MGT 302 “Management of Technology and Innovation” August 17, 2023
Chapter 2 : Developing Technology and Innovation
Summary
There are a number of ways that organizations can develop and manage technology and innovation. We
will focus on organization-level activities and the three strategic processes in this section of the chapter.
In order for a firm to develop a successful management of technology and innovation strategy, it is
imperative that the organization be readied for the effort. This requires agility because changes and
adjustments to products and processes are filled with risk and uncertainty. However, agility is inherantly
less efficiency if it is to be effective. Therefore, the management of technology and innovation must
balance short-term efficiency with long-term effectiveness in the market if the firm is to add value and
thrive in a changing environment. Strong dynamic capabilities are needed if the organization is going
to be able to address the challenges of innovation and dynamic competition. There are four things the
firm should do to balance the conflicting demands of being agile in a dynamic environment. These are:
1. Design systems and processes that can identify, assess, and develop technology based
opportunities (or protect from new technology threats). The systems and processes should be
able to sense what is coming.
2. Identify communication needs and efficiently turn data into information so that the right
information can be available to make the best decision in a timely fashion. The current interest
in big data and what it can tell firms is tied to the notion that we have a lot of bytes of data
available because of computer technology that are not being used effectively or efficiently.
3. Develop employees through training and learning opportunities. This becomes more critical as
the competitive environment for the organization becomes more dynamic. The management of
technology and innovation requires that all levels of the organization are involved and that
efforts are made to ensure that employees are allowed to enhance their skills for themselves and
the organization. The more dynamic the environment, the more important skill enhancement is
for the firm and the individual.
4. Use good change management processes to help the firm succeed in introducing newness into
the organization. Many firms learned expensive lessons when desktop computers were
introduced into the workplace. First, most managers did not type, so they did not adopt the new
technology. Second, younger staff members were more likely to be comfortable with the new
computers (even elated because the computer was better than they could afford at home), so
knowledge power was turned upside down from the hierarchy and seniority. Third, many firms
installed desktops with little or no training (because they were “upgraded typewriters”) while
leaving the typewriters easily accessible. The result was that some companies deemed desktops
a failure and sold the equipment at a loss. Obviously, desktop computers are now a vital tool in
the workplace, but this just illustrates what happens when a good change management process
that includes proper support systems, communication, and training is not implemented.
There are three basic organizational processes—buying and partnering, developing newness within the
firm, and entrepreneurially exploiting a space in the environment. Delineates the three types. Buying
and partnering includes mergers and acquisitions, joint ventures, contractual agreements, and other
forms of acquiring technology/innovation from external sources. Internal sources of new
MGT 302 “Management of Technology and Innovation” August 17, 2023
technology/innovation for the organization include research and development of new products as well
as reconfiguring or developing new processes—ways of doing things. This can be organization structure
or redesigning an assembly line. Adding robotics to a manufacturing process may be an internally driven
process, or a firm may buy a robotics manufacturer to acquire the capability to add robotics to the
assembly process.
The third type of creating new technologies/innovations involves exploiting a space in the environment
through entrepreneurial or new-business development activities. Michael Dell started Dell in his
dormitory room at University of Texas. He wanted a better computer than he could buy, so he bought
parts and assembled his own. Friends asked him to build one for them. He realized there was an
innovative process of customizing computers and delivering directly from the manufacturer to the
customer. Michael Dell’s exploitation of the custom-built, direct manufacturer-to-customer delivery led
to a multibillion dollar business.
M
A
D
External Processes:
M&A, joint ventures, contractual relationships,
cross-organizational projects, informal
relationships
a.
Quicker
b.
Blending rather
than
discovering
c.
Often less costly
a.
Requires bringing
different firm cultures
together
b.
Often leads to
perception of winners
and losers
c.
Not-invented-here
syndrome
Internal Processes: R&D
a.
Clear ownership of
the technology/
innovation
b.
Legal protections
may be stronger
a.
Often takes longer
b.
Key personnel may
leave at a critical time
c.
Can be very costly
New Business/Entrepreneurship
a.
Usually more agile
and flexible in the
marketplace
b.
Dedicated
leadership—it is
their “baby”
a.
Highest risk factor
b.
Lack of skills within the
firm to do things
besides innovation
c.
Usually have very little
slack
