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L7 Technology Environments. EC10: Innovation & Commercialisation Conducting business in the global economy and playing to win Marcus Thompson wmt1@stir.ac.uk. Outline to Technology Environments. The International Business Environment Organisational & Supply Chain Development

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l7 technology environments

L7 Technology Environments

EC10: Innovation & Commercialisation

Conducting business in the global economy and playing to win

Marcus Thompson

wmt1@stir.ac.uk

7. Technology Environments

outline to technology environments
Outline to Technology Environments
  • The International Business Environment
  • Organisational & Supply Chain Development
  • Drucker on Innovation
  • Changing the World

7. Technology EnvironmentsL7: Techn9ology Environments

1 the international business environment

1. The International Business Environment

EC10 Innovation & Commercialisation

7. Technology Environments

international business opportunity and conflict
International Business: Opportunity and Conflict
  • Globalization creates wealth and benefits
  • Critics say it increases the wealth of corporations and investors at the expense of the poor and does other damage to society in general.
  • Failure to become part of the global market assures a nation of declining economic influence and a deteriorating standard of living.

7. Technology EnvironmentsL7: Technology Environments:

motives for internationalization
MOTIVES FOR INTERNATIONALIZATION
  • INTERNAL DRIVERS:
    • Search for Growth
    • Exploitation of opportunity

EXTERNAL DRIVERS

    • Technology’s effects on customers/firms
    • The industrial context

7. Technology EnvironmentsL7: Technology Environments:

1 information requirement
1. Information Requirement
  • Preliminary Screening
    • Estimating Market Potential
      • Income Elasticity of Demand
      • Market Audit
      • Analogy
      • Longitudinal Analysis
      • Gap Analysis
    • Estimating Sales Potential
      • Identifying Segments
  • Selection
    • Concentration versus Diversification

These same issues apply regardless of whether a study is undertaken on or off-line.

7. Technology EnvironmentsL7: Technology Environments:

2 selection issues
2. Selection Issues
  • Factors to take into Account
      • Market-Related Factors
      • Mix-Related Factors
      • Company-Related Factors
  • Market Matches
      • Market-Related Factors
      • Mix-Related Factors
      • Company-Related Factors

7. Technology EnvironmentsL7: Technology Environments:

innovation linkages
Innovation Linkages

Science &

Technology Base

Technological

Developments

Needs of

Market

“Innovation occurs through the interaction of the science base, dominated by the Universities,

technological developments dominated by industry and the needs of the market. (Trott 2002)

7. Technology EnvironmentsL7: Technology Environments:

2 growth options

2. Growth Options

EC10

Innovation & Commercialisation

7. Technology Environments

strategy structure chandler s contribution
Strategy & Structure: Chandler’s contribution

Key points from Chandler’s research:

  • Chandler concluded that strategy came before organisation structure
  • Increased decentralisation: organisations that become more diverse in their products and markets, need to reorganise and probably devolve power
  • Means the centre can no longer make the relevant decisions.

7. Technology Environments

strategy or structure williamson
Strategy or Structure: Williamson
  • Williamson explored the role of the centre as organisations became more diverse.
  • His observations:
    • The role of the a firm’s senior managers (HQ) was to allocate resources between its various divisions and then monitor and control them
    • The strategy of the firm needed to be resolved first, with the organisational structure to follow
  • According to Williamson, strategy came before structure in a firm.

7. Technology Environments

fit between strategy structure
Fit between strategy & structure
  • For a firm to be economically effective, there needs to be a match between the firm’s strategy and its structure: (the concept of strategic fit and or congruency)
  • Firms need to adopt an internally consistent set of practices in order to undertake a proposed strategy.
  • Such practices go beyond organisation structure into other related areas of the business.
  • These areas include: the strategic planning process, recruitment and training, reward systems, knowledge, information systems and processes.

7. Technology Environments

forms of organisation
Forms of Organisation
  • Bureaucratic, hierarchical
  • Flat structure, few management layers
  • Team-oriented structure
  • Matrix structure with a combination of vertical and horizontal authority
  • Product or service-oriented structures

7. Technology Environments

the functional structure
The Functional Structure
  • Main features
    • Organised around tasks
    • Centralised
  • Situations where appropriate
    • Small companies, few plants, limited products
    • Relatively stable – repetitive tasks
  • Advantages
    • Controlled by strategic leader/CEO]
    • Efficient
    • Clearly delineated external relationships
    • Specialist managers
    • Simple line of control
    • Can promote competitive advantage through functions
  • Limitations
    • Succession problems
    • Unlikely to be entrepreneurial or adaptive
    • Profit responsibility exclusively with CEO
    • Become stretched by growth
    • Functional Managers may concentrate on short term routine activities at expense of longer-term strategic developments
    • Problems of ensuring co-ordination between functions – rivalry may develop
    • Functional specialist may seek to build mini-empires

