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Agric., Bus. and Tech. Vol.

5, pp 99-109 (2007)
Copyright 2007 Society for Agriculture, Business and Technology
Agriculture, Business
Printed in Nigeria. All rights of reproduction in any form reserved. and Technology
ISSN 2007-0807
Journal

Conceptual Framework for Formulating Technology Strategy: Technology


Resource/Product Approach
A. Ahmad
School of Management Technology, Abubakar Tafawa Balewa University Nigeria
_________________________________________________________________
Abstract
Despite growing importance of technology strategy in achieving operational efficiency and competitive
advantage, there is rarely a coordinated literature on formulating and implementing technology strategy.
Most literatures are predominantly specialized and highly focused as a result there exist preponderance
of disjointed avalanche of technology strategies that rarely capture the complete picture. This paper
proposes the formulation of technology strategy by exploiting the dichotomous nature of technology. In
addition to exploring technology resource strategy-the art of managing corporate technology inputs, and
technology product strategy-the art of managing corporate technology offering, the paper argues the
need to harmonize these two distinct fields of technology strategy with proper organizational
disposition-creating an enabling organizational set-up that engenders the effective formulation and
implementation of technology strategy. The paper concludes that organizations that fashion their
technology strategy on this holistic view are better poise to exploit and leverage the complexities of
todays highly technology influenced business environment.

Key Words: Technology, Technology Strategy, Technology Resource & Product, Organizational
Disposition
_________________________________________________________________
Introduction operational and competitive capabilities, given
The importance of technology management technologies complexities. Secondly, how can the
cannot be over-emphasized, especially in todays manufacturers of technology (especially high-tech)
world of technology avalanche vis--vis the increasing products market these products given their
reliance on technologies (machineries and peculiarities? Finally, what type of organizational set-
equipment) in all areas of organizational activities. As up is required to effectively achieve the above
new technologies are invented and old ones mentioned? The hunger for answers to these
improved, firms try to integrate them for optimal questions has resulted to ever increasing growth of
organizational performance. Similarly, increase in technology management literature over the years.
governmental, organizational, and societal reliance on Most literatures are specialized and highly focused,
different kinds of technologies demand an increase in and target either technology resource strategy
the number and variety of firms offering technology (Ahmad, 2005; Carr, 2004; Farrell, 2003;
products. Narayanan, 1997; Zayglidoupolous, 1999),
This scenario presents a challenge to technology product strategy (Kotler, 2003; Kurzweil,
business organizations in three unique but 2004; Moore, 1991 & 1995; Norman, 1998;
overlapping ways. First, what, when and how should Rogers, 1983) or the right organizational disposition
organizations acquire, utilize, maintain, upgrade, and (Burgelman, Christensen & Wheelwright, 2004;
replace these resources in order to improve their Christensen, 1997 & 2001; Christensen & Raynor

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Conceptual Framework for Formulating Technology Strategy: Technology Resource/Product Approach

2003; Maidique & Hayes, 1984; Pateli & Giaglis, services as well as their production and delivery
2003; Utterback, 1994) for example. systems. Zayglidoupolous (1999) described
As such there are limited literatures that technology resource as the codifiable and non-
capture clearly the three management challenges and codifiable information and knowledge that is
their interdependence, making it difficult for firms to embedded partly in the manuals and standard
develop a comprehensive technology strategy. The practices, partly in the machinery and equipment, and
main aim of this paper is to propose a coordinated partly in the people and social organization of a
view of formulating technology strategy. Others particular organization. Hence technology resources
include expanding the literature on classifications of comprise three elements: machines (tools, structures,
technology resource an essential ingredient for equipment), men (skills, expertise, knowledge) and
formulating technology strategy and conceptual method (relationship within and between men and
aspects of technology product. The next part of the machines) and all organizations (profit, non-profit,
paper offers a brief explanatory definition of government) require technology resource to operate.
technology and technology change, followed by Ahmad and Ahmad (2006) viewed
discussion on technology resource strategy, technology products as unique corporate offer to the
technology product strategy & organizational markets that are used. In essence consumption of
disposition, the last part of paper explores technology technology product does not lead to its depletion,
strategy by creating a good alignment between the unlike non-technology product. Examples include
three areas of technology strategy in discussion and computer, software, television, satellite signals,
conclusion. mobile phones, GSM service. From the above it can
be deduced the following about technology product.
Understanding Technology First, it has two (2) elements, tangible (TV, laptop,
From management point of view technology car) and intangible (software, GSM service, satellite
can be viewed from two distinct but intricately signals) second, not all organizations produce
overlapping areas. Technology can be viewed from technology product.
what organizations require to operate-technology The two areas of technology are highly
resource and what organization offer to the market- related, since technology product of some firms
technology product. Understanding this represent the technology resource of another, but for
dichotomous perspective of technology provides an the purpose of formulating technology strategy,
important premise for formulating a thorough viewing each differently will enable us understand the
technology strategy. Burgelman, Maidique, and characteristics of each, the different set of
Wheelwright, (2001), viewed technology resource as management challenges they pose and the need for
the theoretical and practical knowledge, skills, and unique organizational approach. In a rare definition
artifacts that can be used to develop products and that captures the dichotomous nature of technology

