Assignment Set-1

1. Discuss various Technology Acquisition alternatives. List the important

points to be kept in mind while managing an acquisition of technology.
Technology Acquisition Alternatives
1. Develop Technology in-house

The company has to estimate the financial costs of the required R&D and its opportunity cost of
that choice. Its impact on the direction of, and the commitment to, other research projects is also
relevant. In addition to this, the company has to assess the suitability of its staff and equipment
for the new project. Among the risks, it has to face are blocking patents. However, the
developed technology can be customized to its precise requirements.
2. Buy the firm that has the Technology

The investment here could be substantial and great care is needed in the evaluation of the
prospective acquisition. Also, it is important that following the purchase, that the operations can
be effectively integrated and that there is no undue loss of key staff.
3. Enter into joint ventures

The costs are shared but so are the benefits of the new technology. Where the risks are high
and the costs heavy, membership of a research consortium becomes a more attractive option.
There is also the co-development of new products or processes, such as between a key
supplier and a major customer.
4. Enter into research contract

R&D contracts can be placed with research associations, universities or consultants. The
company has to consider the costs and the nature of control of the project. There is the risk of
know-how loss.
5. Obtain license for use of Technology

This is essentially the purchase of access to proprietary technology. It can be anything from the
right to use a particular patent to a complete package, which includes know-how agreements,
commissioning assistance for new plant and processes and the provision of updated designs
and other technical information.
6. Education and training

Soft technologies with a strong management dimension e.g. JIT, Quality circles, or Kaizen can be
acquired through training programmes. However, the underlying experience, which makes these
techniques more effective, is often achieved through personal contacts between companies.

The following are important points to be kept in mind while managing an

acquisition of technology:
1. The role and management of technology within the company needs to be assessed,
especially its capability of managing the transfer activity.

2. The allocation of appropriate staff to the transfer and application of the technology. The
project manager must be at senior level while his colleagues need to have engineering
application and change management skills.
3. The corporate objectives, capability and the technology transfer track record of the
prospective transferor need to be considered. Effective technology acquisition is often based on
a longer-term relationship.

4. Clear technical and contract specifications are essential. Because of the nature of the
technology and its integration in intellectual property, the transfer constituents vary in type and
character. Where the transfer is from a different culture, special attention has to be given to
detail and the meaning of language.

5. Contract negotiations can be onerous. They require diplomatic skills and careful record-
keeping.

6. Because of the nature of its acquisition, transferred process technology needs to be handled
with even more care than indigenous technological change. It is important that all affected
company staff appreciate the nature and reasons for the acquisition.

2. What are the ten tenets? Discuss. With the help of examples, show how we
have become /are becoming servants of technology.

Ten Basic Tenets for the Management of Technology (MOT)

