.5 Methods of Acquiring
Technology for details.
9.10 Case Study: Brazil, Thales Alenia Space Ink Satellite, and
Tech Transfer Contracts

On December 12, 2013, AEB, the Brazilian Space Agency, signed a five-
year technology transfer contract with Franco-Italian satellite manufacturer,
Thales Alenia Space, as a part of their long-term partnership plans. The
partnership also includes a commercial contract for developing a civil-
military telecommunications satellite. The contracts were signed in the
recently concluded French-Brazilian summit in Brasilia.
According to the technology transfer contract, Thales Alenia Space will build
Brazil’s SGDC X- and Ka-band telecommunications satellite aboard a
European Ariane 5 rockets, in late 2016 or early 2017.
The total weight of the satellite is 5,800-kilograms, and it should be carrying

seven X-band transponders and 50 ka-band transponders with a total
throughput of 80 gigabits per second. The Ka-band payload will assist the
government in extending Internet access throughout the country.
In addition, a USD 558 million contract for the satellite`s launch and ground
infrastructure was signed with Visiona Space Technology, a new joint-
venture company created by Brazil’s Telebras telecommunications provider
and aerospace hardware manufacturer, Embraer.
Another contract between Thales Alenia Space and AEB worth USD 80
million includes specific technology-transfer efforts in satellite
telecommunications, earth observations, and meteorology for five years.
According to a statement of Thales Alenia Space, regarding the technology

transfer agreement, “The agreement will provide a solid basis for joint
developments as well as a long-term strategic partnership,” Thales Alenia
Space said in a statement.
(Source: Spacenews.com. 2014. Brazil, Thales Alenia Space Ink Satellite and Tech Transfer Contracts |
SpaceNews.com. [Online] Available at: http://www.spacenews.com/article/financial-report/38639brazil-
thales-alenia-space-ink-satellite-and-tech-transfer-contracts.)
Questions:
1. What type of technology transfer does the case study deal with?
2. On the basis of the case, explain the benefits of technology transfer.


J. Wiley.
Hill.
E-References
 Spacenews.com. 2014. Brazil, Thales Alenia Space Ink Satellite and

Tech Transfer Contracts | SpaceNews.com. [online] Available at:
http://www.spacenews.com/article/financial-report/38639brazil-thales-
alenia-space-ink-satellite-and-tech-transfer-contracts.
 Janes.com. 2013. French president pledges 100% technology transfer

to back Dassault F-X2 bid - IHS Jane's 360. [online] Available at:
http://www.janes.com/article/31549/french-president-pledges-100-
technology-transfer-to-back-dassault-f-x2-bid.
 Indianexpress.com. 2014. MoU signed for technology transfer - Indian

Express. [online] Available at: http://www.indianexpress.com/news/mou-
signed-for-technology-transfer/1207445.

http://tto.boun.edu.tr/files/1383812118_An%20overview%20of%20TT%2
0and%20TT%20Models.pdf
 Birac.nic.in. 2014. BIRAC. [online] Available at:

http://www.birac.nic.in/desc.php?id=10.

Unit 10 Effects of Technological Change and Progress

Structure
10.1 Introduction
Objectives
10.2 General Impact of Technological Change
10.3 Impact of Technological Change on Organisational Productivity
10.4 Impact of Technological Change on Quality of Work Life
10.5 Impact of Technological Change on Environment
10.6 Impact of Technological Change on Education and Knowledge
Acquisition
10.7 Trade-off Between Technological Progress and Industrial Policies
10.8 Summary
10.9 Glossary
10.11 Answers
10.12 Case Study: Technologies to Prevent Climate Change
10.1 Introduction
In the previous unit, you studied about technology transfer and acquisition.
Technology transfer relates to the transfer of technological knowledge,
processes, methods, and systems. Technology acquisition refers to the
process through which an organisation acquires the technologies that are
not available to it. In this unit, let us study about the various impacts of
technological changes.
Previously, most organisational functions were conducted manually.
However, with the advent of various modern technologies, such as
automation, computing, and robotics, many manual processes have been
replaced by automated processes. This has not only improved productivity
and efficiency of organisations but also the work life of employees. Any

change in technology changes the way in which business operates,

produces its deliverables, and distributes them to customers.
For example, earlier, even basic banking activities, such as withdrawing
cash, required visiting bank branches, filling up forms, and standing in
queues. However, with the introduction of ATM machines, customers can
withdraw money with more convenience and a lesser amount of time.
Similarly, typewriters have been replaced by computer word processors,
and fixed line phones have been replaced by mobile phones. Technological
changes, such as e-commerce, Internet networking, and enterprise
systems, have brought revolutionary changes in the way business is
conducted. For example, e-commerce establishments, such as Amazon and
eBay, have established themselves as more convenient alternatives in
comparison to physical stores.
In addition to business organisations, technological change also affects the
quality of work life and environment. For instance, technology has enabled
many organisations to allow its employees to work from home. Moreover,
change in technology induces governments to develop and amend industrial
policies accordingly. For example, too much of carbon emission may force a
government to introduce stricter emission norms, like in the European
market.
In this unit, you will study about the general impact of technological change.
Next, the unit will elaborate on the impact of technological change on
organisational productivity. Some of the other topics discussed in the unit
include the impact of technological change on the quality of work life and
environment, and the trade-off between technological progress and
industrial policies.
Objectives
 describe the general impact of technological trends
 explain technological change on organisational productivity

 discuss the impact of technological change on the quality of work life
 explain the impact of technological change on environment

 discuss the impact of technological change on education and knowledge

acquisition
 identify the tradeoff between technological progress and industrial

policies
10.2 General Impact of Technological Change

In simple words, technological change refers to the entire process of
invention, innovation, and diffusion of technology. Technological change is
also termed ‘technological development’, ‘technological achievement’, and
‘technological progress’. Change in technology has immense impact on the
quality of life of people, organisational productivity, efficiency, environment,
and government policies.
Some of the general impacts of technological change include:
Change in lifestyle: Change in technology has greatly changed the way
people live. For example, technology provides all the modern facilities at
home such as air conditioning, modular kitchen, and home theatre. In
addition, contemporary means of transportations, such as metro trains,
bullet trains, and cheaper and fuel-efficient cars, have changed the way
people travel. Progress in communication technology has changed the way
people communicate and network with each other. Revolutionary
improvement in medical technologies has improved the healthcare and the
overall well-being of people.
More efficient utilisation of resources: Technology helps in better
planning and allocation of resources. In addition, technological innovations
also help in producing the same level of output with the help of lower
amount of inputs. For example, energy-efficient electronic appliances help in
reducing electricity consumption.
Delivery of more value for customers: Change in technology also helps in
providing better quality products and services to customers. In addition,
change in technology helps in meeting the newer demands of customers.
For example, advancement in information and communication technology
has made way for a large number of innovative products such as

smartphones, tablet computers, and Global Positioning Systems (GPS)

devices.
Change in the production and delivery processes: Change in technology
also brings revolutionary changes in the production and delivery processes.
For instance, earlier, music distribution was done through cassettes and
Compact Discs (CD). However, at present, varied usages of the Internet
have enabled consumers to download music from the Internet and make
payment online. Similarly, various e-commerce websites have established
themselves as good alternatives of physical stores.
Generation of employment: Change in technology also creates new
employment opportunities, because new technology needs skilled
manpower. For example, advancement in information technology has
created needs for skilled employees in this sector.
Reduction of poverty level through more production and better
channelisation of resources: Change in technology helps in reducing
poverty levels and increasing the average wealth of the population, by
increasing productivity in the agricultural sector and other business sectors,
increasing employment, improving access to markets, and increasing the
efficiency of the delivery system.
Following are some of the other general impacts of technological changes:
 Increasing leisure time available to people
 Facilitating in global networking of individuals and businesses
 Sharing of information and creating a more informed society

So far, we have only highlighted the positive impacts of technological
progress. Following are some of the negative aspects of technological
progress:
 Making people over-dependent on technology

 Reducing number of jobs (in some cases) by making old technology
redundant
 Creating various social and behavioural problems by creating and

circulating too much information

 Creating security issues, such as cyber-crimes, because of

advancement in information technology
 Generating technology wastes, such as used computers and televisions;

safe disposals of technology wastes pose a new challenge to the world
at large
 Creating problems for older generations, because they may find it
difficult to cope with new technology

1. Mention some of the general impacts of technological change.
2. Technological change is also termed ‘technological development’.
(True/False)
Activity 1:
Make a group of your friends and discuss the general impacts of
technological change. Prepare a brief note on the points discussed.
10.3 Impact of Technological Change on Organisational

Productivity
Productivity refers to the amount of output at a given amount of input.
Technological change is part of the fundamental factors that can
permanently improve organisational productivity. It is a commonly accepted
fact that better tools and techniques yield more output at lower input. In
addition, output increases when manual processes are replaced by
machines. Therefore, as you can see, improvement in technology helps
organisations in a number of ways.
Let us consider an example. When the State Bank of India was finding it
difficult to compete with private banks, it brought revolutionary technological
changes in its banking processes, execution of banking transactions,
providing services and supports to the customers, and renovating the
aesthetic aspects of the bank branches, to attract customers and compete
with private banks. This resulted in tremendous success for SBI. The bank
initially planned to implement Business Process Re-engineering (BPR) only

in 3,300 branches. However, because of the tremendous success of BPR,

the bank increased the scope of the project to include more than 14,600 of
SBI and affiliate bank branches.
(Source: Hunt, R. (2009). Case Study: State Bank of India, World's Largest
Centralised Core Processing Implementation).
Another instance is of ONGC (Oil and Natural Gas Commission), which
implemented a massive business re-engineering programme to implement
an organisation-wide enterprise programme. ONGC implemented an
organisation-wide Enterprise Resource System (ERP) to integrate various
divisions and departments for free flow of information, sharing of resources,
and centralised control.
Following are some of the ways in which technology helps in increasing
productivity, as depicted in Fig. 10.1:
Better Management Control
Automation and Robotics
Information Systems
Increased Sales
Increasing Availability of
Information
Fig. 10.1: Instances of Technology Assisting Productivity

(Source: http://projectmanagement-
ijourneys.com/tag/teleconferencing/http://www.livemint.com/Opinion/nmcz8boB5Bn5JgT0TAvctM/Men-
and-machines-in-
India.html/http://www.mindoceantech.com/http://webknowledgeblog.blogspot.com/2012/04/how-
important-is-website-navigation-for.html).

Let us discuss these ways in some detail:

Better management control: Technology helps the management in having
better control over the production process. For example, technological
change enables the management to track projects, receive reports, and
communicate with the employees through more sophisticated
communication systems. Better management control helps in reducing
wastes of resources and time, and increase productivity.
Automation and robotics: These help in automating the production
process and eliminating manual processes. Automation saves time and
increases productivity. For example, automation in the inventory
management system helped Walmart in creating a highly-effective logistics
system.
Information systems: Advanced information systems, such as Enterprise
Resource Planning (ERP), help in integrating various departments of an
organisation and managing them more effectively.
Increased sales: Technological development creates employment and
wealth, which in turn increases demand for the goods and services of
organisations. Increase in demand induces business organisations to
produce more.
Increasing availability of information: Revolutionary changes in
communication technology have made it easier for consumers as well as
business enterprises to have greater access to information. For example,
consumers can easily collect information about the products and services
offered by an organisation from the Internet.
In addition, business enterprises can collect information about the tastes
and preferences of consumers, their demography and contact information,
from various social networking sites. In addition, data mining techniques
help organisations in analysing the collected information and having a better
insight about consumers. Targeting the right group of customers helps in
cutting expenses of the organisations and increasing productivity.

Exhibit 10.1: Change Management in Organisations

For any organisation, change management involves defining and
implementing rules and technologies to cope with the change in the
work environment and to earn profit from the altering prospects. Change
management comprises three aspects, adaption to change, controlling
the change, and making the change effective.
Successful adaption to change is a very crucial phenomenon to
organisations and individuals, because they need to deal with it
efficiently. Otherwise, it is difficult to thrive in a competitive environment.
Adaption might comprise the establishment of structured methodology
for responding to change in the business environment, or the
workplace.
The success of change depends upon its linking with the strategic,
operational, and ordinary aspects of the organisation. It emphasises the
communication of change not only through the everyday aspects of the
organisation but also the translation of change into detailed resource
plans, key tasks, and the way the organisation is managed through
control procedure. Managers are needed to consider the balance
among different approaches to manage the strategic change in
accordance with the circumstances they face in the organisational
context.
In an organisational context, change refers to the alterations and
modifications of the overall strategies and structures. In recent years,
organisational environment has witnessed several changes such as
growing complexity in the production process, accelerated delivery
cycles, changing government rules, regulations and policies, and
unstable global environment. These changes can be handled by
bringing relevant changes in policies, procedures, and norms of an
organisation. Therefore, change is needed for an organisation to survive
and develop in today’s fast changing global environment.
Generally, organisational change refers to the organisation-wide
change, as opposed to smaller changes such as changing the
organisational structure or method of production. Organisation-wide

changes may arise out of various types such as planned versus

unplanned or episodic versus continuous. Such changes might include
alteration in the organisation’s mission, policies, restructuring
operations; or adoption of new policies and programmes, including total
quality management and participative management. Organisation-wide
changes are triggered by some major external events, such as a
dramatic increase in the demand for a particular product and
obsolescence of a widely used technology or product. For example, with
the invention of mobiles, use of pagers became negligible. Therefore,
organisations manufacturing pagers had to change their production
policies to launch a new or improved product for attracting consumers.
If an organisation refuses to keep pace with the rapidly changing
business environment, then it may not survive in the long run. For
example, there was a time when BSNL, a telecommunication services
provider, had monopoly over the market. However, it could not bring
changes in its policies and procedures with the changing needs of
people. As a result of this, BSNL lost its position and market share.
Therefore, an organisation needs to adapt the changes occurring in the
business environment to gain a competitive edge and sustain in the
long run.

3. ________ refers to the amount of output at a given amount of input.
4. ERP is an example of advanced information systems. (True/False)
10.4 Impact of Technological Change on Quality of Work Life

Technological development has significant impact on the quality of work life
of an individual. Change in technology is continuously replacing manual jobs
by machines. Earlier, most organisational activities were conducted
manually. The extent of manual labour was the highest in the manufacturing
industry. In such working conditions, low productivity and longer working
hours were the norm.
Automation, robotics, and advanced computing have replaced many manual
processes. For example, manufacturing of medicines and various electronic

parts have been completely automated. This has led to the reduction in
demand for manual labourers.
Therefore, in the modern economy, the demand for knowledge workers is

higher as compared to the demand for staff workers. These knowledge
workers work on information analysis, strategies, and managing
organisational operations. Therefore, as you can see, the amount of
physical work has been reduced in the workplace. This had led to
overdependence on technology and various lifestyle diseases.
For instance, physical problems, such as nearsightedness and obesity, are

associated with modern work life. However, technology has many positive
impacts on the work life of employees. For example, technology has
enabled organisations to allow employees to work from home and report
online. In addition, because of increased productivity, numerous
organisations are reducing their working hours (for example 5-days work).
Following are some of the important aspects of the effects of technological

change on work life:
 Reduces transportation time to the workplace

 Helps in connecting with other employees and building networks
 Reduces the working hours of organisations, which in turn provides
more leisure time to employees
 Increases wage rates of employees, which in turn improves their lifestyle
 Improves the ergonomics in the workplaces, providing more comfort to
employees

5. In the modern economy, the demand for knowledge workers
_______is higher as compared to the demand for staff workers.
6. Increased _______, because of technological development, allows
organisations to reduce working hours.

10.5 Impact of Technological Change on Environment

The melting of icebergs in the poles at a rapid rate and unusual changes in
weather, worldwide, has made people conscious about the applications of
technology and their effects on the environment. These changes are linked
to global warming and reduction of the green cover from the earth, and have
become an important issue for all the nations. The changes have equally
affected the corporate world and worked to awaken different industries in
recent times.
Technological change can have severe negative effects on the environment.
Global warming, due to emissions of the greenhouse gases, is an example
of the destructive effect of technology. However, at present, many
governments and business organisations are focusing on ‘green
technologies’ to combat climate change and reduce emission. For example,
there is a worldwide concern for renewable energy and alternative sources
of energy. In addition, a wide range of ‘green products’, which help in
reducing emissions and environmental damages, have arrived in the
market.
Following are some of the major impacts of technological change on the
environment:
Global warming and increasing sea level: Emissions of greenhouse
gases from various technological applications are contributing to
permanently raising the average temperature of the environment. This
further leads to melting of the polar ice at an alarming rate; thereby
increasing the sea level and endangering lives and properties of millions of
people living in the nearby coastline. In addition, emission of greenhouse
gases, such as CFC, leads to depleting of the ozone layer.
Health hazards due to pollution: Increasing industrial activities have led to
significant increases in the suspended particles in the air. This leads to
various health hazards such as lung diseases, respiratory problems, and
cardiac problems.
Effects of electro magnetic radiation: Improvement in communication
technology (such as mobile telephony, Internet, and satellite technologies)
has led to increasing electromagnetic radiations in the environment.

Recently, researchers have found that such radiations have negative effects
on health, such as damages in brain cells and cancer.
(Source: Best-emf-health.com. 2014. Dangers of Electromagnetic Radiation
and Related Diseases. [online] Available at: http://www.best-emf-
health.com/dangers-of-electromagnetic-radiation.html)
Exhibit 10.2: Human Cause of Global Warming is Near Certainty, UN

Reports
Global warming is unequivocal; human influence has been the dominant

cause since the mid-20th century, and atmospheric concentrations of
greenhouse gases, already at levels not seen in at least 800,000 years,
will persist for many centuries, the final version of the latest United
Nations report on climate change warned today.
“Continued emissions of greenhouse gases will cause further warming
and changes in all components of the climate system,” according to
the report, which finalises a summary of the findings by the UN-backed
Inter-governmental Panel on Climate Change (IPCC), issued in
September, outlining a litany of threats from the melting of Greenland
and the Antarctic ice sheets to rising oceans and extreme weather
events such as cyclones and heat waves.
“Limiting climate change will require substantial and sustained
reductions of greenhouse gas emissions,” it stresses, using the term

‘extremely likely’ for human casualty, since the mid-20th century,

meaning there is a 95 to 100% probability that humankind, and not
naturally occurring phenomena, are to blame, a 5% increase from the 90
to 100% “very likely” probability of if the IPCC’s last report in 2007.
Even if emissions of global warming carbon dioxide (CO2) emissions are

stopped, most aspects of climate change will persist for many centuries.
“This represents a substantial multi-century climate change commitment
created by past, present and future emissions of CO2,” the report warns.
“Human influence has been detected in warming of the atmosphere and

the ocean, in changes in the global water cycle, in reductions in snow
and ice, in global mean sea level rise, and in changes in some climate
extremes,” it says.
This evidence for human influence has grown since AR4 (the last IPCC
report). It is extremely likely that human influence has been the dominant
cause of the observed warming since the mid-20th century.
The report says that it is extremely likely that more than half the
observed increase in global average surface temperature, from 1951 to
2010, was caused by the increase in greenhouse gases caused by
humans and other human causes. Some of the major warming
emissions caused by humankind since the birth of the industrial era 250
years ago – CO2, methane (CH4), and nitrous oxide (N2O) – have all
increased since 1750 due to human activity.
(Source: UN News Service Section. 2014. UN News - Human cause of global warming is near
certainty, UN reports. [online] Available at:
http://www.un.org/apps/news/story.asp?NewsID=47047&Cr=climate+change&Cr1=#.UutBFD2Sx1Y)

7. Global warming due to the emissions of the ________is an example
of the negative effect of technology.
8. What type of technologies are the governments and business
organisations focusing on to combat climate change and reduce
emissions?

