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The company has to estimate the financial costs of the required R&D and its opportunity cost of
that choice. Its impact on the direction of, and the commitment to, other research projects is also
relevant. In addition to this, the company has to assess the suitability of its staff and equipment
for the new project. Among the risks, it has to face are blocking patents. However, the
developed technology can be customized to its precise requirements.
2. Buy the firm that has the Technology
The investment here could be substantial and great care is needed in the evaluation of the
prospective acquisition. Also, it is important that following the purchase, that the operations can
be effectively integrated and that there is no undue loss of key staff.
3. Enter into joint ventures
The costs are shared but so are the benefits of the new technology. Where the risks are high
and the costs heavy, membership of a research consortium becomes a more attractive option.
There is also the co-development of new products or processes, such as between a key
supplier and a major customer.
4. Enter into research contract
R&D contracts can be placed with research associations, universities or consultants. The
company has to consider the costs and the nature of control of the project. There is the risk of
know-how loss.
5. Obtain license for use of Technology
This is essentially the purchase of access to proprietary technology. It can be anything from the
right to use a particular patent to a complete package, which includes know-how agreements,
commissioning assistance for new plant and processes and the provision of updated designs
and other technical information.
6. Education and training
Soft technologies with a strong management dimension e.g. JIT, Quality circles, or Kaizen can be
acquired through training programmes. However, the underlying experience, which makes these
techniques more effective, is often achieved through personal contacts between companies.
2. The allocation of appropriate staff to the transfer and application of the technology. The
project manager must be at senior level while his colleagues need to have engineering
application and change management skills.
3. The corporate objectives, capability and the technology transfer track record of the
prospective transferor need to be considered. Effective technology acquisition is often based on
a longer-term relationship.
4. Clear technical and contract specifications are essential. Because of the nature of the
technology and its integration in intellectual property, the transfer constituents vary in type and
character. Where the transfer is from a different culture, special attention has to be given to
detail and the meaning of language.
5. Contract negotiations can be onerous. They require diplomatic skills and careful record-
keeping.
6. Because of the nature of its acquisition, transferred process technology needs to be handled
with even more care than indigenous technological change. It is important that all affected
company staff appreciate the nature and reasons for the acquisition.
2. What are the ten tenets? Discuss. With the help of examples, show how we
have become /are becoming servants of technology.
Assignment Set-2
In planning technology strategy for competitive advantage, the following steps have been
suggested:
1. Identify all the distinct technologies and sub-technologies in the value chain.
2. Identify potentially relevant technologies in other industries or those under scientific
development.
3. Determine the likely path of change of key technologies.
4. Determine which technologies and potential technological changes are most significant for
competitive advantage and industry structure.
5. Assess a firm's relative capabilities in important technological aspects and the cost of making
improvements.
6. Select a technology strategy, encompassing all important technologies, that reinforces the
firm's overall competitive strategy.
7. Reinforce business unit technology strategy at the corporate level.
We can identify four elements of a forecast which can be specified and/or estimated. These are
(a) the time period, (b) the nature of technology, (c) .the characteristics to be exhibited by the
technology, and (d) the probability associated with the characteristics. The time period may be
stated generally, or it may be given precisely. The technology being forecast may be narrowly
defined, or it may encompass a very broad range. The characteristics may be stated only in
general terms, or may be given precise quantitative values. Martino has shown that there is
really no alternative to forecasting. He considered various possible alternative scenarios like (a)
regimes of no forecast (tacitly assuming there would be no change in the environs in future), (b)
future is a total gamble and it could be met without any anticipation, (c) resting on laurels of the
glorious past presuming that it would bring a glorious future, (d) dependence on limited
forecasting, without taking into consideration all round changes in the environs, and (e) taking
crisis action to meet the situation. All of these, he showed, may spell disaster for a firm or an
organization.
All these discussions basically highlight one very important aspect that we are dealing with a
probabilistic situation and we should gear ourselves to meet it with a certain degree of
confidence and with all elements of surprise anticipated. A logical question that follows is: How
good is the forecast? Will it come true? To answer these questions, let us classify situations
according to the degree of control the decision maker can exercise. There may be three types of
situations:
a) Absolutely no control, b) Partial control, and c) Full control
It is essential to recognize that a forecast does not put anything into the future. Instead, it tells
only of the implications of available information about the past. These implications are
connected with the future through a logical framework. Hence, the utility of a forecast for
decision making purposes depends on the validity of the logical framework it uses and the
extent to which it extracts all the implications which are contained in the body of available
information. This ability to evaluate the utility of rational and explicit forecasts is, of course, one
more reason to prefer this type of forecast. However, it may be emphasised that following a
certain procedure may not guarantee the forecaster against error; it may only reduce the
likelihood of error. Hence, the forecaster is never absolutely certain that he has prepared the
most useful possible forecast with the available data he has and the resources he has
employed.
The forecast serves as an input to the process of making plans and decisions. Martino has
described the role of the forecast in planning as follows:
a) The forecast identifies limits beyond which it is not possible to go.
b) It establishes feasible rates of progress, so that the plan can be made to take full advantage
of such rates; conversely, it does not demand an impossible rate of progress.
c) It describes the alternatives which are open and can be chosen from.
d) It indicates possibilities which might be achieved, if desired.
e) It provides a reference standard for the plan. The plan can thus be compared with the
forecast at any point in time, to determine whether it can still be fulfilled, or whether, because of
changes in the forecast, it has to be changed, and
f) It furnishes warning signals, which can alert the decision maker that it will not be possible to
continue present activities.
If the forecast makes a decision maker aware of alternatives which he might not have discovered
otherwise, it has increased his degree of freedom. The important point is that the purpose of the
forecast is to improve the quality of his decisions and not to force him to accept a particular decision.
The above points underline the need for interweaving the technology framework with other
areas of business in an enterprise. The idea of a technological innovation should be based or
linked with the potential market and the technology team should closely interact with the rest of
the divisions of the enterprise leading to successful logical conclusions in terms of products/
processes to be developed as per the objectives set in the beginning. This strategy is best
reflected in the form of a “Business Plan” of an enterprise which needs to be prepared and
approved before starting the new business.
The Business Plan: It is a strategic summary of a new venture. Its purposes are:
1. To ensure, by clear focus in strategy, that important points necessary to the success of any
business venture have been considered; and
2. To persuade financial investors to invest in the new venture. A new venture business plan
could include the following:
It is thus clear from the above that technology and technology management are only a part of the total
business activity or business plan of an enterprise.
Managing technology means using new technology to create competitive advantages which is quite a
difficult job, partly due to differing cultures in a company. Technology is often thought to be solely the
domain of the scientific and engineering personnel of an organization. Yet, successful business use of
technology requires strategic decisions about technology by personnel in other functional areas, such as
production, marketing, sales, finance, and so on. Thus, the two cultures – technical and functional –
need to be bridged, and management should integrate technology strategy with business strategy. This
is the essence of technology management.