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Kurzweil (1998), argued that technology goes subsistence. Absence of these technologies results to
beyond mere fashioning (product) and use of tools immediate disruption of the normal business
(resource); it involves a record of tool making and a activities, for example: machinery-air craft to an
progression in the sophistication of tools. airline firm; men-engineer to a construction firm; and
In general, there are two types of account update-in banks. Auxiliary Technologies on
technological change, that traverse technology the other hand are technologies that organizations
resource and product, continuous/incremental need in order to out perform competitors and
change on one hand and generally improves its back-office and front-line
discontinuous/breakthrough change. The former operations. Examples are machinery-satellite TV in
refers to gradual, often indiscernible technological patients room and men-security personnel in a
flows, that improve on existing products or processes, hospital. Absence of auxiliary technologies simply
which are not attributed to a single inventor. The means poor competitive position and does not
later, in contrast, involves revolutionary technological necessarily lead to immediate disruption of corporate
advances due to the invention of new products or operations. However, depending on the regulatory
processes, and quite often are attributed to a framework, structure and sophistication of the
particular inventor. The consensus of literature market, toying with auxiliary technologies can be very
however, is that the two are not mutually exclusive, costly (Ahmad, 2005), in the airline industry for
that is, technological change is characterized by long example; competition is on the basis of auxiliary
period of incremental change punctuated by technology such as onboard TV, games and radio
technological breakthrough (Zayglidoupolous, stations. In the same study Ahmad observed that the
1999). The pace of technological change has greatly effectual technologies varied in terms of importance
accelerated over time, for example the rate of between and within an organization(s), for example it
technological explosion in the first two decades of was found out that while refrigerator represent a key
the twentieth century matched that of the entire technology to the laboratory department it is no
nineteenth century (Kurzweil, 1998). Technology more than an auxiliary technology in the radiography
strategy is hence concerned with skillful deployment department of the same hospital.
and offering of technology for competitive advantage. Ineffectual technologies on the other hand
are technologies that are virtually not relevant to an
Technology Resource organization or are more than the quantitative
There are basically two main categories of and/or qualitative need of an organization.
technology resources based on organizational Ineffectualism is a serious strategic issue to
requirement; effectual (key and auxiliary) and organizations as it drains organizational resources
ineffectual technologies. Key Technologies are and consumes space. Despite these however, few
technologies that an organization relies on for its organizations are completely immune from

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Conceptual Framework for Formulating Technology Strategy: Technology Resource/Product Approach

ineffectualism, this is due to the multiplicity of where whole, components, spare parts and
factors, such as over stocking of effectual repairs/upgrades are readily available in the
technologies, poor maintenance culture, sudden metropolitan market, at affordable price, without
change in consumers taste, rapid invention of new any legal or political barrier. These categories of
technologies and bandwagon effect. technologies are known as commonplace
technologies. Road transportation firms are
Analysis of Organizational Technology Reliance example of industry with easily reachable
Combination of six (6) overlapping factors technologies. From the vehicles, spare parts,
determines organizational technology resource regime maintenance, drivers are all easily reachable.
which significantly moderate the strategic importance Specialty technologies on the other hand are
and hence the task of managing technology resource difficult to access, recruit, obtain, create, buy,
(Ahmad, 2006). They include: Variety; availability; upgrade, repair and/or perform. Specialty
easiness; stability; variability, controllability and technologies are unavailable in the municipality,
durability: neighboring towns and in some cases within a
Variety: measures the extent to which organizations country. Airline firms are examples of
depend on multiple and diverse technologies, organizations that relied on specialty
task of technology resource management technologies i.e. aircraft and pilots.
becomes strategic, where organizations rely on Easiness: measures the simplicity of using
multiple and diverse technologies and vice-versa. organizational technology inputs. Where
Tertiary hospitals and conglomerates are organizational technologies are easy to operate,
example of establishments that require diverse perform, maintain etc with little or no formal
and multiple effectual technologies. Hospitals rigorous training, such technologies are referred
for example require Machine-stethoscope, x-ray to as simple. However, technologies are complex
machine, clinical bed, stretcher, refrigerator, when operators require extensive training,
incubator, scanning machine, kidney dish, etc; inference and/or experience to operate,
Men-physician, pharmacist, nurse, laboratory maintain, and perform. A typical example of
scientist and technician, midwife etc. easily available but complex technology is
Transportation firms, on the other hand such as Stethoscope.
airline and motor companies require relatively Stability: measures the rate of changes taking place
few assortments of effectual technologies. on organizational technology inputs.
Availability: measures the extent to which Technologies that are constantly passing through
organizational technology inputs are easily revolutionary, incremental and disruptive change
accessible physically, legally, financially and are referred to as unstable technologies. Stable
otherwise. Technologies exhibit high availability technologies are technologies that stay for a long