10.6 Impact of Technological Change on Education and

Knowledge Acquisition
Technological change has a huge positive impact on education and
knowledge creation. Technology has significantly changed the way
knowledge is delivered. Today, with the help of virtual classrooms on the
Internet, it is possible to conduct classes without the physical presence of a
teacher with students. As a result, online courses have become immensely
popular in recent times.
Various computer-based technologies help in increasing the efficiency of
knowledge-sharing activities. However, implementation of such technologies
in schools and higher educational institutes was initially hampered by costs
and lack of supporting infrastructure. However, with increasing demands for
such technologies, the cost is also declining; thereby making the
technologies affordable for many institutions.
In addition, the Internet has made it easier for students to access huge
reserves of information and knowledge. Various technological products,
such as computers, projectors, learning software, etc., have facilitated
students in learning, knowledge acquisition, and sharing of information.
In spite of positive impacts, there are certain negative effects of
technological change on education, such as:
 Over-dependence on technology creates distraction.
 Virtual classrooms may not be good substitutes of physical classrooms.
 Dependence on technologies for delivery of education reduces human

interaction.
Exhibit 10.3: IIMs to Launch E-learning Portal

Ashish Gaur, TNN | Feb 20, 2014, 05.01AM IST
INDORE: All branches of the Indian Institute of Management (IIM) have
decided to launch an e-learning portal to make its curriculum more
interesting and effective.
The union human resource development ministry has constituted a high-

level committee under IIM-Calcutta board chairman, Ajit Balakrishnan, to

design content for the portal.
All IIMs have been asked to suggest courses and designs to make the
portal reach its target population.
The move follows the growing popularity of IITs' Web portal - National
Programme on Technology Enhanced Learning (NPTEL) - which offers
video courses in engineering, science, and humanities. NPTEL was
launched to improve the quality of engineering education by developing
curriculum-based video and Web courses.
The IIM committee held its first meeting recently to discuss and develop an
advanced portal that would beat NPTEL in technology. Another meeting will
be held soon.
IIM Indore director, Rishikesha Krishnan, said, "The ministry has started an
initiative to develop online material for management education. But it is still
an open question whether video is the best way to kickstart online study."
The initiative is also seen by experts as the need of the hour, as faculty
strength at premier b-schools is inadequate.
Source: Gaur, A. 2014. IIMs to launch e-learning portal - The Times of India. [online] Available at:
http://timesofindia.indiatimes.com/city/indore/IIMs-to-launch-e-learning-portal/articleshow/30700144.cms

9. With the help of ________classrooms on the Internet, it is possible to
conduct classes without the physical presence of a teacher with
students.
10. Implementation of various computer-based technologies in schools
and higher educational institutes were initially hampered by____ and
_____.
10.7 Trade-off Between Technological Progress and Industrial

Policies
In a liberal economic system, organisations are provided with the freedom to
select their type of business and frame organisational policies. However, the

increasing negative effects of technological progress on environment, forces

government agencies to reduce the exemptions granted to business
organisations. In other words, adverse effects of technological change on
the environment force the government to put restrictive industrial policies.
Therefore, there is a trade-off between the technological progress and the
industrial policies in a country.
For instance, indiscriminate use of certain natural resources may cause
abrupt depletion of such resource, or create pollution. Hence, many
countries are limiting the use of coal for generating electricity and exploring
other unconventional sources.
In the recent past, the government of India has taken the following
legislative measures and industrial policies to contain environmental
damages by industries:
1. According to the Industries Development and Regulation Act (1991),
new or large industries can only be set up beyond 25 kilometres of the
municipal areas of a large city (having population ≥ 10 million). In
addition, the Act restricts the expansion of industries in large cities.
2. The government of India is promoting dispersion of industries, instead
of stratification of industries in a few areas, through various fiscal
initiatives. For this, the government has been setting up a number of
Special Economic Zones (SEZs) throughout the country. Industries set
up in these zones are given special tax incentives and other favourable
policies. Also, under the Central Excise Act, 1944, no excise duty is
payable for the finished goods manufactured and exported from a SEZ.
In addition, under the Central Sales Tax, 1956, no central sales tax
needs to be paid, in respect of the raw materials and capital goods sold
to the industries in the SEZ for further processing. The main objective of
such industrial policies of the government is to disperse industries to
promote regional development and reduce the environmental effects on
the already developed areas.
3. The Air Prevention and Control of Pollution Act, 1956, put the following
responsibilities on organisations:
 Ensuring that the emissions from the unit are under permissible limit

 Ensuring that new industrial plants are not established in the notified
‘Air Pollution Control Areas’
4. The Water Prevention and Control of Pollution Act, 1974, puts the
following restrictions on industries:
 Prohibiting the use of a stream or a well for the disposal of polluted
water
 Prohibiting any obstructions on the streams
 Taking necessary consent for new industrial units or discharges
Exhibit 10.4: Costs for Businesses to Rise as EU Beefs Up Carbon-

Trading System
JUERGEN BAETZ
BRUSSELS — The Associated Press
Published Wednesday, Jan. 08, 2014
It will become more expensive for businesses in the European Union (EU)
to burn fossil fuels this year after the 28-country bloc decided Wednesday
to beef up its carbon-trading system.
The agreement ended a year of bickering over how to amend what is
Europe’s prime tool in the fight against climate change and the world’s
biggest emission-trading system.
Under the cap-and-trade scheme, companies pay per ton of carbon
dioxide they release into the atmosphere, with the pollution certificates
traded on the market. The EU has decided to postpone the sale of 900
million additional carbon allowances – a move that will tighten supply and
likely drive up prices of carbon allowances by 10 to 15%, according to
analysts.
The tightening of the market is set to take effect this spring, EU
Commission spokesman, Isaac Valero, said.
Beefing up the carbon market, saying it would raise energy prices and
broader operating costs, undermining companies’ competitiveness.
Environmentalists, in turn, urged the EU to push ahead.

The 28-nation EU, the world’s largest economy, introduced the system in
2005 to encourage industries to reduce emissions and invest in greener
technologies.
Companies can trade these certificates, providing an incentive to reduce
emissions. Over time, the number of allowances will be lowered, cutting
the overall emissions in the EU.
(Source:http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-
resources/costs-for-businesses-to-rise-as-eu-beefs-up-carbon-trading-system/article16244016/)

11. There is a trade-off between technological progress and industrial
policies. (True/False)
12. The government of India has been setting up ________ zones for the
industries.
10.8 Summary
 Technology change and adoption are becoming essential to meet the
requirements of the growing world population and their increasing
needs. Obviously, there will be negative impacts because of new
technologies, while many positive impacts benefit humanity.
 Change in technology has immense impact on the quality of life of
people; organisational productivity, efficiency, environment; and
government policies.
 Technological change refers to the entire process of invention,
innovation, and diffusion of technology. Technology helps in better
planning and allocation of resources.
 Change in technology also helps in providing better quality products and
services to customers.
 Change in technology also brings revolutionary changes in the
production and delivery processes. In addition, it creates new

employment opportunities, because new technology needs skilled

manpower.
 Change in technology helps in reducing the poverty level and increasing
the average wealth of the population, by increasing productivity in the
agricultural sector and other business sectors, increasing employment,
improving access to markets, and increasing efficiency of the delivery
system.
 Technological change is part of the fundamental factors that can
permanently improve organisational productivity. It is a commonly
accepted fact that better tools and techniques yield more output at lower
input.
 Change in technology improves organisational productivity with the help
of better management control, automation and robotics information
systems, and increased sales.
 Technological development has great impact on the quality of work life

of an individual. Change in technology is continuously replacing manual
jobs by machines.
 Technological change has a huge positive impact on education and

knowledge creation.
10.9 Glossary
Global Warming: It refers to the unequivocal and continuous rise in the
average temperature of the climate system on earth.
E-commerce: It refers to the commercial transactions conducted with the
help of the Internet.
Global Positioning System (GPS): It is a satellite navigation system based
on the space for providing location and time information in all weather
conditions.
Enterprise Resource Planning (ERP): It refers to business management
software that allows organisations to integrate and manage various
functional areas.

Special Economic Zones (SEZ): It refers to a special geographical region

designed for establishing industries, exporting produced goods, and
providing employment opportunities.
Business Process Re-engineering (BPR): It refers to re-designing the
systems, workflow patterns, and processes in an organisation to achieve
greater efficiency and productivity.

1. Define technological change? Provide examples in support of your
answer.
2. What are the general impacts of technological change?
3. How does technological change impact productivity?
4. What is the effect of technological change on the quality of work life?
Discuss.
5. How does technological change affect the environment?
6. Explain the trade-off between technological progress and industrial
policies.
10.11 Answers

1. More efficient utilisation of resources, delivery of more value for the
customers, change in the production and delivery process, and
generation of employment.
2. True
3. Productivity
4. True
5. Knowledge
6. Productivity
7. Greenhouse Gases

8. Green Technology
9. Virtual
10. Costs and lack of supporting infrastructure
11. True
12. Special Economic
Terminal Questions
1. Technological change refers to the entire process of invention,
innovation, and diffusion of technology. Refer to section 10.2 General
Impact of Technological Change for details.
2. Some of the general impacts of technological change include more
efficient utilisation of resources, delivery of more value for customers,
change in production and delivery processes, and generation of
employment. Refer to section 10.2 General Impact of Technological
Change for details.
3. It helps in improving productivity with the help of better management
control, automation and robotics, and information systems. Refer to
section 10.3 Impact of Technological Change on Organisational
Productivity for details.
4. Change in technology is continuously replacing manual jobs by
machines. Therefore, in the modern economy, the demand for
knowledge workers is higher as compared to the demand for staff
workers. Refer to section 10.4 Impact of Technological Change on
Quality of Work Life for details.
5. Technological changes may have immense negative effects on the
environment. Refer to section 10.5 Impact of Technological Change
on Environment for details.
6. There is a trade-off between technological progress and industrial
policies. Liberal industrial policies may affect the environment in
negative ways. Therefore, the government of a country may adopt
restrictive industrial policies to contain environmental damages. Refer
to section 10.6 Impact of Technological Change on Education and
Knowledge Acquisition for details.

10.12 Case Study: Technologies to Prevent Climate Change

In the 1890s, horses, the primary mode of transportation, dropped more
than a million pounds of manure on the New York City streets each day,
causing a sanitation crisis. No one found a fix, and some estimated that the
streets would eventually be buried several feet deep. Then, “shift
happened,” says Harvard chemist Daniel Nocera. The automobile arrived,
and almost overnight, it replaced horses and cleaned up the streets.
As in the 1890s, society is again looking for the next big fix. Dozens of
states now require that a portion of their electricity comes from renewable
sources. In October, California became the first to require its utilities to
install energy-storage equipment — expected to boost technologies such as
batteries that can be used when the sun does not shine or the wind does
not blow. China has increased its use of solar power to reduce the smog,
blanketing its major cities.
“The 19th-century horse-manure crisis suggests some solutions may beget
new problems,” says Eric Morris, an urban planning professor at Clemson
University. However, he says that it also offers another lesson: “Never
discount the power of human ingenuity.”
Here are six technologies — some old, some new — which might stem the
worrisome warming trend:
1. Solar geo-engineering: It is a sort of Hail-Mary pass when attempts to
cut carbon emissions do not go far enough. It includes blasting sulphate
aerosols into the stratosphere to reflect sunlight away from the Earth or
spraying fine sea salt into the sky to whiten clouds.
“One powerful country could do it by itself, if desperate enough for a
quick but temporary fix,” says climate scientist Ken Caldeira of the
Carnegie Institution for Science. He notes how Mount Pinatubo’s 1991
eruptions in the Philippines, which fired sulphur particles high into the
air, cooled global temperatures nearly one degree Fahrenheit in 1992
and 1993.

2. Carbon capture: This traps emissions from power plants and removes
them from the atmosphere and might obviate the need for such a
drastic step.
Because of its current high cost, no commercial, coal-fired facility has

employed this technique. In May, the first effort is slated to debut in
Kemper County, Miss.; it is designed to capture 65% of carbon
emissions. Earlier this year, MIT developed a simpler scrubbing system,
which can be added relatively easily to existing facilities.
The US Department of Energy is funding research on how to capture

industrial emissions and either store them underground or use them to
make products such as fuel, plastics, cement, and fertiliser. Without
federal funds, Mark Herrema founded Newlight Technologies, a
California-based company that captures methane emissions from dairy
farms and uses them to make plastic.
Klaus Lackner, a Columbia University geophysicist, is working on

synthetic trees that absorb carbon dioxide about a thousand times
faster than natural trees. Keith’s Calgary-based start-up, Carbon
Engineering, funded partly by Bill Gates, is developing industrial-scale
technologies to capture carbon from the atmosphere and use it to
produce low-carbon transportation fuels.
3. Artificial photosynthesis: This could yield an entirely new, emissions-

free energy source. In 2011, Nocera unveiled his “artificial leaf” — a
credit-card-sized silicon solar wafer that, when placed in a glass of tap
water and exposed to sunlight, generates hydrogen and oxygen
bubbles that can be stored and — when needed — recombined in a
fuel cell to generate electricity.
“We already know how to do this,” Nocera says. The problem: His
water-splitting device generates hydrogen fuel, but there is no network
yet of hydrogen filling stations in the US.
The DOE is funding related research at the Joint Centre for Artificial
Photosynthesis, led by the California Institute of Technology. “The goal

is to produce a chemical liquid fuel that can replace gasoline,” says

spokesman William Royea.
4. Solar and wind power: These have surged in recent years, and
research is finding new applications. MIT and Sandia National
Laboratories have developed ultralight, atom-thin solar cells that can be
embedded in flexible products like drapes or harder structures like a
tablet’s outer shell to produce power. Similarly, they are developing
transparent cells, that can be placed on windows.
Companies, such as California-based Makani, acquired this year by

Google, are trying to harness power from high-altitude wind, which is
faster and steadier. Their challenge: tethering airborne turbines
hundreds of feet off the ground without interfering with the aircraft. MIT
researchers are looking at far-offshore wind turbines and to store their
power and anchor them, huge concrete spheres that sit on the seafloor.
“Storage will be the game changer” for solar and wind, because their
power is intermittent but electric grids need consistency, says Bob
Armstrong, director of the MIT Energy Initiative. So universities, start-
ups, and major companies are working to boost battery performance.
5. Nuclear power: This is disliked by many environmentalists because of

safety and waste disposal concerns. It is welcomed by climate
scientists, including James Hansen, as a major energy source that does
not emit carbon.
DOE has offered $8.3 billion in loan guarantees to help build a nuclear
power plant in Georgia and is funding efforts by two companies —
North Carolina-based Babcock & Wilcox and Oregon-based NuScale
Power — to develop small modular reactors. These school bus-size
versions of current light water reactors could be made in US factories
and moved from site to site. DOE says it expects commercial operation
around 2025.
TerraPower, a start-up in Bellevue, Wash., partly funded by Bill Gates,

is developing a larger, 500-megawatt, ‘traveling wave’ reactor that runs

on nuclear waste and can go 40 years without refuelling. Last year,

Gates said that the company is looking to build a demonstration plant
and “China is one possible place.”
6. Efficiency: This is often seen as the invisible energy source, because it

is energy not used. Though basic technology, its potential is huge.
Long, who is studying California’s efforts, estimates efficiency upgrades
could halve the state’s energy demand by 2050. Building practices,
such as superior insulation and air sealing, have proven to slash a
home’s energy use up to 90%.
“This is the best way to get at climate mitigation,” says David Gottfried,
co-founder of the US Green Building Council, a private non-profit group.
Noting that residential and commercial buildings account for nearly 40%
of the total US energy use, he says that ultra-efficient buildings can
essentially become “our power plants of the future.”
(Source: Wendy Koch, U. T. 2014. How technology can halt climate change. [online] Available at:
http://www.usatoday.com/story/news/nation/2013/12/30/climate-change-technologies/4041931/. )
Questions:
1. On the basis of the abovementioned case, discuss how technological
change affects the environment.

J. Wiley.

Hill.
E-References
 Small Business - Chron.com. 2014. How Does Technology Improve a

Business. [online] Available at:
http://smallbusiness.chron.com/technology-improve-business-2188.html

 Economics.rpi.edu. 2014. Economics of Technological Change -

Department of Economics - Rensselaer Polytechnic Institute (RPI).
[online] Available at: http://www.economics.rpi.edu/pl/economics-
technological-change.
 http://www.theglobeandmail.com/report-on-business/industry-
news/energy-and-resources/costs-for-businesses-to-rise-as-eu-beefs-
up-carbon-trading-system/article16244016/
 http://www.theglobeandmail.com/report-on-business/industry-
news/energy-and-resources/costs-for-businesses-to-rise-as-eu-beefs-
up-carbon-trading-system/article16244016/
 Best-emf-health.com. 2014. Dangers of Electromagnetic Radiation and

Related Diseases. [online] Available at: http://www.best-emf-
health.com/dangers-of-electromagnetic-radiation.html

Unit 11 Technology Development and Exploitation

Structure
11.1 Introduction
Objectives
11.2 Technological Development and its Stages
11.3 Technology Development Through R&D
11.4 Technology Exploitation
11.5 Summary
11.6 Glossary
11.8 Answers
11.9 Case Study: Singular Logic - Software and Related Services
11.1 Introduction
In the previous unit, you studied about the various impacts of technological
progress on the society, work life of employees, and environment. Now, let
us move forward and discuss about technology development and
exploitation.
From Macintosh computer to iPod, iPhone, and iPad, Apple computers have
always experimented and launched new products in the electronics industry
and thus gained a competitive edge over their competitors. The reasons
behind the exemplary success of Apple are the continuous focus on
Research and Development (R&D) for developing new technology.
In simple words, technology development refers to the creation of a new
technological application with the assistance of available scientific
knowledge. Technology development is very critical for the success of
technology-driven organisations. An organisation develops technology in a
number of ways. One of the most important sources of technology
development is the internal R&D facilities of an organisation.

Technology exploitation, in simple words, refers to the process of making

economic gains out of technological innovations. In other words, through
technology exploitation, an organisation introduces a developed technology
in the market, meets the needs of consumers, and earns revenue. For
example, Sony developed the Walkman in the 1980s and introduced it in the
market to exploit the need of music loving consumers, while walking or on
the move.
The unit introduces you to the concept of technology development. In
addition, you will study some of the recent technological changes. Next, the
unit elaborates on the stages of technology development such as
Determining technological needs, developing plans and budgets, developing
solutions and demonstrating, testing, evaluating, and introducing
Technology. Some of the additional topics explained in the unit include
technology development through R&D, technology portfolio and industrial
R&D, justification of R&D expenditures, and technology exploitation.
Objectives
 discuss the concept of technology development

 discuss the stages of technology development
 explain technology development through R&D
 discuss the concept of technology exploitation
11.2 Technological Development and its Stages

As discussed earlier, technology development refers to the creation of new
technological applications with the help of existing scientific knowledge.
Development of new technology is vital to the success of technology-driven
organisations, because old technologies eventually become obsolete and
competitors may come with more innovative technologies to grab a larger
share of the market. For instance, mobile phone manufacturers are
continuously trying to develop sophisticated mobile phones to provide better
utilities to customers. In the process, mobile phone manufacturers have

been developing various operating systems, such as Android and iOS, and
numerous other applications to meet the demands of consumers.
Technology development is a complex process. It requires long-term
planning, support from top management, vision, and sufficient resources.
For example, software companies invest billions of dollars in R&D
investment to develop innovative software that provide efficiency, speed,
and productivity to organisations.
Technology development involves four stages, as shown in Fig. 11.1:
Determining Technological Needs
Developing Plans and Budgets
Developing Solutions
Demonstrating, Testing, Evaluating,

and Introducing Technology
Fig. 11.1: Phases of the Technology Development Process

These stages are elaborated as follows:
Determining technological needs: At this stage, the needs of a new
technology are identified. In other words, an organisation, which wants to
develop a new technology, needs to first identify why a particular technology
needs to be developed. Following are some of the needs of developing a
new technology:
 Old technologies become redundant.

 Drawbacks in an old technology need to be addressed.
 Competitors develop new technology.

 There is a demand for a new product in the market.

 Environmental concerns need to be addressed.
 An organisational problem needs an innovative solution.

For example, an organisation wants to develop a highly fuel-efficient car. In
such a case, the organisation needs to determine the market demand and
the feasibility of developing such a technology.
Developing plans and budgets: At this stage, a road map of technology
development is developed and resources are allocated. This stage involves:
Developing an R&D team
 Defining the roles of the individual members of the R&D team
 Allocating a particular budget for the development of the new technology

 Developing a timeline for the project
 Defining the characteristics and functions of the technology to be
developed
For example, at this stage, an organisation decides the roadmap for
developing the fuel-efficient car and allocates a team and other resources
for the project.
Developing the technology: This is the main stage in which a new
technology is developed. An organisation may develop a technology by
using its internal R&D resourcing or building an alliance with other
organisations. An organisation needs to maintain proper control throughout
the technology development process. For example, at this stage, the fuel-
efficient car is actually developed.
Demonstrating, testing, evaluating, and introducing technology: This is
the last stage of technology development, in which a new technology is
tested and demonstrated; its functions are evaluated and the final product is
introduced in the market. For example, at this stage, the organisation tests
the fuel efficiency and other functions of the car, demonstrates it, evaluates
its performance, and introduces the car in the market.

Exhibit 11.1: Some Recent Technological Developments

10 Big Science and Technology Advances to Watch
With so many remarkable things happening in the science and tech world,
it is hard to choose which to talk about. Here are a few on-going
developments worth keeping your eyes on.
Medicine
Stem Cell Heart Generation: For the first time, a human heart has
been created using stem cells, a major step forward in organ
generation. A couple years ago, scientists rebuilt the heart of a rat by
using stem cells; the same team is behind the latest breakthrough. If all
goes as planned, the heart will continue to grow and eventually begin
beating automatically. The implications of this development are huge,
including overcoming the problems of transplanting donated hearts.
Hybrid MRI/PET Imaging: Simultaneous Positron Emission Tomography
(PET) and Magnetic Resonance Imaging (MRI) could provide the
broadest spectrum of diagnostics possible, at least by current-tech
standards. MRI is especially useful for examining soft tissues in the body,
and when combined with PET (which is better at structural evaluation), it
can provide extremely detailed imaging of organ tissue. The duo would
work especially well in evaluating the true extent of liver damage, as one
example, without exposure to high levels of radiation. The problem is that
these technologies do not play well together, so integrating them is no
small challenge.

Applied Sciences and Engineering
Mimicking Porosity in Nature: ‘Graduated porosity’ in beehives, trees,

seashells, bones, and many other marvels of nature allow these materials
to endure incredible stress without compromising the integrity of the entire
structure. Bones, for example, can fracture in one place without affecting
the rest of the bone. The problem is that these structures have evolved
for specific purposes, and it is not easy to synthesise eons of complexity.
We are, however, getting closer to figuring out what clams and bees
already know.
Nano Batteries: Scientists have created the equivalent of a rechargeable
lithium-ion battery the size of a nanowire, thousands of times smaller than
a human hair. But unlike previous nanobatteries, this one is actually built
right into a nanowire. This infinitesimal power source could
provide nanomachines with the continuous power needed to accomplish
whatever uses they are designed for, such as exploring the
cardiovascular system of a heart disease patient.
Transparent Batteries: While we are talking about batteries, it is worth
noting that the first completely transparent battery was created this year.
Developing a transparent power source was the last obstacle to creating
transparent digital gadgets.
Environmental

Image by ahisgett via Flickr

Plasma Arc Waste Disposal: Imagine harnessing the power of lightning
to turn garbage into glass or into a gas that can be used as an energy
source. This technology is gaining momentum in the waste disposal
industry and is even in use at some solid waste facilities. The advantages
include less garbage in landfills, less carbon from incineration, and
creating a natural gas power resource. The problem: it is expensive
technology, and in these days of economic woes, few public entities can
afford it.
Ocean Desalination: The US lags behind the Middle East and Australia
in figuring out ways to remove salt from ocean water to make it drinkable,
but the technology is being used in a handful of coastal cities, and we can
expect several more desalination plants to launch sooner than later.
Brackish water desalination is already widely used throughout the
country. Two big questions facing ocean desalination:
1. How badly will it disrupt the ocean’s ecosystem?
2. What to do with the salt brine?
Information Technology
Paperless Paper: For us stubborn paper lovers, there may soon be a
product available that provides the look and feel of paper, with the
advantages of a digital device. In fact, the technology is already available,
though it has not yet translated into a marketable product. It is called
electronic paper (not to be confused with digital paper, a different
technology). Before long, the plastic shell of e-readers may not be
needed, and you will be able to handle ‘paper’ books, magazines, etc.
with all the bells and whistles your Kindle or Nook provides now.
Neuroscience
Using EEG to Put the Brakes On moving Vehicles: Researchers have
been exploring how to harness brain signals via electroencephalography
(EEG) for several years, with some remarkable advances. Now a group of
German scientists have figured out how to use EEG to put the brakes on
a moving vehicle. This is a big deal, because the normal reaction time
for a person to apply brakes is often too long to prevent an accident.