7. Technology Environments

the entrepreneurial structure
The Entrepreneurial Structure
  • Main Features
    • Organised around the entrepreneur
    • Totally centralised; no division responsibility
  • Situations where appropriate
    • Simple companies in early stages of development
  • Advantages
    • Enables the founder, who logically understands the business to control its early growth and development.
  • Limitations
    • The founder may not have sufficient specialist knowledge
    • Only appropriate to a certain size

7. Technology Environments

3 organisational development

3. Organisational Development

EC10

Innovation & Commercialisation

7. Technology Environments

the effective organisation
The Effective Organisation
  • The strategic purpose of the organisation
  • Its mission, vision and values
  • Customer characterisation and requirements
  • The culture and environment of the organisation

7. Technology Environments

strategy structure
Strategy & Structure
  • The organisation's mission and strategy drive the structure
  • The culture and environment of the organisation plays a large role in determining structure.
  • Informal and formal structures need to be aligned

7. Technology Environments

strategy structure chandler s contribution1
Strategy & Structure: Chandler’s contribution

Key points from Chandler’s research:

  • Chandler concluded that strategy came before organisation structure
  • Increased decentralisation: organisations that become more diverse in their products and markets, need to reorganise and probably devolve power
  • Means the centre can no longer make the relevant decisions.

7. Technology Environments

strategy or structure williamson1
Strategy or Structure: Williamson
  • Williamson explored the role of the centre as organisations became more diverse.
  • His observations:
    • The role of the a firm’s senior managers (HQ) was to allocate resources between its various divisions and then monitor and control them
    • The strategy of the firm needed to be resolved first, with the organisational structure to follow
  • According to Williamson, strategy came before structure in a firm.

7. Technology Environments

fit between strategy structure1
Fit between strategy & structure
  • For a firm to be economically effective, there needs to be a match between the firm’s strategy and its structure: (the concept of strategic fit and or congruency)
  • Firms need to adopt an internally consistent set of practices in order to undertake a proposed strategy.
  • Such practices go beyondorganisation structure into other related areas of the business.
  • These areas include: the strategic planning process, recruitment and training, reward systems, knowledge, information systems and processes.

7. Technology Environments

six pulls on organisations
Six ‘pulls’ on organisations

To centralise

To evangelise

To collaborate

To standardise

To balkanise

To professionalise

7. Technology Environments

the simple structure
The simple structure

The firm

Small firms run by one person

often highly informal with strategy

made at the top. Simple structures exist

where the industry is fragmented and

is comprised of small highly competitive

firms.

The strategy?

Some form of differentiation strategy is needed for survival. A niche or marketing strategy is beneficial in targeting a market that is

least competitive.

The environment

Simple technologies are used to

produce products or deliver services

Barriers to entry are low leads to market

instability, cost/price squeezes and firm

vulnerability. Firms often have very

little bargaining power over customers

7. Technology Environments

the machine bureaucracy
The Machine Bureaucracy

The firm

Very rigid with co-ordination achieved via

standardisation of work. Firm highly specialised

as tasks are broken down. Very bureaucratic with

many rules and regulations with no real power at

lower levels of the firm.

The strategy?

Strategic options limited due to their inflexibility and gearing towards efficiency. Innovation out of the question and markets not growing much. So market differentiation and cost leadership the

only two option open to such firms.

The environment

Such firms thrive only in stable settings

Industries are often highly concentrated

with most firms of a large size. Little uncertainty

as competitor and customer behaviour predictable

with stable demand and market share.

7. Technology Environments

the divisionalised structure
The Divisionalised Structure

The firm

Consists of divisions that are responsible for

producing and marketing a discrete product.

Divisions may be driven to become bureaucratised

and formalised leading to standard products.

Performance controls ensure a degree of conformity

although divisions autonomous.

The strategy?

Due to the structure will require strategies based on the context of the divisions operating in

different markets.

Due to the control element it

precludes strategies based upon business differentiation through innovation. However, marketing differentiation and cost leadership

may be useful.

The environment

Varies from division to division. May need

environment to be stable, but also operates in

some turbulent sectors of the economy.

7. Technology Environments

the adhocracy
The Adhocracy

The firm

Performs unusual and complex tasks which

can change constantly. Groups of highly

trained people working together to design

and produce complex and rapidly changing

products. Power decentralised to those with

the skills and based on expertise

The strategy?

Because of flexible structure and collaborative

working a strategy of differentiation through

innovation is beneficial. Not too broad or too

narrow a focus due to the competition

The environment

Very complex and dynamic. Technologies

change rapidly as do product design and customer

needs. ‘Knowledge’ barriers to entry. Markets may

be unstable as firms ‘leapfrog’ each other with new

creative advances. Moderately competitive.

