Finance Article

ARTICLE REVIEW 7

Article review: Portfolio Management in Double Unknown Situations

Financial Management

Group One

Prof. Thomas Leung

Introduction

Technological Platforms and the Role of Cross-Application Managers is an article written by the authors Olga Kokshagina, Pascal Le Masson, Benoit Weil and Patrick Cogez. The article aims at investigating management portfolio in most double management situations. Double unknown means an instance where technology and markets are unknown and where uncertainty remains high. This can be room for growth discoveries, new performance solutions, and the structuring of the portfolio. The literature emphasizes that a double unknown scenario involves creating generic technologies capable of dealing with various current and emerging industries and generating demand across a variety of applications. The article explores the initial stages and the related portfolio mechanisms of generic technology governance in multi-project companies. The review will summarize the authors' view, critics of the argument, some recommendations, and a summary.

Portfolio Management in Double Unknown Situations

According to the authors, portfolio management and structuring in a company determine a company's innovative capabilities. But organizations are working rapidly in new and unfamiliar settings, radically shifting the rationale of decision-making and making traditional planning methods unsatisfactory. Organizations need to take more versatile approaches to combine learning and privilege of project-specific experiences in such circumstances. These significant shifts in market conditions and increasing competition contribute to confusion for portfolio managers by adjusting portfolios' strategic path, balance and priority projects differently (Kokshagina et al., 2016). Recent progress in portfolio literature has shown that competitive environments and growing uncertainty do not adequately handle risks. A high likelihood of unknown risks may lead to companies questioning and even generating their portfolios. In these settings, businesses need new practices to minimize uncertainties, handle uncertainty and improve the probability that they can succeed.

The article shows that the structuring portfolio of generic technology involves developing a framework that addresses business complementarities and a technological structure's primary function. The results show that portfolio management must also be extremely transversal to account for the discovery of generic technology in a high degree of uncertainty (Kokshagina et al., 2016). Fund managers contend with many new technologies and markets in unknown double cases and assemble generic technology-based portfolios. There is a tremendous amount of scientific work to the rationale for generic technologies designs. The management of this process of designs is crucial to the practical design of generic technologies and portfolio implementation (Kokshagina et al., 2016). For successful portfolio strategizing and management, the cross-application manager position seems critical in considering successful standard technology design.

The renewal and organizational development of a corporation needs to be ensured to ensure its long - term sustainability. A group of projects and initiatives or other tasks grouped to help effectively coordinate the work to achieve strategic business goals (Kokshagina et al., 2016). The project portfolio is portfolio management helps an organization to make strategic decisions and is important to prioritize and choose projects between different options for emerging companies. There are various risks in portfolios, which can affect potential results and alter the course of action. Managers need to handle multiple levels of risk and ambiguity to ensure portfolio performance. The article gives a literature review that presenting the portfolio management activities and practices of the project in uncertainties and risks. Its perspective addresses a logic that can mitigate the risks and focus on the known unknowns.

There is ambiguity in portfolios as alternative projects still can be found, and when handling uncertainty, it is essential to make the right choice between potential decisions and likely circumstances. However, the result is not entirely understood in this situation (Kokshagina et al., 2016). There are various sources of uncertainty, including operational complexity, external environments that include technological and market uncertainty, changing norms, rules, the context of the unit's sector and industry volatility. Where there is considerable uncertainty, probabilistic methods are reduced because the likelihood grows and cannot first be correctly estimated during the discovery process. In this situation, uncertainty mitigating techniques are mobilized to mitigate these uncertainties (Kokshagina et al., 2016). More sophisticated portfolio regulatory compliance approaches are required because environmental conditions are often volatile and risk management is not likely to take place owing to high price fluctuations and technical volatility.

The purpose the article was to create an understanding of PPM in most uncertain environments for generic design. The analysis was carried out in the semi-conductive industry, where the possibility of generic technology exists, and there are several uncertainties. To help them understand, this study used a multiple case analysis. The approach to multiple case studies is crucial in understand the background variability effect to verify the findings experimentally and obtain more general results. Multiple scenarios make for a more precise abstraction and lead to enhanced generalization (Kokshagina et al., 2016). To better reveal the phenomenon, numerous organizational contexts have been chosen.

The article also describes the data collection methods and the techniques used in the analysis of the data. Documentation Interviews and findings during gatherings or conferences were used as the report's data collection methods. The interviews took place according to the transparent, semi-structured guidelines. To learn more about individual case studies, the researchers interviewed several members and external partners from various functional backgrounds, including the senior management and the managers for the project and portfolio and other experts from industry, finance, technology, marketing, research, growth, and operations (Kokshagina et al., 2016). The data collected from the interviews was then transcribed and a sample is selected to create the analysis themes. An understanding was created using the different cases whose results are also explained in the article.

The analysis of the case allowed a comparison of three points organized around the generic technology portfolio. Of the three instances, only portfolios were considered, which were structured to work in multiple environments. The article explains how the researchers analyzed the situations, how that portfolio was organized, and how the interdependencies were identified to explore generic techniques. In the first case, the two given sites participating in this had different technologies. The dominant R&D groups that were responsible for particular technical advancement develops, advanced R&D units to pursue immature and yet unknown innovations and R&D groups related to each business unit regardless of the general R&D (Kokshagina et al., 2016). On the technology side, every employee from these groups participated openly.

The second was motivated by the idea of 'More than Moore' for technologies not inherently following trends in CMOS miniaturization and reflected a rising proportion of the overall silicone-based semi-conductor market (Kokshagina et al., 2016). The diversity and future applications of these technologies make road-mapping very difficult. One of the primary drivers in many fields such as healthcare, communications, environmental control, automotive, security, and entertainment is the heterogeneous convergence of digital and analogue features into combined systems. Companies need to be prepared for breaches in their knowledge, design and their functionality in the selected business model types to sustain technological leadership (Kokshagina et al., 2016). The Technology Taskforce "More than Moore" is to organize exploratory activities in the same unknown situations and provide creative market solutions. The exploration of highly advanced technology ideas into two unknown circumstances is facilitated by the development of a 'More than Moore' Technology Worktop.

For the third case, only the portfolios were selected which were well placed to deal with 'More than Moore.' For example, the MEMS business unit began in 1996 to develop the MEMS micro-electro-mechanical system (MEMS).

References

Kokshagina, O., Le Masson, P., Weil, B., & Cogez, P. (2016). Portfolio management in double unknown situations: Technological platforms and the role of cross‐application managers. Creativity and Innovation Management, 25(2), 270-291.