Scientists showed that using EEG, they reduced braking distance by

nearly four meters – the length of an average-sized car.
DNA Neural Networks: Researchers at the California Institute of
Technology say that they have created the first DNA neural network that
‘thinks’. They used DNA molecules to build four neurons made up of 112
distinct DNA strands. The amazing part is that the network can be trained
to play memory games and come up with correct answers.
(Source: Disalvo, D. 2011. 10 Big Science and Technology Advances to Watch. [online] Available at:
http://www.forbes.com/sites/daviddisalvo/2011/07/29/10-big-science-and-technology-advances-to-watch/
[Accessed: 3 Feb 2014].)

1. Technology development has ________ stages.
2. Determining technological needs is the first step of the technology
development process. (True/False)
3. An organisation may develop a technology by using its internal R&D
resourcing or building a strategic ________with other organisations.
Activity 1:
Make a group of your friends and discuss the stages of technology
development. Prepare a short note on the discussion.
11.3 Technology Development Through R&D

R&D, also known as research and technical development or Research and
Technological Development (RTD), refers to specific activities within a
business organisation. The scope of R&D differs in different organisations.
However, there are basically two primary models of R&D. In the first model,
the R&D function involves developing new products such as cars, mobile
phones, and toothpastes. The second model involves discovering and
creating new scientific and technological knowledge to facilitate
development of products, services, and processes. In the first model, the
R&D mainly consists of engineers, whereas in the second model, the team
may consist of industrial scientists.

No matter which model is being followed, R&D activities of organisations are

different from most other activities of a business organisation. This is
because most organisational activities are intended to yield immediate
returns to the organisation and involve few risks. However, R&D activities
are long term in nature and involve significant amount of risks. For example,
the R&D efforts of a drug company to develop a drug for a disease may take
significant amount of time and involve high uncertainty (i.e. there is hardly
any guarantee that the drug can be developed or not).
In a typical technology-driven organisation, the market research team
conducts surveys to discover the tastes and preferences of consumers,
market trends, and changing patterns of consumer behaviour. In addition,
the R&D team conducts research to develop suitable products to
commercially exploit the changing needs of consumers.
Internal R&D is a major source of technology development in technology-
based corporations such as Google, Apple and Microsoft. However, most
small or medium-sized organisations do not have capable R&D facilities.
R&D involves a huge amount of costs, skilled manpower, strong technology
vision of a company, and support from senior management and board.
Therefore, many organisations rely on other organisations for technology
development.
NOTE:
In the US, a typical industrial company spends about 3.5% of its revenue
on R&D. This measure is termed ‘R&D intensity’. Though high technology
companies, such as computer manufacturers, may spend up to 7% of their
revenue on R&D. Allergen, a biotechnology company, tops the chart with
43.4% of its revenue invested in R&D. An R&D investment over 15% of
the revenue is considered to be remarkable. Some companies in the
remarkable level of R&D investment are pharmaceutical companies such
as Merck & Co. (14.1%), Novartis (15.1%), and Ericsson (24.9%), an
engineering company.
Following is the list of the top 50 biggest R&D spenders in the most recent
four quarters:

50 Biggest R&D Spenders

Rank Company R&D, MOST RECENT FOUR
QUARTER
1 MICROSOFT $7,420,000,000
2 IBM $6,153,000,000
3 INTEL $5,755,000,000
4 CISCO $4,730,000,000
5 HEWLETT-PACKARD $3,632,000,000
6 ORACLE $2,496,000,000
7 SAP $2,296,330,000
8 GOOGLE $2,120,000,000
9 SUN MICROSYSTEMS $1,937,000,000
10 ADVANCED MICRO DEVICES $1,847,000,000
11 EMC $1,526,928,000
12 YAHOO $1,084,000,000
13 SEAGATE $939,000,000
14 SYMANTEC $890,000,000
15 APPLE $844,000,000
16 CA $657,000,000
17 ADOBE SYSTEMS $613,242,000
18 INTUIT $544,137,000
19 CADENCE DESIGN SYSTEMS $494,000,000
20 AUTODESK $452,800,000
21 NETWORK APPLIANCE $436,039,000
22 VMWARE $285,941,000
23 BEA SYSTEMS $240,578,000
24 MCAFEE $218,000,000
25 PALM $213,994,000
26 NOVELL $208,370,000

50 Biggest R&D Spenders

Rank Company R&D, MOST RECENT FOUR
QUARTER
27 BMC SOFTWARE $207,000,000
28 CITRIX SYSTEMS $205,000,000
29 PARAMETRIC TECHNOLOGY $166,000,000
30 VERISIGN $160,000,000
31 SYBASE $153,000,000
32 NATIONAL INSTRUMENTS $127,000,000
33 TERADATA $126,000,000
34 QUEST SOFTWARE $123,000,000
35 COMPUWARE $109,000,000
36 REALNETWORKS $103,000,000
37 TIBCO SOFTWARE $92,924,000
38 NUANCE COMMUNICATIONS $92,000,000
39 RED HAT $91,125,000
40 LAWSON SOFTWARE $81,488,000
41 WIND RIVER SYSTEMS $81,432,000
42 PROGRESS SOFTWARE $80,345,000
43 INFORMATICA $70,000,000
44 OPENWAVE SYSTEMS $65,369,000
45 SALESFORCE.COM $63,812,000
46 TRIZETTO GROUP $62,000,000
47 BORLAND SOFTWARE $57,795,000
48 SILICON GRAPHICS $57,000,000
49 ANSYS $56,000,000
50 MSC SOFTWARE $53,000,000
(Source: Company filings, Yahoo Finance)

(Source: Rajani, J. 2014. Top 50 Technology R&D Spenders. [online] Available at:
http://www.ciozone.com/index.php/Editorial-Research/Top-50-Technology-R&D-Spenders/50-Biggest-
R.html)
Technology development through internal R&D provides the following

benefits to an organisation, as depicted in Fig. 11.2:
Better Exploitation
Less Dependence
Competitive Advantage
Technology Leadership
Fig. 11.2: Benefits of R&D to Organisations

(Source: http://cassette-to-cd.baktrack.com/greatest-inventions-poll-gives-props-to-sony-walkman/
http://www.thenewstribe.com/2012/07/14/apple-inc-and-steve-jobs-a-journey-of-apple-i-iii-ipod-iphone-
and-ipad-and-others/ https://www.eventbrite.com/e/atx-startup-crawl-2013-presented-by-google-tickets-
7105846779/http://www.amazon.co.uk/kindle-ereader-ebook-reader/dp/B007HCCOD0)
Now, let us briefly discuss the benefits of R&D in the following section:
Better exploitation: Internal R&D allows an organisation in exploiting a
technology in a more profitable way. In other words, an organisation, which
develops a technology for the first time, can gain maximum commercial
benefits from the technology. Sony Walkman and Apple iPod are two
examples of such technological innovations through internal R&D.
Less dependence: Strong internal R&D helps an organisation in

developing technology on its own with the help of the internal resources of
the organisation. Therefore, such organisations do not need to depend on
other parties for new technology. This provides a competitive edge to the
technology developer and reduces its dependence on other organisations.
Apple is an example of an organisation that has a strong internal R&D
culture.
Competitive advantage: It refers to a unique quality possessed by an

organisation, which helps it in beating competition. Strong R&D helps an

organisation in possessing a competitive advantage in terms of advanced

technology. Strong R&D is the reason that companies, such as Google and
Apple, have strong dominance in their respective markets.
Technology leadership: This refers to a competitive position in which an
organisation introduces a particular technology in the market before the
competitors. Technology leadership helps an organisation in commercially
exploiting a technology in more profitable ways. For example, tech giant
Amazon launched an innovative e-book reader called Kindle. It enables
users to read books in digital format. It saves space, provides more
convenience to consumers, and reduces the time required for gaining
access to a book. The product helped Amazon in achieving leadership in
this category. In addition to Amazon, some of the technology leaders at
present are Google, Apple, and Facebook.
Exhibit 11.2: R&D Expenses in Apple Computers
Apple's R&D expenses hit new highs this year, but they continue to
remain a sliver of how much it spends -- especially when stacked up to
competitors.
According to Apple's annual report, which was filed with the US Securities
and Exchange Commission early Wednesday, the company spent nearly
$4.5 billion on R&D. That is up from about $1.1 billion, or 32%, from last
year.
The higher expenditure is still a small number compared with the
company's overall sales, which came in around 3% -- up a single
percentage point from last year.
Apple continues to be one of the smallest R&D spenders compared with
its peers. Microsoft, for instance, spent $10.4 billion or 13% of the
company's revenue on research during its 2013 fiscal year, which ran
through June. There is also Google, which has spent $5.8 billion so far
this year (and $9.8 billion in all of 2012), as well as Samsung, which spent

around $10.5 billion on R&D last year, and which is currently building a
massive new facility in Silicon Valley.
Perhaps a closer comparison is Amazon, which has spent $4.7 billion so
far this year, already beyond the $4.6 billion it spent during all of last year.
This is not a new story for Apple, though it has become a more interesting
one, as expectations rise for the company to release products in different
categories -- like a watch and a television. A part of those plans also
involves an expansion to its facilities as part of the upcoming
headquarters revamp in Cupertino, Calif., which had the green light from
the local government earlier this month.
Apple's R&D spending was not the only thing to get a bump this year.
Apple also:
 Spent $100 million more on advertising this year than last, racking up
$1.1 billion in ads on newspapers, TV, online, and elsewhere
 Hired 7,500 more employees during the year
 Increased its stock repurchase spending from $10 billion to $60 billion
(Source: Lowensohn, J. and Lowensohn, J. 2013. Apple's R&D up 32 percent in 2013, still dwarfed by
rivals. [online] Available at: http://news.cnet.com/8301-13579_3-57610073-37/apples-r-d-up-32-percent-
in-2013-still-dwarfed-by-rivals/.)

4. R&D is also called Research and Technological Development (RTD).
(True/False)
5. _______refers to a competitive position in which an organisation
introduces a particular technology in the market before the
competitors.
6. R&D investment over ______ of the revenue is considered to be
remarkable.
11.4 Technology Exploitation

In simple words, technology exploitation refers to the process of gaining
economic benefits from a technology. For instance, merely developing a
new gadget does not yield financial benefit to Apple computers. The

company needs to introduce the product in the market to fulfil the needs of
consumers or license the technology to other organisations at a fee. These
are the instances of technology exploitation.
An organisation may follow different strategies for exploiting a technology.
For instance, an organisation may want to use the technology in its own
products and services. In such cases, the organisation should have a
capable marketing and distribution network to gain maximum advantage of
the technology.
Also, the timing of introducing a product also plays a crucial role in
determining the economic value received from the technology. For example,
today, there is an increasing awareness about the negative effects of
technology on the environment. Therefore, there is an increasing demand
for environmental-friendly products i.e. products with lesser adverse effects
on the environment. For example, the demand for consumer durable goods
with higher ratings and more fuel efficient cars is rising. Therefore,
organisations exploiting these technologies are able to cash in on the
prevailing market sentiment in a better manner.
An organisation also needs to do sufficient market research to identify
market needs and demands for the technology before introducing it to the
market. Licensing technology becomes a profitable option when a
technology developer does not have sufficient marketing and distributional
capabilities to exploit the technology.
David Ford developed the Technology Exploitation Matrix to facilitate
organisations in deciding the right means of technology exploitation. Fig.
11.3 depicts the Technology Exploitation Matrix:
Fig. 11.3: David Ford`s Technology Exploitation Matrix

As you can see in Fig. 11.3, an organisation should employ a developed

technology in its own products and services when it has very low urgency of
exploitation and need for support technologies, and when it is in the early
stages of the product life cycle. The other methods of technology can be
read from the table in the similar way.
(Source: David Ford, “Develop Your Technology Strategy.” Reprinted from Long Range Planning,
Vol.21, 92, with permission from Elsevier Science.)
Following are some of the benefits of technology exploitation:

 It helps an organisation in introducing innovative products and services
and achieving an edge over competitors.
 It helps an organisation in achieving a technology leadership position.
 Technology exploitation is the reason behind the commercial
sustainability of a technology-driven business organisation.
 Technology exploitation provides consumers with wide alternative
choices of goods and services.
 Technology exploitation increases competition in the market and thereby
fuels innovation.
7. __________refers to the process of gaining economic benefits from a
technology.
8. ________becomes a profitable option when a technology developer
does not have sufficient marketing and distributional capabilities to
exploit the technology.
11.5 Summary
 Technology development refers to the creation of a new technological

application with the help of available scientific knowledge.
 Development of new technology is vital to the success of technology-
driven organisations, because old technologies eventually become
obsolete, and competitors may come with more innovative technologies
to grab a larger share of the market.

 Technology development is a complex process. It requires long-term

planning, support from top management, vision, and sufficient
resources.
 Technology development refers to the creation of new technological
applications with the help of existing scientific knowledge.
 The stages of technology development are determining technological
needs; developing plans and budgets; developing solutions; and
demonstrating, testing, evaluating, and introducing technology.
 An organisation that wants to develop a new technology needs to first
identify why a particular technology needs to be developed.
 An organisation may develop a technology by using its internal R&D
resourcing or building an alliance with other organisations.
 In the last stage of technology development, a new technology is tested
and demonstrated, its functions are evaluated, and the final product is
introduced in the market.
 R&D refers to specific activities within a business organisation.
 Internal R&D is a major source of technology development in
technology-based corporations such as Google, Apple, and Microsoft.
 Some benefits of R&D are better exploitation, less dependence,
competitive advantage, technology leadership, and technology
exploitation.
 Technology exploitation refers to the process of gaining economic
benefits from a technology.
11.6 Glossary
E-book: It refers to the digital versions of physical books, which can be read
in various digital systems, such as smart phones, computers, laptops, and
tablet computers.
LED: It refers to Light-Emitting Diode, a modern technology of TV display.
CRT: It refers to the Cathode Ray Tube, an old technology of TV display.


1. Explain technology development. Mention its stages.
2. Elaborate on the stages of technology development.
3. Discuss how R&D helps in technology development.
4. Define technology exploitation. When should a company use a
developed technology in its own products and services?
11.8 Answers

1. Four
2. True
3. Alliance
4. True
5. Technology leadership
6. 15%
7. Technology exploitation
8. Licensing technology
Terminal Questions
1. Technology development refers to the creation of new technological
applications with the help of the existing scientific knowledge. Refer to
section 11.2 Technological Development and its Stages for details.
2. Technology development is a complex process. It requires long-term
planning, support from top management, vision, and sufficient
resources. The stages of technology development include determining
technological needs; developing plans and budgets; developing
solutions; and demonstrating, testing, evaluating, and introducing
technology. Refer section 11.2 Technological Development and its
Stages for details.
3. R&D, also known as research and technical development or RTD,
refers to specific activities within a business organisation. The scope of

R&D differs in different organisations. R&D is a major source of

technology development in the technology-based corporations such as
Google, Apple, and Microsoft. Refer to section 11.3 Technology
Development Through R&D for details.
4. Technology exploitation refers to the process of gaining economic
benefits from a technology. Refer to section 11.4 Technology
Exploitation for details.
11.9 Case Study: Singular Logic - Software and Related Services

Singular Logic, established in the year 1984, is a leading software and
integrated IT Solutions company, based in Greece. The company
commands leadership positions in business software services and business
software licensing with 29% and 26% of market share, respectively. The
company has grown through a number of mergers and acquisitions over the
last two decades.
The group provides integrated software solutions for the private and public
sector enterprises in Greece and other Balkan countries, such as Bulgaria
and Romania. The entire portfolio of the company comprises at least 40
software products. There are mainly three divisions of the company:
enterprise division, focusing on the design and implementation of integrated
IT solutions; software division, focusing on the development and distribution
of business software applications; and the integrator division, focusing on
the design and implementation of integrated IT solutions for the public
sector organisations.
Strong focus on R&D is part of the most important reasons behind the
success of the organisation. Singular Logic employs an internal time R&D
team consisting of 23 full-time members, 20 part-term workers, and 20
external persons, contracted in various universities and research institutes.
The R&D department is in close cooperation with the software project
management department to facilitate software development and transfer of
technology from the R&D department. In addition, the R&D also has close

linkages with the customer interface to understand the needs of the

customer. There is a fixed R&D budget. However, the organisation receives
R&D funding from national and EU sources.
Some of the typical R&D outcomes in the company include incremental
improvements in products, processes, and services (improvement in the
service delivery processes, enabling technologies, and service delivery
channels). Some of the bottlenecks in the R&D in the company include the
cyclical nature of product development and funding. Organisations find it
easy to cut costs by reducing R&D investment. Therefore, in difficult times,
R&D spending is significantly reduced, thereby affecting innovations and
technology development. In addition, finding skilled R&D staff is another
problem faced by the organisation.
Questions:
1. With the help of the case, explain why R&D is beneficial for an
organisation.
2. Discuss some of the potential bottlenecks of R&D in an organisation.

J. Wiley.
Hill.
E-References
 Lowensohn, J. and Lowensohn, J. 2013. Apple's R&D up 32 percent in

2013, still dwarfed by rivals. [online] Available at:
http://news.cnet.com/8301-13579_3-57610073-37/apples-r-d-up-32-
percent-in-2013-still-dwarfed-by-rivals/.\\
 Disalvo, D. 2011. 10 Big Science and Technology Advances to Watch.
[online] Available at:
http://www.forbes.com/sites/daviddisalvo/2011/07/29/10-big-science-
and-technology-advances-to-watch/ [Accessed: 3 Feb 2014].

Unit 12 Technology Support System: Information

Technology
Structure
12.1 Introduction
Objectives
12.2 Overview of IT
12.3 IT and Globalisation
Managing GIS
GIS Development Methodologies
Virtual Organisations
12.4 IT and Networking
12.5 Summary
12.6 Glossary
12.8 Answers
12.9 Case Study: Infy to help Myanmar develop e-governance strategy
12.1 Introduction
In the previous unit, you studied about technology development and
technology acquisition. In simple words, technology development refers to
the process of creating a new technological application with the help of
existing scientific knowledge. Technology exploitation refers to the process
of gaining commercial benefits from a developed technology. Now, let us
move forward and discuss different aspects of information technology.
Earlier, you had to go to a library to find out important information about a
place, consult a telephone directory to find out the contact details of a
doctor, or stand in a long queue for hours to book a railway ticket. However,
with the advent of information technology (hereafter referred as IT) has
changed the way people perform these and numerous other transactions. In

simple words, IT refers to a computer-enabled system that helps in

collecting, storing, sharing and utilising information through networking.
Virtually, IT has connected the entire world. IT has enabled business
organisations to reach the customers easily, collect information about
customers, selling goods and receiving payment online and provide
customer assistance and maintaining a customer relationship in an efficient
manner. Apart from business organisations, IT has benefitted other
stakeholders in the society. For instance, IT has enabled e-governance i.e.
delivery of the government services online. IT has improved healthcare
facilities, education systems and transportation systems.
In this unit, you will study about various aspects of IT. The unit begins with
an overview of the IT sector. In addition, it explains the benefit received by
companies from IT. The unit also relates IT and globalisation and provides a
detail account of global information system (GIS). Some of the other topics
discussed in the unit include impact of IT in India, IT and networking and
role of IT in e-governance.
Objectives
 explain the meaning of information technology
 discuss information technology and globalisation
 describe global information system

 explain the functions of networking in IT
12.2 Overview of IT
In earlier times, it was difficult for organisations to do business from one
country to another predominantly because of limited means of
communication. Information Technology (IT) has changed the way we were
accustomed to look at our world. It has provided a global access of
information through technology. Information technology has been described
as the use of technology for managing information. The Internet has
facilitated real-time information sharing around the world.

According to the Information Technology Association of America

(ITAA), “IT (Information technology) is the study, design, development,
implementation, support or management of computer based information
system particularly software applications and computer hardware.”
Business requires an interaction among stakeholders so that they can share
information necessary to manage the business effectively. Technology has
brought revolutionary changes in the way business communication used to
take place in the past. Earlier, sharing information between countries was a
matter of days, but now, it is possible in a few minutes.
IT has become an industry, which is expected to grow and become worth
225 billion US dollar by 2020. It has made information a scientific product
and has materialised the field of Information Technology Enabled Services
(ITES). Besides its application in business, IT has contributed significantly in
various other spheres, such as education, manufacturing, banking and
telecommunication. In India, the industry has a significant contribution to the
country’s Gross Domestic Product (GDP).
Fig. 12.1 depicts different fields in which IT has immense contribution:
Business
Education
Automobile
Defence
Telecommunication
Bio-medical
Entertainment
Fig. 12.1: Contribution of IT in Various Fields

(Source: http://www.uts.edu.au/future-students/find-a-
course/courses/c04161/ http://www.lsue.edu/elearning/ http://www.dspace.com/en/pub/home.cfm
http://www.casino.org/news/south-korean-soldiers-gambling-online-sees-sharp-
increase http://www.tec.gov.in/ http://www.research.ibm.com/haifa/info/200911_BioMIMS.shtml
http://pinoytekkie.blogspot.in/2014/01/viewsonic-leads-in-big-way-for.html)
As depicted in Fig. 12.1, IT contributes significantly in business, education,

automobile, defence, telecommunication, bio-medical and entertainment. In
business, it provides information systems, while in education sector, it

provides e-learning. Apart from this, in automobiles, it helps in running

efficient engines. The field of telecommunication and entertainment has
been enriched with communication networks and many.
Exhibit 12.1: Information Technology in the News

“Philips Healthcare launches new information technology division
Philips Healthcare, best known for its medical devices, is expanding its
non-device offerings by launching a new Healthcare Informatics Solutions
and Services business group. The new unit builds upon the Andover,
mass-based company’s increasing focus on providing integrated solutions
to its hospital customers.
The new division will offer hospitals and health systems customised
clinical programs, data analytics and interoperable, cloud-based platforms
to help them transform to new models of care, including Accountable
Care Organisations.
"Healthcare systems today are changing the way they operate, how
decisions are made and how patients receive care" Philips Healthcare
CEO Deborah DiSanzo said in a statement. "This requires a significant
overhaul of complex organisations, as well as the associated actionable
data about each patient population they serve”.
Jeroen Tas, who previously served as chief information officer at Philips,
will lead the new business unit. The company also announced that it
would reconfigure its sales team to reflect the amount of consolidation
that has recently occurred in the hospital industry, and to focus more
resources on larger health systems.”
(Source: Donnelly, J. 2014. Philips Healthcare launches new information technology division - Boston
Business Journal. [online] Available at: http://www.bizjournals.com/boston/blog/health-
care/2014/01/philips-healthcare-launches-new-it-unit.html)


1. IT has become an industry, which is expected to grow and become
worth 225 billion US dollar by 2015. (True/False)
2. ITES can be expanded as Information Technology and Engineering
Services. (True/False)
Activity 1:
Assume yourself as a general manager of a multinational organisation
and prepare a list of everyday business functions. List the activities that
require IT assistance.
12.3 IT and Globalisation

Globalisation involves the integration of different economies, societies and
cultures through cross-border communication and trades. The reduction in
trade barriers and increase in competition has encouraged organisations to
enter into global businesses. Globalisation has provided organisations
enormous opportunities for growth and expansion in the international
market.
In the present scenario, there are expected to be very few organisations that
operate in an isolated and country-specific environment. Organisations
cannot avoid globalisation because it may lead to losing the market share.
In addition, if the organisations do not expand their business globally, they
may lose profitable market opportunities. The modern world economy
facilitates relatively a free flow of products, services, people, technologies
and financial capital across national boundaries. The reduction in trade
barriers, travel and immigration restrictions and other barriers to
international flows has speeded up the rate of globalisation of organisations.
Globalisation provides opportunities to organisations to sell products and
services and acquire resources in a well unified global market.
The influence of technology has localised the world in terms of culture and
language. The revolution of technology in the field of communication has
brought drastic changes in the way information was often spread around the
world. IT has played a crucial role in breaking geographical barriers among
nations.

