<ul><li>Technological Environment </li></ul>
<ul><li>Technological Environment </li></ul><ul><li>• J K Galbraith defines technology as a ‘systematic  </li></ul><ul><li...
<ul><li>Classification of Technology </li></ul><ul><li>Technology can be classified according to any of the  </li></ul><ul...
<ul><li>• Core technologies :  Technologies that are  </li></ul><ul><li>essential to maintain a competitive position. </li...
<ul><li>processes. </li></ul><ul><li>• Scouting technologies :  Formal tracking of  </li></ul><ul><li>potential product & ...
<ul><li>The Technology Cycle </li></ul><ul><li>Following classification, technology management  </li></ul><ul><li>involves...
Technology Awareness  of marketable invention Technology Acquisition by self-generation or transfer  Technology  Adaptatio...
<ul><li>The Technology Cycle, showing the five basic elements  </li></ul><ul><li>of technology management at any given lev...
<ul><li>Awareness phase </li></ul><ul><li>• This is the first phase of the technology cycle in  </li></ul><ul><li>which a ...
<ul><li>2.  Acquisition Phase </li></ul><ul><li>  • To go from the awareness phase from acquisition  </li></ul><ul><li>pha...
<ul><li>3.  Adaptation Phase </li></ul><ul><li>  • Virtually every enterprise ends up adapting an  </li></ul><ul><li>acqui...
<ul><li>4.  Advancement Phase </li></ul><ul><li>  • When capital is limited one cannot indiscriminately  </li></ul><ul><li...
<ul><li>5.  Abandonment Phase </li></ul><ul><li>  • This last phase of the technology is the most critical  </li></ul><ul>...
<ul><li>Impact of Technology </li></ul><ul><li>• We propose to discuss the impact of technology in </li></ul><ul><li>gener...
Technology  A. Social implications C. Plant level changes B. Economics implications High expectation  of consumers Systems...
<ul><li>A.   Social Implications </li></ul><ul><li>• Perhaps the most striking influence of  </li></ul><ul><li>technology ...
<ul><li>A1.  High Expectations of Consumers </li></ul><ul><li>• Technology has contributed to the emergence  </li></ul><ul...
<ul><li>• Industry owners in Japan swear by the dictum – the </li></ul><ul><li>customer is a god who is always right. </li...
<ul><li>A2.  System Complexity </li></ul><ul><li>• Technology has resulted in complexity </li></ul><ul><li>• Modern machin...
<ul><li>assumes greater significance because of  </li></ul><ul><li>interdependence of systems. </li></ul><ul><li>•   Manag...
<ul><li>A3.  Social Change </li></ul><ul><li>• The role of technology on social change may be </li></ul><ul><li>observed i...
<ul><li>technology directly changes the patterns of their  </li></ul><ul><li>social life. An invention may open new employ...
<ul><li>the employees in foreign collaborations are paid  </li></ul><ul><li>much more than are paid in other local Indian ...
<ul><li>Fifth , technology has its impact on religion in at least </li></ul><ul><li>two ways, first, religiosity has decli...
<ul><li>world’s best libraries, instructors, & courses  </li></ul><ul><li>available through the Internet. </li></ul>
<ul><li>A4.  Social Systems </li></ul><ul><li>• Of particular interest is the knowledge of  </li></ul><ul><li>technology <...
<ul><li>value to whatever the organisation does </li></ul><ul><li>• He will have to create new jobs in consultation with <...
<ul><li>B.   Economic Implications </li></ul><ul><li>• Developments in technology also have  </li></ul><ul><li>significant...
<ul><li>B1.  Increased productivity </li></ul><ul><li>• the most fundamental effect of technology is  </li></ul><ul><li>gr...
<ul><li>B2.  Need to Spend on R&D </li></ul><ul><li>• Research & Development (R&D) assumes  </li></ul><ul><li>considerable...
<ul><li>Secondly , technology transfer, the process of taking  </li></ul><ul><li>new technology from the laboratory to the...
<ul><li>technology to yield better performance. The R&D  </li></ul><ul><li>manager must determine when to abandon present ...
<ul><li>• The supplier has proprietary technology </li></ul><ul><li>• The supplier’s technology is better &/or  </li></ul>...
<ul><li>improved  manufacturing facilities, increasing  </li></ul><ul><li>product quality, & faster distribution become  <...
<ul><li>B3.  Jobs Become Intellectual </li></ul><ul><li>  • With the advent of technology, jobs tend to  </li></ul><ul><li...
<ul><li>to provide training & educational facilities to its </li></ul><ul><li>citizens -  those who pick up & acquaint the...
<ul><li>B4.  Problem of Technostructure </li></ul><ul><li>• Not only jobs become more intellectual &  </li></ul><ul><li>kn...
<ul><li>by opportunities which offer challenges or growth </li></ul><ul><li>or achievement. </li></ul><ul><li>Secondly , r...
<ul><li>persons a financial stake in the ideas they  </li></ul><ul><li>create </li></ul><ul><li>• Attendance at profession...
<ul><li>in a tight position to balance the ruffled feelings of  </li></ul><ul><li>technocrats & the social consequences of...
<ul><li>B5.  Increased Regulation & Stiff Opposition </li></ul><ul><li>• A by-product of technological advancement is </li...
<ul><li>B6.  Rise & Decline of Products & Organisations </li></ul><ul><li>• Change of technology is a norm & not an  excep...
abandonment •  An organisation that is associated with particular  technology will go in sequence through the following st...
B7.  Boundaries Redefined   Technological changes have significant consequences   for industries :- • Technological change...
due to technological changes that they or others have effected • Technological change is one of the important factors givi...
<ul><li>discussion applies to single-business units),  </li></ul><ul><li>technological change  may have multiple impacts. ...
<ul><li>C.  Plant Level Changes </li></ul><ul><li>  • The impact of technology at the plant level is also  </li></ul><ul><...
<ul><li>C1.  Technology & Organisation Structure </li></ul><ul><li>• Technology has considerable influence on  </li></ul><...
<ul><li>personalities of the people who founded the firm &  </li></ul><ul><li>managed it subsequently, but the impact of t...
<ul><li>• Any technological advancement will result in :- </li></ul><ul><li>a) the expanded availability of a range of  </...
<ul><li>C2.  Resistance to Change </li></ul><ul><li>• The manager of a given business unit shall  </li></ul><ul><li>face r...
<ul><li>Specifically, resistance to change stems from the  </li></ul><ul><li>following reasons :- </li></ul><ul><li>1. Psy...
<ul><li>C3.  Fear of Risk </li></ul><ul><li>• There is always the fear of risk. </li></ul><ul><li>• A research oriented-co...
<ul><li>C4.   E-commerce </li></ul><ul><li>• The phenomenal growth of the internet & the  </li></ul><ul><li>associated Wor...
<ul><li>goods in a shorter period of time (to produce one car </li></ul><ul><li>it takes less than 10 seconds) & with fewe...
<ul><li>new relationships between businesses & customers </li></ul><ul><li>The internet & e-business provide a number of b...
<ul><li>C5.  Telecommunications </li></ul><ul><li>• The obvious dimension of the technological  </li></ul><ul><li>environm...
<ul><li>C6.  Transportation </li></ul><ul><li>• In addition to developments in computers &  </li></ul><ul><li>telecommunic...
<ul><li>C7.  Gobalisation of Production </li></ul><ul><li>• Technological breakthroughs have facilitated </li></ul><ul><li...