A tenet is a principle based on observation, intuition, experience, and in some cases, empirical
analysis. Ten tenets, proposed in available literature, are presented below as guiding principles
for an enterprise to operate within a technology cycle (TC) framework. David Sumanth in his
work (1988) proposed a total systems approach to technology management (TSTM) what he
called the technology cycle. He contended that the management of technology in enterprises is
not just a one-shot deal, but a continuous process, involving five distinctly different phases of
technology, namely, awareness (of marketable inventions), acquisition (by self-generation or
transfer), adaptation (by minor modifications of acquired technology for specific needs),
advancement (innovation involving major modifications of acquired technology), and
abandonment (of obsolete technology). The tenets recognize that short-term treatments of any
issue in general, and technology management in particular, are at best sub-optimizations, and
so, will not lead to more long-Iasting solutions in adapting and advancing technology. Let us
take some time now to discuss these principles in detail.
1. Value diversification is a poor substitute for MOT
Value diversification refers to the improvement of stockholders' investments in a company
through quick-fix solutions on paper, such as mergers, acquisitions, and other stock-enhancing
strategies. Unfortunately, this traditional approach to value enhancement results in mostly short-
term gains and long-term pains. Every company ought to identify core technologies and core
competencies, and then hone them to get the most out of those for innovating products and/or
services. When IBM acquired ROLM Corporation many years ago, IBM was trying to
complement its core technologies in mainframe computers and personal computers with the
core technology of ROLM, communication systems. Unfortunately, this did not work out very
well, and IBM eventually sold ROLM. In the early 1980s, McGraw-Hill, whose core technologies
are in publishing, books, journals, and related products, went into the personal computer
business with Odyssey with a totally different core technology that didn't work, either.
2. Manufacturability must keep pace with inventiveness and marketability.
In industries, in general, and manufacturing companies in particular, people in manufacturing
functions often find themselves coping with increasingly aggressive marketing strategies and
design strategies. Manufacturing in the United States is being troubled by intense competition
from the Pacific Rim and European trading partners, who are developing new and better
technologies and techniques to increase their advantage in product design and manufacturing
process (Gold, 1994). Yet, in today's globally competitive marketplace, it is not only a necessity
for manufacturability to be in step with marketing and design strategies but also a luxury,
serving as an important weapon to chip away the market share of the competition.
3. Quality and total productivity are inseparable concepts in managing technology.
In the 1970s, here in the United States, productivity was of major concern, particularly after the
1973 Oil Embargo, and the ensuing Japanese "automobile attack." In the 1980s, after the
famous NBC documentary, "If Japan Can, Why Can't We?" emphasis on quality reemerged with
great ferocity and intensity. The Total Quality Management (TQM) movement made quality a
common prerequisite for ensuring competitiveness, even in the domestic markets. With the
onset of the information superhighways in the late 1980s, and the rapidly changing global
communication technology panorama, time has become a third crucial strategic variable in a
company's drive to be competitive. Quality and total productivity are like two sides of the same
coin or two rails of the same track. Companies that have excellent quality and competitive prices
still cannot do well unless they can bring products of highest value to the marketplace in the
least time possible. Information technologies have made it possible today to order products 24
hours a day from the luxury of one's home through the Home Shopping Network (HSN) and
others, where the customer expects a rapid response rate. In fact, Thurow (1992) predicts that
in the twenty-first century there will be high-tech and low-tech final products, but almost every
product in every industry-from fast food to textiles-will be produced with high-tech processes.
4. It is management's responsibility to bring about technological change and job security
for long-term competitiveness.
Often, technological improvements have been associated with such downsizing. Unfortunately, this is a
poor business strategy because it under-estimates the employees' ability to manage not only existing
technologies that their company has but also their creative capabilities to create and perfect new ones.
Employees must feel that they have job security, particularly when they are responsible for suggesting
and implementing new technologies. They feel betrayed after they spend hours of hard work designing a
technologically advanced environment for greater competitiveness, only to find themselves victims of
their own making. This need not be the case. Companies often spend millions of dollars trying to
mitigate the negative effects of low morale, job dissatisfaction, and consequent low productivity,
following a layoff or cost-cutting measure, right after a major technological change.
5. Technology must be the "servant," not the "master"; the "master" is still the human
being.
Until recently, we used to be the masters of technology, our servant. We used to drive
technology, but today we have become technology's servant, and technology is driving us. We
believe that we have crossed a "technology threshold," whereby our response to technology has
become one of catching up. Many companies are unable to cope with the dramatic changes
taking place in the very nature of technologies. This, in turn, puts a company in a reactive
posture, rather than a proactive one. Companies which are learning the art of managing new
technologies have a better chance at being a technology master instead of a technology
servant. The chaos that companies face today in responding to "rapid technologies" can be
harnessed as a positive strategy to create opportunities for new products and/or services. Cable
companies will soon be in the computer business; and computer companies, in the
telecommunication business. It is impossible to even conceive the extent of the technological
integration revolution we will be facing even before we enter the twenty-first century. Our
wristwatches might become microcomputer devices, working as remote-control units and
