CHAPTER 5

TECHNOLOGY MANAGEMENT AND INNOVATION

By
Department of Management and Technology
Faculty of Technology Management and Business
University Tun Hussein Onn Malaysia
 CHAPTER OUTLINE

1. Introduction
2. Definition of innovation
3. Technological Innovation Process Modeling
4. Individual Characteristics' that enhance innovation initiative
5. Factors that Promote Innovation
6. Factors that Disrupt Innovation
7. Classification of Innovation
 INTRODUCTION
Innovation is a fundamental basis of competitiveness
for firms, region and nations.

Market systems has always rested on its capacity to

create:
New products;
New ways of producing them.
 INTRODUCTION
Rapid innovation are required because:
Contemporary society's search for higher standards of
living.
Thirst for new ways of fulfilling increasingly sophisticated
needs.
Definition of Innovation
The process whereby new and improved products, processes,
materials and services are developed and transferred to a plant
and/or market, where they are appropriate.

Innovation is any system of organized activities that transforms

a technology from idea to commercialization.

A complex set of activities that transforms ideas and scientific

knowledge into physical reality & real-world applications.

5
Technological Innovation Process Modelling

• There is no universal model to describe the

complexity of innovation process.

• 4 general types of models:

– Stage models
– Conversion models
– Integrative models
– Decision models
 Stage Models
• Innovation is viewed as a series of discrete stages
(i.e. sequential linear activities).

• The unit of analysis within each stage:

– Activity, or
– Functional responsibility.
Conversion Models (Technology Push / Market Pull
Models
• Inputs being converted into product or processes
through a number of steps.
• Addresses the needs of the marketplace and the
opportunities presented by new technologies.
 Integrative Models
• These models attempt to integrate process and product
innovation in respect to technology life cycle.

• The dynamic nature of the innovation process was stressed &

the process was represented as changing over time as the
industry evolved and matured.
Decisions Models

• Approach the innovation process in terms of these decision

points.

• Offers management a practical approach to the process.

• Points to the evolutionary nature of decision-making process.

Individual characteristics that enhance innovation initiative
• Asking questions to identify problems and opportunities.

• Learning new skills.

• Taking risks and being proactive.

• Aligning strong personal beliefs and values with the

organization’s values and goals.

If an organization manages the work environment in such a

way as to encourage these behaviors, then innovation is
more likely.
 Factors that Promote Innovation
• Greater control of the process and the outcomes.

• Greater understanding of the technology produced and how

to apply it.

• Greater ability to potentially develop the next generation of

technology.

• Greater profit potential as a first mover.

Factors that Disrupt Innovation
• Longer time is needed to develop internal
innovation strategy compared to purchased from
outside the firm.

• There is greater risk of failure to develop the right

product at the right time.

• Keeping a pipeline of new products and/or

processes is difficult at best. There is always the
danger that another firm will enter the market first.
Disruptive Innovation
Prior to the development of hydraulic shovels, established
manufacturers were focused on developing larger mechanical
earth-moving equipment designed to move greater and
greater amount of earth.
However, many customers were not interested in moving
larger amounts of earth;
they needed an efficient
machine that was
compact and flexible.
The Case of Hydraulic Shovels
• A relatively small firm, JCB introduced the first hydraulic
shovel or backhoe.

• The established firm had focused only on large mechanical

equipment, and the development of their own version of the
backhoe took time.

• Their innovation failed to generate the right product at the

right time for their market.

• In this case, the hydraulic shovel can be considered as a

disruptive innovation to the established firm.
Classification of Innovation
• Innovations can be classified in a number of ways, however
one of the most common is from the perspective of product
and process innovations.

• Both concepts are related and there is rarely one without

some effect on the other.

• Product innovation:
– Basic research, applied research and systems integration

• Process innovation:
– Restructuring and reengineering
 Product Innovation
• For most organizations, product innovations are the center of
their research and development efforts.

• The types of innovation efforts found in the R&D process

include:
– Basic: pure research and development
– Applied: new product development
– Development (systems integration): product improvement or market
expansion

• A firm may have any or all of these different types going on at

any given time.
Process Innovation
• To increase the efficiencies or the effectiveness of an
organization.

• Offer the organization and its personnel opportunities to

improve the value of the organization and to continue the
organization’s viability.

• There are 3 types of process innovations:

– Restructuring
– Reengineering
– Value destruction
Restructuring
• Refers to a major reorganization of a firm.

• Periodically, organizations need to undertake a major review

of what it does and why.

• Mainly caused by:

– Slow decision making due to information delay.
– Opportunities and threats being missed by the organization.
– Disruption in the environment that caused extreme stress to the
organization.

• Common activities in restructuring are downsizing.

 Downsizing
• Occurs when a firm either sells some of its units or lays off
employees.

• However, many firms that downsize have experienced

negative results.

• Survivors of the downsizing often feel overworked and are

uncertain if they might be laid off next.

• This will effect expected financial benefits of the

restructuring, which are often not met.

• Therefore, the planning and goals of downsizing should be

extensive and clear.
 Reengineering

• Requires fundamental rethinking and radical redesign of work

processes.

• Has 5 specific goals:

– Increasing productivity
– Optimizing value to shareholders
– Achieving quantum results
– Consolidating functions
– Eliminating unnecessary levels and work

• The main idea is to identify processes within the organization

that create no value for the firm.
 Value Destruction
• Obsolescence, or being leapfrogged may require the firm to
destroy value in one area to gain resources to undertake
value creation and/or appropriation in another.

• Important so that firms could focus their attention and

resources in a given area that offers the greatest
opportunity.

• Eg: in 1990, IBM had to undergo radical changes that involved

restructuring units and laying off employees for the first time
in its history. The actions were necessary so that IBM could
promote new products that would allow it to prosper in the
future.
The end.
 CONTACT ME

+60-0127421076

hadilah@uthm.edu.my

Fb:

Department of Management and Technology,

Faculty of Technology Management and Business
Universiti Tun Hussein Onn Malaysia
THANK YOU
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