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time before being upgraded or are rarely affected later part of the paper.
by discontinuous change. Information In general, technology resource strategy
Communication Technologies are example of includes methods and responsibility of technology
constantly changing technologies. acquisition; policy on obsolescences, update and
Variability: measures the extent to which different retirement; determining organisational technology
technologies perform same or similar function. need; partnership and alliance; technology
For example organization can send and receive competence; technology forecasting and technology
message via a host of technologies such as Fax, planning (Ahmad, 2006; Bateman & Snell, 1999;
telephone, internet, cell phone, pager etc. The Burgelman et al., 2001; khalil, 2000).
strategic importance of technologies increases
with their variability. Technology Product
Controllability: measures the extent to which Technology products are often classified
organizational technology inputs to be useful based on five (5) overlapping perspectives;
without external technology support. sophistication, tangibility, life cycle, contact duration,
Technologies are controllable when and market place effect.
organizations perform their normal operations Sophistication: Low technologies are simple
without alliance, partnership or support from and stable technologies that are easily produced, such
external technologies. Uncontrollable as plates, bucket, chairs, etc low technology products
technologies in contrast, are technologies that may be exclusively produced from a single matter.
relied on technologies produce and/or control High technologies are complex and unstable
by other firms to operate. Airlines depend on technologies that are rarely utilized in isolation and
airports, radar, etc while GSM (SIM) requires are made from multitude of many complex
handsets to be useful. technologies. Aircrafts, computers, and handsets are
Durability: measures the expected life span of examples of high tech. Medium technologies fall in
technologies. Some organizations largely depend between high and low tech (Ahmad, 2006; Kast &
on long term technologies, while others in Rosenzweig, 1985; Khalil, 2000). Tangibility:
addition to long duration technologies also Technology product can be either tangible such as
heavily rely on short term technologies and car, fridge, watch, or intangible such as GSM service,
disposal technologies. Medical institutions satellite signal or software. Contact Duration:
represent examples of sector that heavily uses Continuous technology products require unending
disposable technologies, such as naso-gastric relationship between technology firm and the
tube, canular, scalp vein needle, cables etc. The customers, many intangible technologies such as
implication of technology regimes to overall telecommunications services requires incessant
corporate technology strategy is discussed in the relationship between the telecoms firms and the

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Conceptual Framework for Formulating Technology Strategy: Technology Resource/Product Approach

subscribers in order to continuously access the and improved technologies dominate them in all
services. Discontinuous technology products only facets of customer value assessment. Some
require intermittent relationship with the technology disappearing technologies are submerged quickly and
firms, e.g. Software-periodic update and Motor unnoticeable, others disappeared slowly but steadily,
vehicle-maintenance. no matter the nature of disappearance however,
Anthes and Mitchell (2003) observed that
Life cycle: New and emerging technologies monitoring of disappearing technologies, should
are technologies that allow users to perform a form part of technology strategy in order to avoid
function that was not possible to be performed prior last minute expensive changes. Marketplace Effect:
to their inventions, or present a new and better way Convergent technologies (also known as packet
of performing an old function. New technologies can technologies) are technologies that perform the
be further sub-divided into first beneath the sky, first function of two or more different technologies. One-
beneath the nation, and first beneath the company. in-four digital equipment is a typical example that
Not all new technologies matured because of high enables; printing, faxing, photocopying, and scanning.
R&D on improvement, lack of loyalty and ease of Convergent technologies offer important benefits to
piracy. Incremental technologies (also referred to as consumers, such as space management, less fatigue,
sustaining technologies), usually improves a key overall cost savings. There are two main types of
parameter of an existing technology value equation convergent technologies; simple and complex, where
(Christensen, 1997), for example, increases speed, the multiple functions performed are related or
efficiency, quality, capacity, reduces error rate and otherwise respectively. Gartenberg (2002) argued
portability. Incremental technologies are also further that, convergent technology may compromise
divided according to the intensity of the functionality and results to higher total cost of
improvement i.e. minor or radical improvement. ownership, he also argued that their proliferation is
Incremental technologies obviously have lesser mainly influenced by technology vendors technical
acceptance problems and R&D expenditure capacity rather than market need. However, virtually
compared to new technologies. Deliberate all new and incremental technologies offer one or
incremental effort usually target safety, compatibility, more elements of convergence. Disruptive
resistant to extreme circumstances, functional and technologies are simple, convenienttouse
physical upgrade among others (Ahmad & Ahmad, innovations that are initially used by only the
2006). Disappearing Technologies are technologies unsophisticated customers at the low end of the
that are steadily fading from the market, because of market (Christensen, 1997). At the time of their
the inventions of new/improved technologies and inventions, their impacts were seen as only
perhaps changes in customer taste. These incremental, if not inconsequential. At the time of
technologies become virtually useless because the new their release disruptive technologies are normally