information retrieval systems. We might see a series of technology thresholds bombarding us in
the years to come, and every time we cross one of them, companies have an opportunity to
convert technological chaos into economic opportunities.
6. The consequences of technology selection can be more serious than expected
because of systemic effects.
This principle has major impact on the economic viability of the twenty-first-century organization,
because we will be selecting multiple technologies with a rapidity that is hard to comprehend at
this time. Product technologies will become obsolete in such short periods of time that they will
resemble the toy industry, where the average shelf life of a product may be only one season or
sometimes only a month. We are already beginning to see personal computers fall into this
category. In the early 1980s, when the personal computer was something new to all of us, the
average shelf life was approximately 4 to 5 years for a model to become obsolete. Today, just
13 years later, the average shelf life has been whittled down to less than 1 year. By the time a
company decides to update its PC technology to state of the art and acquire it, that technology
would just become obsolete. In anticipation of even greater obsolescences, companies will
usually wait for newer models in both hardware and software. The rapid turnover in both of
these categories of technologies makes it even more difficult to implement newer ones.
7. Continuous education and training in a constantly changing workplace is a necessity,
not a luxury.
Companies have traditionally slashed the education and training budgets during times of
economic downturn. Today, this would be a foolish strategy, because most employees know
how to use process and information technologies to the fullest extent. Having spent millions,
and sometimes billions of dollars in such technologies, it would be most uneconomical not to get
the most out of these expensive technologies.
Sometimes, a million-dollar piece of equipment has a 20 percent downtime, costing hundreds of
thousands of dollars in lost revenues, simply because operators and engineers have not been
trained in all aspects of its operation. The more the education and training for managing
technologies, the greater the utilization rates would be, and hence, the greater the economic
leverage. For example, in a multinational bank, such as Citibank, the technology group strives
hard for customers to do worldwide banking in anyone of 14 languages. The company spends
much time and energy educating and training the personal bankers, the customer service
representatives, and others, in an effort to offer their clients the ever-increasing portfolio of
products and services in a competitive manner.
8. Technology gradient is a dynamic component of the technology management process,
to be monitored for strategic advantage.
The term technology gradient refers to the technical advantage an enterprise enjoys with
respect to its licensees and its competitors. Normally, most sensible multinationals maintain a
sufficiently high technology gradient with respect to their licensees, particularly if the latter are
even remotely associated with a product line that competes anywhere in the world. This is
particularly true when the technologies are radically new, for example, biotechnology, global
networking technology, etc. Technology gradient, which is the subject of another chapter in this
handbook, is a powerful concept for managing the technological advantage that the company
enjoys with respect to its competition worldwide. Briefly, a company monitoring its technology
gradient can be in one of four postures: technology leader, technology follower, technology
yielder, or technology loser. Depending on the technology advantage a company wishes to
enjoy, it must consciously position itself as one of these.
9. The RTC factor must be carefully analyzed and meticulously monitored for gaining the
most out of any technology, particularly a new one.
The RTC factor refers to the magnitude and nature of resistance to change. Unfortunately, very
little is known about the process of the RTC factor, and the rational means to minimize it. At the
same time, however, we now know that a high RTC factor can lead to work slowdowns, poor
employee morale, high maintenance costs, and even serious sabotages. Management has to
recognize that a creative, lively workforce is better than stagnant, high-priced technology.
Research shows that when new technologies are implemented, "total productivity" at first drops
because of the natural response of employees-resistance to accept the new technologies as
viable means-before it picks up again.
The competitive threat of a new technology-based business paradigm (and its early
implementation success) does often, unfortunately, prolong the last gasps of life in the old
technology because it temporarily forces a really serious competitive pressure on the old
technology. Under this real threat, it is amazing how much excess effort, costs, and
inefficiencies can be wrung out of the last defense stand of the "old guard." It is usually a
wasted effort, which delays the acceleration of the inevitable new "S" curve and prolongs the
agony of the old.
10. Information linkage must keep pace with technology growth.
As pointed out during previous discussion, information networks are evolving so rapidly that
unless companies take advantage of linking up to such networks, they lose opportunities for
new revenue streams. For example, companies that quickly capitalized on the accessibility to
the Internet increased their market share through an exposure of their products and/or services
to millions of people around the world. We barely understand the potential of the Internet
through the World Wide Web (WWW).
1. Within a company, it has become an absolute necessity to keep all the employees informed
of the latest technological developments within their own company so that unnecessary
duplication of costly effort is avoided, and product changes and client updates are offered on an
on-line basis so that customer responsiveness can be in real time. Time lags can cause serious
miscommunications, particularly with multinationals. For example, if a component is eliminated
in a product and this information is not communicated to the company's worldwide spare-parts
inventory system, retail clerks somewhere in Indonesia or Taiwan may still be
carrying the part on shelves unnecessarily, increasing their inventory carrying costs. Companies
like Caterpillar and International Harvester maintain global inventory management systems so
efficiently that within 24 hours they can have a part made available to any retailer around the
world. In such situations, this tenet has even greater relevance and respect.