12.3.1 Managing GIS

With the increasing number of multinational corporations (MNCs) and the
profits involved in international business, organisations required a system to
manage profitable execution of business strategy. The idea of developing a
global information system (GIS) aims at meeting the challenges of
international business so that a profitable running can be made possible.
The demand of a global organisation is driven by the global demand pattern
and the global approach of the administration. Management of global
resources and regulatory conditions worldwide is represents one of the
challenges. Information technology has contributed to the development of a
global information system to meet with such challenges in global business.
The development of this system follows the global strategy that is adopted
by the firm. Fig. 12.2 shows a global information system:
Fig. 12.2: Demonstrating Global Information System

The Fig. 12.2 shows there are two projects namely; project1 and project2
running in an organisation and different group of countries are engaged in
different projects. Data is gathered from various countries and global
market conditions to develop a global data warehouse. This data warehouse
is accessed by an information processing system to generate useful
information. This information is circulated back to the countries. Countries
also share and communicate among themselves. Project1 and Project 2
also coordinate with each other.

12.3.2 GIS Development Methodologies

There are a lot of methodologies to develop a global information system.
The aim of these methodologies is to minimise the risk of system failure and
meeting the challenges. Fig. 12.3 depicts the types of methodologies
followed for the development of GIS.
Transformational Approach
Multinational Approach
GIS -MEthodology
International Approach
Expert Approach
Off-Shore Developement
Approach
Fig. 12.3: GIS Development Methodologies

Now, let us briefly discuss these methodologies in the following section.
Transformational Approach: This approach involves the transformation of
system. It has been successfully used in the headquarters of international
organisations. It believes that all the details of all units should be shared by
headquarters. Thus, requirements at separate locations can be effectively
traced by the headquarters.
Multinational Approach: This approach involves the development at
national units. Under this approach, the system developed by all the units is
analysed and the best one of the lot is selected and implemented in all the
units. This approach follows the idea that each nation has distinct capability
and equal opportunity should be given to all.

International Approach: This approach involves development of the

system by each site individually. All the individual systems are then
integrated with one another. This approach believes that locations are itself
capable enough to perceive the requirements. Hence, the locations should
develop their own individual system.
Expert Approach: This approach involves building a development team of
system experts from all the units of the multinational organisation and then
developing the global information system. The team of experts is believed to
be able to perceive the requirements and develop a system for integrated
requirements for all the units.
Off-Shore Development Approach: This approach involves hiring a
system supplier for the development of a global system as per the
requirements of multinational organisation. This approach refers to
outsourcing of system development. The responsibility for system
development is on the supplier and the client organisation pays for this
service.
12.3.3 Virtual Organisations

The emergence of IT has contributed in flattening the structure of
organisation. As the name suggests, an organisation is the combination of
factors of production and their functioning towards a common goal. These
factors are the five ‘M’s of production — man, machine, money, material
and method. A virtual organisation combines these resources throughout
the world without creating any physical boundaries. The concept of the
virtual organisation emerged as an idea of rendering support to the small
and medium sized enterprises which turned into a web based business in
collaboration with the increasing emergence of IT. It has originated from a
suggestion of web-based organisation to support agile production of
airplane and car manufacturing companies. This suggestion was a part of a
joint work in support of agile production by the Massachusetts Institute of
Technology (MIT) and Leigh University presented in 1995. In the functions
of a virtual organisation, all the factors from customers till the salesmen
move virtually through electronic and multimedia sources.
As a distinct feature, virtual organisations are more flexible and rely on
networks to relate the parties involved in business. The environment under

which virtual organisations work is filled with issues related to globalisation

and high degree of change in the work environment. There is generally no
physical interaction among the parties involved in production.
The idea of web based organisation requires consolidation of the business
processes. The following points discuss the major areas of consolidation in
a virtual organisation:
Technical Consolidation: It involves implementation of a network
throughout the coverage of organisation and equipping each part with
adequate technological tools.
Administrative Consolidation: It involves coordination and cooperation
among various business processes. This is needed to control over
processes being run at different locations of the world.
Procedural Consolidation: It involves linking all the different business
processes being run across the world. Separate processes need to be
integrated as one business so that it can provide the desired profit. For
example, the part of manufacturing needs to be consolidated with finance
and marketing as it needs to know the customer’s requirement and how
much of the capital an organisation can invest.
Consolidation of Work: It involves integration of labour and managerial
efforts in one direction that is leading towards achievement of organisational
goal.
The revolution in information technology has made possible the
consolidation of all these factors so that a virtual organisation can be
formed. The development of this approach in business has provided comfort
to the customers as they can access the products and services from the
place of their convenience.
For instance, J. M. Mold is a virtual organisation based in Ohio which has 35
employees. The organisation deals in manufacturing of spare parts of the
passenger plane named Boeing. Consumer durable producer and number
one in washing machine market, Whirlpool is also named in the list of clients
of J. M. Mold. The company values agility of trade functions with rapid and
flexible development. It believes that not practicing this value leads the
company towards extinction. The company has established an electronic

network the work capability of which resembles that of multi-communication

system. The multi-communication system enables fast and suitable
information sharing among the employees and units of the organisation. It
also allows setting up web-cams operations that can be well monitored on a
daily basis. They show the recorded operations and manufacturing schedule
to the clients so that they can be convinced on quality.

3. ______ involves the integration of diverse economies, societies and
cultures through cross-border communication and trades.
4. GIS is the acronym of which of the following?
a.Global Information System
b.Global Information Software
c. Global Internet System
d.Geographical Information System
5. Mention the five M of production in an organisation.
12.4 IT and Networking

A cluster of interconnected computers that communicate with one another
through a shared communication link for data exchange is known as a
computer network. Two interconnected systems are shown in Fig. 12.4.
Fig. 12.4: Two Interconnected Systems

A computer network requires two or more individual computers having some
data to share. The individual computers must be connected through a
physical pathway called the transmission medium. All the interconnected
systems of a network are bound by a set of communication rules to ensure
proper delivery of data from the source to the destination. The rules that

govern computer communication are called protocols. In brief, all networks

must have:
 Data to share
 A physical pathway (transmission medium)

 Rules of communication (protocols)
Merely having a transmission pathway does not produce communication.
When two entities communicate, they do not merely exchange data; rather,
they have to interpret the data they receive from one another. The goal of
computer networking, therefore, is not simply the exchange of data, but to
interpret and use the received data.
Fig. 12.5 shows a network with three computers connected together within a
network cable and also attached with a laser printer:
Fig. 12.5: Three Computers and a Printer Connected Together

Fig. 12.5 depicts that all the computers can use the same laser printer
because the printer is attached to the network.
When two or more computers are connected to one another, they are
deemed to be on the network. The technical term for a computer that is on
the network is node. When a computer is switched on and is able to access
the network, the computer is said to be on-line; if it is unable to access the
network, it is off-line. A computer could be off-line if it is switched off or the
cable connecting it to the network is unplugged.
A computer network allows multiple computers to connect, communicate
and exchange information with one another.
Let us consider an example to understand the concept of a computer
network. A computer network can be compared to a group of friends where

all the friends stay connected with one another through various means of
communication such as mobile phones, social networking, emails, etc. each
person in the group can communicate with others, if they stay connected.
Likewise, multiple computers in a network can be connected to share the
information among them. Today, computers have become an important part
of our lives. Around the world, hundreds and thousands of computers share
information with each other through different media such as cables,
microwaves towers and satellites. Information that would have otherwise
taken days to reach us can now be read or heard in minutes. Data transfer
or sharing that took weeks to complete can be expected to be completed in
hours. All this is possible due to network. Today, computer networks are not
merely a circuitry of cables and computers; they have become backbones of
human society.
6. A cluster of interconnected computers that connect with one another
through a shared communication link for data exchange is known as
a ________.
7. A computer network allows multiple computers to connect,
communicate and share information with one another. (True/False)
12.5 Summary
 Information Technology (IT) has changed the way we used to look at our
world. It has provided a global access of information through technology.
 IT contributes significantly in business, education, automobile, defence,
telecommunication, bio-medical and entertainment.
 Globalisation involves the integration of different economies, societies
and cultures through cross-border communication and trades. The
reduction in trade barriers and increase in competition has encouraged
organisations to enter into global business.
 The revolution of technology in the field of communication has brought
drastic changes in the way information used to be spread around the
world.

 The idea of developing a global information system (GIS) aims at

meeting the challenges of international business so that a profitable
running can be made possible.
 There are a number of methodologies to develop a global information
system. The aim of these methodologies is to minimise the risk of
system failure and meeting the challenges.
 Some of the methodologies of developing a GIS are transformational
approach, multinational approach, international approach, expert
approach and off-shore development approach.
 A virtual organisation combines different factors of production, such as a
man, machine, material, method and money without creating a physical
boundary.
 The major areas of consolidation in a virtual organisation are technical
consolidation, administrative consolidation, procedural consolidation and
consolidation of work.
 A cluster of interconnected computers that communicate with one
another through a shared communication link for data exchange is
known as a computer network.
 A network must have data to share, a physical pathway and rules of
communication.
12.6 Glossary
Stakeholders: They are different parties who have direct or indirect
interests in an organisation.
Trade Barriers: These are various trade restrictions put by the government
in a country to reduce import of goods and promote exports.
Multinational corporations: These are the countries that operate in a
number of countries.
Node: It is a technical term for a computer on a network.
Protocol: These are the rules that govern computer communication.


1. What do you mean by IT? What are its benefits?
2. Describe the role of IT in globalisation.
3. Discuss how a global information system is managed.
4. Explain the GIS development methodologies.
5. What is a virtual organisation? Mention the factors that are disoriented
in a virtual organisation.
6. Describe computer networking.
12.8 Answers

1. False
2. False
3. Globalisation
4. a.
5. Man, machine, money, material and method.
6. Computer network.
7. True
Terminal Questions
1. IT refers to a computer-enabled system that helps in collecting, storing,
sharing and utilising information through networking. Refer to section
12.2 for details.
2. Globalisation involves the integration of different economies, societies
and cultures through cross-border communication and trades. The
influence of technology has localised the world in terms of culture and
language. The revolution of technology in the field of communication
has brought drastic changes in the way information used to be spread
around the world. Refer to section 12.3 for details.

4. Some of the methodologies of developing a GIS are transformational

approach, multinational approach, international approach, expert
approach, and off-shore development approach. Refer to section 12.3.2
for details.
5. A virtual organisation combines different factors of production, such as
a man, machine, material, method and money without creating any
physical boundary. Refer to section 12.3.3 for details.
6. A computer network requires two or more individual computers having
some data to share. Refer to section 12.4 for details.
12.9 Case Study: Infy to help Myanmar develop e-governance

strategy
With its economy opening up after decades of isolation, the reformist
government in Myanmar is trying to make the country’s presence felt on the
global information-technology (IT) map. There is information that the
Southeast Asian nation has roped in tech major Infosys to devise a strategy
for using IT to improve governance efficiency. This would focus on grooming
the local eco-system.
Sources say Infosys, India’s second-largest IT services company, has
bagged a consulting project from the Myanmar government for the same.
This deal would give Infosys an entry into the country once considered
untouchable by global investors, owing to its prolonged civil war under the
military junta.
In November last year, Myanmar’s pro-democracy leader and Nobel
laureate Daw Aung San Suu Kyi visited Infosys headquarters. During her
interaction with senior company officials, Suu Kyi discussed on how
technology could play a role in the Myanmar’s development. Infosys had
also committed to undertake a six-month training programme for 100
engineering students from that country.
At home, Infosys is working with the government in various IT modernisation
initiatives. This includes managing the income tax department’s central
processing centre and postal department’s IT Modernisation initiatives.
“Infosys is trying to take its success in India in various e-governance
projects to other countries in Southeast Asia,” a company source said.
Under the democratically-elected government, Myanmar is looking to bolster

its investment ecosystem and in the process is wooing global technology

companies. The country is taking the help of the US Agency for International
Development (USAID) to attract global technology majors such as
Cisco, Google, HP, Intel and Microsoft.
Preceding year, Microsoft had announced to enter Myanmar with a local
company, Myanmar Information Technology (MIT). Besides, Cisco has
announced to open networking academies with an aim of training the locals
before establishing a presence in the country.
According to research firm IDC, the IT spends in Myanmar is estimated to
reach $233.56 million by 2016, with a compound annual growth rate of 16
per cent between 2011 and 2016.
Questions:
1. Based on the case, discuss the role of IT in e-governance.

J. Wiley.

Hill.
E-References
 Mishra, B. 2014. Infy to help Myanmar develop e-governance strategy.

[online] Available at: http://www.business-
standard.com/article/companies/infy-to-help-myanmar-develop-e-
governance-strategy-114010801573_1.html
 Deity.gov.in. 2014. Government of India, Department of Electronics and

Information Technology (DeitY) : Home Page. [online] Available at:
http://deity.gov.in/
http://www.ettighoffer.com/fr/etudes/virtual-organisations.pdf

Unit 13 Technology Support System: Infrastructure

and Facilities
Structure
13.1 Introduction
Objectives
13.2 Infrastructure and Facilities Sector of India
13.3 Emerging Trends in Infrastructure and Facilities Sector
13.4 Application of Technology in Infrastructure and Facilities Sector
13.5 Summary
13.6 Glossary
13.8 Answers
13.9 Case Study: DECC Announces £8m Boost for Energy Storage
Technology
13.1 Introduction
In the previous unit, you studied about the various aspects of Information
Technology (IT). IT refers to a computer-enabled system of collecting,
storing, analysing, and sharing information. Now, let us move forward and
discuss the infrastructure and facilities sector in India.
Infrastructure and facilities refer to the various utilities provided in terms of
transportation, communication, water supply, etc. The infrastructure of a
country is responsible for improving the standard of life of people. For
instance, the standard of life of citizens of developed countries, such as the
US and the UK, is much better than that of African or Asian countries. This
is because of the huge disparities in infrastructure in these regions. It is a
commonly accepted notion that nations with better roads, ports, and energy
producing and water supply facilities, provide a better life for their citizens.

Technology plays a very critical role in infrastructure by facilitating in

infrastructure development, maintenance, and repair. For example,
technological development has revolutionised air travel by increasing speed
and safety, dramatically reducing the number of mishaps and providing
various entertainment facilities to travellers. Similarly, technology has
improved the efficiency of power generation and water supply.
In this unit, you will study about the infrastructure and facilities sector in
India. Next, the unit elaborates on the emerging trends in the infrastructure
and facilities sector. Other topics discussed in the unit include the needs of
technology and applications of technology in the infrastructure and facilities
sector.
Objectives
 explain the infrastructure and facilities sector in India

 discuss the emerging trends in the infrastructure and facilities sector
 describe the need for technologies in the infrastructure and facilities
sector
 discuss the application of technology to the infrastructure and facilities
sector
13.2 Infrastructure and Facilities Sector of India

Infrastructure is the cornerstone of any economy. After the liberalisation of
the Indian economy in 1991, there has been a paradigm shift in the focus on
the infrastructure sector in India. Prior to liberalisation, lack of good
infrastructure was one of the reasons behind the low growth rate of the
economy (around 4% annually). However, towards the end of the 1980s, the
need for superior infrastructure was recognised. As a result, the government
has been putting emphasis on building world-class roads, ports, power
generation facilities, railways, and transportation facilities. India`s focus on
infrastructure in the last decade has made it the second fastest growth
economy in the world.

NOTE:
Infrastructure and facilities combined together are called the infrastructure

sector.
Now, let us discuss the various individual components of infrastructure in

India:
Roads: Surface transportation is one of the most important components of
the overall infrastructure in any country. Countries with wide road networks
are more efficient in transporting materials in different parts of the country,
thereby facilitating manufacturing and production activities. India holds the
second largest road networks in the world. Presently, India has a total road
network of over 4,689,842 kilometres. However, a major portion of the roads
in India is not suitable for large vehicles. Also, India has less than 4
kilometres per capita roads.
Moreover, India has only 0.07 kilometres of all seasons and 4 or more laned
highways as compared to 21 kilometres in the US and 15 kilometres in
France. (Ministry of Road Transport and Highways, Government of India,
2010-2011 Report). Therefore, as you can see, India needs to go a long
way to match the road networks of developed countries.
Railways: This mode of transportation is considered advantageous,
because rail has the ability to transport a large quantity of products at a time
from one place to another over longer distances. For example, unit trains of
up to 100 cars haul coal from the mines in Eastern India to the coal-using
thermal power stations in Western India. Recent years have seen a lot of
technological innovations in the railways in India. For example, cold
carriage, introduced by Indian Railways, now, has the ability to carry
refrigerated items. These innovations proved helpful for the various
shipments by rail. One of the major classes of goods that are transported
consists of agricultural products.
The rail, of course, is not without its problems. When revenue runs low,
economies are obtained in operating costs by slighting the maintenance of
way and equipment. Still, rail reigns supreme as an economic and efficient
hauler of bulky items over long distances.

Ports: India has a long coastline of around 7516.6 kilometres. There are 13
major ports (12 run by the government and 1 by corporate) and 187 notified
minor and intermediate ports. Overall, major ports handle 74% of all the
cargo in the country. The traffic of containerised cargo is expected to
increase by 15.5% (CAGR) over the next 5 years. Therefore, the existing
port infrastructure in the country is not in a position to handle increased
load.
(Anonymous. 2014. [online] Available at: http://www.pwc.in/en_IN/in/assets/pdfs/infrastructure-in-india).
Exhibit 13.1: India Will Have 2 New Ports by 2020
India’s shipping minister, G. K. Vasan, has committed to two new ports, one
in West Bengal and another in Andhra Pradesh, by 2020, reports Daily
Shipping Times.
The Cabinet Committee on Economic Affairs approved the ports in May last
year, and since then, plans have been fast-tracked.
Currently, there are 12 major ports in India: Mumbai, Jawaharlal Nehru Port
Trust, Kolkata (with Haldia), Chennai, Visakhapatanam, Cochin, Paradip,
New Mangalore, Marmagao, Ennore, Tuticorin, and Kandla. These ports
handle 75% of the total cargo traffic in the country.
ICRA research services reports that the ministry had set a target to approve
30 projects in FY 2013-14 to add a total of 284 million tonne capacity.
Plans have also been approved to develop five new cargo terminals,
including four major container facilities, at various ports, as part of the
country’s $110 billion port growth program.
(Source: Maritime-executive.com. 2014. India Will Have 2 New Ports by 2020. [online] Available at:
http://www.maritime-executive.com/article/India-Will-Have-2-New-Ports-by-2020--2014-02-12/)

Airports: India is the 9th largest aviation market in the world. In addition,
because of the increasing disposable income of people, the air traffic in
India has been increasing at a rapid speed. In addition, increase in business
activities has significantly increased cargo traffic in India.
Exhibit 13.2: Soon: New airports in India's Smaller Cities
India’s domestic airline industry is betting on smaller cities in the country

to fuel growth, because they are witnessing a falling passenger demand
from larger cities.
Airline companies are now building a fleet of regional jets, like turboprops,
ATRs, and Bombardiers, that could cater to tier II and tier III cities.
“There is a significant untapped demand potential in Tier II and Tier III
cities, which is where the future of Indian aviation lies,” HSBC Global
Research said in its report on the airline industry. “With airlines acquiring
regional jets, these cities with constrained infrastructure are being
accessed and the response has been positive.”
The Airport Authority of India’s (AAI) plans to upgrade the airport
infrastructure in Tier II and Tier III cities will also help the airline industry
to tap the pent up demand in these sectors.
(Source: Yahoo India Finance. 2014. Soon: New airports in India's smaller cities. [online] Available at:
http://in.finance.yahoo.com/news/aai-plans-to-upgrade-airport-infrastructure-094724502.htm)
Power: The aggregate capacity of the Indian power sector is 2, 28,721.71

MW. Fig. 13.1 shows the sector-wise breakdown of the power sector:

Fig. 13.1: Sector-wise Breakdown of the Power Sector

Fig. 13.2 shows the source-wise breakdown of the power sector:
Fig. 13.2: Source-wise Breakdown of the Power Sector

(Source: Powermin.nic.in. 2014. Power Sector at a Glance ALL INDIA. [Online] Available at:
http://powermin.nic.in/indian_electricity_scenario/introduction.htm)
However, India faces an acute power crisis in different regions throughout

the year. To address the situation, investment needs to be increased in the
power sector and various renewable sources of energy need to be explored.
According to Mr. Sambitosh Mohapatra, an executive director at
PricewaterhouseCoopers Pvt Ltd, “India is witnessing a revival of interest in
investments, especially of international operators and investors from the
Middle East, Europe, and Japan, especially in the areas of renewables,
conventional power generation (with advanced construction stage or
operational), and electrical equipment.”