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inferior and cheaper compared to the technologies firms, their inferior nature gives them ample
they displaced. Disruptive technologies are however, improvements capacity and their simplicity of usage
very difficult to deal with, because their low initial and low cost engenders ease of trials (Ahmad &
profit makes them less fashionable to the established Ahmad, 2006; Christensen, 1997).

Technology
Product

Sophisticat- Market Place Life Cycle Contact Tangibi-


ion Effect Duration lity

High Medium Low Continuous Contact Discontinuous Contact


Tech Tech Tech Tech Tech

Tangible Tech Intangible Tech

Convergent Disruptive New & Emerging Incremental Disappearing


Tech Tech Tech Tech Tech

Fig. 1: Classification of Technology Product

In general technology product strategy managerial strategies.


includes the following activities: timing technology
release and upgrade; deciding the type of technology Discussion & Conclusion
to concentrate during initial offer and upgrade Collective analyses of technology resource
between incremental, disruptive or convergent at and product offer unprecedented opportunities for
appropriate time and market; and the general formulating an effective technology strategy. The
technology product marketing strategy taking into traditional commencement point for formulation
consideration the different types of customers, stages strategy is scope definition. The scope of technology
and the appropriate marketing, technical and strategy for non-technology firms is narrow

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Conceptual Framework for Formulating Technology Strategy: Technology Resource/Product Approach

compared to organizations that offer technology, produce, when and where. For example, where the
since the later manage both technology resource and market is saturated with sophisticated incremental
product. Additionally, even for non-technology firms technologies and the real per capita is coming down
the scope often varies depending on their technology the market is reaped for the introduction of
reliance regime thus, organizations that rely on few disruptive technologies.
varieties of controllable, commonplace, stable and Additionally, the technology resource
simple technologies that exhibit little variability have reliance regime will help organizations to put the
even a narrower scope and vice-versa. Where an seemingly contradictory works of Carr (2004) and
organization realized for example that it relies heavily Hamel and Skarzynski (2001) about being slow and
on an unstable technology with high variability fast in acquiring/adopting new technologies in
organization can use Kurzweil life cycle of perspective, for example where organization/
technology model to analyze and locate the stage the industries largely relies on unstable technologies they
technology lies and hence makes a more informed should be slow acquirers/ adopters of new
long term choice for both technology offering and technology offerings and vice-versa. Likewise where
acquisition decisions. organization/ industry overwhelmingly relies on
Similarly merging the knowledge of uncontrollable technologies alliance, partnership and
technology adoption life cycle model and cooperation should form a considerable part of their
classifications of technology product also enables technology strategy. Similarly, organizational
firms to effectively manage its technology offerings. technology resource reliance regime can enable firms
Hence, for disappearing technology and/or decline to clarify the key technologies upon which it needs to
stage best strategic option form the technology operate and excel in a given environment, and take a
vendors viewpoint is to eliminate the technology more proactive decision on their acquisition. The
from its products line. Kotler (2003) enumerated the circumstance-based theory is also an invaluable tool
cost of non-eliminating weak products as follows: for recruiting (internally or externally) and placing
consume too much managements time; require managers at appropriate technology positions taking
regular price and inventory fine-tuning; involve short into consideration managers previous experience
production runs despite expensive setup times; with different classes of technology products and
require both advertising and sales force attention that technology resource reliance regime.
might be better used elsewhere; affects corporate Although skillful integration of technology
image; more importantly he observes that failing to resource and technology product offers great
eliminate weak products delays the aggressive search opportunity formulating technology strategy,
for new ones. Analyzing classifications of technology however an important prerequisite for effective
product also equipped firms with answer to strategic implementation is designing enabling organizational
questions such as what type of technology to atmosphere. Pateli and Giaglis (2003) argue that

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