3. Explain the five stages of innovation process which is based on the

pioneering work of Edward B. Roberts. What are the steps involved in
measuring innovative performance?
Stage 1: Recognition of Opportunity. In most cases, the innovative process is prompted by an
opportunity to fill a market need (market-pull) and/or exploit a technology (technology-push).
These opportunities could be for new or improved products, processes, or services. The
potential customer could be internal or external to the organization.
Stage 2: Idea Generation, Evaluation, and Selection. This stage is dominated by the search for
ideas to capture the opportunity identified in stage I. This might include formal RD&E processes
or informal thinking. Results may vary from an orally communicated idea to formal concept
papers, designs, prototypes, and feasibility studies. Further, the idea generation process may
vary, depending on company culture and management philosophy. They range from
incremental to breakthrough innovation and from top-down direction to bottom-up innovative
efforts, typical for continuous productivity improvements.
Stage 3: Product Development. This stage involves transfer of the new concept to the market. It
is a problem-solving stage which takes the advanced concepts and ideas generated in stage 2
and develops them into a working prototype or pilot production run. Strong cross-functional
linkages must be established and maintained among all functions engaged in this stage 3
technology transfer which usually involves highly co-ordinated efforts among R&D, product
development and engineering, prototyping, manufacturing, marketing, and a host of support
functions such as finance, product assurance, field services, and subcontractors.
Stage 4: Full-Scale Development, Volume Production, and Commercialization. This stage takes
a proven concept from stage 3 and transforms it into a final product according to predefined
specifications, reliability, cost, production volume, and schedules. Well-established
organizational linkages are crucial to transferring technology into the market and to leveraging
an organization's production capabilities, as well as to integrating all company resources into
the total innovation process, throughout its five stages.
Stage 5: Technology Utilization and Diffusion into the Marketplace. This stage involves the
manufacturing, market promotion, distribution, and technical support of the new product or service.
This stage usually requires the largest investment of resources, often far exceeding the combined cost of
stages 1 through 4. It is also associated with a large risk factor, as demonstrated by the statistical
realities that, on average, only one-third of products entering this state ever achieve a break-even
return on their investment. Successful companies recognize the complexity and multi-functionality of
the underlying process. Successful companies also understand that such complex business processes do
not perform well by themselves, but must be managed carefully. This includes the continuous study of
these processes, defining measurements, documentation, comparison, standardization, and control
toward continuous improvement.

Measuring Innovative Performance

Innovative performance involves complex sets of interrelated variables, which fluctuate with the cultural
and philosophical differences among departments and companies. Most managers agree, however, that
certain metrics, such as (1) the number of innovative ideas, (2) the number of new product concepts
implemented, (3) cost and performance improvements, and (4) patent disclosures, are important factors
in contributing to a company's innovative performance. Yet, the individual measurement of quality and
effectiveness of such innovative contribution is very fuzzy and often impossible to obtain with any
degree of confidence. These measurements of innovative performance are even more difficult in non-
engineering areas, such as manufacturing, marketing, and product assurance. In these areas innovation
and creativity are often critical to meeting customer expectations or delivering results according to plan.
However, traditional measures of innovative performance seldom apply. In many cases, outcomes are
part of collaborative efforts among many departments and individuals without any useful metrics for
measuring important contributions such as agility, change orientation, multifunctional cooperation, and
customer satisfaction. Therefore, it is not surprising that managers in technology based companies, for
most functions, including R&D and engineering, use overall judgment as the only principal measure of
innovative performance. However, in support of such an overall judgment, specific subsets of
parameters, some of them quantifiable, can be developed and used to (1) articulate desired innovative
behaviour and characteristics to members of the work team; (2) benchmark innovative performance,
especially on the organization or team level; (3) engage in focus-group discussions toward organizational
improvement of innovative performance; and finally (4) support managerial judgment of overall
innovative performance and salary reviews.

