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By :
Prof. Amit Kumar

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“A student pursuing management education from IILM-
Graduate School of Management, for example may find
himself or herself placed in a firm located in a totally
different country. Knowledge about international
business keeps the youngster mentally prepared to
accept assignment in an alien environment. Forewarning
is definitely forearming, for the fresh management
graduate”.
IILM-GSM
Importance of this course
Global Business Management

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Course: Global Business Management
1. Globalization
2. Global Trade & Theory
3. Global Technological Environment
4. Global Economic Environment
5. Global Political-Legal Environment
6. Foreign Direct Investments
7. Regional Economic Integration
8. Strategy and Structure of International Business
IILM-GSM
Global Business Management

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Global Business Management Global Technological Environment
IILM-GSM

5. 07/03/15
Contents
• Opening Case: Videocon, Tata, RIL
• Science & Technology
• Classification of Technology
• The Technology Cycle
• Technology Transfer
• 'Moonlighting Strategy’ for Technology Transfer
Global Business Management Global Technological Environment
IILM-GSM

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Opening Case
Now, Indian companies are looking to globalize
and they need to have long product pipelines.
This is simply not possible without an in-house
research program.
Global Business Management Global Technological Environment
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Opening Case: Videocon
Years ago, Videocon had a 'commodity' approach to the
market, but with margins moving towards the high-end
technology differentiating market, the company has
changed tack.
The company has set up R&D centers in the last one
year in Japan, Italy, China and India. Infact, R&D
spends for the company, as a percentage of sales,
have moved up from 1% to 4%.
Global Business Management Global Technological Environment
IILM-GSM

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Opening Case: Tata Group
Tata Group's desire to develop advanced building
materials. These materials might mitigate the
usage of settel in construction. This will need
builders and consumers to use such materials.
This is clearly long-term play, and the group is
spending close to Rs. 300 crore in this research.
Global Business Management Global Technological Environment
IILM-GSM

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Opening Case: Reliance
RIL subsidiary, Reliance Life Sciences, which has
set up in 2001, is working on novel proteins and
still in early stages of development. The company
is also developing a wide-range of cell-based
therapies for regenerative medicine.
Global Business Management Global Technological Environment
IILM-GSM

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Technological Environment
• Fast moving and changing environment.
• Technological environment like its counterparts-political
and legal, and cultural-wields considerable influence on
international business.
• Technological advances can affect materials,
components and products, manufacturing business
processes, administration and distribution systems.
Global Business Management Global Technological Environment
IILM-GSM

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Global Business Management Global Technological Environment
IILM-GSM
Technology is powerful, but remember the
other two dimensions:
Technological Environment
 Economic: Is the technology cost effective?
 Behavioural: Will customers really use it?

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Science & Technology
Global Business Management Global Technological Environment
IILM-GSM
Features Science Technology
In pursuit of Knowledge Socio-economic gains
People involved Scientists Engineers
Agencies Involved Research Institution Industrial
establishment
Funding Mostly government Industry
Motivation To satisfy curiosity To bring out need
satisfying products
Domain Public Private/Secret
Impact Discontinuous Continuous
Time span Uncertain Evolutionary

