Chapter 17 Flashcards
1
Q
TECHNOLOGY AND INNOVATION
innovation
A
- The introduction of new goods and services; a change in method or technology; a positive, useful departure from previous ways of doing things
- three fundamental types :
1. Product innovation : do they change is a change in the outputs (goods or services) the organization produces. If BP’s research into biofuel resulted a new kind of fuel to sell, this would be an example of product innovation.
2. Process innovation : is a change in the way outputs (goods or services) are produced. If BP’s research into biofuels resulted in a more efficient way to produce fuel from sugarcane, this would be an example of process innovation. Other examples of process innovation are flexible manufacturing processes, including mass customization, just-in-time, and concurrent engineering.
3. Business model innovation : refers to a change in the way the organization creates and delivers value. The change may affect any element of a company’s business model: its customer value proposition (the basic problem and it solves, such as eco-friendly fuel for about the same cost as fossil fuel), its profit formula (the financial roadmap for its success), its key resource (people, technology, facilities, brand, etc.), and its key processes. Example of business model innovation include Amazon (bookselling), Netflix (video rental), and NetJets (business travel)”
2
Q
TECHNOLOGY AND INNOVATION
technology
A
- The systematic application of scientific knowledge to a new product, process, or service
1. There must be a need, or demand, for the technology. Without this need driving the process, there is no reason for technological innovation to occur.
2. Meeting the need must be theoretically possible, and the knowledge to do so must be available from basic science.
3. We must be able to convert the scientific knowledge into practice in both engineering and economic terms. If we can theoretically do something but doing it is economically impractical, the technology cannot be expected to emerge.
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.
3
Q
TECHNOLOGY AND INNOVATION
technology life cycle
A
- A predictable pattern followed by a technological innovation, from its inception and development to market saturation and replacement
4
Q
TECHNOLOGY AND INNOVATION
Five groups of adopters of new technology
A
- Innovators :
- are adventurous and willing to take risks
- they are willing to pay a premium for the latest and newest technology or product to come along and to champion it if it meets with their approval
- The enthusiasm of innovation adopter is no guarantee of success – for example, the product may still be too expensive for the general market
- but lack of enthusiasm among this group is often a sign that the new technology has serious problems and more development is needed - Early Adopters :
- is critical to the success of a new technology because its members include well respected opinion leaders
- are often people or organizations to which others look for leadership, ideas, and up-to-date technological information - Early Majority :
- are more deliberate and take longer to decide to use something new
- often they are important members of a community or industry, but typically not the leaders
- it may take a while for the technology or new product to spread to this group, but once it does, use will begin to proliferate into the mainstream - Late Majority :
- members of this group are more skeptical of technological change and approach innovation with great caution, often adopting only out of economic necessity or increasing social pressure - Laggards :
- often isolated and highly conservative and their views, laggards are extremely suspicious of innovation and change
5
Q
MANAGING INNOVATION IN A COMPETITIVE ENVIRONMENT
Advantages and Disadvantages of Technology Leadership
A
- Advantages :
- first-mover advantage
- little or no competition
- greater efficiency
- higher profit margins
- sustainable advantage
- reputation for innovation
- establishment of entry barriers
- occupation of best market niches
- opportunities to learn
- Disadvantages :
- greater risks
- cost of technology development
- costs of market development and customer education
- infrastructure costs
- costs of learning and eliminating defects
- possible cannibalization of existing products
6
Q
ASSESSING TECHNOLOGY NEEDS
technology audit
A
- process of clarifying the key technologies on which an organization depends
- The most important dimension of a new technology is it’s competitive value.
- Emerging technologies : are still under development and thus are unproved. They may, however, significantly alter the rules of competition in the future. Managers will want to monitor the development of emerging technologies that may not yet need to invest in them until they have been more fully developed.
- Pacing technologies: have yet to prove their full value but have the potential to alter the rules of competition by providing significant advantage. For example, when first installed, computer aided manufacturing was a pacing technology. It’s full potential was not yet widely realized, but companies that used it effectively developed significant speed and cost advantages. Managers will want to focus on developing or investing in pacing technologies because of the competitive advantages they can provide.
- Key technologies : have proved effective, but they also provide a strategic advantage because not everyone uses them. Knowledge and dissemination of these technologies are limited, and they continue to provide first mover advantages. For example, a more powerful, proprietary processing chip by Intel is a key technology for that organization. Eventually, alternatives to key technology can emerge. But until then key technologies can give organization managers a significant competitive edge and make it much more difficult for new entrants to threaten the organization.
- Base technologies : are those that are commonplace in the industry; everyone must have them to be able to operate. Thus they provide little competitive advantage. Managers have to invest only to ensure their organization’s continued competence and the technology.
7
Q
SOURCING OR ACQUIRING NEW TECHNOLOGIES
make-or-buy decision
A
- The question an organization asks itself about whether to acquire new technology from an outside source or develop it itself
- some of the most common alternatives :
- internal development, purchase, contracted development, licensing, technology trading, research partnerships and joint ventures, acquisition of an owner of the technology
7
Q
TECHNOLOGY AND MANAGERIAL ROLES
chief information officer (CIO)
A
- executive in charge of information technology strategy and development
- coordinate the technological efforts of the various business units; act as a voice for technology and the top management team; identify ways that technology can support the company’s strategy; supervise new technology development; and process the technological implications of major strategic initiatives such as acquisitions, new ventures, and strategic alliances; they also manage their organization’s information technology (IT) group
9
Q
TECHNOLOGY AND MANAGERIAL ROLES
technical innovator
A
- A person who develops a new technology or has the key skills to install and operate the technology
- this person possesses the requisite technical skills, but he or she may not have the managerial skills needed to push the idea forward and secure acceptance within the organization
10
Q
TECHNOLOGY AND MANAGERIAL ROLES
product champion
A
- A person who promotes a new technology throughout the organization in an effort to obtain acceptance of and support for it
- The champion can be a high-level manager but often is not.
- If the champion lacks the power or resources to make the required changes independently, she or he must convince people who have such authority to support the innovation
11
Q
TECHNOLOGY AND MANAGERIAL ROLES
executive champion
A
- an executive who supports a new technology and protects the product champion of the innovation
- sponsorship comes from the executive champion
- without this support and protection, the product champion, and thus the new technology, could not succeed
- resources needed to develop the innovation would be unavailable, and without protection, the champion would not be allowed to continue promoting the change
12
Q
ORGANIZING FOR INNOVATION
development project
A
- A focused organizational effort to create a new product or process via technological advances
- typically features a special cross functional team that works together on an overall concept or idea
- it’s success depends on how well individuals work together to pursue a common vision
13
Q
ORGANIZING FOR INNOVATION
sociotechnical systems
A
- 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
13
Q
REVIEW
List the types of processes that Spur development of new technologies.
A
- Forces that compel the emergence of a new technology include:
1. A need for the technology
2. The requisite scientific knowledge
3. The technical convertibility of this knowledge
4. The capital resources to fund development
5. The entrepreneurial insight and initiative to pull the components together
14
Q
REVIEW
Describe how proceed through a lifecycle.
A
- New technologies follow a predictable life cycle:
- First, a workable idea about how to meet a market need is developed into a product innovation. Early progress can be slow as competitors experiment with product designs.
- Eventually a dominant design emerges as the market accepts the technology, and further refinements to the technology result from process innovations.
- As the technology begins with to approach both the theoretical limits to its performance potential and market saturation, growth slows and the technology matures.
- At this point, the technology can remain stable or be replaced by a new technology.