Assignment Set-2

1. What is Technology Strategy and what is its importance at the corporate

level? What are the steps involved in planning Technology Strategies?
Technology Strategy
Whether or not an organisation would generate or develop its own technology and with what intensity
it would pursue the efforts in this respect would depend upon technology strategy it has formulated or
adopted. Let us, therefore, first see what a technology strategy is, what could be the different types of
technology strategies, why is it important to have a technology strategy, and how could we link it with
the overall business of an organisation. Though the term 'strategy' is commonly used as an antonym of
'tactics', it actually implies long-term, purposeful and interconnected efforts, while tactics imply action
to deal with immediate specific problems. 'Technology Strategy" may accordingly be defined as a
strategy to deal with the technology and related issues at macro and micro levels, with respect to set
objectives.
Importance of Technology Strategy
Mark Dodgson has identified the following five issues which bear on the importance of corporate
strategy for technology:
i) The need to cope with technological uncertainty;
ii) Complexity and discontinuous nature of technological development;
iii) The need for technology to be viewed in a global context;
iv) The need to attain complementarities, and
v) The relationship between corporate strategy technology and public technology policies.

In planning technology strategy for competitive advantage, the following steps have been
suggested:
1. Identify all the distinct technologies and sub-technologies in the value chain.
2. Identify potentially relevant technologies in other industries or those under scientific
development.
3. Determine the likely path of change of key technologies.
4. Determine which technologies and potential technological changes are most significant for
competitive advantage and industry structure.
5. Assess a firm's relative capabilities in important technological aspects and the cost of making
improvements.
6. Select a technology strategy, encompassing all important technologies, that reinforces the
firm's overall competitive strategy.
7. Reinforce business unit technology strategy at the corporate level.

2. What is Technology Forecasting? Explain its role at national and enterprise

level. What purpose does a technology forecast serve?

Technological forecast is a prediction of the future characteristics of useful machines, products,

processes, procedures or techniques. There are two important points implied in this statement,
viz.:
a) A technological forecast deals with certain characteristics such as levels of technical
performance (e.g., technical specifications including energy efficiency, emission levels, speed,
power, safety, temperature, etc.), rate of technological advances (introduction of paperless
office, picture phone, new materials, costs, etc.).
b) Technological forecasting also deals with useful machines, procedures, or techniques. In
particular, this is intended to exclude from the domain of technological forecasting those items
intended for pleasure or amusement since they depend more on personal fads, foibles or tastes
rather than on technological capability.

Necessity for Technology Forecasting

Historically, the U.S. Navy was one of the major institutions which started formal technological
forecasting to support the preparation of a fifteen year plan to identify the likely opportunities
and threats, and to develop a technological setting for the future. Technology forecasting has
now assumed importance in India due to the structural reforms introduced in our economic
system with a view to create a market-driven economy. Essentially, technology forecasting is
used for the purpose of:
a) Scanning the technological environment;
b) Anticipating emerging technological changes;
c) Identifying suitable technologies by evaluating various alternatives;
d) Planning for technologies for future needs.