C8.  Markets • Along with the globalisation of production,  technological innovations have facilitated the  internationali...
<ul><li>• This has reduced the cultural distance between the  </li></ul><ul><li>countries & is bringing about convergence ...
<ul><li>C9.  Technology Transfers </li></ul><ul><li>Technology transfers includes :- </li></ul><ul><li>i) Internal transfe...
<ul><li>its members </li></ul><ul><li>• Simply told, technology transfer is a process that  </li></ul><ul><li>permits the ...
<ul><li>2. Regional Technology Transfer  is transferred  </li></ul><ul><li>from one region of a country to another. </li><...
<ul><li>6. Pirating or Reverse-Engineering  whereby  </li></ul><ul><li>access to technology is obtained as the expense of ...
<ul><li>International Technology Transfer </li></ul><ul><li>Parties in the Transfer Process </li></ul><ul><li>i) Home coun...
<ul><li>Home country </li></ul><ul><li>• Argue that the establishment of production facilities </li></ul><ul><li>by MNCs i...
<ul><li>ii)  Host Country </li></ul><ul><li>a)  Economic Implications </li></ul><ul><li>b) Social Implications   </li></ul>
<ul><li>Economic Implications </li></ul><ul><li>• Economic implications include payment of fee,  </li></ul><ul><li>royalty...
<ul><li>resources endowment of developed nations. </li></ul>
<ul><li>b)  Social Implications </li></ul><ul><li>• Along with the transfer of technology, there is the  </li></ul><ul><li...
<ul><li>iii)  Transaction </li></ul><ul><li>• This element focuses on the nitty-grities of the  </li></ul><ul><li>transfer...
<ul><li>Stager in the Transfer Process </li></ul><ul><li>The transfer of technology between countries,  </li></ul><ul><li>...
<ul><li>studies, plans, diagrams, models, instructions,  </li></ul><ul><li>guides, formulations, service contracts &  </li...
<ul><li>5. Industrial & technical cooperation agreements of  </li></ul><ul><li>any kind, including turnkey agreements,  </...
<ul><li>International Technology Issues </li></ul>
<ul><li>Technology Issues </li></ul>International  Technology Issues  Terms of  Technology  Transfer Choice of  Technology...
<ul><li>Foreign Technology Acquisition </li></ul><ul><li>• One of the major issues in technology relates to the  </li></ul...
<ul><li>has specific sources for most of the new technologies. </li></ul><ul><li>Broadly the acquisition routes are three ...
<ul><li>Internal Technology Acquisition </li></ul><ul><li>• Internal technology acquisition option have the  </li></ul><ul...
<ul><li>B.  External Acquisition </li></ul><ul><li>  • External technology acquisition is the process of  </li></ul><ul><l...
<ul><li>C.  Combined Sources </li></ul><ul><li>  • Many forms of technology acquisition are  </li></ul><ul><li>combination...
<ul><li>Technology acquisition Routes </li></ul>Purely Internal  Purely External Seizing Tacit    X   Knowledge Internal R...
<ul><li>Technology transfer X </li></ul><ul><li>& Absorption </li></ul><ul><li>Contract R&D X </li></ul><ul><li>R&D Strate...
<ul><li>Choice of Technology   </li></ul><ul><li>Terms & Conditions of Technology Transfer </li></ul>
Restrict Clauses No. of clauses/ Agreements <ul><li>Export Clause </li></ul><ul><li>i) Permission of collaborator for expo...
<ul><li>Sources of Supply of Raw Materials & Plant &  </li></ul><ul><li>Machinery </li></ul><ul><li>Payment of Minimum Roy...
<ul><li>Globalisation  </li></ul><ul><li>• The world economy is passing through structural  </li></ul><ul><li>changes </li...
<ul><li>barriers between countries & involving mechanism  </li></ul><ul><li>for smooth conduct of trade among nations  </l...
<ul><li>Barriers to Technology Transfer </li></ul><ul><li>The final international technology issue relates to  </li></ul><...
<ul><li>the process of technology transfer (mutual benefits) </li></ul><ul><li>• Lack of systematic & integrated engineeri...
<ul><li>assessment of technological impact </li></ul><ul><li>• Failure to determine whether a national consensus </li></ul...
<ul><li>• Absence of any substantial effort to review & utilise  </li></ul><ul><li>the potential of technological intercha...
<ul><li>distribution of physical resources needed for specific </li></ul><ul><li>industry in the long-term (for instance, ...
<ul><li>technological planning & technology assessment  </li></ul><ul><li>within the technology transfer framework. </li><...
 
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Technological environment

  1. 1. <ul><li>Technological Environment </li></ul>
  2. 2. <ul><li>Technological Environment </li></ul><ul><li>• J K Galbraith defines technology as a ‘systematic </li></ul><ul><li>application of scientific or other organised </li></ul><ul><li>knowledge to practical tasks’ </li></ul><ul><li> </li></ul>
  3. 3. <ul><li>Classification of Technology </li></ul><ul><li>Technology can be classified according to any of the </li></ul><ul><li>following categories :- </li></ul><ul><li>• State-of-the-art-technologies : Technologies that </li></ul><ul><li>equal or surpass the competitors. </li></ul><ul><li>• Proprietary technologies : Technologies </li></ul><ul><li>protected by patents or secrecy agreements that </li></ul><ul><li>provide a measurable competitive advantage. </li></ul><ul><li>• Known technologies : Technologies that may be </li></ul><ul><li>common to many organisations but are used in </li></ul><ul><li>unique ways. </li></ul>
  4. 4. <ul><li>• Core technologies : Technologies that are </li></ul><ul><li>essential to maintain a competitive position. </li></ul><ul><li>• Leveraging technologies : Technologies that </li></ul><ul><li>support several products, product lines, or classes of </li></ul><ul><li>products. </li></ul><ul><li>• Supporting technologies : Technologies that </li></ul><ul><li>support the core technologies. </li></ul><ul><li>• Pacing technologies : Technologies whose rate of </li></ul><ul><li>development controls the rate of product process </li></ul><ul><li>development. </li></ul><ul><li>• Emerging technologies : Technologies that are </li></ul><ul><li>currently under consideration for future products or </li></ul>
  5. 5. <ul><li>processes. </li></ul><ul><li>• Scouting technologies : Formal tracking of </li></ul><ul><li>potential product & process technologies for future </li></ul><ul><li>study or application. </li></ul><ul><li>• Idealized unknown basic technologies : </li></ul><ul><li>Technologies that, if available, would provide a </li></ul><ul><li>significant benefit in some aspect of life. </li></ul>
  6. 6. <ul><li>The Technology Cycle </li></ul><ul><li>Following classification, technology management </li></ul><ul><li>involves carefully implementing five stages :- </li></ul><ul><li>1. Awareness phase </li></ul><ul><li>2. Acquisition Phase </li></ul><ul><li>3. Adaptation Phase </li></ul><ul><li>4. Advancement Phase </li></ul><ul><li>5. Abandonment Phase </li></ul><ul><li> (See Fig. Below) </li></ul>
  7. 7. Technology Awareness of marketable invention Technology Acquisition by self-generation or transfer Technology Adaptation Minor modifications of acquired technology for specific needs Technology Advancement Innovation involving major modifications of acquired technology Technological Abandonment obsolescencing External & internal Environment Factors affecting the technology user Promotion Need driven expectations Justification Installation 1 2 3 4 5 6 Demolition Time
  8. 8. <ul><li>The Technology Cycle, showing the five basic elements </li></ul><ul><li>of technology management at any given level (product, </li></ul><ul><li>service, function, work centre, plant/division, </li></ul><ul><li>corporation, industry, national or international) </li></ul><ul><li>applicable to deal with an existing or new technology. </li></ul><ul><li>The dashed lines represent ‘analysis’. </li></ul>