7. Technology Environments

4 changing the world

4. Changing the World

EC10

Innovation & Commercialisation

7. Technology Environments

consequences of change
Consequences of Change
  • Rogers identifies three consequences or changes:
    • Desirable versus undesirable consequences
    • Direct versus indirect consequences, and
    • Anticipated versus unanticipated consequences.

7. Technology Environments

4 imperatives for scotland
4. Imperatives for Scotland
  • SMEs need to be motivated in a way that is meaningful to them to spend scarce resources on R&D activity.
  • Universities and Research Institutes need incentivised to spend scarce resources (people, money, and time) on creating meaningful interactions with SMEs.
  • Meaningful interaction between the worlds of business and academia will only grow if there are people dedicated to building the links, through actively engaging with the SME base face to face, assessing their needs, and then matching these needs to where appropriate academic expertise lies. Such interactions need to happen coherently over a lengthy period of time, probably a minimum of ten years.
  • 4. Ongoing growth will require links between technologically-aware local businesses and academic institutions to be nurtured, in order to develop, and to exploit commercially, “orphan” Intellectual Property (IP)
  • (Technology Ventures Scotland, 2005)

7. Technology Environments

the first rule of innovation
The First Rule of Innovation

deal with failure

7. Technology Environments

the learning organisation
The Learning Organisation
  • An organisation that learns and encourages learning among its people. It promotes exchange of information between employees hence creating a more knowledgable workforce. This produces a very flexible organisation where people will accept and adapt to new ideas and changes through a shared vision.

7. Technology Environments

generic learning organisation strategies
Generic Learning Organisation Strategies

Accidental

  • Not initiated through awareness of the Learning Organisation concept. Company may already be taking steps to achieve their business goals that, in hindsight, fit the framework for implementing a Learning Organisation.

Subversive

  • Once an organisation has discovered the Learning Organisation philosophy, they make a decision as to how to proceed. This is a choice between a subversive and a declared strategy. The subversive strategy differs from an accidental one in the level of awareness; but it is not secretive! Thus, while not openly endorsing the Learning Organisation ideal, they are able to exploit the ideas and techniques.

Declared

  • The principles of Learning Organisations are adopted as part of the company ethos, become company "speak" and are manifest openly in all company initiatives.
  • Senge, 1990 Five Disciplines of Learning Organisations

7. Technology Environments

risk analysis
Risk Analysis
  • to be effective, the change must be drastic and not introduced slowly as time is money
  • not all employees want to learn and will resist the change
  • the openness created endangers the trust between employees
  • ignorance about learning; that is not following the proper learning cycle
  • `Over the top': too much emphasis on learning and not enough on getting the job donetoo much freedom and information can create misunderstandings
  • information overload, too much to absorb at once "To love knowing and not learning: shallowness" ,Confucius
  • the culture of the country may be a disadvantage
  • the perils of being a pioneer

7. Technology Environments

10 routes to success 1 of 5
10 Routes to Success (1 of 5)
  • Invest in Technology
    • Look inside and outside the business
    • Existing technologies combines are as good as new technologies
    • The technology has to fulfil a need.
  • Invest in People
    • People are long-term
    • Work culture & job content are more important than share options
    • Don’t employ portfolio careerist who hop from job to job

Source: Business 2.0, February 2001, pp19 -35

7. Technology Environments

10 routes to success 2 of 5
10 Routes To Success (2 of 5)
  • Form alliances
    • Choose partners strategically
    • Leverage brands
    • Partner for tangible benefits
  • Invest in Customer Care
    • CRM is not rocket science
    • Help customers, don’t smother them
    • Past trend are not a guide to future ones.

Source: Business 2.0, February 2001, pp19 -35

7. Technology Environments

10 routes to success 3 of 5
10 Routes to Success (3 of 5)
  • Be prepared to Fail
    • Adapting to changing conditions means reviewing business models
    • Lower burn rates through effective customer acquision
    • Learn from mistakes
  • Stretch Your Business
    • Explore new ways to do business
    • Employ established brands
    • Exploit synergies between on and off-line activity

Source: Business 2.0, February 2001, pp19 -35

7. Technology Environments

10 routes to success 4 of 5
10 Routes to Success (4 of 5)
  • Talk to your Competitor
    • Some projects are too good to go it alone.
    • Alliances minimise risk.
    • Don’t put eggs in one basket.
  • Share the Power
    • Centralise guiding principles & decentralise everything else.
    • Looks outside for ideas & people.
    • Empower individuals to make decisions.

Source: Business 2.0, February 2001, pp19 -35

7. Technology Environments

10 routes to success 5 of 5
10 Routes to Success (5 of 5)
  • Lead Your Market
    • Have a proposition that can be sold to investors
    • Map out technical difficulties
    • Stay focussed.
  • Plan for a Revolution
    • Take the long-term view

7. Technology Environments