Exhibit 13.3: India's Power Plants Attracting Foreign Buyers

NEW DELHI: Indian power assets are attracting foreign buyers keen to
invest in a sector that is unable to meet demand, even as the owners of
those assets struggle with debt and impediments to growth.
A consortium led by Abu Dhabi National Energy Co. of the United Arab
Emirates, for example, is in the final stages of talks with Jaypee Group,
an Indian construction and power company, to buy two of its
hydroelectric projects in the north Indian state of Himachal Pradesh for
up to $2 billion, two people familiar with the talks said last week.
Recent deals include the purchase by Singapore's SembCorp
Industries Ltd. U96.SG +1.32% early this month of a 45% stake in a
power project jointly owned by NCC Infrastructure and Gayatri Energy
Ventures for 175 million Singapore dollars (US$139 million). Tang Kin
Fei, group president and chief executive of SembCorp Industries, at the
time said that expanding the company's India foothold will provide
opportunities "to grow significantly in years to come."
In December, French energy company GDF
Suez SA GSZ.FR +2.04% bought a 74% stake in a coal-fired power
plant in southern India owned by Meenakshi Energy & Infrastructure
Holdings Pvt. Ltd. GDF Suez said the deal was part of its strategy of
investing in fast-growing markets.
(Source: Chaturvedi, S. 2014. Foreign investors see opportunity where Indian power companies
found problems. [online] Available
at:http://online.wsj.com/news/articles/SB10001424052702304675504579390521675089520?mg=reno64-
wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB1000142405270230467550457939052167
5089520.html)

1. The Indian economy was liberalised in the year 2001. (True/False)
2. India has the ______ largest road networks in the world.
3. India is the ______ fastest growing economy in the world.
Activity 1:
Using the Internet, conduct a research and compare the infrastructure
scenario in India and China. Present your findings in a brief note.

13.3 Emerging Trends in Infrastructure and Facilities Sector

A well-developed infrastructure helps an economy in achieving high growth,
eradicating poverty, providing a higher standard of life to people, and
effectively utilising the resources available. However, infrastructure goes
through evolution. In other words, modern infrastructure is significantly
different from the various infrastructure facilities available a few decades
back. For example, various transport facilities, such as Metro rail and bullet
trains, were not available a few decades ago. Fig. 13.3 depicts metro rail
and bullet train:
Fig. 13.3: Bullet train and Metro train

Therefore, as you can see, with the advancement of technology,
infrastructure also goes through changes. Following are some of the recent
trends in infrastructure:
Investment: Recently, the investment in infrastructure has increased

significantly in India. This is due to the integration of the Indian economy
with the global economy and the recognition of the importance of
infrastructure in economic development. Investing more in infrastructure is
reflected in the increasing budget allocation in infrastructure in the union
budget. One significant trend in investment in infrastructure project is Public
Private Partnership (PPP). This refers to the joint effort and investment of
the government and the private sector in developing infrastructure.
Technology: Increasing use of technology is another trend in the
infrastructure sector. Various infrastructure facilities, such as aviation, oil
exploration, transportation, mining, railway, and ship building, are
increasingly using modern technological facilities. For example, modern
technologies have reduced the number of flight accidents. In addition,
modern geo-thermal technologies help in better identification of oil fields,
thereby reducing wastages of resources.

Urban infrastructure: An emerging trend in the infrastructure sector is the

increasing effort of establishing and maintaining urban infrastructure such
as rapid transportation systems. The Indian government has launched the
Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and has
been allocating significant amount of funds in the scheme to improve urban
infrastructure.
Private sector participation: The increasing need for improving
infrastructure necessitated the participation of the private sector in investing
in infrastructure. As a result, most infrastructure projects are being
undertaken in the PPP model. Under this model, government agencies and
private organisations participate to execute a project and share the costs,
risks, and the gains. Some examples of PPP infrastructure projects in India
are:
 Delhi Gurgaon expressway
 Mumbai metro
 Hyderabad metro
 Kakinada deep water port

4. Modern _________help in better identification of oil fields, thereby
reducing wastages of resources.
5 Under _______model, government agencies and private organisations
participate to execute a project and share the costs, risks, and the
gains.
13.4 Application of Technology in Infrastructure and Facilities

Sector
As discussed in previous sections, technology helps in the advancement of
the infrastructure of a country. Technology helps in infrastructure
development in the following ways:
Increasing efficiency: Technology helps in increasing the efficiency of the
infrastructure facilities of a country. Efficiency can be in terms of providing
infrastructure facilitates to a larger number of the population, increasing the

production level (for example, increasing the production level of power), or

increasing the safety level. For example, the modern GPS system helps in
better navigation of flights by identifying the exact location of an aircraft.
Cost effectiveness: Technology helps in reducing wastes, thereby cutting
costs. For example, satellite technology has enhanced the efficiency and cut
the costs of oil exploration. In addition, various computer tools, such as
Microsoft project software, help in project planning and scheduling, resource
management, project review, preparation of charts, tracking progress, and
generating reports. Therefore, as you can see, technological tools help in
better execution and control of project activities, thereby saving time and
resources.
Exhibit 13.4: Satellite Technology Aids Oil Exploration

It is part of the popular lore of how to get rich by finding oil: all you have
to do is look for it bubbling to the surface. That is actually how some of
the biggest oil fields were discovered many years ago.
Now, scientists are again trying to reach oil and gas deposits by looking
for them at the surface, albeit with sophisticated satellite and digital
technology.
“We’re using hyperspectral satellite remote sensing,” explains Dr.
Shuhab Khan, sitting in his geology laboratory at the University of
Houston. “We have done this in Texas, North Texas; we are still doing
some sites in Oklahoma.”
Khan has been working for years on perfecting a method of oil
exploration that uses images of the earth’s surface taken by NASA
satellites. Khan and a team of students use computers to sort through
satellite images to find anomalies that are linked to where oil and gas
are seeping to the surface. Called microseeps, these tiny hydrocarbon
leaks can cause chemical changes in plants, soil, and rocks. The
changes are sometimes so subtle that only a computer can tell.
However, in some cases, the changes to the earth’s surface are more
dramatic.
“You would see the manifestations of the microseepages; bleaching of
sandstone, changing the colour of the sandstone from red to white,” said
University of Houston graduate student Unal Okyay.

Microseepages are unlike the Hollywood depictions of how oil

millionaires get their starts by spotting crude oozing to the surface.
Instead, microspeepages are often no more than vapours, which over
many years, have caused rocks to change colour or vegetation to grow
differently.
Khan and his researchers are digitally documenting those anomalies at
known oil and gas fields, which will then allow them to know exactly what
to look for in satellite images of potentially millions of acres of land,
which so far, have not been tapped for oil and gas.
“That is the beauty of remote sensing; we can see very large areas in a
very short time,” said Khan. By contrast, conventional seismic testing
looks at far smaller areas and reveals geologic formations favourable for
oil and gas.
“Seismic surveys and a lot of other surveys are very expensive; they
cannot do the whole area. But with remote sensing, we can cover the
whole country,” said Khan.
Could it be the holy grail of oil exploration?
(Source: http://www.oaoa.com/news/business/article_ff8e035c-f3da-11e2-aa37-0019bb30f31a.html)
Following are some of the other applications of technology in infrastructure:
 Better scheduling and execution of project activities

 Better documenting of the results of a project and sharing the
information for future projects
 Sharing information; thereby sharing knowledge of project execution
 Replacement of various manual processes by technological equipment
and hastening the construction process
 Reduction of requirements of human resources

6. Mention some of the roles of technology in infrastructure
development.
7. Microsoft project software helps in project planning, scheduling,
resource management, and project review. (True/False)

13.5 Summary
 Infrastructure is the backbone of any economy. After the liberalisation of

the Indian economy in 1991, there has been a paradigm shift in the
focus on the infrastructure sector in India.
 Surface transportation is part of the most important components of the
overall infrastructure in any country. Countries with wide road networks
are more efficient in transporting materials in different parts of the
country, thereby facilitating manufacturing and production activities.
 India has a long coastline of around 7516.6 kilometres.
 The total capacity of the Indian power sector is 2, 28,721.71 MW.
 India faces an acute power crisis in different regions throughout the
year.
 Well-developed infrastructure helps an economy in achieving high
growth, eradicating poverty, providing higher standards of life to people,
and effectively utilising the resources available.
 Some of the recent trends in infrastructure in India are investment,
technology, urban infrastructure, and private sector participation.
 Technology helps in infrastructure development, increasing efficiency
and reducing costs.
13.6 Glossary
GDP (Gross Domestic Product): It refers to a measure of the economic
value of the total produced goods and services in an economy in a particular
period.
Liberalisation: It refers to the process of increasing integration of an
economy with the world economy through liberal trade policies.
FDI (Foreign Direct Investment): It refers to the investment made by any
company or entity in another company or entity based in another country.
PPP (Public Private Partnership): It is a type of business model in which
government agencies and private businessmen work together in a project.


1. Discuss the current infrastructure scenario in India.
2. Explain some of the contemporary trends in infrastructure development
in India.
3. How does technology assist in infrastructure development?
4. What do you know about private sector participation in infrastructure
development?
5. Discuss about the power sector of India.
13.8 Answers

1. False
2. Second
3. Second
4. Geo-thermal technologies
5. PPP
6. Increasing effectiveness and reducing costs
7. True
Terminal Questions
1. After the liberalisation of the Indian economy in 1991, there has been a
paradigm shift in the focus on the infrastructure sector in India. Refer to
section 13.2 Infrastructure and Facilities Sector of India for details.
2. Some of the recent trends in infrastructure in India are investment,
technology, urban infrastructure, and private sector participation. Refer
to section 13.3 Emerging Trends in Infrastructure and Facilities
Sector for details.
3. Technology helps in improving efficiency and reducing costs. Refer to
section 13.4 Application of Technology in Infrastructure and
Facilities Sector for details.

4. The increasing need for improving infrastructure necessitated the

participation of the private sector in investing in infrastructure. Refer to
section 13.3 Emerging Trends in Infrastructure and Facilities
Sector for details.
5. The total capacity of the Indian power sector is 2, 28,721.71 MW. Refer
to section 13.2 Infrastructure and Facilities Sector of India for
details.
13.9 Case Study: DECC Announces £8m Boost for Energy

Storage Technology
An innovative energy storage technology that promises to help balance

supply and demand on the national grid has received a major boost today,
as the government announced £8m of funding to support the project.
Climate Change Minister, Greg Barker, confirmed that the funding had been
awarded to Viridor Waste Management Ltd. and Highview Power Storage,
which are jointly working on a project to pilot a new liquid air energy storage
project, which aims to store air in a liquid format, allowing it to then be used
to produce electricity when required.
"Storing energy will become increasingly important in the move towards a
low carbon economy, and has the potential to save the energy system over
£4bn by 2050," said Barker. "Energy storage systems are potentially
revolutionary technologies - just imagine how much the energy system will
change if we are able to manage supply and demand better by storing
energy cost-effectively, not to mention the benefits for British research and
manufacturing industries."
Supporters of clean energy have long argued that cost effective energy
storage technologies could play a major role in supporting the deployment
of intermittent renewable energy technologies such as wind farms and solar
parks.
The government is keen to accelerate the development of viable energy
storage systems and the latest funding comes from a £17m Energy Storage
Technology Demonstration Competition, which has already seen similar

awards made to energy storage developers, Moixa Technology Ltd., REDT

UK Ltd., and EValu8 Transport Innovations Ltd.
Gareth Brett, chief executive of Highview Power Storage, said that the latest
funding award will play a major role in helping to commercialise a potentially
game-changing technology for the sector.
"By selecting to fund the demonstration of Highview's Liquid Air Energy
Storage system, DECC has given a British company a great opportunity to
begin commercialising a home grown, innovative technology that has the
potential to make a major contribution in terms of helping balance electricity
systems in the future," he said in a statement. "The collaboration with Viridor
will enable Highview to showcase the technology at larger scale, harvesting
waste heat from landfill gas engines and demonstrating our readiness for
deployment elsewhere."
The announcement also came as the government published a new Strategic
Framework from the Low Carbon Innovation Coordination Group (LCICG),
which brings together the various agencies providing public funding to clean
technology R&D.
The strategy is designed to make it easier for companies to identify where
funding is available and to help ensure that different agencies do not
provide overlapping funding.
Richard Knight, the deputy chief engineer at the Energy Technologies
Institute (ETI) and current chair of the LCICG, said that the new strategy will
help ensure that government funding is used to deliver the maximum impact
from clean tech projects.
"The level of opportunity as well as the challenges to achieve a low carbon
transition means no one party can deliver the change required in isolation.
Collaboration is the key to success in this field," he said. "The LCICG
provides the ability to bring together innovation activities in a co-ordinated
manner, underpinned by a shared evidence base, to ensure focus and
resource is allocated wisely."
(Source: Energystoragenews.org. 2014. DECC Announces £8m Boost for Energy Storage Technology -
BusinessGreen. [online] Available at: http://www.energystoragenews.org/articles/2210555/decc-
announces-ps8m-boost-for-energy-storage-techn/.)
Questions:
1. On the basis of the case, discuss the importance of technology in
infrastructure.


J. Wiley.
Hill.
E-References
 Businessgreen.com. 2014. DECC announces £8m boost for energy

storage technology. [online] Available at:
http://www.businessgreen.com/bg/news/2328725/decc-announces-
gbp8m-boost-for-energy-storage-technology.
 Energystoragenews.org. 2014. DECC Announces £8m Boost for Energy
Storage Technology - BusinessGreen. [online] Available at:
http://www.energystoragenews.org/articles/2210555/decc-announces-
ps8m-boost-for-energy-storage-techn/
 (Source: http://www.oaoa.com/news/business/article_ff8e035c-f3da-
11e2-aa37-0019bb30f31a.html)
 Chaturvedi, S. 2014. Foreign investors see opportunity where Indian
power companies found problems. [online] Available at:
http://online.wsj.com/news/articles/SB100014240527023046755045793
90521675089520?mg=reno64-
wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB1000142405
2702304675504579390521675089520.html
 (Source: Maritime-executive.com. 2014. India Will Have 2 New Ports by
2020. [online] Available at: http://www.maritime-
executive.com/article/India-Will-Have-2-New-Ports-by-2020--2014-02-
12/)

Unit 14 Competitiveness and Technology

Management
Structure
14.1 Introduction
Objectives
14.2 Competitiveness and Its Indicators
Competitive Strategies
14.3 Global Competitiveness and Technology Management
14.4 Competitiveness at Firm level
14.5 Summary
14.6 Glossary
14.8 Answers
14.9 Case Studies: How Google Maintains Its Competitive Advantage
14.1 Introduction
In the previous unit, you studied about the infrastructure and facilities sector,
and the role of technology in this sector. Now, let us move forward and
discuss how efficient management of technology helps an organisation in
attaining competitiveness.
In simple words, competitiveness refers to the relative advantage
possessed by a competitor over others. For example, Apple possesses a
relative technological strength over many competitors. In other words, Apple
possesses certain competitiveness. Competitiveness does not remain
limited only to the companies. Nations also possess competitiveness. For
example, countries, such as China has a competitive advantage in
manufacturing because of its cheap labour force. Therefore,
competitiveness is vital to maintain a leading position in the market.

Technology is a major source of competitiveness for business

organisations, as well as countries. For example, Apple focuses on having a
strong internal R&D to keep on introducing innovative products in the
market. Strong R&D helps Apple in achieving a technological leadership
position in the market. Thus, technology is one of the reasons behind the
competitiveness of Apple. Similarly, technologically advanced countries,
such as USA and Japan have strong economies, higher standard of life, and
excellent infrastructure to support industry.
In this unit, you will study about the meaning and indicators of
competitiveness. Next, you will be acquainted with management of
technology to achieve global competitiveness. Some of the other topics
discussed in the unit include indicators of competitiveness and
competitiveness at the firm and national level.
Objectives
 explain competitiveness and its indicators

 describe various competitive strategies
 discuss global competitiveness and technology management
 discuss competitiveness at the firm and national level
14.2 Competitiveness and Its Indicators

You may have come across the term ‘competitiveness’ in different contexts.
Generally, it refers to the process by which a person or entity outperforms
another person or entity. The objective of competitiveness is to win.
However, ability to win through competitiveness requires certain factors,
such as commitment, capabilities, resources and planning.
An organisation that possesses competitiveness is referred to as a
competitive company. A competitive company must provide products and
services that meet the need of the customers in a timely and cost effective
manner. To remain competitive, a company needs to continuously
outperform its competitors in terms of costs of goods and services, quality,
and other supporting services. However, given the high level of competition

in the market, maintaining competitiveness becomes a very difficult task for

companies.
At the national level, competitiveness refers to the relative strength of an
economy (measured by per capita Gross Domestic Product or GDP) and
the standard of living of people. National competitiveness is the resultant of
the combined competitiveness of the individuals and organisations.
Fig. 14.1 shows the hierarchy of national competitiveness:
Fig. 14.1: Pyramid of National Competitiveness

In the Fig. 14.1 we can see that investment in the productive facilities, such
as factories, R&D, and technology is at the lowest level. Next, is
productivity, trade and high standard of living the same order. That means
investment increases productivity that in turn spurs trade and the standard
of living of people.
NOTE:
The US President`s Commission on Industrial Competitiveness (Council

on Competitiveness 1984) defined competitiveness as “ the degree to
which a nation can, under free and fair market conditions, produce goods
and services that will meet the test of international markets while
simultaneously maintaining or expanding the real income of its citizens”.

Each of the elements of the pyramid is known as an indicator of

competitiveness. These indicators are briefly discussed as follows:
Investment: It is the driver of growth in any economy. Investment in
infrastructure, technology, factory, equipment and skill building creates the
foundation of economic growth.
Productivity: It refers to the produced output for a given amount of input.
Productivity reflects the efficiency of production. Productivity depends on
various factors, such as level of investment, quality of the plants and
equipment, technological innovations etc. Productivity is a determinant as
well as an indicator of competitiveness.
Trade: It consists of imports and exports. The level and growth rate of
exports is a significant indicator of the national competitiveness. Some of
the trade indices include balance of payment, growth in exports of
manufactured products and services, and merchandises.
Standard of Living: This indicator is at the top of the national
competitiveness pyramid. This is because improving the standard of living is
the main objective of a free market economy. This is the reason the
standard of living is the primary indicator of national competitiveness. The
principal measure of standard of living is the per capita GDP.
14.2.1 Competitive Strategies

Competitive strategies are the strategies, which are adopted to outperform
the competitors in an industry, and capture a larger market share.
Competitors here refer to those organisations in an industry, which offer
similar products or services. Harvard University Professor Michael Porter
proposed two generic competitive strategies. These strategies are as
follows:
Lower Cost: This refers to the strategy under which an organisation design,
produces and distributes a product or service in an efficient manner, and at
a cost lower than its competitors.
Differentiation: This refers to the strategy under which an organisation
provides unique and better quality products, which have more features.
After sales services are also prompt and regular. These additional features

and benefits of the products thus provide more value to the customers, than
the competitors’ products.
These strategies are called generic strategies because of their applicability
in all organisations, regardless of their type or size. Generic strategies are
also applicable to not-for-profit organisations. According to Michael Porter,
the competitive strategies help an organisation in gaining competitive
advantage. As proposed by Porter, an organisation should determine the
following factors before adopting any of the generic competitive strategies:
 Product Range
 Channels of Distribution
 Market Segments to Target

 Geographical Areas to Serve
An organisation targets either a broad or a narrow segment of the market.
When the two generic competitive strategies are combined with the two
types of target market; they result in four types of generic strategies. These
are depicted in Fig. 14.2:
Fig. 14.2: Sources of Competitive Advantage
Strategies as depicted in Fig. 14.2 are discussed as follows:

Cost Leadership: This refers to the generic competitive strategy under
which an organisation delivers its products or services at a cost lower than
its competitors, and targets a broad market segment. To become a cost

leader, the organisation needs to have an efficient production system and a

greater control over the overhead costs. Therefore, a continuous effort is
required to minimise the cost of production and distribution. Further, the
organisation needs to minimise costs in areas such as advertising,
promotion, sales force and R&D. A cost leader in the industry can charge
the customers a lower price for its products than its competitors charge, and
still make a significant amount of profit. Some organisations, which have
successfully adopted the cost leadership strategy, are Dell, Wal-Mart and
Southwest Airlines.
Differentiation: This refers to the generic competitive strategy under which
an organisation provides unique products or services to its customers. The
uniqueness of a product or service can be achieved by providing more
features, creating a brand image stronger than the competitors, better
service and more value for money. A differentiation strategy helps in
building customer loyalty, which, in turn, enhances the sales of the product
or the service. An organisation may charge a premium price from its
customers for offering unique products or services. HUL, Nike, BMW and
Apple are some of the organisations, which have successfully adopted the
differentiation strategy. Following are some of the widely used differentiating
factors of products or services:
 Product warranties (example: Sears tools)
 Strong brand image (example: Nike)
 Technological innovation (example: Apple, Sony)

 Value (example: Walt Disney)
 Service (example: Oberoi Hotels)
Cost Focus: This refers to the low cost generic competitive strategy in
which an organisation focuses on a small segment of the market. Cost focus
strategy helps the organisation in achieving cost advantage in a small
market segment. This strategy is mostly adopted by the start-up
organisations.
Differentiation Focus Strategy: This signifies the generic competitive
strategy in which an organisation offering unique products or services
focuses on a very small segment of the market. For example, Os foods

adopted this strategy when the organisation launched Catch, a bottled

natural spring water brand. The organisation positioned catch as a zero
calorie flavored soda water, and targeted the high-end market.
Exhibit 14.1: CNES Tech Budget Focused on Competitiveness in

Telecom Satellites
Europe’s principal weapon in the battle for increased market share is the
Neosat satellite platform (above), employing an all-electric propulsion
system an attempt to play catch up to TOULOUSE, France — The
French space agency, CNES, is aligning its research and technology
budget behind an attempt to increase French and European satellite
telecommunications prime contractors’ share of the global commercial
market to 50 percent by 2020, up from 30 percent now, CNES officials
said Jan. 30.
Europe’s principal weapon in the battle for increased market share is the
Neosat satellite platform, developed in collaboration with the 20-nation
European Space Agency and employing an all-electric propulsion system
to reduce satellite weight and launch costs, as well as other new
technologies.
CNES doubled its participation in ESA’s ARTES telecommunications
research program in 2012, mainly because of Neosat, which is scheduled
to make its first flight by 2019. CNES has increased its overall
telecommunications-related research by 30 percent from the four-year
period ending in 2012 to the four-year period ending in 2016.
But CNES wants to give France’s two satellite prime contractors, Airbus
Defence and Space, and Thales Alenia Space, enough research help so
that both could begin introducing Neosat technologies well before 2019,
CNES officials said here Jan. 30 during the annual CNES R&T Day.