  9. 9. <ul><li>Awareness phase </li></ul><ul><li>• This is the first phase of the technology cycle in </li></ul><ul><li>which a company has a formal mechanism to </li></ul><ul><li>become aware of emerging technologies </li></ul><ul><li>• Some companies from ‘think tank’ with engineers & </li></ul><ul><li>scientists, who research from around the world & </li></ul><ul><li>put in short internal report form for the benefit of </li></ul><ul><li>corporate strategic planners & technology policy </li></ul><ul><li>markers. </li></ul>
  10. 10. <ul><li>2. Acquisition Phase </li></ul><ul><li> • To go from the awareness phase from acquisition </li></ul><ul><li>phase, the company’s technology group, in </li></ul><ul><li>collaboration with the industrial engineering group, </li></ul><ul><li>would conduct technical feasibility, & economic </li></ul><ul><li>feasibility studies before justifying & acquiring a </li></ul><ul><li>new technology. </li></ul>
  11. 11. <ul><li>3. Adaptation Phase </li></ul><ul><li> • Virtually every enterprise ends up adapting an </li></ul><ul><li>acquired technology for its particular needs </li></ul><ul><li> • If the homework done correctly, the transition from </li></ul><ul><li>acquisition to adaptation becomes much smoother </li></ul><ul><li>& less expensive </li></ul><ul><li> • Conversely, this not only frustrates the people </li></ul><ul><li>acquiring the technology but also slows down the </li></ul><ul><li>assimilation rate, causes major productivity losses, </li></ul><ul><li>& results in severe quality problems. </li></ul><ul><li> </li></ul>
  12. 12. <ul><li>4. Advancement Phase </li></ul><ul><li> • When capital is limited one cannot indiscriminately </li></ul><ul><li>purchase & abandon technologies with scarce money </li></ul><ul><li> • It becomes imperative to improvise the acquired </li></ul><ul><li>technologies for one’s home needs. </li></ul>
  13. 13. <ul><li>5. Abandonment Phase </li></ul><ul><li> • This last phase of the technology is the most critical </li></ul><ul><li> • Bad timing in prematurely abandoning a product </li></ul><ul><li>could result in lost revenues, & on the other hand, </li></ul><ul><li>waiting too long to abandon might also result in lost </li></ul><ul><li>revenues because a customer may find a better </li></ul><ul><li>alternative in competition. </li></ul>
  14. 14. <ul><li>Impact of Technology </li></ul><ul><li>• We propose to discuss the impact of technology in </li></ul><ul><li>general, under three heads :- </li></ul><ul><li>a) Technology & social change </li></ul><ul><li>b) Economic effects of technology, & </li></ul><ul><li>c) Technology & plant level changes </li></ul><ul><li> (See Fig. Below) </li></ul>
  15. 15. Technology A. Social implications C. Plant level changes B. Economics implications High expectation of consumers Systems complexity Social systems Social changes Organisation structure Resistance to change Increased regulation & stiff opposition Problems of techno- structure Jobs become intellectual Increased productivity Fear of risk e-Commerce Telecommuting Rise & decline of products & organisations Boundaries redefined Transportation Markets Technology transfers Impact of Technology Need to spend on R&D
  16. 16. <ul><li>A. Social Implications </li></ul><ul><li>• Perhaps the most striking influence of </li></ul><ul><li>technology is found on society as every area of social life & the life of every individual has been, in some sense or the other, changed by the developments in technology. </li></ul>
  17. 17. <ul><li>A1. High Expectations of Consumers </li></ul><ul><li>• Technology has contributed to the emergence </li></ul><ul><li>of affluent societies, who want more of many </li></ul><ul><li>things than more of same things, like varieties </li></ul><ul><li>of products, superior in quality, free from </li></ul><ul><li>pollution, more safe, & more comfortable. </li></ul><ul><li>• This calls for substantial investment in R&D. </li></ul><ul><li>• One important compulsion for investing in </li></ul><ul><li>technological advances in Japan is its </li></ul><ul><li>customer’s high expectations regarding design </li></ul><ul><li>sophistication, quality, delivery, schedules, & </li></ul><ul><li>prices </li></ul>
  18. 18. <ul><li>• Industry owners in Japan swear by the dictum – the </li></ul><ul><li>customer is a god who is always right. </li></ul><ul><li>• High expectations of consumers pose a challenge & </li></ul><ul><li>an opportunity to the owners of business institutions. </li></ul>
  19. 19. <ul><li>A2. System Complexity </li></ul><ul><li>• Technology has resulted in complexity </li></ul><ul><li>• Modern machines work better & faster no </li></ul><ul><li>doubt </li></ul><ul><li>• But if they fail, they need the services of </li></ul><ul><li>experts for repairs </li></ul><ul><li>• They fail often because of their complexity </li></ul><ul><li>• A machine or a system is composed of several </li></ul><ul><li>hundred components </li></ul><ul><li>• All parts must work in tandem to accomplish </li></ul><ul><li>a desired task </li></ul><ul><li>• Reliable performance of each part, therefore, </li></ul>
  20. 20. <ul><li>assumes greater significance because of </li></ul><ul><li>interdependence of systems. </li></ul><ul><li>• Management is, therefore, under pressure to keep </li></ul><ul><li>the whole system working all the time. </li></ul>
  21. 21. <ul><li>A3. Social Change </li></ul><ul><li>• The role of technology on social change may be </li></ul><ul><li>observed in more than one way :- </li></ul><ul><li>First , there is the change in social life, which </li></ul><ul><li>results from a change in a technological </li></ul><ul><li>process. Thus, an invention may displace </li></ul><ul><li>thousand of workers, yet the same invention </li></ul><ul><li>may result in the creation of a new city some- </li></ul><ul><li>where else & create even more jobs than it </li></ul><ul><li>originally destroyed. Technological changes of </li></ul><ul><li>this sort create a turmoil in society. </li></ul><ul><li>Secondly , besides uprooting population, </li></ul>
  22. 22. <ul><li>technology directly changes the patterns of their </li></ul><ul><li>social life. An invention may open new employment </li></ul><ul><li>opportunities to women, radically change hours </li></ul><ul><li>spent at work & in the family, increase available </li></ul><ul><li>leisure time, open jobs to youth, & deny them to </li></ul><ul><li>middle-aged or old workers. Technological advance- </li></ul><ul><li>ment tends to smoothen out differences, as it creates </li></ul><ul><li>a more freer & egalitarian society. </li></ul><ul><li>Thirdly , though social differences tend to be ironed </li></ul><ul><li>out, status differences are likely to be created by </li></ul><ul><li>technological advancement in developing countries </li></ul><ul><li>as technology flows to less developed countries </li></ul><ul><li>mainly through multinational companies. In India, </li></ul>
  23. 23. <ul><li>the employees in foreign collaborations are paid </li></ul><ul><li>much more than are paid in other local Indian </li></ul><ul><li>companies, though they do the same job in the same </li></ul><ul><li>field. </li></ul><ul><li>Fourth , the way we cook, communicate,use media & </li></ul><ul><li>work are affected by technology. Even the language </li></ul><ul><li>we use is changing, terms that until recently were </li></ul><ul><li>not even part of our lexicon have become common </li></ul><ul><li>place. Social changes are also reflected in our </li></ul><ul><li>vocabularies like, house-husband, surrogate mother, </li></ul><ul><li>& domestic partner, etc. It is therefore, rightly said </li></ul><ul><li>that the words are the bugles of social change. when </li></ul><ul><li> our language changes, behaviour will not be far </li></ul><ul><li>behind. </li></ul>