We can identify four elements of a forecast which can be specified and/or estimated. These are
(a) the time period, (b) the nature of technology, (c) .the characteristics to be exhibited by the
technology, and (d) the probability associated with the characteristics. The time period may be
stated generally, or it may be given precisely. The technology being forecast may be narrowly
defined, or it may encompass a very broad range. The characteristics may be stated only in
general terms, or may be given precise quantitative values. Martino has shown that there is
really no alternative to forecasting. He considered various possible alternative scenarios like (a)
regimes of no forecast (tacitly assuming there would be no change in the environs in future), (b)
future is a total gamble and it could be met without any anticipation, (c) resting on laurels of the
glorious past presuming that it would bring a glorious future, (d) dependence on limited
forecasting, without taking into consideration all round changes in the environs, and (e) taking
crisis action to meet the situation. All of these, he showed, may spell disaster for a firm or an
organization.
All these discussions basically highlight one very important aspect that we are dealing with a
probabilistic situation and we should gear ourselves to meet it with a certain degree of
confidence and with all elements of surprise anticipated. A logical question that follows is: How
good is the forecast? Will it come true? To answer these questions, let us classify situations
according to the degree of control the decision maker can exercise. There may be three types of
situations:
a) Absolutely no control, b) Partial control, and c) Full control

It is essential to recognize that a forecast does not put anything into the future. Instead, it tells
only of the implications of available information about the past. These implications are
connected with the future through a logical framework. Hence, the utility of a forecast for
decision making purposes depends on the validity of the logical framework it uses and the
extent to which it extracts all the implications which are contained in the body of available
information. This ability to evaluate the utility of rational and explicit forecasts is, of course, one
more reason to prefer this type of forecast. However, it may be emphasised that following a
certain procedure may not guarantee the forecaster against error; it may only reduce the
likelihood of error. Hence, the forecaster is never absolutely certain that he has prepared the
most useful possible forecast with the available data he has and the resources he has
employed.
The forecast serves as an input to the process of making plans and decisions. Martino has
described the role of the forecast in planning as follows:
a) The forecast identifies limits beyond which it is not possible to go.
b) It establishes feasible rates of progress, so that the plan can be made to take full advantage
of such rates; conversely, it does not demand an impossible rate of progress.
c) It describes the alternatives which are open and can be chosen from.
d) It indicates possibilities which might be achieved, if desired.
e) It provides a reference standard for the plan. The plan can thus be compared with the
forecast at any point in time, to determine whether it can still be fulfilled, or whether, because of
changes in the forecast, it has to be changed, and
f) It furnishes warning signals, which can alert the decision maker that it will not be possible to
continue present activities.
If the forecast makes a decision maker aware of alternatives which he might not have discovered
otherwise, it has increased his degree of freedom. The important point is that the purpose of the
forecast is to improve the quality of his decisions and not to force him to accept a particular decision.

3. How does technology affect business plan of an organization? Explain with

examples. Do you agree that technology and technology management are part
of the total business activity or business plan of an enterprise?

Role and Importance of Technology Management

Technology and management of technology are critical for an enterprise for its successful
operation on long-term basis. Technology management is, however, a part of the total
management system. There are three basic considerations for starting any new firm based on
technological innovation.
1. The idea for a technological innovation;
2. A potential market;
3. Team work in both technological and business expertise.

The above points underline the need for interweaving the technology framework with other
areas of business in an enterprise. The idea of a technological innovation should be based or
linked with the potential market and the technology team should closely interact with the rest of
the divisions of the enterprise leading to successful logical conclusions in terms of products/
processes to be developed as per the objectives set in the beginning. This strategy is best
reflected in the form of a “Business Plan” of an enterprise which needs to be prepared and
approved before starting the new business.
The Business Plan: It is a strategic summary of a new venture. Its purposes are:
1. To ensure, by clear focus in strategy, that important points necessary to the success of any
business venture have been considered; and
2. To persuade financial investors to invest in the new venture. A new venture business plan
could include the following:
It is thus clear from the above that technology and technology management are only a part of the total
business activity or business plan of an enterprise.

Managing technology means using new technology to create competitive advantages which is quite a
difficult job, partly due to differing cultures in a company. Technology is often thought to be solely the
domain of the scientific and engineering personnel of an organization. Yet, successful business use of
technology requires strategic decisions about technology by personnel in other functional areas, such as
production, marketing, sales, finance, and so on. Thus, the two cultures – technical and functional –
need to be bridged, and management should integrate technology strategy with business strategy. This
is the essence of technology management.