1. At the________, competitiveness refers to the relative strength of an
economy (most commonly measured by per capita GDP and the
standard of living of people.
2. Mention the indicators of national competitiveness.
3. _______refers to the low cost generic competitive strategy in which
an organisation focuses on a small segment of the market.
Activity 1:
Conduct research on any technology-driven company in India and explore
the source of its competitiveness. You can take help of publicly available
14.3 Global Competitiveness and Technology Management

Global competitiveness refers to the ability to compete at the global level.
Because of globalisation and increasing financial integration, the need for
competing at the global scale has been increased manifold. In addition,
nations also need to achieve global competitiveness to achieve a higher
standard of living. According to Nobel Laureate economist Paul Krugman
(1996) mentions, “majority of the people think that it is the view that nations
compete for world markets in the same way that corporations do; that a
nation which fails to match other nations in productivity or technology will
face the same kind of crisis as a company that cannot match the costs or
products of its rivals.”
Efficient management of technology plays a crucial role in maintaining
global competitiveness. Nations need to take the following actions to
achieve global competitiveness:
 Developing technology growth policies considering the fact that

technology plays crucial a role in economic growth.
 Developing human resources to compete in the global level
 Providing technological support to business organisations for
commercial and economic growth.

 Increasing cooperation among various parties, such as the government,

research institutions and industry.
NOTE:
Fagerberg (1988) defines the international competitiveness of a country as

“the ability to realise central economic policy goals, especially growth in
income and employment, without running into balance-of-payments
difficulties.”
OECD (1992; in Wignaraja, 2003) states that: “At the macroeconomic

level, competitiveness is the ability of a country to make products that
meet the test of international competition while expanding domestic real
income.”
Previously, nations used to focus only on the exploitation of the natural

resources and labour to maintain competitiveness. However, globalisation
has broken the boundaries of the nations and changed the scenario of
global competitiveness. Multinational corporations are increasingly shifting
their manufacturing facilities to low cost centers, such as China, Mexico,
and Indonesia. This globalisation of production facilities has shifted the
focus of organisations to technical skill building and managing technology
more effectively. Therefore, these emerging trends indicate that in the
current global scenario, competitiveness can be achieved through the
efficient management of technology.
Let us consider an example of Singapore to understand how a nation builds

global competitiveness. The typical three problems facing Singapore were
small domestic market, limited natural resources, and a limited supply of
indigenous human resources. However, the country overcame the
challenges by following these approaches:
 Serving as a regional business service hub for the neighboring nations.
 Engaging in niche and specialised manufacturing

 Acting as an R&D hub for various global enterprises

Following are some of the technology management guidelines that should

be followed by nations to achieve competitiveness:
 Having a strong political system to promote economic growth.
 Developing institutions for developing, transferring, and implementing

technology.
 Developing financial institutions that can support technical progress of

the country.
 Improving the education and skill building system to create technical

talents
 Developing technology development, transfer and sharing strategies
 Supporting entrepreneurship and promoting creativity
 Predicting and analysing the social and environmental effects of

technology and taking measures to tackle negative consequences.
 Developing partnerships with other nations for improving technologies

ties and building technology transfer agreements.

4. Previously, nations used to focus only on the exploitation of
_______and labour to maintain competitiveness.
5. This globalisation of production facilities has shifted the focus of
organisations to technical skill building and managing technology
more effectively. (True/False)
6. The typical three problems facing __________were small domestic
market, limited natural resources, and a limited supply of indigenous
human resources.
14.4 Competitiveness at Firm level

Competitiveness at the firm level refers to the ability of a firm in providing
goods and services according to the requirements of the client in a timely

and cost-efficient manner. In other words, a competitive firm attains the

leadership position in a market.
Technology can be a great facilitator for a firm to achieve a highly
competitive position. For example, technological companies, such as IBM,
Google, Amazon, Apple Microsoft etc. leverage technology in such a way
that they achieve the leadership position in their respective market. A firm
can achieve competitiveness in a number of ways, such as having a clear
vision and goal, employing a highly competitive and skilled workforce,
deploying efficient technologies and equipment, developing aggressive
marketing and branding strategies etc. However, we would keep our
discussion limited to how technology helps firms in achieving
competitiveness.
Following points elaborate on how technology helps in achieving

competitiveness:
Innovative Products: Organisations develop innovative products with the

help of technology. Innovative products help organisations in beating
completion and maintain leadership position in the market. For example,
iPod is a revolutionary technological product. The product was an instant
success and helped Apple in achieving leadership position in the market.
Innovation in Production Processes: Technology helps a company in

achieving competitiveness by revamping the production processes. For
example, Japanese organisations pioneered applications of robotics and
automation in the production processes. Naturally, Japanese companies
such as Sony and Toyota were the first organisations to achieve
competitiveness through automation and robotics.
Innovation in Supporting Functions: Technology helps in improving

various supporting services, such as logistics, and marketing. For example,
Walmart has developed one of the most efficient supply chains with the help
of technological innovations, such as RFID (Radio Frequency Identification)
to locate and manage the merchandises and networking technology to
integrate the logistics system.

Exhibit 14.2: 21 Most Admired Companies Making IT A Competitive

Advantage
“All enterprises, regardless of what they produce or the services they

deliver, are really information businesses.
The accuracy, speed and precision of IT systems means the difference
between winning or losing customers, keeping supply chains profitable,
and solidly translating new concepts into revenue-producing products and
services. The world’s best-run services businesses have customer-driven
IT as part of their DNA; it is very much who these companies are
internally.
In the recently published Gartner report CEO and Senior Executive
Survey 2013: 21 Top Companies Admired for Competitive IT completed
between October and December, 2012, which was part of the 2013 CEO
and Senior Business Executive Survey, C-level respondents were asked
to name the companies they most admired in terms of their ability to apply
IT-related business capabilities for competitive advantage. Respondents
were also asked to limit their responses only to their own and related
industries.
391 respondents participated in the survey with 147 being CEOs, 149,
CFOs; 49, COOs; and 46 being board members including Chairman of
the board and president. Geographic distribution included 152
respondents from North America; 124 from Europe; 78 from Asia/Pacific;
20 from Brazil; 12 from South Africa; and 5 from the Middle East

with minimum company size being $250M in annual sales or above.

The following is the list of the world’s most admired companies using IT
for competitive advantage.”
Following is the list of these 21 companies:
1. Accenture
2. Amazon
3. Apple
4. Cleveland Clinic
5. General Electric
6. Goldman Sachs
7. Google
8. Hospital Corporation of America
9. IBM
10. Intermountain Healthcare
11. JP Morgan Chase
12. Kaiser Permanente
13. Mayo Clinic
14. Microsoft
15. Nestle
16. Procter & Gamble
17. Progressive Insurance
18. Schlumberger
19. Target
20. Toyota
21. Wells Fargo
(Source: Columbus, L. 2013. 21 Most Admired Companies Making IT A Competitive Advantage. [online]
Available at: http://www.forbes.com/sites/louiscolumbus/2013/04/01/21-most-admired-companies-

making-it-a-competitive-advantage)
Following are some of the technology management guidelines for firms to

achieve competitiveness:
 Developing an organisational culture that assesses the value of
technology as a strategic weapon of the firm.
 Understanding the dynamic process of technological innovation and

creation.
 Monitoring and forecasting technological changes.
 Analysing and measuring the effects of technological changes on the

business of the firm.
 Facilitating the implementation of new technology in the organisation
and making way for migration from on technology to another technology.
 Recruiting and training a technically skilled workforce to facilitate

development and implementation of new technologies.
 Developing an organisational culture that welcomes technological
changes.
 Developing an appraisal and reward system to promote innovation.

7. _________at the firm level refers to the ability of a firm in providing
goods and services according to the requirements of the client in a
timely and cost-efficient manner.
8. Developing an organisational culture that assesses the value of
technology as a strategic weapon of the firm helps in achieving
competitiveness. (True/False)
14.5 Summary
 In simple words, competitiveness refers to the relative advantage
possessed by a competitor over others.

 Technology is a major source of competitiveness for business

organisations, as well as the national level.
 In the national level, competitiveness refers to the relative strength of an

economy (most commonly measured by per capita GDP) and the
standard of living of people.
 The elements of technological competitiveness are investment,
productivity, trade, and standard of living.
 Four generic strategies by Michael E. Porter are cost leadership,
differentiation, cost focus and differentiation focus.
 Global competitiveness refers to the ability to compete at the global
level. Because of globalisation and increasing financial integration, the
need for competing at the global scale has increased manifold.
 Competitiveness at the firm level refers to the ability of a firm in
providing goods and services according to the requirements of the client
in a timely and cost-efficient manner. In other words, a competitive firm
attains the leadership position in a market.
14.6 Glossary
USP: This is the abbreviated form of Unique Selling Proposition. It refers to
a special attribute of a product, service or any other entity that acts as a
differentiating factor.
Competitive Advantage: It refers to a relative competitive position
achieved by an organisation over its competitors, which allows it to gain
higher market share.
GDP: It refers to the total economic value of all the goods and services
produced in a country in a financial year.
RFID: It refers to a technology in which the radio frequency is used to locate
items.


1. What do you mean by competitiveness? Mention some indicators of
competitiveness.
2. Discuss various competitive strategies.
3. How does technology management help in achieving global
competitiveness?
4. Explain competition at the firm levels with examples.
5. Mention some of the technology management guidelines for
competitiveness in the firm level.
14.8 Answers

1. National level
2. Investment, productivity, trade and standard of living.
3. Cost focus
4. The natural resources.
5. True
6. Singapore
7. Competitiveness
8. True
Terminal Questions
1. In simple words, competitiveness refers to the relative advantage
possessed by a competitor over others. Refer to section 14.2 for
details.
2. These indicators are investment, productivity, trade, and standard of
living. Refer to section 14.2 for details.
3. Global competitiveness refers to the ability to compete at the global
level. Because of globalisation and increasing financial integration, the
need for competing at the global scale has been increased manifold.
Refer to section 14.3 for details.

4. Competitiveness at the firm level refers to the ability of a firm in

providing goods and services according to the requirements of the
client in a timely and cost-efficient manner. In other words, a
competitive firm attains the leadership position in a market. Refer to
section 14.4 for details.
5. Some of these guidelines are developing an organisational culture that
assesses the value of technology as a strategic weapon of the firm and
understanding the dynamic process of technological innovation and
creation. Refer to section 14.4 for details.
14.9 Case Studies: How Google Maintains Its Competitive

Advantage
According to Hitwise, a digital marketing intelligence solutions company,
Google upholds the dominant search engine position in the world capturing
65% of the market. Some of the other popular search engines are Bing,
Yahoo! Search, Ask, and Aol Search.
Over the years, the company has developed an infrastructure that ensures
fast and efficient search engine as well as starting other associated
services.
If we examine the speed of an average Google search, a random Google
search takes between .06 to 0.12 seconds (Gigaom). High competitiveness
of Google can be traced to the fact that over the years they have built their
own infrastructure of servers, storage systems, bandwidth, and hardware
supporting the fastest search in the web.

Google spends billions of dollars in R&D that builds a protective wall around
Google from other search engines, such as Bing and Yahoo. Increasing
spending in R&D also allows Google to keep the cost of conducting a
search down.
The rapid speed of search of Google keeps users going back over to
Google. Different, search engine may produce different search results;
however, Google allows users to search a keyword with minimal time;
therefore, reducing the probability of the user from switching to the
competitors.
In addition to fast search, some of the other services provided by Google
include Google Toolbar, Google Maps, Google Earth and Google News.
Google Toolbar enables users to conduct searches without having to leave
the homepage. In addition, it simplifies navigation of web pages by
recounting the most searched –for web pages by each user. Google Maps
provide location finder services and Google News provides customised
news services to the users.

Google expanded its services to mobile phones with Android operating

system that delivers various Google services and features in the form of
mobile applications.
Combined, these strategies allow Google to reach its target audience and
create an unbeatable competitive advantage. Competitors, such as Bing or
Yahoo! would have to improve the technological infrastructure to match the
speed and comprehensiveness that Google possesses.
(Source: Smartadvantage.com. 2014. Smart Advantage | Competitive Advantage Experts | Business
Marketing Consultant - Smart Advantage. [online] Available at: http://smartadvantage.com/blog/how-
google-maintains-its-competitive-advantage/)
Question:
1. What do you think is the main source of competitive advantage of
Google?
2. How does technology helps Google in achieving competitive
advantage?

J. Wiley.
Hill.
E-References
 Inter-American Development Bank. 2014. Competitiveness,Technology

and Innovation - Inter-American Development Bank. [online] Available
at: http://www.iadb.org/en/topics/competitiveness-technology-and-
innovation/competitivenesstechnology-and-innovation,1366.html
 Businessworld.in. 2014. Use Of Data Analytics To Transform Into
Competitive Advantages. [online] Available at:
http://www.businessworld.in/news/economy/use-of-data-analytics-to-
transform-into-competitive-advantages/1254810/page-1.html

 Reliableplant.com. 2014. Creating Competitive Advantages with CMMS

Software. [online] Available at:
http://www.reliableplant.com/Read/29625/cmms-competitive-advantages
 Smartadvantage.com. 2014. Smart Advantage | Competitive Advantage
Experts | Business Marketing Consultant - Smart Advantage. [online]
Available at: http://smartadvantage.com/blog/how-google-maintains-its-
competitive-advantage/

Unit 15 Developing Technical Talent for Managing

Technology
Structure
15.1 Introduction
Objectives
15.2 Professional Development
15.3 Career Development and Management
15.4 Career Counselling
15.5 Summary
15.6 Glossary
15.8 Answers
15.9 Case Study: Talent Management in Apple
15.1 Introduction
In the previous unit, you studied about the infrastructure and facilities sector
in India. Now, let us discuss the development of technical talent for
managing technology.
It is needless to say that a skilled workforce is the cornerstone of any
organisation. However, technology-driven organisations find it very
challenging to acquire and retain skilled manpower. This is the reason
companies, such as Google, Microsoft and IBM have excellent systems of
recruitment, development, and carrier counseling in place. For example,
Google follows a 70-20-10 model under which employees devote their 70%
of time in core projects, 20% of time in related projects and the rest of the
10% of the time in the projects of their interest. This provides employees
with more freedom to learn and excel.
Career development refers to the process in which an organisation
systematically manages the career of the employees for the mutual benefits

of the organisations and the employees. Career development is of particular

importance in the technology-driven companies as they tend to have higher
employee turnover.
Career Counseling refers to a process in which a qualified professional or a
group of professionals help employees in selecting career paths, managing
career, selecting projects and learning new skills. In a technology-driven
organisation, career counseling helps employees in driving them as well as
organisational resources and efforts in the right direction.
The unit starts with a detailed discussion on professional development. In
addition, you will study career development and counseling. Some of the
other topics discussed in the unit include need for technical development of
employees and steps in technical development of employees.
Objectives
 describe the meaning of professional development
 explain career development and career counseling
 discuss the need for technical development of employees

 explain the steps in technical development of employees
15.2 Professional Development

Professional development refers to the systematic identification and
fulfillment of the training needs of technical professionals in an organisation.
Newly recruited engineers and scientists are eager to learn and put efforts
to improve their job. However, because of lack of professional development,
they do not get adequate support to grow. A proper professional
development plan identifies the needs and career plans of the technical
professionals and helps them identify projects that would add to their skills
and fulfil their career plans.
Lack of career growth in organisations influences the employees to leave
and look for other opportunities. Thus, the professional development of
employees is one of the most significant retention tools. Professional

development initiatives motivate employees, keep them happy and engage

them in work. It aims to help an employee reach his/her full potential. There
are many strategies for professional development. The chosen strategy
depends upon various factors such as the type of organisation, the position
that employees hold in the market, the challenge they experience from
immediate rivals and the frequency and magnitude of changes they have to
make. Productivity indicator, engagement surveys and reduction in attrition
rate provide an idea of success or failure of the professional development
strategy.
NOTE:
The term career can be defined both objectively and subjectively.
According to the objective view, career refers to the positions handled by

an individual throughout his/her life. In simple words, it can be defined as
the sequence of work-related activities performed by an individual that
gives meaning, stability and continuity of his/her work life.
According to the subjective view, the career of an individual implies the

changes that take place in his/her work attitude as he/she goes through
various life stages. The assumption that lies in both views is that an
individual can form his/her destiny by planning and implementing some
systematic actions. However, the career of an individual is affected by
various other factors such as family background, education and
experience.
Professional development not only helps the employees in charting their

career paths, but also attracting and retaining talented technical people.
This is explained by the fact that competent technical people are concerned
about the professional growth, as well as stability in career. Therefore, they
tend to join companies having a systematic professional development
program. Thus, in countries like India where technically skilled employees
are scarce, a technology-driven organisation should have an effective
professional development program in place.

Exhibit 15.1: Career Anchors

Career anchors represent the basic drives in an individual to take up a
certain type of career. Dr. Edgar Schein at MIT (Massachusetts Institute
of Technology) has identified the eight major career anchors and
proposed that individuals prioritise these anchors. For instance, a person
with the primary career anchor of “security” demands a secure and stable
employment over a challenging and riskier one. Following Fig. shows the
eight career anchors proposed by Dr. Schein:
Technical/Functional Competence
Autonomy/Independence
Security/Stability
Entrepreneurial Creativity
Service/Dedication to a Cause
Pure Challenge
Lifestyle
General Managerial Competence
These anchors are explained as follows:

1. Technical/Functional Competence: This refers to a quality present
in individuals who work to become an expert. Individuals with the
technical and functional competence are motivated to learn new skills
and expand the current knowledge base.
2. Autonomy/Independence: This refers to a quality present in
individuals who have a primary need to work under their own rules
and procedures. They avoid standards and want a control over their
work. These individuals are most suitable for autonomous professions
such as independent consulting, teaching and contract work.
3. Security/Stability: This refers to a quality present in individuals who

seek stability and continuity as the primary factor of their personal

lives and work. They avoid taking chances and are motivated by
calmness and consistency in work. These individuals look for
predictability and safety. The security-focused individuals strive for
stable companies and emphasis on the context of the job rather than
the content of work. In other words, pay, benefits and work
environment are the most important factors for these individuals.
4. Entrepreneurial Creativity: It refers to a quality present in individuals
who seek to invent things, be creative and take the challenge of
starting new projects or their own businesses. They differ from those
who seek autonomy where the emphasis is on creating a new
business and not just on working without any superior. They have a
lot of interests and energy; therefore, tend to get bored easily. They
consider themselves successful when they accumulate sufficient
wealth.
5. Service/Dedication to a Cause: It refers to a quality present in
individuals who are driven by a pursuit of personal values and causes
rather than the work itself. They may work well in public services or in
service-oriented professions such as human resource and
consultancies.
6. Pure Challenge: It refers to a quality present in individuals who are
driven by challenges. Such individuals are most suitable for careers
where competition is primary. These individuals change their jobs
when the current one gets boring. These individuals are motivated by
their desires of overcoming obstacles, conquering problems, winning
and constantly testing themselves.
7. Lifestyle: It refers to a philosophy followed by individuals who are
focused to balance their work and personal lives. They live under the
philosophy of work to live, instead of live to work. They enjoy work but
consider it one of many important parts of life. These individuals want
to work in organisations that promote both personal and professional
lives.
8. General Managerial Competence: It refers to a quality present in
individuals who never miss the opportunity of climbing to the highest

level in the organisation. They manage the organisational functions,

integrate the efforts of others across the organisation and show
responsibility for the output of any particular unit of the organisation.
They show managerial capabilities based on analytical skills,
interpersonal skills and group skills.

1. ________ to the systematic identification and fulfillment of the training
needs of technical professionals in an organisation.
2. According to the________ view, career refers to the positions
handled by an individual throughout his/her life.
3. Career anchors represent the basic drives in an individual to take up
a certain type of career. (True/False)
4. ________refers to a quality present in individuals who have a primary
need to work under their own rules and procedures.
Activity 1:
Make a group of your friends and discuss about professional
development. Write a brief note on the discussion points.
15.3 Career Development and Management

Career development consists of personal actions that are performed by an
individual to achieve a career plan. It focuses on the long-term career
effectiveness of an employee. A career development plan can be initiated
by an employee or by an organisation. Initiatives taken by an employee for
his/her career development programme are based on the following factors:
 Performing as per the standards set by an organisation
 Developing exposure with people handling promotions, transfer, and

career opportunities
 Building professional and personal contacts for achieving career
ambitions

 Taking up a new job for better career prospects in terms of knowledge,

pay and future
 Interacting with mentors and senior executives for getting guidance to go

ahead in the organisation
 Attending the training programmes and workshops arranged by the top

management for career development
The assistance from the managers and the HR department also plays a
critical role in achieving individual career development objectives. The
initiatives taken by an organisation for career development plan for the
individuals are as follows:
 Conducting individual counselling for employees, so that they can be

guided in the right direction of organisational objectives
 Monitoring individual’s performance histories, development, and skills

and accordingly giving suggestions for improvement
 Developing a sound career development programme, so that employees

feel good in the work place and contribute towards the organisational
development
 Organising career development seminars and workshops by connecting

the individual progress with the organisational progress
Exhibit 15.2: Career Development Strategies Followed in

Organisations
Career development strategies followed by some of the leading
organisations are as follows:
Ernst & Young
Ernst & Young (E&Y) seeks to align individual aspirations with the
business, functional and organisational goals. It uses a formal
assessment system for checking the skill gaps and career potentials of its
employees. E&Y is more concerned about the performance history, future
potential, individual skills and competencies of managers. In addition, the

organisation also conducts an effective training programme at different

levels of managers.
Hyundai
In Hyundai, the career development programme is focused on converting
its managers into achievers by developing unique attributes such as
skills, mental robustness, level of professional competence and the desire
to progress. It also conducts a three-day process where the development
programme is discussed by using separate case studies.
Career management involves setting career objectives and implementing

career development strategies for the benefit of organisation and
individuals. Both individuals and organisations carry the process of career
management. Thus, it balances an individual’s career goals and
organisational requirements.
According to Gutteridge, “Both career management and career planning
are included in career development for a proper utilisation of human talent
and their development at the workplace.” According to Bernardin and
Russel, career management involves three important aspects namely,
individual career plan, organisational career plan and career development.
Bernardin and Russel provided an integrated view of all these concepts in a
defined manner.
Fig. 15.1 shows the career management model by Bernardin and Russel:
Fig. 15.1: Career Management Model by Bernardin and Russel

Exhibit 15.3: American Productivity and Quality Center (APQC)

American Productivity and Quality Center (APQC) is a member-based
non-profit organisation and one of the leading proponents of
benchmarking, best practices, and knowledge management. It works with
more than 500 organisations worldwide in different industries to provide
information regarding the best practices in benchmarking. Recently,
APQX has released the results of its latest collaborative benchmarking
study on technical talent management, and sourcing, developing and
retaining technical talent.
The study was conducted on organisations, such as Caterpillar, Inc.,
General Mills, Inc., IBM Corp., Lockheed Martin Corp, Space Systems
Company (SSC), and Schlumberger Ltd. The study reveals the following
19 best practices of managing technical talent:
1. Dedicate specific job roles or teams to oversee technical talent
management.
2. Select individuals with technical skills to lead technical talent
management initiatives.
3. Use work force planning to link technical talent management strategy
with business strategy.
4. Include work force diversity in the technical talent management
strategy.
5. Craft and communicate an employment brand that appeals to
technical workers.
6. Develop campus recruiting relationships and internship programs as
sources of technical talent.
7. Use technology to recruit technical talent.
8. Encourage students to pursue technical careers.
9. Use competency models to guide and assess technical worker
performance.
10. Ground performance conversations with technical employees with
facts and data.