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Technology helping the dialogue between
a company and its customers
• Technology has helped market research - complex sets
of data can be input and analysed quickly and safely.
• Database technology allows the storage, retrieval and
maintenance of detailed customer profiles and the
creation of personalised customer marketing offers.
• Information sharing and communication between
company and customers.
• Means of ordering goods and services.
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• Proprietary Technology: Technology protected by patents
or secrecy agreements that provide a measurable
competitive advantage
• Known Technology: Technologies that may be common to
many organizations but are used in unique ways
• Core Technologies: Technologies that are essential to
maintain a competitive advantage
• Leveraging Technologies: Technologies that support
several products, product lines, or classes of products.
• Supporting Technologies: Technologies that support the
core technologies
• Emerging Technologies: Technologies that are currently
under consideration for future products or processes
Classification of Technology
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The Technology Cycle
Following classification, technology management involves
carefully implementing five stages:
1. Awareness
2. Acquisition
3. Adaptation
4. Advancement and
5. Abandonment.
The Technology Cycle
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The Technology Cycle: Awareness
• This is the first phase of technology cycle in which a
company has a formal mechanism to become aware of
emerging technologies relevant to company's needs.
• Videocon come-up with plasma and LCD at low price.
• Some companies form 'think tank's' with engineers and
scientists.
The Technology Cycle
Global Business Management Global Technological Environment
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The Technology Cycle: Awareness
• Some companies form 'think tank's' with engineers and
scientists, who research from around the world, and
gather information through computer bulletin services,
journals, magazines, books, conferences and
international product exhibitions.
• The information is synthesized and put in short internal
report for the benefit of corporate strategic planners and
technology policy makers.
The Technology Cycle
Global Business Management Global Technological Environment
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The Technology Cycle: Acquisition
This phase involves actual acquisition of a particular
technology. To go from the awareness phase to the
acquisition phase, the company's technology group , in
collaboration with the industrial engineering group,
would conduct technical feasibility study, as well as
economic feasibility study, before justifying and
acquiring a new technology.
The Technology Cycle
Global Business Management Global Technological Environment
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The Technology Cycle: Adaptation
Virtually every enterprise ends up adapting an
acquired technology for its particular needs. If the
homework is done correctly, the transition from
acquisition to adaptation becomes much smoother
and less expensive.
The Technology Cycle
Global Business Management Global Technological Environment
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The Technology Cycle: Advancement
When capital is limited one can not indiscriminately
purchase and abandon technologies with scare
money. It becomes imperative to improvise the
acquired technologies for one's home needs.
Companies like, Lincoln Electric have taken this
thinking to a new height.
The Technology Cycle
Global Business Management Global Technological Environment
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The Technology Cycle: Advancement
Lincoln Electric is the world leader in electric arc-
welding equipment, and generates most of the process
technologies internally, eventually patenting them
because it can not find equipment among the vendors.
For the most part, it advances technologies through
the efforts of its design and development engineers.
The Technology Cycle
Global Business Management Global Technological Environment
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The Technology Cycle: Abandonment
This last phase of the technology cycle is the most
critical because decisions are made concerning the
obsolescence of a particular technology. With the
rapid discarding of existing technologies, timing for
new technology is critical for survival.
The Technology Cycle
Global Business Management Global Technological Environment
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The Technology Cycle: Abandonment
• Bad timing in prematurely abandoning a product
could result in lost revenues and on the other hand,
waiting too long to abandon might also result in lost
revenues because customer may find a better
alternative in competition.
• There does not seem to be an easy formula to make
the selection, but it can be done with greater input of
information from different areas of the company,
such as R&D, Marketing and Production.
The Technology Cycle
Global Business Management Global Technological Environment
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• What is it that is transferred in the name of technology?
Technology is transferred through published materials
(such as journals and books); purchase and sale of
machinery, equipment and intermediate goods, transfer
of data and personnel; and interpersonal
communication.
• Technology transfer comprises five categories:
Technology Transfers
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Technology Transfer comprises five categories:
1. International Technology transfer: Generally, such transfer
take place between developed and developing countries.
2. Regional Technology transfer: transferred from one region
of a country to another.
3. Cross-industry or Cross-sector technology transfer:
example is transfer of technology from the space program to
commercial application
4. Inter-firm technology transfer: transferred from one
company to another. Example is transfer of CAD and CAM
machines from the machine tool manufacturing firm to a
furniture making firm.
5. Intra-firm technology transfer: technology is transferred
within a firm, from one location to another. Intra-firm transfer
can also be made from one department to another within the
same facility.
Technology Transfers
Global Business Management Global Technological Environment
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Global Business Management Global Technological Environment
IILM-GSM
Seoul- every Friday evening, dozens of young and
middle-aged men leave their offices in Tokyo, head
for the airport, and arrive here in south Korea a few
hours later. They are Japanese engineers who have
come to spend the weekend quietly moonlighting at
Korean companies.
A 'MOONLIGHTING' Strategy for
Technology Transferred

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Global Business Management Global Technological Environment
IILM-GSM
Among them are engineering professionals,
partners in technical firms, and employees of major
Japanese corporations. Some are exporting their
skills on the sly without the consent of their bosses.
Some of these engineers are working at big
personal risk.
A 'MOONLIGHTING' Strategy for
Technology Transferred

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Global Business Management Global Technological Environment
IILM-GSM
Their Korean sponsors range from small auto-parts
makers to the biggest conglomerates. They typically
meet the Japanese at the airport, put them up in a
good hotels, provide interpreters, and pay them
equivalent of US $250 a day. Some even lend the
Japanese money to help buy houses back in Japan.
A 'MOONLIGHTING' Strategy for
Technology Transferred

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Global Business Management Global Technological Environment
IILM-GSM
The moonlighting engineers are just a small part of a
large Korean strategy. South Korea desperately wants
to go high-tech but is badly lacking in the plans,
people and processes needed to get there alone.
'We're very weak in design technology', say Yu Hee
Yol, the head of technology transfer at the Ministry
of Science and Technology, 'SO WE IMPORT
WHAT WE CAN'T CREATE'.
A 'MOONLIGHTING' Strategy for
Technology Transferred