  24. 24. <ul><li>Fifth , technology has its impact on religion in at least </li></ul><ul><li>two ways, first, religiosity has declined in </li></ul><ul><li>importance as consumers have come to rely on </li></ul><ul><li>technology rather than on benevolent deities for </li></ul><ul><li>their well-being. Secondly, (on the negative side), </li></ul><ul><li>modernisation pressures against genetically modified </li></ul><ul><li>foods to wholesale rejection of western technologies </li></ul><ul><li>by certain religious fundamentalists. </li></ul><ul><li>Sixth , technology has revolutionalised the education </li></ul><ul><li>system. The internet makes vast knowledge bases </li></ul><ul><li>available to a large number of people electronically. </li></ul><ul><li>It has virtually democratised education by enabling </li></ul><ul><li>in the very poor & remote countries to access the </li></ul>
  25. 25. <ul><li>world’s best libraries, instructors, & courses </li></ul><ul><li>available through the Internet. </li></ul>
  26. 26. <ul><li>A4. Social Systems </li></ul><ul><li>• Of particular interest is the knowledge of </li></ul><ul><li>technology </li></ul><ul><li>• At this level, technology creates a distinct type </li></ul><ul><li>of social system, namely, the knowledge society </li></ul><ul><li>• In the knowledge society, use & transfer of </li></ul><ul><li>knowledge & information, rather than manual </li></ul><ul><li>skill, dominates work & employs the largest </li></ul><ul><li>portion of labour force </li></ul><ul><li>• The knowledge-worker will have to show why </li></ul><ul><li>he should be retained, what benefit he can </li></ul><ul><li>offer to the organisation, & how he can add </li></ul>
  27. 27. <ul><li>value to whatever the organisation does </li></ul><ul><li>• He will have to create new jobs in consultation with </li></ul><ul><li>his employer </li></ul><ul><li>• A job will then become a joint venture </li></ul><ul><li>• When this happens, the worker can forget pension </li></ul><ul><li>plans. </li></ul>
  28. 28. <ul><li>B. Economic Implications </li></ul><ul><li>• Developments in technology also have </li></ul><ul><li>significant economic implications :- </li></ul>
  29. 29. <ul><li>B1. Increased productivity </li></ul><ul><li>• the most fundamental effect of technology is </li></ul><ul><li>greater productivity in terms of both quality </li></ul><ul><li>& quantity </li></ul><ul><li>• This is the main reason why technology at all </li></ul><ul><li>levels is adopted </li></ul><ul><li>• As a result of productivity improvements, real </li></ul><ul><li>wages of employees tend to rise & prices of </li></ul><ul><li>some products decline. </li></ul>
  30. 30. <ul><li>B2. Need to Spend on R&D </li></ul><ul><li>• Research & Development (R&D) assumes </li></ul><ul><li>considerable relevance in organisations as </li></ul><ul><li>technology advances </li></ul><ul><li>• Firms are required to consider, decide & take </li></ul><ul><li>action on at least six issues. </li></ul><ul><li>First , the allocation of resources to R&D. </li></ul><ul><li>It enables business improve corporate </li></ul><ul><li>performance by enabling the firm to better </li></ul><ul><li>develop synergies among product lines & </li></ul><ul><li>business units. </li></ul>
  31. 31. <ul><li>Secondly , technology transfer, the process of taking </li></ul><ul><li>new technology from the laboratory to the market </li></ul><ul><li>place is equally important when the company fails to </li></ul><ul><li>develop much in the way of major innovations. </li></ul><ul><li>Thirdly , time factor is important in R&D. </li></ul><ul><li>Companies can no longer assume that competition </li></ul><ul><li>will allow them the time needed to recoup their </li></ul><ul><li>investment. </li></ul><ul><li>Fourthly , as new technology comes in, the old </li></ul><ul><li>technology needs to be abandoned. The process of </li></ul><ul><li>old replaced by new is called technological </li></ul><ul><li>discontinuity. Such discontinuity occurs when a new </li></ul><ul><li>technology cannot be used simply to enhance the </li></ul><ul><li>current technology but actually substitutes for that </li></ul>
  32. 32. <ul><li>technology to yield better performance. The R&D </li></ul><ul><li>manager must determine when to abandon present </li></ul><ul><li>technology & when to develop or adapt new </li></ul><ul><li>technology. </li></ul><ul><li>Fifthly , the firm must also decide on its own R&D or </li></ul><ul><li>to outsource technology. As a rule, it may be stated </li></ul><ul><li>that a company should buy technologies that are </li></ul><ul><li>commonly available but make (& protect) those at </li></ul><ul><li>are rare, valuable, hard to imitate, & have no close </li></ul><ul><li>substitutes. In addition, outsourcing technology may </li></ul><ul><li>be appropriate when :- </li></ul><ul><li>• The technology is of little significance to com- </li></ul><ul><li>petitive advantage </li></ul>
  33. 33. <ul><li>• The supplier has proprietary technology </li></ul><ul><li>• The supplier’s technology is better &/or </li></ul><ul><li>cheaper & reasonable easy to integrate into </li></ul><ul><li>the current system </li></ul><ul><li>• The technology development process requires </li></ul><ul><li>special expertise, & </li></ul><ul><li>• the technology development process requires </li></ul><ul><li>new people & new resources. </li></ul><ul><li>The sixth & the final issue relates to the decision on </li></ul><ul><li>product innovation or process innovation. In the </li></ul><ul><li>early stages, product innovations are most important </li></ul><ul><li>because the product’s physical attributes & </li></ul><ul><li>capabilities affect financial performance </li></ul><ul><li>considerably. Later, process innovations such as </li></ul>
  34. 34. <ul><li>improved manufacturing facilities, increasing </li></ul><ul><li>product quality, & faster distribution become </li></ul><ul><li>important in maintaining the product’s economic </li></ul><ul><li>returns. </li></ul>
  35. 35. <ul><li>B3. Jobs Become Intellectual </li></ul><ul><li> • With the advent of technology, jobs tend to </li></ul><ul><li>become more intellectual or upgraded </li></ul><ul><li>• A job hitherto handled by an illiterate & un- </li></ul><ul><li>skilled worker now requires the services of an </li></ul><ul><li>educated & component worker </li></ul><ul><li>• Introduction of new technology dislocates </li></ul><ul><li>some workers </li></ul><ul><li>• This makes it obligatory on the part of </li></ul><ul><li>business houses to retrain its employees & to </li></ul><ul><li>rehabilitate those displaced & untrainable </li></ul><ul><li>• Equal is the responsibility of the government </li></ul>
  36. 36. <ul><li>to provide training & educational facilities to its </li></ul><ul><li>citizens - those who pick up & acquaint themselves </li></ul><ul><li>with the new technology, the job will be rewarding </li></ul><ul><li>as they stand to gain through increased productivity, </li></ul><ul><li>reduced prices, & increased real wages </li></ul><ul><li>• Along with upgrading jobs, technology has its </li></ul><ul><li>impact on human relations </li></ul><ul><li>• Since interaction & activity affect sentiments, & they </li></ul><ul><li>begin to feel & think about one another & about </li></ul><ul><li>their work situation. </li></ul>