11. Offer flexible career paths, including dual-career ladders.

12. Provide self-service and/or technology-based tools to assist technical
workers in planning for careers at the organisation.
13. Leverage a succession planning process to identify, develop, and
promote high-potential technical talent.
14. Use on-the-job training as the primary mechanism for developing
technical talent.
15. Recognize high-performance technical employees in public ways.
16. Offer development and advancement opportunities to retain technical
employees.
17. Use work/life balance and flexible work options to retain technical
talent.
18. Offer technical workers multiple ways to exchange expertise.
19. Make fact-based decisions regarding how to improve technical talent
management.
(Source: Apqc.org. 2014. APQC Named a Top Workplace by the Houston Chronicle. [online] Available
at: http://www.apqc.org/apqc-named-top-workplace-houston-chronicle)

5. __________consists of personal actions that are performed by an
individual to achieve a career plan.
6. Career development focuses on the long-term effectiveness of an
employee. (True/False)
7. ___________is a member-based non-profit organisation and one of
the leading proponents of benchmarking, best practices, and
knowledge management.
8. ____ involves setting career objectives and implementing career
development strategies for the benefit of organisation and individuals.

15.4 Career Counselling

Employee counselling service seeks to assist employees by resolving their
personal and work related issues. Next thing that an employee counselling
service provides is, communicating result oriented guidelines to employees
so that, they can successfully drive in the right direction in life. There are
several employers who prefer to organise programmes on appropriate
counselling services. Several counselling services also provide 24 hours
support service. An effective counselling service aims at:
 Providing result oriented advice/suggestions

 Conducting training programmes for managers to meet the sensitive
situation
 Involving experienced counsellors under direct supervision of employee

counselling service
 Listening to employees’ grievances and resolving their issues
As a successful counsellor, you should work on creating an action plan so
that, employee should know their role and feel comfortable to discharge
his/her responsibilities with ease. Counsellor should try finding out the
difficulties faced by employees while performing their assigned tasks. There
should not be any communication gap between the manager and his/her
subordinates so that, employee issues, new ideas, or thoughts can be
exchanged spontaneously. After action plan and exchange of information,
counsellor should focus on following up to notice, if the counselling has
worked as per plan. Regular follow up brings employees more close to the
counsellor. It makes employees feel free to share their issues. Today, there
are several such counselling service providers for employers as well.
There are some commonly used skills in employee counselling, which are
described as follows:
Paraphrasing: This indicates the skill used to restate the statement of an
employee in different words. This skill encourages the employee that,
his/her issues are attended by the counsellor. Paraphrasing does not lead to
an agreement with the employee. Some of the common ways of initiating a
paraphrase are “let’s see if I understand your problem”, and “let me try to
recall your statement”. One of the major drawbacks of this skill is that,

counsellor may challenge an employee’s statement too early, which might

scare the employee in explaining his/her issue, freely.
Questioning and probing: This provides additional meaning to the
statement of an employee. This skill engages the employee by placing
his/her issues elaborately. While answering to various questions, employee
may provide some additional information related to his/her issues. Thus,
questioning also helps the counsellor in finding the right solution for
employees.
Employee counselling services work as a motivator for employees in terms
of developing their performance and morale. An employee well guided is
able to guide his/her co-workers as well. Thus, counselling is an ongoing
process; it delivers effective results only when performed properly.
According to several managers and supervisors, it is easier to discipline an
employee rather than to counsel. Employee counselling is not a single day
effort to execute, it takes time based upon the situation. Sometimes
employee gets easily motivated, while some instances may irate the
employees. Therefore, a successful counselling is said to be well-executed
when the counsellor spends ample time to plan and conduct the session.
According to some counselling experts, the approach of counsellor falls
between extremely directive and extremely non-directive approach.
Directive approach of counselling indicates that, the manager should take
the lead and get involved in most of the discussion with his/her
subordinates. Non-directive approach of counselling on the other hand
states that, it is the employee who needs to be more on the discussion. In
this approach, the manager should encourage employees to share their
problems.
9. Employee counselling service seeks to assist employees by resolving
their personal and work related issues. (True/False)
10. According to some counselling experts, the approach of
_________falls between extremely directive and extremely non-
directive approach.
11. ______indicates the skill used to restate the statement of an
employee in different words.

15.5 Summary
In this unit you have studied:
 Professional development refers to the systematic identification and
fulfillment of the training needs of technical professionals in an
organisation.
 Lack of career growth in organisations influences the employees to

leave and look for other opportunities. Thus, the professional
development of employees is one of the most important retention tools.
 Career anchors represent the basic drives in an individual to take up a

certain type of career. Some of the career anchors are
technical/functional competence, autonomy/independence,
security/stability, entrepreneurial creativity, service/dedication to a
cause, pure challenge, lifestyle, and general managerial competence
 Career development consists of personal actions that are performed by

an individual to achieve a career plan. It focuses on the long-term career
effectiveness of an employee. A career development plan can be
initiated by an employee or by an organisation.
 The assistance from the managers and the HR department also plays a
key role in achieving individual career development objectives.
 Career management involves setting career objectives and

implementing career development strategies for the benefit of
organisation and individuals.
 Employee counselling service seeks to assist employees by resolving

their personal and work related issues.
 Some of the commonly used career counselling tools are, and

questioning and probing.
 Employee counselling services work as a motivator for employees in

terms of developing their performance and morale.

15.6 Glossary
Survey: It refers to a detailed study on something.
Project: It refers to a temporary endeavor with a definite beginning and end
undertaken by organisations to achieve specified goals.
Benchmarking: It refers to the process by which the business activities of
an organisation as compared with that of other organisations to find the best
practices.

1. What do you understand by professional development? Discuss.
2. What is a career anchor? Mention some of the career anchors.
3. Define career development.
4. Mention some of the initiatives taken by organisations for career
development.
5. What is career management?
6. What is career counseling? Mention some of the commonly used skills
in employee counseling.
15.8 Answers

1. Professional development
2. Objective
3. True
4. Autonomy.
5. Career development
6. True
7. American Productivity and Quality Center (APQC). ________
8. Career management

9. True
10. Counsellor. .
11. Paraphrasing
Terminal Questions
1. Professional development refers to the systematic identification and
fulfillment of the training needs of technical professionals in an
organisation. Refer to section 15.2 for details.
2. Career anchors represent the basic drives in an individual to take up a
certain type of career. Refer to section 15.2 for details.
3. Career development consists of personal actions that are performed by
an individual to achieve a career plan. Refer to section 15.3 for details.
4. Some of the initiatives are career counselling and paraphrasing. Refer
to section 15.3 for details.
5. Career management involves setting career objectives and
implementing career development strategies for the benefit of
organisation and individuals. Refer to section 15.3 for details.
6. Employee counselling service seeks to assist employees by resolving
their personal and work related issues. Refer to section 15.4 for details.
15.9 Case Study: Talent Management in Apple

“Think different” is the tagline of the brand Apple. It is natural that the talent
management practices in the firm would be different from that of other firms.
Following are some of the talent management approaches of Apple which
make it different from other competitors.
Career paths reduce self-reliance and cross-pollination — generally, in
organisations; the approach of HR is to speed the process of employee
career progression. This is because of the premise that employee retention
rate improves if the process of career progression is made easy. However,
Apple takes a quite different approach to career progression. It wants its
employees to take the full responsibility of their career advancement. This
concept, also known as “employees own their career”, began much before

Kevin Sullvian became the VP of HR. The company does not fully support in
the career advancement of the employees because it does not want its
employees to have a “sense of entitlement”, which may lead them to believe
that they have a right to continuous promotion.
The company also believes that career path weakens the self-reliance of the
employees decreasing cross departmental collaboration and learning. In the
absence of a career path, employees actively engage themselves to seek
information about jobs in other functions and business units. In addition,
automatically shifting employees to the next functional job may be also
severally narrow the internal movement in the organisation, reducing the
level of diverse thinking in some groups.
Create and manage a culture of innovation — most firms have a culture
with a singular focus on one attribute like performance, quality, customer
service, or cost-containment. Apple is unique in that it has two dominant
cultural attributes that exist side-by-side. The first (discussed in part one) is
“performance,” with the second being “innovation”; the latter may actually be
the strongest of the two. The dual emphasis works at Apple, because the
firm operates in the consumer technology field, where there is a universal
expectation for “disruptive” performance.
Producing $2 million-plus in revenue per employee certainly establishes
Apple as a performer, but it is its industry-dominating product innovation that
differentiates it from competitors like HP, Sony, Microsoft, and IBM. Three
factors drive the innovation attribute, including the expectation of continuous
innovation, extreme secrecy within the product development process, and
continuous brainstorming/challenge meetings (even at play just days before
a product launch).
“I expect a pony”
Apple’s culture of innovation is unique because the goal is to produce a
“pony, not a real horse but instead something so desirable that everyone
wants it and considers it ‘gorgeous.” Simple evolution doesn’t cut it — only
extraordinary industry-leading innovation that results in WOW products
does. To accomplish that, Apple doesn’t do what most consumers assume it
does. Instead of developing completely new industry technologies, Apple
takes existing technologies and then bundles numerous small developments

on top to produce what appears to the public as a giant step forward. It

takes a powerful culture and group of managers to delay taking great work
public faster, but Apple knows that numerous small releases don’t produce
the same media and consumer buzz.
The expectation of innovation permeates the culture
The expectation of innovation is driven by Apple’s history of innovation, its
leaders (who forbid the use of “that’s not possible”), and the peer pressure
among employees to be among the contributors to the final product that the
customer sees. In order to generate this expectation of innovation, it doesn’t
rely on posters or motivational slogans (although they have those too
… around here, changing the world just comes with the job description).
Instead, every communication, process, product launch event, and even
advertising slogans (Think Different, Imagine the Possibilities, Here’s to the
crazy ones. The misfits. The rebels. Etc.) make it crystal-clear that
innovation is at the heart of Apple’s success. Innovation has driven Apple’s
past and current successes, and it will continue to drive future success.
After walking in the door of the corporate offices in Cupertino, California,
you can literally “feel” the expectation to innovate.
Secrecy drives internal competition
The second critical driver of innovation is the product development process.
This innovation process is unique in that it doesn’t rely on a formal “ideation”
type model; instead, it has been described as an “iteration” process
energised by peer competition and Apple’s famous siloed/secret approach
to teams. Apple does many things using small development teams, as many
firms do, but doesn’t rely on a single team to design each product element.
Multiple teams may be assigned to the same area (or they may accidentally
wander into the same area). The approach has been called 10 to 3 to 1
because 10 teams may work on a product area independently. When work
is ready for review a formal peer review, it will whittle 10 mockups to three
and eventually down to one. It is an approach that is unique to Apple.
Outsiders may consider it expensive and slow, but they can’t argue it isn’t
effective.
Apple is well known for its obsession with secrecy in order to heighten the
impact during a product release. Secrecy is also the most unique element in
its innovation process. In order to maintain secrecy, development and
design teams are intentionally siloed. As a result of these communication

barriers, team leaders may not be initially aware of how many teams they’re
competing against and what those other teams are working on. The level of
open collaboration that you might find at other firms like Google is not
possible under this process, but neither is early-stage groupthink. Once
possible feature solutions move forward to peer review, the organisation
benefits from broader scope best-practice sharing and collaboration. While it
may seem counterintuitive, Apple has turned “team silos” that would be a
negative factor at most firms into a positive force.
Paired design meetings force free-thinking to continue until the end of
the design
Another element of the design and innovation process is the holding of
weekly “paired design meetings.” Every design team is expected to hold two
meetings each week. The first is a traditional production meeting where
small refinements are discussed and made. The second is a “go crazy”
meeting, in which everyone brainstorms and uses free-thinking to scope out
parameters. Most organisations stop these brainstorming meetings once the
design parameters are clear, but Apple continues them long into the
development cycle to guarantee that completely new ideas will constantly
raise the innovation bar.
The talent management lessons to learn in the area of innovation include
the concept that intense competition may produce innovation faster than
any formal ideation process. In addition, peer vetting of ideas, delaying
collaboration until toward the end of the development process, and requiring
the continuous use of brainstorming processes may result in bolder
innovations and higher levels of risk-taking.
Tying economic rewards to overall company success can reduce
selfish behavior – You won’t find anyone who will publicly argue that Apple
pays well with regard to base compensation. Economic rewards at Apple
are significant, but largely tied to the company’s valuation. The primary
monetary motivator at Apple is “the opportunity for wealth creation” as a
result of stock ownership. Most employees at Apple receive periodic stock
grants to reward their contribution. By putting the focus on the stock, they
send every employee a clear message that individual accomplishments are
important only if they directly contribute to the overall success of the
company. This approach, coupled with the firm’s famous “product focus,”
keeps everyone focused on product success rather than individual results

and individual rewards. Individual rewards are provided based on

performance and consist of stock grants and cash bonuses up to 30% of
base salary. Apple’s retail employees also have stock opportunities. They
are paid on an hourly basis and do not receive a sales commission.
Benefits and even pay play a secondary role in recruiting and
retention— at Apple, the primary long-term attraction and retention factors
are stock growth and exciting work. Because of the importance of these two
factors, its message on benefits is clear. If you’re doing the best work of
your life and having a major impact on the world, do you really need sushi in
the cafeteria? (It has that also.) Although most talented competitors to Apple
spend huge amounts of money on benefits, Apple’s offerings are spartan
when compared to Google, Facebook, and Microsoft. While Apple’s health
plan is well-funded, and it has good food and an on-campus gym, neither
the food nor the gym is free. One perk that does excite potential applicants
(especially in retail) is the employee discount on Apple products which is
given to every employee. These discount further support and reinforce
Apple’s companywide emphasis on the product.
Your corporate jobs website should boldly inspire — because the
primary goal of most corporate career/jobs websites is simply to provide
company and job information to potential candidates, most corporate job
pages are chock-full full of information. Apple’s website is lean on
information but strong on inspiration. As a result, after exploring the site, the
potential applicant comes away inspired rather than with a pile of
information about the company.
There are two categories of inspirational messages on the site, and each
one is bold. The first group of corporate messages makes it clear that Apple
is “anti-corporate.” In fact, the first bold headline you see is “corporate jobs,
without the corporate part.” They also highlight what they are proud not to
have to include endless meetings, being bureaucratic, having executive
perks and managers wearing suits. Instead they boldly tell you “don’t expect
business as usual.”
The additional category of inspiration on the website concentrates on
openness, innovation, and changing the world. Key phrases include “open
minds, collaboration, and of course innovation.” You will also find the phrase
“there’s plenty of open space — and open minds” (obviously perfect
sentence structure isn’t a high priority either). Finally, they promise to “give
you a license to change the world” and “be inspired.”

Its focus on inspiration is so strong that for a tech firm, there is a

surprising lack of technology-speak on the page. You will not find blogs,
videos, or any mention of Apple’s availability on Twitter or Facebook easily.
When it comes to mobile access, the site will render fine on the latest
smartphones, but receives a 1.51/5.0 with regard to meeting mobile
standards. If you visit the site, you might even find links that don’t work and
features that load very slowly. What you will find is inspiration — loads of it.
(Source: Taken from Talent Management Lessons From Apple … A Case Study of the World’s Most
Valuable Firm (Part 2 of 4) - ERE.net. [online] Available at: http://www.ere.net/2011/09/19/talent-
management-lessons-from-apple-a-case-study-of-the-worlds-most-valuable-firm-part-2-of-3/)
Questions:
1. What are the key professional development strategies of Apple?
2. On the basis of the case, discuss how having a professional
development strategy helps an organisation.

J. Wiley.
Hill.
E-References
 Talent Management Lessons From Apple … A Case Study of the

World’s Most Valuable Firm (Part 2 of 4) - ERE.net. [online] Available at:
http://www.ere.net/2011/09/19/talent-management-lessons-from-apple-
a-case-study-of-the-worlds-most-valuable-firm-part-2-of-3/
 Asme.org. 2014. ASMEorg Career and Education Topics - ASME.
[online] Available at: https://www.asme.org/career-education/career-
development

Unit 16 Future of Technology in Society

Structure
16.1 Introduction
Objectives
16.2 Technology in Society
16.3 Continuous Evolution of Technology in Society
16.4 Management of Technology as a Multidisciplinary Intersection
16.5 Summary
16.6 Glossary
16.8 Answers
16.9 Case Study: New Technology a Gesture Towards the Future
16.1 Introduction
In the previous unit, we discussed about the development and management
of technical skills in technology-driven organisations. Now, we will discuss
evolution of technology and its effects on the society in the following unit.
Mobile phones have revolutionised the way people communicate with one
another. Though, it was introduced as a device used for voice calls.
Gradually, the applications and functions in a mobile phone increased to
such a level that, at present, one can transfer money, read books, listen to
music, watch movies, surf on the Internet, send e-mails, book movies,
railway and flight tickets, and even use mobile phones as a projector.
Therefore, as you can see, a simple technological device can evolve into a
very complex device with multiple functions in the future.
Technology has significantly changed society. A large number of people
globally use and benefit from technology. Technology has impacted almost
all areas of society such as education, industry, medicine, communication,
transportation, environment, and so on. Technology is constantly evolving

and fulfilling a number of objectives in the society and simultaneously

creating the need for further developments. It is important that technological
developments must sync with societal needs. Technological developments
need to aim towards the development of basic human needs, environmental
conservation, economic efficiency, work-personal life balance, and self-
actualisation. However, excessive use of technology has its disadvantages
as well. Although the speed of accomplishing tasks accelerates with the
help of technology, technology has negative effects on the society as well.
Technological efficiencies need to be synergised with science,
management, and engineering disciplines for better Management Of
Technology (MOT) in the society. This ensures that technological
developments lead to a rise in an individual’s living standards and the
creation of wealth, without compromising on the negative impacts it can
have on society in future.
In this unit, we begin by discussing the various impacts of technology on the
society. We will proceed by looking into the continuous evolution of
technology in society. Towards the end, we will discuss MOT as a
multidisciplinary intersection.
Objectives
 discuss the impact of technology on society
 describe the stages of technological evolution and evolution of

technology in society
 enumerate the benefits of integrating technology with human values
 explain the concept of Management of Technology

 discuss Management of Technology as a multidisciplinary intersection
16.2 Technology in Society

There occurs a cyclical relationship between technology and society.
Technology has brought about major changes in society and the increasing
dependence on technology shapes the path for further technological

expansions. As technology developed, it greatly impacted several aspects

of society. Some of the impacts of technology on society are shown in
Fig. 16.1:
Technology's impact on business
Technology's impact on education
Technology's impact on environment
Technology's impact on communication and Transportation
Technology’s impact on private life of individuals
Fig. 16.1: Technological Impacts on Different Aspects of Society

Now, let us discuss the impact of technology on each of these aspects in
detail in the following section.
Technology's Impact on Business
Business has been at the forefront of technology for ages. From the
discovery of machines to replace manual labour in industries to the
discovery of the Internet, technology has affected business procedures and
operations considerably. The emergence of computers in the 20th century
promised a new era of information technology. Most business, nowadays, is
conducted using computers and other communication devices. Computers
have enabled organisations to store and process databases, send or
receive essential information, and automate business operations.
With information traveling faster and reliably, the global boundaries have
disappeared, making overseas trade feasible and efficient. The Internet
further changed the way business is conducted nowadays with the advent of
e-commerce and outsourcing of business processes.
E-commerce is related to carrying out buying and selling transactions
through the electronic medium. Information technology is another major
technological development that has consistently affected business

operations. An infrastructure of computers and informational technology,

providing uninterrupted connectivity through e-mails, social networking, and
chat rooms has condensed the informational barriers to efficient market
operation.
Business owners are increasingly using laptops and mobile phones with
Internet connectivity to exchange vital information and perform transactions.
Online retailing has enabled individuals to buy and sell goods through the
Internet. The banking sector has benefited immeasurably due to the
implementation of technology almost in every nation in the world.
Productivity augmentation, innovative products and services, prompt
transactions, smooth transfer of funds, real time information system, and
effective risk management are some trends in banking derived through
technology.
Technology's Impact on Education
Two decades back, computers were not common inside classrooms and
households. Nowadays, computers, in schools, colleges, and households,
have become a necessity, contributing to increased student awareness.
Through Internet connections, students and teachers have a connection to
every part of the world. Online courses and distance learning have become
possible due to technology.
Technology has greatly contributed in the field of research by enabling
researchers to carry out sophisticated studies using electronic devices. The
history of technological development in the society has shown links between
innovations in industry and communications with improvements in
educational methods. The success of net-based curriculum at all levels of
education is an example of the educational development through
technology. Students can access publications, books, and study material on
the Web. The ability of Web-enabled computers, offering lessons in
multimedia formats and allowing real-time interactions between teachers
and students, has paved the delivery of quality education in the new
century. However, rapid technological advances have made continual
upgrading of professional skills an economic necessity.

