Ch. 2

Ch. 2
3 Level
1. Task Environment
2. Industry/competitive Environment
3. General or Macroenvironment
FIRM
Industry/
Competitive
environment
Refer to the set of customers, suppliers, competitors, and other
environmental agencies (such as trade associations) directly
related to the firms.
Example: negotiate a new source of capital with potential
investors, enter into a component co-development agreement
with its supplier, or attend to upgrading its service to a particular
group of customers.
That is comprised of a firm and its competitors
functioning in the same industry.
At this level, environmental factors directly
affect all competitors in the same industry.
New entrants, substitute products, suppliers of
raw materials or compnents, customers, and
rivalsry among competitors influence what
happens in an industry.
Macro environment affects almost all
industries.
There are four major segments in the macro
environment: social, economic, political, and
technological.
Nation State 1
Nation State 2
Sosial
Technological
Sosial
Politik
Economic
Politik
Macro environment
The technological environment is thus a
major segment of the macro
environment.
It constitutes the primary environmental
segment influencing the MANAGEMENT
OF TEHCNOLOGY
Technological environment is the most visible and
pervasive macro environmental segment in a society
for three reason:
It brings new product, processes, and materials.
It directly impacts every aspect of the society around us—
for example, transportation modes, energy,
communications, entertainment, health care, food,
agriculture, and industry.
It alters the rules of global trade and competition.
It is composed of institutions that participate in the creation of
new knowledge and the application of that knowledge to
develop new product, processes, and materials.
Technology development consist of two set of activities: creation
of new knowledge and application of that knowledge.
The knowledge base of technology usually drives from basic
research, defined as original investigation of advancement of
scientific knowledge that do not have specific objectives or bind
this knowledge to practical problems.
This consists of investigations that are intended to solve practical
problems.
Scientific knowledge is put into practice in order to design an
innovation that will solve a perceived need or problem.
Researchers involved in application are the main consumers of
basic research.
We distinguish between four types of organizations in the
technological environment along two major dimensions: 1)
private versus public; 2) developers versus facilitators.
DEVELOPER
FACILITATORS
•
PUBLIC
•
•
Government Laboratory
University Laboratory
PRIVATE
•
•
•
•
Firm R&D
R&D Consortia
Technological Alliances
Partnerships
•
•
Agency for the Assessment and Application of
Technology (BPPT)
Incubator
State Agencies
•
•
Venture Capitalists
Technology Evaluators
As technology developers, they are drivers of change in the
technology environment.
They are the beneficiaries of technology change initiated by
others. By adopting more efficient technologies into their
product and processes, corporations can improve their
performance and thus create value.
They may facilitate technology development by others external
to the firm through investments in their research project.
Corporations may also be the victims of technology change
created by other.
Creation of
New
Knowledge
Aplication of
Knowledge
Applied
Research
Engineering
Commercialization
Development
•Government •Government
Institutions
Agencies (e.g.,
(e.g. Federal
NASA)
Labs, NASA)
•Scientific
Research
Labs (e.g.,
AT&T)
•Corporation
(e.g., GE, R&D
Labs)
•Universities
•Entrepreneurs
•Universities
•R&D Consortia
Corporation
Private Firm
New Venture
Development
Groups
In the technological environment, inter linkages develop
between numerous organization.
Thus, organizations with widely differing missions, such as
universities, private firms, or government agencies (e.g.
BATAN)—all part of the technological environment—become
connected through networks that facilitate the flow of
information, resources, personnel, and other inputs necessary
for technology development and diffusion.
Increasingly, linkages are forming among the
technology developers, both among private
organization and between private and public
organization.
For example, many pharmaceutical firms rely
on universities for conducting some basic
research necessary for producing commercially
viable drugs or therapeutic techniques.
Technology facilitator, such as LIPI stimulate
technological development by other
organization, creating inter-organizational
linkages between technology developers and
facilitators.
The facilitating organizations, be they private
or public, function in three major capacities:
Resource providers.
Policy analysts
Linking organizations.
Technological Environment
Change in the technological
environment often come about in
two interrelated ways:
1. Induced Changes
2. Autonomous Changes
1. Induced Change
Induced changes represent the technological consequences created
by social, political, or economic forces.
For example: demographics and lifestyles, especially through their
impact on the political and economic areas, often influence the
nature and direction of technology development.
2. Autonomous Change
This changes are initiated by technology developers but are
largely independent of the forces in other macro environmental
segment.
This changes are less predictable than induced changes, but they
can be tracked on an ongoing basis through personal sources of
information
2. Autonomous Change
Autonomous changes in technology are drivers of fundamental social and economic
change:
1. Social Change.
a) First stage corresponds to agriculture.
b) Second stage corresponds to machine production.
c) Third stage refers to the information revolution triggered by advances in computer
technology.
2. Long-Wave Theory of Economic Change.
Arguing that technological innovation lies at the heart of major periods of economic expansion.
Process work as follow:
a)
b)
c)
d)
First, discoveries in science trigger technological innovation, leading to new product and market.
Second, new industries are formed around these markets, and continued innovations in these
newly formed industries expand the markets.
Third, as technology matures, many competitors enter internationally, eventually creating excess
capacity that in turn decreases profitability.
Finally, business failure, unemployment, and attendant economic turmoil in financial markets may
lead to depressions.
Both type of change in the technological environment—
induced and autonomous—create opportunities and threats
for firms operating in various industries.
Although a large number of specific developments are taking
place in different technological sectors and industries, three
general trends deserve special mention:
1) Globalization
2) Time Compression
3) Technology Integration
1. Globalization
a.
b.
c.
d.
Resource allocated to technology development
Changing location of manufacturing facilities
Rise of multinationals
Comparative advantage of nations
2. Time Compression
a.
b.
c.
Shortened product life cycles
Shortened development times
Decreasing payback periods
3. Technology Integration
a.
b.
Combining technologies to develop new products
Combining technologies to commercialize product
Globalization
The scope of environment is global
Time Compression
Increased interdependence of
institutions
Technology
Integration
Need for simultaneous imitation
and innovation
The Impact of Trends on Institutions
1. Technological environment is dynamic and need to be tracked on an
ongoing basis. From an open-system perspective, management of
organizations, including technology, should be predicated on the
environment facing organization.
2. Tracking technological changes in the environment requires managers to
penetrate the organization and networks that conduct and facilitate
technology development.
3. Globalization, time compression, and technology integration—require
managers to adopt a global perspective, enhance organizational speed of
response, and work with other oranizations to adapt to technological
changes as well as to fully exploit the potential of new technology.