  37. 37. <ul><li>B4. Problem of Technostructure </li></ul><ul><li>• Not only jobs become more intellectual & </li></ul><ul><li>knowledge-oriented, even the incumbents tend </li></ul><ul><li>to become highly professional & </li></ul><ul><li>knowledgeable </li></ul><ul><li>• Such an enterprise has to face on this account </li></ul><ul><li>serious problems :- </li></ul><ul><li>First , motivation of such employees is a </li></ul><ul><li>difficult task because incentives as attractive </li></ul><ul><li>remuneration, job security, & just treatment, </li></ul><ul><li>hardly inspire the enlightened employees to </li></ul><ul><li>work more. They are instead motivated </li></ul>
  38. 38. <ul><li>by opportunities which offer challenges or growth </li></ul><ul><li>or achievement. </li></ul><ul><li>Secondly , retraining such employees for long is a </li></ul><ul><li>difficult job. Flighting & not sticking to one </li></ul><ul><li>company is their culture. The company has to make </li></ul><ul><li>several exceptions to discourage rootless ness of its </li></ul><ul><li>professional employees :- </li></ul><ul><li>• Regular attendance & punctuality have to be </li></ul><ul><li>relaxed </li></ul><ul><li>• Dual promotion ladders have to be established </li></ul><ul><li>so that distinguished technical people can rise </li></ul><ul><li>in rank </li></ul><ul><li>• Profit-sharing to be provided to give creative </li></ul>
  39. 39. <ul><li>persons a financial stake in the ideas they </li></ul><ul><li>create </li></ul><ul><li>• Attendance at professional get-togethers has </li></ul><ul><li>to be sponsored </li></ul><ul><li>• Writing professional articles has to be </li></ul><ul><li>encouraged & special assignments & part-time </li></ul><ul><li>teaching may be allowed. </li></ul><ul><li>Thirdly, scientific & professional workers constitute, </li></ul><ul><li>the technostructure . The technostructure tries to </li></ul><ul><li>control the organisation through influencing </li></ul><ul><li>management’s decision-making. But they are more </li></ul><ul><li>action oriented & are yet to learn social problems of </li></ul><ul><li>business decisions. Management is, therefore, in a </li></ul>
  40. 40. <ul><li>in a tight position to balance the ruffled feelings of </li></ul><ul><li>technocrats & the social consequences of business </li></ul><ul><li>decisions. </li></ul>
  41. 41. <ul><li>B5. Increased Regulation & Stiff Opposition </li></ul><ul><li>• A by-product of technological advancement is </li></ul><ul><li>the ever-increasing regulation imposed on </li></ul><ul><li>business by the government of the land & stiff </li></ul><ul><li>opposition from the public as the host govern- </li></ul><ul><li>ment has the powers to investigate & ban products that are directly harmful or hurt the </li></ul><ul><li> sentiments of a section of society. </li></ul>
  42. 42. <ul><li>B6. Rise & Decline of Products & Organisations </li></ul><ul><li>• Change of technology is a norm & not an exception </li></ul><ul><li>• This poses another problem to business </li></ul><ul><li>• A new technology may spawn a major </li></ul><ul><li>industry but it may also destroy an existing </li></ul><ul><li>one </li></ul><ul><li>• Transistors, for example, hurt the vacuum- </li></ul><ul><li>tube industry & xerography hurt the carbon </li></ul><ul><li>paper business </li></ul><ul><li>• A typical product, today, is subject to a cycle : </li></ul><ul><li>introduction, growth, maturity, decline, & </li></ul>
  43. 43. abandonment • An organisation that is associated with particular technology will go in sequence through the following stages :- (i) birth, (ii) growth, (iii) policy, (iv) procedure, (v) theory, (vi) religion, (vii) ritual, & (viii) last rites.
  44. 44. B7. Boundaries Redefined Technological changes have significant consequences for industries :- • Technological change is a potent force in the reconfiguring of industry boundaries, it may broaden or narrow generally excepted industry boundaries • As a consequence of its impact on whole industries, technological change can have a significant impact on the prevailing business definition of individual companies. Companies may find themselves in a different business
  45. 45. due to technological changes that they or others have effected • Technological change is one of the important factors giving rise to product substitution & product differentiation. Technological change is a dominant force in shaping competitive dynamics in many industries. It influences industry boundaries & structure, product substitution & differentiation, & the price quality relationships between products • Technological change in the form of process (as opposed to product) & materials innovations may contribute to many of the impacts noted above • Finally, for multi-product companies (preceding
  46. 46. <ul><li>discussion applies to single-business units), </li></ul><ul><li>technological change may have multiple impacts. </li></ul>
  47. 47. <ul><li>C. Plant Level Changes </li></ul><ul><li> • The impact of technology at the plant level is also </li></ul><ul><li>significant. </li></ul>
  48. 48. <ul><li>C1. Technology & Organisation Structure </li></ul><ul><li>• Technology has considerable influence on </li></ul><ul><li>organisation structure, length of the line of </li></ul><ul><li>command, & span of control of the chief </li></ul><ul><li>executive </li></ul><ul><li>• Where companies use technology, which is fast </li></ul><ul><li>changing, matrix structures are more common </li></ul><ul><li>• Some companies use a matrix even though the </li></ul><ul><li>rate of technological change is not fast </li></ul><ul><li>• Besides technology, other factors that have </li></ul><ul><li>their influence on organisation structure are </li></ul><ul><li>history & background of a company & the </li></ul>
  49. 49. <ul><li>personalities of the people who founded the firm & </li></ul><ul><li>managed it subsequently, but the impact of techno- </li></ul><ul><li>logy is considerable </li></ul><ul><li>• Line of command tend to be lengthy where the </li></ul><ul><li>production is routine & process based </li></ul><ul><li>• Decision-making is highly centralised </li></ul><ul><li>• It tends to be short if the production activities are </li></ul><ul><li>customised </li></ul><ul><li>• The use of specialists will be more & hence decision- </li></ul><ul><li>making gets delegated </li></ul><ul><li>• In mass production technologies, the number of </li></ul><ul><li>people whom an executive controls tends to be larger </li></ul><ul><li>than when the production is unit based </li></ul>
  50. 50. <ul><li>• Any technological advancement will result in :- </li></ul><ul><li>a) the expanded availability of a range of </li></ul><ul><li>products & services </li></ul><ul><li>b) substitution of capital for labour, leading to </li></ul><ul><li>higher productivity & lower costs </li></ul><ul><li>c) increases in sales or power for the innovating </li></ul><ul><li>organisation relative to its competitors </li></ul><ul><li>d) initiation of changes in behaviour among </li></ul><ul><li>customers, suppliers, employees, or society, & </li></ul><ul><li>e) side-effects on the quality of physical </li></ul><ul><li>environment. </li></ul>
  51. 51. <ul><li>C2. Resistance to Change </li></ul><ul><li>• The manager of a given business unit shall </li></ul><ul><li>face resistance to change as new technology </li></ul><ul><li>poses new problems </li></ul><ul><li>• The resistance to change is often psychological </li></ul><ul><li>• A typical businessman himself is opposed to </li></ul><ul><li>adopting new technology as it is expensive & </li></ul><ul><li>risky </li></ul><ul><li>• When he is making enough money with </li></ul><ul><li>obsolete technology why must he worry about </li></ul><ul><li>new technology? </li></ul>
