Managing
Technology
and Innovation
Chapter 17
McGraw-Hill/Irwin
Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
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
Technology and Innovation
 Innovation
 A change in method or technology; a positive,
useful departure from previous ways of doing
things.
17-5
Forces Driving Technological Development
1. Must be a need, or demand, for the
technology
2. Meeting the need must be theoretically
possible, and the knowledge to do so must
be available from basic science
3. Must be able to convert the scientific
knowledge into practice in both engineering
and economic terms
17-6
Forces Driving Technological Development
4. The funding, skilled labor, time, space, and
other resources needed to develop the
technology must be available
5. Entrepreneurial initiative is needed to
identify and pull all the necessary elements
together.
17-7
Technology Life Cycle
 Technology life cycle
 A predictable pattern followed by a technological
innovation, from its inception and development to
market saturation and replacement.
17-8
The Technology Life Cycle
Figure 17.1
17-9
Technology Dissemination Pattern and
Adopter Categories
Figure 17.2
17-10
Diffusion of Technological Innovations
Innovators
Laggards
Late
Majority
Early
Adopters
Early
Majority
17-11
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
 Examples
17-12
Technological Innovation in a Competitive
Environment
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
Assessing Technology Needs
 Technology audit
 Process of clarifying
the key technologies
on which an
organization depends
17-17
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
17-18
Measuring Current Technologies
 Key technologies
 Base technologies are
have proved effective,
those that are
but they also provide
commonplace in the
a strategic advantage
industry; everyone
because not everyone
must have them to be
uses them
able to operate
17-19
Assessing External Technological Trends
 Benchmarking
 the process of comparing the organization’s
practices and technologies with those of other
companies
17-20
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
17-21
Key Factors to Consider in Technology
Decisions
Anticipated market receptiveness
Technology feasibility
Economic viability
Anticipated competency
development
Organizational suitability
17-22
Framing Decisions about
Technological Innovation
Table 17.2
17-23
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.
17-24
Sourcing and Acquiring New Technologies
 Internal development  Technology trading
 Purchase
 Research
partnerships and
 Contracted
joint ventures
development
 Acquisition of the
 Licensing
owner of the
technology
17-25
Sourcing and Acquiring New Technologies
Managers should ask the following basic questions:
1. Is it important (and possible) in terms of competitive
advantage that the technology remain proprietary?
2. Are the time, skills, and resources for internal
development available?
3. Is the technology readily available outside the
company?
4. Do we have to do it?
17-26
Technology Acquisition Options
Figure 17.4
17-27
Technology and Managerial Roles
 Chief information officer (CIO)
 executive in charge of information technology
strategy and development.
 coordinate the technological efforts of the various
business units
 identify ways that technology can support the
company’s strategy
 supervise new-technology development
17-28
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.
17-29
Technology and Managerial Roles
 Executive champion
 An executive who
supports a new
technology and
protects the product
champion of the
innovation.
17-30
Organizing for Innovation
 Unleashing creativity involves encouraging
creativity and celebrating failure
 Bureaucracy busting is necessary because
bureaucracy is the enemy of innovation
17-31
3M’s Rules for an Innovative Culture
Table 17.3
17-32
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
17-33
Compensation Practices in Traditional and
Advanced Manufacturing Firms
Table 17.4
17-34