SML 703: Management of Technology Transfer and Absorption

Reading 1: Strategic Use of Technology By Joseph Morone

Group 9Executive MBA, 2nd yearDMS, IIT Delhi

121/04/2023

Entry # NAME

2013SMN6739 Bhanu Verma

2013SMN6741 Sudatta Kar

2013SMN6753 Saurabh Sharma

2013SMN6761 Navneet Pal Singh

2013SMN6768 Aditya Kant

2013SMN6772 Gaurav Thapar

21/04/2023 2

A video on L&T

21/04/2023 3

Agenda• About the Reading• Content of Reading

– Technology and Competitive Advantage– Strategic Use of Technology– Towards an analytical framework– Hypotheses

• Take Away from the Reading• References

421/04/2023

21/04/2023 5

About the Reading• Why do some companies respond differently than others?

– Some firms bring technology to bear on the market more effectively

– Within a given industry, in response to a given competitive environment, some firms build competitive advantage on the basis of technology

– Some firms build their strategies around technology-based opportunities

• Successful firms place more emphasis on "management of technology” especially on– Integration of design and manufacturing– Balance between product and process R&D– Acquisition and integration of externally developed technology– Focus on management of technology functions as well as on

integration of technology with business strategy– Focus on response of general strategic management responds

to technological opportunity: some managers recognize the strategic implications and take advantage of them

Content of the Reading

• Technology and Competitive Advantage• Strategic Use of Technology• Towards an analytical framework• Hypotheses

21/04/2023 6

21/04/2023 7

Technology and Competitive Advantage

• Technological innovation has been a powerful force for industrial development, productivity growth and indeed, our rising standard of living throughout history

• The evidence comes from a number of directions:– Consumer Electronics– Semiconductors– Factory Automation– Productivity– Technology

• Industry Life Cycles• Management of Technology

21/04/2023 8

The Strategic Use of TechnologyIt is the ability of the firm to translate the awareness of Developments in particular technology field into strategic options.• Technology Strategy

As per Maidique and Patch, it consists of :– Policies and decisions involving Technology Progress– Choice between alternative new technologies– Criteria of embodiment

It’s to bring the potential opportunities that technology creates to bear on formation of corporate strategy.

• Technological Leadership

As per the views of Porter and Freeman:

A company’s posture towards technology should follow from it’s overall corporate strategy. – But what about other ay round: Case of IBM’s PC and GE’s CT,

with reference to Apple and EMI?

Focus needs to be on actual behavior of firms – their way of response to stimuli of technology opportunitiesextant around them

Towards an Analytical Framework

Problem Solving Perspective :

Why some firms make better use of technology – the alternative solutions are mostly “ dimly perceived” and goals are ambiguous and sometimes contradictory. The steps can therefore be broken down into following components:

• Problem Definition : Defining problem more conducive to strategic use of technology in light of competitive environment.

• Search and Evaluation: Searches and evaluation of potential solutions. More important is that how the mangers evaluate the options identified by technology operations (usually an acceptable solution is chosen over optimal one).

• Successive Approximation :The problem is broken down in smaller problems and solutions also in steps. First step leads to next and so on, and hence gradually solution is found. Firms which use the technology exhibit different learning pattern as they have conducive learning environment.

21/04/2023 9

21/04/2023 10

Hypotheses• Hypothesis 1: In defining or representing the strategic issues confronting them, firms

that make strategic use of technology exhibit longer time horizons than their counterparts

• Hypothesis 1a: In defining the strategic issues confronting them, firms that make strategic use of technology exhibit greater market focus than their counterparts.

• Hypothesis 2: Firms that make strategic use of technology are more likely than their counterparts to exhibit strong internal technical capabilities, which are (a) loosely coupled to current operations, and (b) tightly coupled to strategic decision making.

• Hypothesis 3: In evaluating technology-based options, firms that tend to make strategic use of technology place more weight than their counterparts on how well the option "fits" with their representation of the strategic issues before them, and less weight on more formal financial and market analyses.

• Hypothesis 3a: Firms that tend to select the technology option are more likely than their counterparts to rely on experimental approaches to marketing.

• Hypothesis 4: Firms that succeed in using technology for strategic advantage exhibit a high degree of learning from experience. Successful new products and processes emerge gradually, over the source of a sequence of earlier product and process introductions.

• Hypothesis 4a: Firms that succeed in using technology for strategic advantage exhibit consistent and stable strategic management.

Take Away from the Reading

Why do some companies do better job of using Technology as a source of COMPETETIVE ADVANTAGE• Go beyond management of technology• General strategic management to technology opportunities• Technology opportunity from perspective of corporate strategist.• Learning behavior of firms• Derived hypothesis • Next step is to test the hypothesis• Need of enough studies to gain confidence in findings• Variations in the industry to generalize the findings• Research is painstaking and data is not easily available

1121/04/2023

References1. “ Strategic Use of technology” By Joseph Morone, Cambridge Management

Review

2. L&T Case Study Video - https://www.youtube.com/watch?v=J4Yl00qTyPE

1221/04/2023

Thank You!

1321/04/2023