  52. 52. <ul><li>Specifically, resistance to change stems from the </li></ul><ul><li>following reasons :- </li></ul><ul><li>1. Psychological or social commitments to existing </li></ul><ul><li>products, process & organisation, </li></ul><ul><li>2. Sizable capital investments in long-life single-use </li></ul><ul><li>facilities, </li></ul><ul><li>3. Low profits & reduced rate of growth, </li></ul><ul><li>4. Small size or fragmented activities, </li></ul><ul><li>5. Complacent top management, </li></ul><ul><li>6. Industry norms & associations or cartels that </li></ul><ul><li>perpetuate industry-bound thinking, </li></ul><ul><li>7. Lack of successful entrepreneurial models to emulate, & </li></ul><ul><li>8. Powerful labour resistance to changes in methods. </li></ul>
  53. 53. <ul><li>C3. Fear of Risk </li></ul><ul><li>• There is always the fear of risk. </li></ul><ul><li>• A research oriented-company like DuPont </li></ul><ul><li>Corfam, an intended substitute for the fore- </li></ul><ul><li>casted shortage of shoe leather, after an invest- </li></ul><ul><li>ment of $3000 million, abandoned the project </li></ul><ul><li>in 1971 because of quality & cost problems. </li></ul>
  54. 54. <ul><li>C4. E-commerce </li></ul><ul><li>• The phenomenal growth of the internet & the </li></ul><ul><li>associated World Wide Web has made e- </li></ul><ul><li>commerce possible </li></ul><ul><li>• E-commerce is contributing to a growing per- </li></ul><ul><li>centage of cross-border transactions </li></ul><ul><li>• It rolls back some of the constraints of </li></ul><ul><li>location, distance, scale, & time zones </li></ul><ul><li>• The Web allows, both small & large, to expand </li></ul><ul><li>their global presence at a lower cost than ever </li></ul><ul><li>before, wherever they may be located, & what </li></ul><ul><li>ever their size </li></ul><ul><li>• Modern factories are now able to produce </li></ul>
  55. 55. <ul><li>goods in a shorter period of time (to produce one car </li></ul><ul><li>it takes less than 10 seconds) & with fewer defects - </li></ul><ul><li>thanks to the introduction of ‘Six Sigma’ quality </li></ul><ul><li>programmes </li></ul><ul><li>• Six Sigma is a statistical term that means 3.5 errors </li></ul><ul><li>per million, effectively eliminating performance </li></ul><ul><li>problems & ensuring that products conform to </li></ul><ul><li>standards </li></ul><ul><li> • While e-commerce focuses on marketing & sales </li></ul><ul><li>process, E-business emphasises integration of </li></ul><ul><li>systems, processes, organisations, value chains, & </li></ul><ul><li>markets </li></ul><ul><li>• Integration operate through Internet & helps build </li></ul>
  56. 56. <ul><li>new relationships between businesses & customers </li></ul><ul><li>The internet & e-business provide a number of benefits </li></ul><ul><li>in global business, including the following :- </li></ul><ul><li>1. Convenience in conducting business worldwide; </li></ul><ul><li>facilitating communication across borders which </li></ul><ul><li>brings markets closer </li></ul><ul><li>2. An electronic meeting & trading place, which adds </li></ul><ul><li>efficiency in the conduct of business </li></ul><ul><li>3. Power to consumers as they gain access to limitless </li></ul><ul><li>options & price differential </li></ul><ul><li>4. Efficiency in distribution </li></ul>
  57. 57. <ul><li>C5. Telecommunications </li></ul><ul><li>• The obvious dimension of the technological </li></ul><ul><li>environment facing international business is </li></ul><ul><li>telecommunications </li></ul><ul><li>• This growth is welcome as business, domestic </li></ul><ul><li>or global, cannot prosper without an efficient </li></ul><ul><li>telephone system, such as, 3G, MMS of </li></ul><ul><li>NOKIA. </li></ul>
  58. 58. <ul><li>C6. Transportation </li></ul><ul><li>• In addition to developments in computers & </li></ul><ul><li>telecommunications, several major innovations </li></ul><ul><li>in transportation have occurred since World </li></ul><ul><li>War II </li></ul><ul><li>• While the advent of commercial jet has </li></ul><ul><li>reduced the travel time of businessmen, </li></ul><ul><li>containerisation has lowered the costs of </li></ul><ul><li>shipping goods over long distances. </li></ul>
  59. 59. <ul><li>C7. Gobalisation of Production </li></ul><ul><li>• Technological breakthroughs have facilitated </li></ul><ul><li>globalisation of production </li></ul><ul><li>• A satellite based communications system </li></ul><ul><li>allows Texas Instruments (TI) to co-ordinate </li></ul><ul><li>on a global scale, its production planning, cost </li></ul><ul><li>accounting, financial planning, marketing, </li></ul><ul><li>customer service, & human resource. </li></ul>
  60. 60. C8. Markets • Along with the globalisation of production, technological innovations have facilitated the internationalisation of markets • As stated earlier, containerisation has made it more economical to transport goods over long distances, thereby creating global market • Low-cost global communications networks such as the World Wide Web are helping to electronic global market places • In additions, low-cost jet travel has resulted in the mass movement of people around the world
  61. 61. <ul><li>• This has reduced the cultural distance between the </li></ul><ul><li>countries & is bringing about convergence of </li></ul><ul><li>consumer tastes & preferences </li></ul><ul><li>• At the same time, global communications networks </li></ul><ul><li>& global media are creating a worldwide culture </li></ul><ul><li>• Worldwide culture is creating a world market for </li></ul><ul><li>consumer goods. </li></ul>
  62. 62. <ul><li>C9. Technology Transfers </li></ul><ul><li>Technology transfers includes :- </li></ul><ul><li>i) Internal transfer of technology from the R&D </li></ul><ul><li>or engineering department to the </li></ul><ul><li>manufacturing department of a firm based in </li></ul><ul><li>a country </li></ul><ul><li>ii) The same transfer of technology from a </li></ul><ul><li>laboratory or operations of an MNC in one </li></ul><ul><li>country to its laboratory or operations in </li></ul><ul><li>another country </li></ul><ul><li>iii) The transfer of technology from a research </li></ul><ul><li>consortium supported by many firms to one of </li></ul>
  63. 63. <ul><li>its members </li></ul><ul><li>• Simply told, technology transfer is a process that </li></ul><ul><li>permits the flow of technology from a source to a </li></ul><ul><li>receiver through published material </li></ul><ul><li>• Purchase & sale of machinery, equipment & inter- </li></ul><ul><li>mediate goods, transfer of data & personnel; & </li></ul><ul><li>interpersonal communication </li></ul><ul><li>Technology transfer comprise six categories :- </li></ul><ul><li>1. International Technology Transfer is across </li></ul><ul><li>national boundaries. Generally, such transfers take </li></ul><ul><li>place between developed & developing countries. </li></ul>
  64. 64. <ul><li>2. Regional Technology Transfer is transferred </li></ul><ul><li>from one region of a country to another. </li></ul><ul><li>3. Cross-industry or Cross-sector Technology </li></ul><ul><li>Transfer is transferred from one industrial sector </li></ul><ul><li>to another. </li></ul><ul><li>4. Interfirm Technology Transfer is transferred </li></ul><ul><li>from one company to another. </li></ul><ul><li>5. Intra-firm Technology Transfer is transferred </li></ul><ul><li>within a firm, from one location to another. Intra- </li></ul><ul><li>firm transfers can also be made from one </li></ul><ul><li>department to another within the same facility. </li></ul>