Technology's Impact on the Environment

Technological developments in the society have done more harm than good
to the environment. Air, water, and noise pollution can all be caused by
producing and using technology. Non-renewable sources of energy are
consumed to generate electricity to use technology.
Technology generates large amounts of physical waste, such as used
computers and electronics, which are disposed after they become outdated.
Such waste is referred to as ‘techno-trash’. Such waste contains all sorts of
hazardous material, unsafe for the environment, and needs to be disposed
of, using special methods.
However, technology has certain positive effects on the environment. For
example, use of e-mails and paperless transactions conducted online has
helped in reducing the felling of trees to make paper. Technology has
helped develop environmentally friendly raw materials and chemicals. It is
important that technology is used responsibly to create a balance between
the uses of technology, while still managing its effect on the environment.
Technology's Impact on Communication and Transportation
Earlier, messages were relayed with word-of-mouth through a messenger
and took a long time. This took the form of telephonic conversations, fax,
and telegraphs. The amalgamation of technology and the Internet has made
it possible that a message can now be received through e-mails, online
chats, and text messaging, using mobile phones in a matter of seconds from
across the world. Technology has compressed the world by making
communication across boundaries possible.
Technology has made transportation faster, more comfortable, and
environment friendly. For example, technological innovations, such as metro
rail networks, solve the problems of urban transportation. Technological
improvement has also increased the speed and safety of commercial
aircrafts. In addition, innovations, such as electric cars, provide
environment-friendly transportation solutions to commuters.
Technology’s Impact on Private Life of Individuals
Technology has undoubtedly increased the comfort level of individuals,
providing better connectivity, but at the same time, inevitably a dependence

on technology has been created. Individuals are now dependent on

technology for transport, communications, and carrying out daily chores.
Dependence on technology creates risks. Failure in the technological
infrastructure may result in the failure of economic and social functionality.
From the viewpoint of privacy, technology has made it possible for people to
gain access to personal information, which can be tampered or used for
illegal purposes. Youngsters are getting increasingly addicted to social
networking sites and spending long hours using these applications. The
ethical aspects related to the use of technology need to be given
importance, and over-dependence on technology needs to be checked by
each individual in society.
Some of the other impacts of technology on society are:
 Technological improvement promotes overall wellbeing of the people.
For example, technological advancement saves time, which in turn
provides more leisure time to employees. This helps them in focusing on
their health and other aspects of wellbeing.
 Technological advancement creates employment, thereby reducing
poverty and unemployment. Increasing income also creates welfare for
people.

1. ____________ is related to carrying out buying and selling
transactions through the electronic medium.
2. Online retailing has enabled individuals to buy and sell goods through
the Internet. (True/False)
3. History of technological development in the society has shown links
between ___________________ and communications with
improvements in educational methods.
4. Technology generates huge amounts of waste, such as used
computers and electronics, which are disposed after they become
outdated, referred to as _______________________.

16.3 Continuous Evolution of Technology in Society

There is a well-known saying that necessity is the mother of invention. The
earliest technological developments were a result of humanity’s quest to
satisfy the basic needs. The need for water compelled humans to dig wells,
construct dams, and develop hydraulic technology. The need for food
motivated humans to cultivate land, develop agricultural tools, and
machines. Similarly, the need for clothes led to textile technology, and the
need to navigate comfortably and quickly led to discovery of bicycles,
carriages, ships, trains, and cars.
However, not all developments in technology can be categorised as need
based. Mankind has increasingly used technology for comforts and luxuries.
We can cite various examples of technology being used for comfort or as
luxury around us. The cars, mobile gadgets, air conditioners, microwave
ovens, and many more equipment have been invented for luxury and
comfort than to serve a basic need. Society is witnessing continuous
development in technology for various reasons.
However, technological evolution can be broadly segmented into three
stages. The three major stages of technological development that have
helped mankind by reducing their physical efforts and increasing their
efficiency are discussed below:
1. First Stage - Development of Tools: A tool provides a mechanical
advantage in accomplishing a physical task. Early humans were
hunters or gatherers, and they needed tools, such as spears, arrows
and hammers, to procure food. With advances in technology, tools have
taken different shapes, such as levers, pulleys, microscopes, and
telescopes.
2. Second Stage - Development of Machines: Machines further reduced
human efforts and were required only to control their functions. These
became widespread with the industrial revolution. Productivity saw a
ten-fold increase in the use of these machines in both industry and
agriculture. Tractors on farms, heavy machineries for construction, cars,
and trains have all helped humans to exceed their physical capabilities.

3. Third Stage - Automation: Automation or automatic control is the use

of various control systems/automation algorithm for operating
machines/equipment or any other application with minimal or reduced
human intervention. The major benefit of automation is that it saves
labour. However, it is also used to save energy and materials; and to
improve quality, accuracy, and precision. Fig. 16.2 represent the
technological evolution:
Stage I- Development Stage II- Development Stage III- Automation

of Tool of Machine of Machine
Fig. 16.2: Evolution of Technology

New technologies are being discovered continuously, affecting various
aspects of the society. The challenge for society is to redirect technology
towards realising human and environmental values on the planet.
Technology needs to be integrated with human values to meet broad social
objectives, which are further explained, as follows:
Technology for basic human needs: To sustain peace and justice for all,
adequate food, shelter, health, and education must be available to
everyone. The priorities need to be concentrated to create human-scale
technologies that promote agriculture, public health programmes, and
affordable housing in developing and underdeveloped nations. Technology
should be directed to eliminate poverty and hunger.
Technology for R&D: Research in the field of technology should be guided
by human needs, ecological wisdom, and human safety aspects; and not be
focused on developments that will provide more luxuries to the privileged.
Technology for conserving environment: Technological policy and
design need to be drafted around conserving natural resources, efficient use
of energy, attaining low levels of pollution, and working in harmony with
nature. There need to be bio-centric human technologies that are
compatible with the planet. Such technologies enable the agricultural,

energy, architectural, and other projects to be carried, such that they do not
interrupt with the Earth’s functioning.
Technology for economic efficiency: Technological evolution needs to be
aimed towards economic efficiency. Cheaper processes and lower prices
are vital and should regulate technological decisions. Environmental
regulations and worker safety protocols add to business costs but need to
be followed through all organisations. Cost accounting and social and
ecological efficiency standards make hydro, solar, wind, and other
renewable technologies cost effective and control environmental pollution.
Technology for work-personal life balance: Excessive work pressures,
long working hours, and exposure to radiations from gadgets, especially in
high-tech industries, are leading to extremely stressful conditions, affecting
the health quotient of a normal individual. Apart from an income to support
basic human and family needs, job satisfaction requires workplaces that are
safe and non-toxic.
Technology for self-actualisation: The technology for self-actualisation
facilitates the realisation of the highest human potential. There is a need to
develop technologies supporting public education, peace conferences, and
other human inventions. This will help in building a society that can facilitate
rather than inhibit the realisation of the highest human potential.
Exhibit 16.1: Technological Evolution for Value Creation

Exhibit 16.2: 10 Emerging Technologies that Could Shape the Future

Computers operated by the power of thought, wearable technology, and
advanced cancer treatments are among the top ten emerging
technologies, which will reshape the future, a news report claims.
The World Economic Forum has compiled a list of the most potentially
influential technologies currently being developed, which also include
mining metals from the desalination of sea water and super-light cars
made using carbon-fibre elements.
Each innovation was selected for its capacity to have a real and positive
impact on the world, according to the WEC’s Global Agenda Council on
Emerging Technologies, which made its selections with the help of
leading figures from industry and academia.
Topping the list is “brain-computer interfaces”, which would build on the
already available technology that allows people to type by monitoring the
electrical activity in their brain.
The technology could make it possible for people with disabilities to
operate wheelchairs and other equipment using their thoughts, according
to the council.
In its report, the council stated: “Technology has become perhaps the
greatest agent of change in the modern world. While never without risk,
positive technological breakthroughs promise innovative solutions to the
most pressing global challenges of our time, from resource scarcity to
global environmental change.”
“However, due to a lack of appropriate investment, outdated regulatory
frameworks, and gaps in public understanding, many promising
technologies are constrained from achieving their potential.”
According to the report, there is hope for arid countries, which see very
little rainfall as the mining of metals from waste water or brine is making
large-scale desalination financially viable for the first time, while the drive
to cut carbon emissions could be boosted by cars built with carbon-fibre
reinforced parts, making them up to 40% lighter and stronger than older
models, offering huge energy savings.

Cleaner energy will benefit from advances in grid-scale electricity storage,

which would allow surplus energy from fluctuating renewable sources,
such as sun and wind, to be stored until it is needed, while new batteries
based on silicon could hold up to three times more power than existing
products.
New wearable electronics, which are already available in the form of
Google Glass and Fitbit wristband, could offer health benefits by tracking
heart rates and stress levels, while new cancer treatments are being
developed by harnessing the power of microbes, which occur naturally in
the human body.
Other medical research is focusing on drugs based on proteins that
regulate human genes, which could be used to fight cancer and infectious
diseases.
Noubar Afeyan, chair of the Global Agenda Council on Emerging
Technologies and CEO of Flagship Ventures, said: “These breakthroughs
show the boundless potential for technology to have a positive impact on
society, from finding cleaner energy to new cures for disease.
“For these gains to be realised, we need the right regulatory frameworks,
strategic alliances among innovators and market leaders, investment
capital, as well as greater public awareness.”
The council wants to see governments working with researchers and
businesses to promote the emerging technologies, which could bring
great improvements to many people’s lives.
Martina Larkin, senior director and head of the Network of Global Agenda
Councils, said: “2014 will be a crucial year for these technologies. Close
cooperation between governments, industry, and academia is essential to
harness their potential.”
The full list of the top ten emerging technologies are:
 Brain-computer interfaces: It is already possible to type just by
monitoring the electrical activity of your brain, but as the technology
advances, it could be possible for people with disabilities to operate
wheelchairs using only their thoughts.
 Mining metals from desalination brine: Large-scale desalination is

becoming economically feasible for the first time because of new

chemical processes that enable the mining of metals from waste,
water, or brine.
 Nanostructured carbon composites: Cars made from carbon-fibre
reinforced composites are as much as 40% lighter than older models,
stronger, and easier to recycle, offering the prospect for huge energy
savings.
 Grid-scale electricity storage: A fundamental breakthrough is close
that will allow the saving of surplus energy from fluctuating renewable
sources, such as sun and wind, within the electricity grid.
 Body-adapted wearable electronics: Whether worn on the body,
embedded in clothes, or even under the skin, these devices can track
information, such as heart rate and stress levels, giving people real-
time feedback about their health.
 Nanowire lithium-ion batteries: New batteries based on silicon –
using tiny silicon nanowires – can have a longer life, charge more
quickly, and hold up to three times the power of existing batteries.
 Screenless display: A 3D image projected into space – a
‘screenless display’ – can convey information that a 2D image
presented on a screen cannot and is close to becoming a practical
reality.
 Human microbiome therapeutics: Drawing on knowledge gained
from the Human Microbiome Project in 2012 and other research,
human microbiome technology is increasingly seen as an important
source of treatment for serious diseases as well as for improving
health.
 RNA-based therapeutics: RNA, like DNA, plays a part in protein
synthesis, and to a lesser extent, the transmission of genetic
information. Scientific advances are combining to enable a new
generation of targeted, RNA-based drugs, which could help find new
treatments for cancer and infectious diseases.
(Source: Tec, 1. 2014. 10 Emerging Technologies That Could Shape The Future. [online] Available at:
http://www.businessinsider.com/top-ten-emerging-technologies-which-could-shape-the-future-2014-2?IR=T)


5. The first stage of technological evolution is associated with
___________________.
6. The second stage of technological evolution is associated with
___________________________.
7. The third stage of technological evolution is associated with
___________________________.
8. The technology for ___________________ can be described as one
that facilitates the realisation of the highest human potentials.
16.4 Management of Technology as a Multidisciplinary

Intersection
MOT refers to a set of management disciplines that enables organisations
to manage their technological aspects to create competitive advantage. It is
an interdisciplinary intersection of science, engineering, management
knowledge, and practice. Technology management integrates various
disciplines to enhance knowledge and intellectual capital, optimise utilisation
of resources, conserve the natural environment and other factors
responsible for increasing the standard of living, and use technology for
human advantage. MOT includes management of the aspects that are
responsible for creation, acquisition, and exploitation of technology to
enable human endeavours and satisfy customer needs.
Research, development, and innovation are essential components in
creation of better technology and enhancement of technological progress.
Nevertheless, to use technology for the creation of wealth, it is important to
commercialise technology. Technology needs to be connected to a
customer for its benefits to be reaped. The customer could be an individual,
a corporation, or a government entity. Technological innovations, which are
not put to any use by a customer, do not contribute to the creation of wealth.
An idea that has been patented but is not exploited by customers does not
bring any monetary benefits. Technological advancements generate
monetary benefits when they are commercialised or used to achieve a
desired organisational objective.

While technology remains the most influential factor for wealth creation,
many other factors contribute to the realisation of wealth in a system such
as capital, labour, social, political, and environmental conditions. Each of
these factors of growth has its own disciplinary field of study and research.
Knowledge acquired from the study of these factors, combined with
technological development, contributes to MOT as an interdisciplinary
intersection. Fig. 16.3 depicts MOT as an interdisciplinary intersection:
Social
Science
Natural
Engineering
Science
Management
of Technology
Business Industrial
Theory Parctice
Fig. 16.3: MOT as an Interdisciplinary Intersection
The Conceptual Framework

MOT creates an intersection of science, management, and engineering
disciplines. The traditional fields in science and engineering contribute to
scientific and technological discoveries. Similarly, traditional fields in
business administration also contribute to the management of enterprises,
economics, finance, marketing, and public policy. MOT links disciplines that
focus on technology development, which leads to the creation of wealth.
Fig. 16.4 shows the conceptual framework of MOT:

Science and Management of Business

Engineering Technology Administratio
Disciplines n Disciplines
Fig. 16.4: Conceptual Framework of MOT

MOT evaluates the following:
 How technology can be created

 How technology can be used to create business opportunities
 How technological strategies can be integrated with business strategies
 How technology can be used to gain competitive advantage
 How technology can be used to improve manufacturing and service
processes
 How to manage organisational change to adapt to technological
changes
 How technology can be used to ensure sustainability in the country
 How technology can be used to improve healthcare
 How can technology be used to enhance performance in sports
 How technology can be used to improve transportation
 How and when to adopt or abandon a technology
Management of Technology or MOT is essentially due to the fact that with
change in technological paradigms, the management systems must also be
adapted to cope with these changes. This leads to utilisation of technology
for wealth creation and customer satisfaction.

9. ________ is an interdisciplinary intersection of science, engineering,
management knowledge, and practice.

16.5 Summary
 Technology has brought about major changes in society, and the
increasing dependence on technology shapes the path for further
technological expansions.
 Technological impacts can be seen in the areas of business, education,
research, environment, communication, and the private life of
individuals.
 The earliest technological developments were a result of humanity’s
quest to satisfy the basic needs.
 The three major stages of technological development, which have
helped humankind by reducing their physical efforts and increasing their
efficiency, are development of tool, development of machine, and
automation.
 Technology needs to be integrated with human values to meet broad
social objectives such as basic human needs, R&D, environmental
actualisation.
 MOT is refers to a set of management disciplines that enables
organisations to manage their technological aspects to create
competitive advantage.
 MOT includes management of aspects responsible for creation,
acquisition, and exploitation of technology to enable human endeavours
and satisfy customer needs.
 The conceptual framework of MOT creates an intersection of science,
management, and engineering disciplines.
16.6 Glossary
E-commerce: E-commerce refers to the industry where buying and selling
occur through the Internet, using electronic or digital media.

Online retailing: Online retailing refers to the act of buying and selling
online, using the Internet.
Automation: Automation refers to the use of control systems for operating
equipment such as machines and processes.
Techno-trash: Techno-trash refers to electronic waste generated on
disposing used computers, mobiles, floppy discs, and the likes.
Self-actualisation: Self-actualisation refers to the realisation of an
individual’s talents and potentialities.

1. Explain the impact of technology on society.
2. What are the stages in technological evolution in society?
3. Describe the importance of integrating technological evolution with
human needs.
4. What is MOT?
5. Explain MOT as a multidisciplinary intersection.
16.8 Answers

1. E-commerce
2. True
3. Innovations in industry
4. Techno-trash
5. Development of tool
6. Development of machine
7. Automation
8. Self-actualisation
9. MOT

10. Science, management, and engineering
Terminal Questions
1. Technological impacts can be seen in the areas of business, education,
research, environment, communication, and private life of individuals.
Refer to section 16.2 Technology
in Society for details.
2. The three major stages of technological development, which have
helped humankind by reducing their physical efforts and increasing their
efficiency, are development of tool, development of machine and
automation. Refer to section 16.3 Continuous Evolution of
Technology in Society for details.
3. Technology needs to be integrated with human values to meet broad
social objectives such as basic human needs, R&D, environmental
actualisation. Refer to section 16.3 Continuous Evolution of
Technology in Society for details.
4. MOT refers to a set of management disciplines that enables
organisations to manage their technological aspects to create
competitive advantage. Refer to section 16.4 Management of
Technology as a Multidisciplinary Intersection for details.
5. The conceptual framework of MOT creates an intersection of science,
management, and engineering disciplines. Refer to section 16.4
Management of Technology as a Multidisciplinary Intersection for
details.
16.9 Case Study: New Technology a Gesture Towards the Future

Thalmic Myo Armband is a pure genius. Essentially, it senses a user's arm
muscles and uses these gestures to control a device by converting them
into electronic signals.

The Myo contains eight electromyography sensors, along with a nine-axis

inertial measurement unit (three axes each for accelerometer, gyro, and
magnetometer). By pulling all of this data together, the device can
understand a forearm gesture and relative motion. For example, by opening
your hand, you can open a video; by closing your hand, you can lower the
volume; or by rotating your finger in a small circle, you can take a picture.
Do you remember the movie, Minority Report, in which the police officer
manages to sift through large data sets, photos, and videos, using hand
gestures? That is it, except it is now real!
The Myo armband lets you control pretty much anything that has a
Bluetooth connection across a variety of platforms, including Android,
Windows, Mac, and iOS. This opens the door to being able to control an
endless array of devices such as computers, smartphones, automobiles,
appliances, televisions, toys, and even military-grade robots.
Imagine the experience of creating music by conducting a virtual orchestra
or performing research by manipulating different variables in a virtual
laboratory. In a university classroom, teachers will be able to manipulate a
slide presentation with different multimedia by gesturing towards the screen.
Other professions will be impacted as well. Imagine artists making 3D
models or sculptures with no physical mess, or picture a surgeon
manipulating a virtual internal organ, while a robotic arm executes the
incision thousands of miles away. Of course, the gamers out there cannot
wait for this thing to hit retail shelves. It can only be imagined how
engrossing ‘first shooter’, ‘car driver’, and ‘sports’ games will become for
console makers, Sony, Microsoft, and Nintendo. It definitely takes the Wii
and Kinect to a whole new level. Imagine wearing two armbands, one on
each arm. That is where the applications and games can become really
engrossing.
The genesis behind this famous startup is located in Waterloo. Ont. Thalmic
Labs is led by mechatronics engineers, Stephen Lake, Matthew Bailey, and
Aaron Grant, who describe themselves as a world-class team of engineers,
researchers, and designers, building the future of human-computer
interaction. Thalmic Labs actually develop both the hardware and the
software system in-house, which are a testament to its strong intellectual
capital. They have currently shipped out a few hundred alpha units to a

select group of software developers to obtain initial feedback on the

armband and work out any kinks.
So, when can your average consumer purchase one? Not yet,
unfortunately. The founders of the company want to make sure that the
technology matures enough, so that consumers can be delighted with the
armband. They expect the developer community to continue to innovate
with the armband and create new applications that the founders have not
yet even thought about. The projected commercial release of the Myo is
sometime in 2014.
Questions:
1. On the basis of the case, discuss how innovative technology can impact
life in the future.

J. Wiley.
Hill.
E-References
 Ru.org. (2014). Technology, society and human evolution | society.

[online] Retrieved from: http://www.ru.org/society/technology-society-
and-human-evolution.html [Accessed: 24 Feb 2014].
 Us, H. (2014). How technology affects us | teen opinion essay on ipod,
internet, chat rooms, society and youth. [online] Retrieved from:
http://www.teenink.com/opinion/social_issues_civics/article/166619/How
-Technology-Affects-Us/ [Accessed: 24 Feb 2014].
 Wu, T. (2014). As technology gets better, will society get worse. [online]
Retrieved from:
http://www.newyorker.com/online/blogs/elements/2014/02/as-
technology-gets-better-will-society-get-worse.html [Accessed: 24 Feb
2014].

Unit 1 Introduction To Science and Technology: Structure

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Technology Management Unit 1

Unit 1 Introduction to Science and Technology

Sikkim Manipal University B1979 Page No. 1

receiving payment from customers. This explains the cost-leadership

 define technology portfolio

Sikkim Manipal University B1979 Page No. 2

1.2 Defining Science

Fig. 1.1: Electromagnetic Wave and Sharing of Information

Sikkim Manipal University B1979 Page No. 3

Therefore, science is a systematic study of the structure and behaviour of

Self Assessment Questions:

Sikkim Manipal University B1979 Page No. 4

Exhibit 1.1: Technology Transfer

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organisations, and even countries. Technology transfer ensures that

Exhibit 1.2: Cancer Research Technology and Teva

Sikkim Manipal University B1979 Page No. 6

development of new treatment options.

“For cancer patients, it is important that we maintain the momentum of

1.3.1 Types of technology

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Product-based technology is a derivative of science and it focuses on the

Fig. 1.2 shows some examples of product-based technologies:

Mobile Automobile Jet Engine E-book Reader

Fig. 1.2: Showing Some Product-based Technologies

Principles of Product Designing: In product designing, the major

Sikkim Manipal University B1979 Page No. 8

Fig. 1.3: Showing Exchange of Information Using EDI

1.3.2 Technology portfolio

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Exhibit 1.3: “Facebook Buys Instagram For $1 Billion, Turns

However, increasing the technology portfolio does not always ensure

It is the role of the technology manager to manage the technology portfolio

1.3.3 Technology for survival and growth

Sikkim Manipal University B1979 Page No. 10

Technology also enables organisations to have a better insight into the

Exhibit 1.4: Role of IT in Business

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Exhibit 1.5: Some Technological Trends Driving Business

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2010 itself. Smart mobility is reducing direct interaction among people. In

Self Assessment Questions:

Sikkim Manipal University B1979 Page No. 13

5. ______ refers to the process of transferring skills, knowledge,

1.4 Transformation of Science into Technology

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Organisations spend billions of dollars in R&D for new drugs, software

Exhibit 1.6: “Apple's R&D Expenses Surge 33%, on Pace to Top $4

Therefore, organisations need to consider a number of factors, such as

Sikkim Manipal University B1979 Page No. 15

Fig. 1.4: Water Purifying Products in India

1.4.1 Science and Technology (S&T) policies of the

Sikkim Manipal University B1979 Page No. 16

technology usage policies of the organisation. Organisations need to

1.4.2 Innovation in Science and Technology

Exhibit 1.7: Technological Innovation in XRS

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Innovation is not only fuelled by the requirement of providing a new solution.

1.4.3 Globalisation of technology

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Today, the influence of globalisation on technology diffusion is quite evident

Self Assessment Questions:

 Technology plays a very important role in the competitiveness,