Global Business Environment
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Chapter 11 : An overview of Technology
Definition of Technology
The Choice of
Technologies to Develop
Technology Development
Interconnections
among technology developers
Geographical Features of Technology
Networks
Technology Transfer
Impact of Information Technology on
organizations
Characteristics of new technologies
IT and its
Strategic Value
IT does matter.
Chapter Summary
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Technology is the knowledge or methods that are necessary to
carry on or to improve the existing production and distribution of goods,
services, products or processes, and also includes entrepreneurial expertise and
professional know-how. The choice of technology for a company must depend on the
type of competitive advantage it seeks to develop. Such a choice can complement
the firm’s competitive advantage.
The technology chosen must be in tune with the firm's overall strategies. A
thorough analysis of all the firms’ available technologies is necessary to
identify areas where there is scope for cost minimization or product
differentiation. Technology development need not always occur in a single
organization. It can occur in inter-connected networks of organizations such as
industry-university cooperative research centers, R&D consortia, and R&D limited
partnerships also. |
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Universities and firms are increasingly entering
into collaboration to conduct joint research. This type of research
generally involves several corporations and universities. R&D
consortia have been replacing other inter-organizational
alternatives such as licensing arrangements, acquisitions, and joint
ventures since the early 1980s. An R&D consortium can be
defined as a group of firms linked together by cooperation
agreements and conducting their R&D together.
R&D limited partnerships are formed between a general partner and a
group of limited partners. Organizational networks represent some
geographical characteristics based on which we can classify them
into industrial parks or industrial clusters. An industrial park is
an area designed and zoned for manufacturing and associated
activities. This is developed and managed as a single unit. Clusters
rarely come into existence because of government initiatives.
Silicon Valley was not a result of any government policy. The
government does however have an important role to play in nurturing
clusters. Technology transfer is a process that involves
dissemination of commercial technology. It involves communication of
relevant knowledge between a transferor and a recipient. Foreign
firms are the main source of new technology for developing countries
such as India. Technology transfer to host countries happens in two
ways: internal transfer and external transfer.
A technology transfer is said to be an internal transfer when a firm
transfers technology to its affiliates that are under its ownership
and control. It is said to be an external transfer when the
recipient is a different firm.
In the 1990s, companies invested lot of resources in deploying new
information technologies. They spent millions of dollars on
sophisticated software packages, tele-conferencing equipment,
broadband networks, mobile communications, and other digital
technologies. But now, firms have to be selective while choosing
technologies.
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