  65. 65. <ul><li>6. Pirating or Reverse-Engineering whereby </li></ul><ul><li>access to technology is obtained as the expense of the </li></ul><ul><li>proprietary rights of the owners of technology. </li></ul>
  66. 66. <ul><li>International Technology Transfer </li></ul><ul><li>Parties in the Transfer Process </li></ul><ul><li>i) Home country, </li></ul><ul><li>ii) Host Country, & </li></ul><ul><li>iii) The Transaction </li></ul>
  67. 67. <ul><li>Home country </li></ul><ul><li>• Argue that the establishment of production facilities </li></ul><ul><li>by MNCs in subsidiaries abroad decrease their </li></ul><ul><li>export potential </li></ul><ul><li>• Some of the MNCs imports stem from their </li></ul><ul><li>subsidiaries, the volume of imports of the home </li></ul><ul><li>country tends to increase </li></ul><ul><li>• Besides, technology transfer tends to effect adversely </li></ul><ul><li>competitive advantage of the home country </li></ul><ul><li>• Labour unions in the home country too oppose </li></ul><ul><li>technology transfer on the ground that the jobs </li></ul><ul><li>generated from the new technology will benefit the </li></ul><ul><li>host country citizens. </li></ul>
  68. 68. <ul><li>ii) Host Country </li></ul><ul><li>a) Economic Implications </li></ul><ul><li>b) Social Implications </li></ul>
  69. 69. <ul><li>Economic Implications </li></ul><ul><li>• Economic implications include payment of fee, </li></ul><ul><li>royalty, dividends, interest, & salaries to foreign </li></ul><ul><li>technicians & tax concessions resulting in loss to the </li></ul><ul><li>national exchequer </li></ul><ul><li>• All these are payable to the transferring country & </li></ul><ul><li>might prove very expensive to the host country </li></ul><ul><li>• Many times, the type of technology transferred by </li></ul><ul><li>international business is not appropriate to </li></ul><ul><li>developing countries, is designed to produce the </li></ul><ul><li>types of goods that a rich country needs </li></ul><ul><li> & to do so by methods, which are appropriate to </li></ul>
  70. 70. <ul><li>resources endowment of developed nations. </li></ul>
  71. 71. <ul><li>b) Social Implications </li></ul><ul><li>• Along with the transfer of technology, there is the </li></ul><ul><li>transmission of culture from the exporting countries </li></ul><ul><li>• The upper & middle class Indians are a case in point </li></ul><ul><li>• Majority of these neo-rich people are totally Wester- </li></ul><ul><li>nised & Americanised in their attitudes, behaviours, </li></ul><ul><li>food habits, & dress accustomedness </li></ul><ul><li>• This is because, we import technology from the </li></ul><ul><li>United States & European countries. </li></ul>
  72. 72. <ul><li>iii) Transaction </li></ul><ul><li>• This element focuses on the nitty-grities of the </li></ul><ul><li>transfer. </li></ul>
  73. 73. <ul><li>Stager in the Transfer Process </li></ul><ul><li>The transfer of technology between countries, </li></ul><ul><li>particularly from rich to developing nations, proceeds </li></ul><ul><li>in five different, but coordinated stages :- </li></ul><ul><li>1. Assignments, including sale & licensing agreements </li></ul><ul><li>covering all forms of industrial property including </li></ul><ul><li>patents, inventor’s certificates, utility models, </li></ul><ul><li>industrial designs, trademarks, service names, & </li></ul><ul><li>trade names. </li></ul><ul><li>2. Arrangements, covering the provision of know-how </li></ul><ul><li>& technical expertise in the form of feasibility </li></ul>
  74. 74. <ul><li>studies, plans, diagrams, models, instructions, </li></ul><ul><li>guides, formulations, service contracts & </li></ul><ul><li>specifications, &/or involving technical, advising, </li></ul><ul><li>& managerial personnel, personnel training, & </li></ul><ul><li>equipments for training. </li></ul><ul><li>3. Arrangements, covering the provision of basic or </li></ul><ul><li>detailed engineering designs, & the installation & </li></ul><ul><li>operations of plant & equipment. </li></ul><ul><li>4. Purchases, including leases & other forms of </li></ul><ul><li>acquisition of machinery, equipment, intermediate </li></ul><ul><li>goods, &/or raw materials insofar as they are part of </li></ul><ul><li>transactions involving technology transfers </li></ul>
  75. 75. <ul><li>5. Industrial & technical cooperation agreements of </li></ul><ul><li>any kind, including turnkey agreements, </li></ul><ul><li>international subcontracting, as well as provision for </li></ul><ul><li>managements of & marketing services </li></ul><ul><li>Technology is not a homogeneous phenomenon. There </li></ul><ul><li>are different types of technology, each posing fundamentally different problems & demanding </li></ul><ul><li>different solutions in the international transfer process. </li></ul>
  76. 76. <ul><li>International Technology Issues </li></ul>
  77. 77. <ul><li>Technology Issues </li></ul>International Technology Issues Terms of Technology Transfer Choice of Technology Creating Local Capability Foreign Technology Acquisition Globalisation Barriers
  78. 78. <ul><li>Foreign Technology Acquisition </li></ul><ul><li>• One of the major issues in technology relates to the </li></ul><ul><li>mode of acquisition </li></ul><ul><li>• Developing new technology may conjure up visions </li></ul><ul><li>of scientists & product developers working in R&D </li></ul><ul><li>laboratories </li></ul><ul><li>• In reality, new technology comes from many </li></ul><ul><li>different sources, including suppliers, manufacturers </li></ul><ul><li>users, other industries, universities, government & </li></ul><ul><li>MNCs </li></ul><ul><li>• While every source needs to be explored, each firm </li></ul>
  79. 79. <ul><li>has specific sources for most of the new technologies. </li></ul><ul><li>Broadly the acquisition routes are three :- </li></ul><ul><li>A. Internal Technology Acquisition </li></ul><ul><li>B. External Acquisition </li></ul><ul><li>C. Combined Sources </li></ul>
  80. 80. <ul><li>Internal Technology Acquisition </li></ul><ul><li>• Internal technology acquisition option have the </li></ul><ul><li>advantage that any innovation becomes the exclusive </li></ul><ul><li>property of the firm </li></ul><ul><li>• In addition, the resulting technology will be tailored </li></ul><ul><li>to meet the firm’s needs </li></ul><ul><li>• However, internal development has risks </li></ul><ul><li>• The development take longer time than acquiring </li></ul><ul><li>already developed technology from external sources </li></ul><ul><li>• In addition, internally generated technology is more </li></ul><ul><li>expensive than the one acquired from outside </li></ul><ul><li>sources. </li></ul>
  81. 81. <ul><li>B. External Acquisition </li></ul><ul><li> • External technology acquisition is the process of </li></ul><ul><li>acquiring technology developed by other for use in </li></ul><ul><li>the company </li></ul><ul><li> • External technology acquisition generally has the </li></ul><ul><li>advantage of reduced cost & time to implement & </li></ul><ul><li>lower risks </li></ul><ul><li> • However, technology available from outside sources </li></ul><ul><li>was generally developed for different applications </li></ul><ul><li> • Therefore, external acquisition should contain an </li></ul><ul><li>aspect of adaptation to the acquiring co. application. </li></ul>
