Managing
Technology
and Innovation
Chapter Seventeen
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Learning Objectives
LO 1 List the types of processes that spur
development of new technologies.
LO 2 Describe how technologies proceed
through a life cycle.
LO 3 Discuss ways to manage technology for
competitive advantage.
LO 4 Summarize how to assess technology
needs.
17-2
Learning Objectives (cont.)
LO 5 Identify alternative methods of pursuing
technological innovation.
LO 6 Define key roles in managing technology.
LO 7 Describe the elements of an innovative
organization.
LO 8 List characteristics of successful
development projects.
17-3
Technology and Innovation
 Technology
 The systematic
application of
scientific knowledge
to a new product,
process, or service.
17-4
Question
___________ is a change in method or
technology.
A. Innovation
B. Quality
C. Speed
D. Service
17-5
Technology and Innovation
Innovation


change in method or technology
positive, useful departure from previous ways of
doing things.
17-6
Forces Driving
Technological Development
1.
2.
3.
Must be a need, or demand, for the technology
Meeting the need must be theoretically
possible, and the knowledge to do so must be
available from basic science
Must be able to convert the scientific knowledge
into practice in both engineering and economic
terms
17-7
Forces Driving
Technological Development
4. The funding, skilled labor, time, space, and
5.
other resources needed to develop the
technology must be available
Entrepreneurial initiative is needed to
identify and pull all the necessary elements
together.
17-8
Technology Life Cycle
Technology life cycle

A predictable pattern followed by a technological
innovation, from its inception and development
to market saturation and replacement.
17-9
The Technology Life Cycle
Figure 17.1
17-10
Technology Dissemination Pattern and
Adopter Categories
Figure 17.2
17-11
Diffusion of Technological Innovations
Innovators
Laggards
Late
Majority
Early
Adopters
Early
Majority
17-12
Diffusion of Technological Innovations
An innovation will spread quickly if it





Has a great advantage over its predecessor
Is compatible with existing systems, procedures,
infrastructures, and ways of thinking
Has less rather than greater complexity
Can be tried and tested easily without significant
cost or commitment
Can be observed and copied easily
17-13
Advantages and Disadvantages of
Technology Leadership
Table 17.1
17-14
Technology Followership
A manager’s decision on when to adopt new
technology also depends on the potential
benefits of the new technology, as well as the
organization’s technology skills
Following the technology leader can save
development expense
17-15
Dynamic Forces of a Technology’s
Competitive Impact
Figure 17.3
17-16
Question
What is the process of clarifying the key
technologies on which an organization
depends?
A. Managerial audit
B. Benchmarking
C. External audit
D. Technology audit
17-17
Assessing Technology Needs
 Technology audit
 Process of clarifying
the key technologies
on which an
organization depends
17-18
Measuring Current Technologies
 Emerging
technologies are still
under development
and thus are
unproved
 Pacing technologies
have yet to prove
their full value but
have the potential to
alter the rules of
competition by
providing significant
advantage
17-19
Measuring Current Technologies
 Key technologies
have proved
effective, but they
also provide a
strategic advantage
because not
everyone uses them
 Base technologies
are those that are
commonplace in the
industry; everyone
must have them to be
able to operate
17-20
Question
What is the process of comparing the
organization’s practices and technologies with
those of other companies?
A. Benchmarking
B. Quality control
C. Scanning
D. Environmental scanning
17-21
Assessing External
Technological Trends
Benchmarking

the process of comparing the organization’s
practices and technologies with those of other
companies
17-22
Assessing External
Technological Trends
Scanning


focuses on what can be done and what is being
developed
places greater emphasis on identifying and
monitoring the sources of new technologies for
an industry
17-23
Key Factors to Consider in
Technology Decisions
Anticipated market receptiveness
Technology feasibility
Economic viability
Anticipated capability development
Organizational suitability
17-24
Framing Decisions about
Technological Innovation
Table 17.2
17-25
Sourcing and Acquiring
New Technologies
Make-or-buy decision

The question an organization asks itself about
whether to acquire new technology from an
outside source or develop it itself.
17-26
Sourcing and Acquiring
New Technologies
 Internal development  Technology trading
 Purchase
 Research
partnerships and
 Contracted
development
 Licensing
joint ventures
 Acquisition of the
owner of the
technology
17-27
Sourcing and Acquiring
New Technologies
Managers should ask the following basic questions:
1. Is it important (and possible) in terms of
2.
3.
competitive advantage that the technology
remain proprietary?
Are the time, skills, and resources for internal
development available?
Is the technology readily available outside the
company?
17-28
Technology Acquisition Options
Figure 17.4
17-29
Question
Which executive is in charge of information
technology strategy and development?
A. COO
B. CEO
C. CTO
D. CIO
17-30
Technology and Managerial Roles
Chief information officer (CIO)




executive in charge of information technology
strategy and development.
coordinates the technological efforts of the
various business units
identifies ways that technology can support the
company’s strategy
supervises new-technology development
17-31
Technology and Managerial Roles
Technical innovator

A person who develops a new technology or has
the key skills to install and operate the
technology
Product champion

A person who promotes a new technology
throughout the organization in an effort to
obtain acceptance of and support for it.
17-32
Technology and Managerial Roles
 Executive champion
 An executive who
supports a new
technology and
protects the product
champion of the
innovation.
17-33
Requirements for Innovation
Figure 17.5
17-34
Organizing for Innovation
Unleashing creativity involves encouraging
creativity and celebrating failure
Bureaucracy busting is necessary because
bureaucracy is the enemy of innovation
17-35
3M’s Rules for an
Innovative Culture
Table 17.3
17-36
Organizing for Innovation
Development project

A focused organizational effort to create a new
product or process via technological advances
17-37
Organizing for Innovation
Sociotechnical systems

An approach to job design that attempts to
redesign tasks to optimize operation of a new
technology while preserving employees’
interpersonal relationships and other human
aspects of the work
17-38
Compensation Practices in Traditional
and Advanced Manufacturing Firms
Table 17.4
17-39
Video: Netflix
 How is Netflix an
innovator?
 What are the
consequences to
competitors of
Netflix’s innovations?
17-40