TECHNOLOGICAL ENVIRONMENT

Technological Environment

• Technology is a ‘systematic application of scientific or other organised knowledge to practical tasks’

Classification of Technology

Technology can be classified according to any of the following categories :-Core technologies : Technologies that are essential to maintain a competitive position.

Example-diesel Engine technology is central to Mahindra& MahindraComplementary technologies : Technologies that

support several product& product development.Example- Desigining Shockers in automobile industry

Peripheral Technology-It is defined as technology that is not necessarily incorporate into product whose application contribute to the business.

Example-Computer software or microprocessor technology are peripheral technology for Mahindra& Mahindra

Emerging technology: Technologies that are currently under consideration for future products or processes.Example-Alternative fuel technology for Mahindra& Mahindra

The Technology Cycle

Following classification, technology management involves carefully implementing five stages :-

1. Awareness phase2. Acquisition Phase3. Adaptation Phase4. Advancement Phase5. Abandonment Phase

Technology Awareness

of marketable invention

TechnologyAcquisition

by self-generationor transfer

Technology Adaptation

Minor modificationsof acquired technology

for specific needs

Technology Advancement

Innovation involvingmajor modifications

of acquired technology

TechnologicalAbandonment

obsolescencing

External & internalEnvironment

Factors affectingthe technology user

Promotion

Need driven

expectations

Justification

Installation

1

2

34

56

Demolition

Time

The Technology Cycle, showing the five basic elements of technology management at any given level (product,service, function, work centre, plant/division, corporation, industry, national or international) applicable to deal with an existing or new technology. The dashed lines represent ‘analysis’.

1. Awareness phase

• This is the first phase of the technology cycle in which a company has a formal mechanism to become aware of emerging technologies• Some companies from ‘think tank’ with engineers &scientists, who research from around the world & put in short internal report form for the benefit of corporate strategic planners & technology policy markers.

2. Acquisition Phase

• To go from the awareness phase from acquisition phase, the company’s technology group, in collaboration with the industrial engineering group,would conduct technical feasibility, & economic feasibility studies before justifying & acquiring a new technology.

3. Adaptation Phase

• Virtually every enterprise ends up adapting an acquired technology for its particular needs • If the homework done correctly, the transition fromacquisition to adaptation becomes much smoother& less expensive • Conversely, this not only frustrates the people acquiring the technology but also slows down the assimilation rate, causes major productivity losses, & results in severe quality problems.

4. Advancement Phase

• When capital is limited one cannot indiscriminately purchase & abandon technologies with scarce money • It becomes imperative to improvise the acquired technologies for one’s home needs.

5. Abandonment Phase

• This last phase of the technology is the most critical • Bad timing in prematurely abandoning a product could result in lost revenues, & on the other hand,waiting too long to abandon might also result in lost revenues because a customer may find a better alternative in competition.

Globalization & Technology

• The world economy is passing through structural changes• These changes are driven by globalisation of business as well as by the revolution in information, communication, & transportation technology• Nations now have powerful technology in their hands, fundamentally transforming the way in which business is conducted around the globe• The World Trade Organization (WTO) is contributing to globalization by removing trade

barriers between countries & involving mechanism for smooth conduct of trade among nations • the WTO has also evolved a mechanism to managetechnology better• The main provision of the WTO that influence technology transfer are included under the followingsections :-1. Trade Related Aspects of Intellectual PropertyRights (TRIPs)2. Trade Related Investment Measures (TRIMs)3. Subsidies & Countervailing Measures (SCMs)4. The Information Technology Agreements(ITA)

Appropriate technology

• The technology suitable in one environment may not be appropriate in a different environment due to several reasons. The latest or highly sophisticated technology may not be appropriate in several environments. Intermediate technology, which often means a technology which combine elements of traditional technology with elements of modern technology, gained importance in the developing countries.

Characteristics of Technology• It involves particular set of production• Technological changes happened over time to

develop new method of production.• Technology is characterized by the dynamic of

incessant improvement, which means that it need to continually improved.

• Technology required new managerial philosophy and practice.

• Technology is the prime factor of domestic productivity and international competitiveness.

TECHNOLOGICAL TRANSFER

• Applications of technology for new users and new usages.

Reasons for technological transfer• Profit by selling Technology• Location and logistic• Competitive edge• Limitation in Home/Host country

Methods of Technological Transfer

• FDI Policy• Licensing• Franchising• Management contract• Joint Venture• Contract Manufacturing

Contribution in Countries Economy

• Revolution increment– Green– White– Yellow– Blue

• Employment increase• Effect on Life-style