  82. 82. <ul><li>C. Combined Sources </li></ul><ul><li> • Many forms of technology acquisition are </li></ul><ul><li>combinations of external & internal activities </li></ul><ul><li> • Combined acquisition seek to overcome the </li></ul><ul><li>limitations of internal & external sources, taking </li></ul><ul><li>advantages of both the actions at the same time </li></ul>
  83. 83. <ul><li>Technology acquisition Routes </li></ul>Purely Internal Purely External Seizing Tacit X Knowledge Internal R&D X Internal R&D with X Networking Reverse X Engineering Covert acquisition With R&D Covert Acquisition X
  84. 84. <ul><li>Technology transfer X </li></ul><ul><li>& Absorption </li></ul><ul><li>Contract R&D X </li></ul><ul><li>R&D Strategic </li></ul><ul><li>Partnership X X </li></ul><ul><li>Licensing X </li></ul><ul><li>Purchasing X </li></ul><ul><li>Joint Venture X </li></ul><ul><li>Acquisition of Co. </li></ul><ul><li>With Technology X </li></ul>
  85. 85. <ul><li>Choice of Technology </li></ul><ul><li>Terms & Conditions of Technology Transfer </li></ul>
  86. 86. Restrict Clauses No. of clauses/ Agreements <ul><li>Export Clause </li></ul><ul><li>i) Permission of collaborator for exports </li></ul><ul><li>ii) Export permitted only to certain countries </li></ul><ul><li>iii) Export prohibited to certain countries </li></ul><ul><li>iv) Export prohibited </li></ul><ul><li>v) Export restricted to certain types of product </li></ul><ul><li>vi) Export restricted only to collaborators/ </li></ul><ul><li>Agents/ Distributors </li></ul><ul><li>vii) Restrictions on use of trade marks for </li></ul><ul><li>exports </li></ul>169 37 80 22 18 1 6 5
  87. 87. <ul><li>Sources of Supply of Raw Materials & Plant & </li></ul><ul><li>Machinery </li></ul><ul><li>Payment of Minimum Royalty </li></ul><ul><li>Restrictions on Production Pattern </li></ul><ul><li>Restrictions on Sale Procedures </li></ul><ul><li>Restrictions on Termination of Agreement </li></ul>94 40 27 5 1 Total Number of Agreements with Restrictive Clauses 213
  88. 88. <ul><li>Globalisation </li></ul><ul><li>• The world economy is passing through structural </li></ul><ul><li>changes </li></ul><ul><li>• These changes are driven by globalisation of </li></ul><ul><li>business as well as by the revolution in information, </li></ul><ul><li>communication, & transportation technology </li></ul><ul><li>• Nations now have powerful technology in their </li></ul><ul><li>hands, fundamentally transforming the way in </li></ul><ul><li>which business is conducted around the globe </li></ul><ul><li>• The World Trade Organisation (WTO) is </li></ul><ul><li>contributing to globalisation by removing trade </li></ul>
  89. 89. <ul><li>barriers between countries & involving mechanism </li></ul><ul><li>for smooth conduct of trade among nations </li></ul><ul><li>• the WTO has also evolved a mechanism to manage </li></ul><ul><li>technology better </li></ul><ul><li>• The main provision of the WTO that influence </li></ul><ul><li>technology transfer are included under the following </li></ul><ul><li>sections :- </li></ul><ul><li>1. Trade Related Aspects of Intellectual Property </li></ul><ul><li>Rights (TRIPs) </li></ul><ul><li>2. Trade Related Investment Measures (TRIMs) </li></ul><ul><li>3. Subsidies & Countervailing Measures (SCMs) </li></ul><ul><li>4. The Information Technology Agreements </li></ul><ul><li>(ITA) </li></ul>
  90. 90. <ul><li>Barriers to Technology Transfer </li></ul><ul><li>The final international technology issue relates to </li></ul><ul><li>barriers. The problems encountered in transfer of </li></ul><ul><li>technology are :- </li></ul><ul><li>• A limited general understanding of the concept of </li></ul><ul><li>technology, & the lack of consistent framework for </li></ul><ul><li>its study </li></ul><ul><li>• Lack of systematic planning for technology in </li></ul><ul><li>developing countries or misunderstanding of its </li></ul><ul><li>underlying philosophy </li></ul><ul><li>• Lack of bilateral scientific/ technology advantage in </li></ul>
  91. 91. <ul><li>the process of technology transfer (mutual benefits) </li></ul><ul><li>• Lack of systematic & integrated engineering & sicio- </li></ul><ul><li>economic approach to the technology transfer </li></ul><ul><li>process </li></ul><ul><li>• Lack of a relevant quantitative framework/ </li></ul><ul><li>approach to the analysis & evaluation of technology </li></ul><ul><li>transfer to developing countries </li></ul><ul><li>• Failure to include ergonomic aspects in technology </li></ul><ul><li>transfer or to accord sufficient value to the human </li></ul><ul><li>machine interface variable of the transferred </li></ul><ul><li>technology, or the failure to adjust the technology to </li></ul><ul><li>the existing socio-cultural system </li></ul><ul><li>• Lack of attention to environmental consideration & </li></ul>
  92. 92. <ul><li>assessment of technological impact </li></ul><ul><li>• Failure to determine whether a national consensus </li></ul><ul><li>& orientation exist for a transfer </li></ul><ul><li>• Failure to recognise the local potential (cultural & </li></ul><ul><li>economic) for adoption of technology (that is, failure </li></ul><ul><li>to determine the availability of social & economic </li></ul><ul><li>infrastructures) </li></ul><ul><li>• Failure to determine if the existing national </li></ul><ul><li>productive capacity is adequate to support the </li></ul><ul><li>application of the transferred technology </li></ul><ul><li>• Restricting the feasibility study of technology </li></ul><ul><li>transfer to financial assessments (mostly cost benefit </li></ul><ul><li>analysis) </li></ul>
  93. 93. <ul><li>• Absence of any substantial effort to review & utilise </li></ul><ul><li>the potential of technological interchange & socio- </li></ul><ul><li>technical collaboration for technology transfer </li></ul><ul><li>between developing countries </li></ul><ul><li>• Presence of ethnical problems within the technology </li></ul><ul><li>transfer </li></ul><ul><li>• failure to evaluate or consider ‘conflict causing’ </li></ul><ul><li>factors pertaining to the transferred technology. </li></ul><ul><li>these factors can be categories into :- </li></ul><ul><li>1. ‘sector conflict factors’ conflicts that can arise </li></ul><ul><li>within the techno-economic systems </li></ul><ul><li>2. ‘rural urban conflict factors’ arising because of </li></ul><ul><li>spatial (that is, regional) imbalance in the </li></ul>
  94. 94. <ul><li>distribution of physical resources needed for specific </li></ul><ul><li>industry in the long-term (for instance, sacrificing </li></ul><ul><li>the existing production institutions in an area in </li></ul><ul><li>order to initiate to new, imported, mostly large scale </li></ul><ul><li>technology), leading to </li></ul><ul><li>3. Factors ‘ disturbing the socio-cultural balance’ that </li></ul><ul><li>operate with in the social system : </li></ul><ul><li>due to the nonconformity of the transferred </li></ul><ul><li>technology with the available potential, & with the </li></ul><ul><li>inherent objective of development policies & </li></ul><ul><li>national techno-economic plans in developing </li></ul><ul><li>countries ; & due to the lack of specific software & </li></ul><ul><li>any other sophisticated supportive tools for </li></ul>
  95. 95. <ul><li>technological planning & technology assessment </li></ul><ul><li>within the technology transfer framework. </li></ul>
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