innovation and technology management (cnp532) dr keith hampson school of construction management and...
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Innovation and Innovation and Technology Technology
ManagementManagement
(CNP532)(CNP532)
Dr Keith Hampson
School of Construction Management and Property
© Hampson, 2000 2 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
INTRODUCTION INTRODUCTION
Introductions Personal Group
Background and interests of audience Participant goals
© Hampson, 2000 3 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
OBJECTIVESOBJECTIVES
To provide overview of key concepts and importance of STM to competitive performance of firms today.
To provide background to the relevant literature. To provide a set of concepts and tools for use in
formulating and implementing technology strategy. To work together to use the strategic technology
frameworks to analyse a case study example. To challenge traditional approaches.
© Hampson, 2000 4 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
EXPECTED OUTCOMESEXPECTED OUTCOMES
Understand the important effect that technology has on business today.
Discuss current perspectives and better understand the role that management of technology has in building and maintaining a competitive edge in business.
Be able to apply key concepts and tools to enhance the competitive performance of your own organisation.
© Hampson, 2000 5 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
MY ROLE … MY ROLE …
More the guide on the side, More the guide on the side, rather than the sage on the stagerather than the sage on the stage
TECHNOLOGY TECHNOLOGY AND AND COMPETITIVE COMPETITIVE ADVANTAGEADVANTAGE
© Hampson, 2000 7 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
TECHNOLOGY AND COMPETITIVE ADVANTAGETECHNOLOGY AND COMPETITIVE ADVANTAGE
INTRODUCTIONINTRODUCTION
Why Study Strategic Technology Management? International Perspectives Basic Concepts and Definitions Technological Change and Economic Growth
© Hampson, 2000 8 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
WHY STUDY STRATEGIC WHY STUDY STRATEGIC TECHNOLOGY MANAGEMENT?TECHNOLOGY MANAGEMENT?
More effective use of engineering and science skills is essential if Australia is to develop the industrial structure necessary for economic growth. This requires technological and multi-skilling of our engineers and scientists, a balance of skills—technical and managerial—with a finely developed social awareness of the impact of their decisions on industry, community and environment.
(Kim Beazley, 1992- former Minister for Employment, Education and Training)
© Hampson, 2000 9 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
The industrialist who rejects the aid of science is about to be weighed in the balance.He will then be found wanting, and his business will soon pass to other hands. The wise investor will avoid him and his companies.
(Arthur Dehon Little, The Handwriting on the Wall, 1991)
© Hampson, 2000 10 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
WHY STUDY STRATEGIC WHY STUDY STRATEGIC TECHNOLOGY MANAGEMENT?TECHNOLOGY MANAGEMENT?
A society that blindly accepts the decisions of experts is a sick society on its way to death. The time has come when we must produce, alongside specialists, another class of scholars and citizens who have broad familiarity with the facts, methods and objectives of science and thus are capable of making judgements about scientific policies. Persons who work at the interface of science and society have become essential simply because almost everything that happens in society is influenced by science. (Dubox, 1970, p227)
© Hampson, 2000 11 School of Construction School of Construction Management and PropertyManagement and Property
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APESAAPESA (1992)(1992)
Australia’s engineers are well prepared in engineering technology, but not as well prepared for the full practice of engineering and business dimensions. ... Specialists—like managing engineers and scientists—must also have broader and non-technical skills, and the capability to perceive the wider opportunities provided by technology so that possibilities can be turned into commercial products.
© Hampson, 2000 12 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
INTERNATIONAL PERSPECTIVESINTERNATIONAL PERSPECTIVESEurope Europe ((Collins et al, 1991)
Perceptions of how management would handle problems in adoption of new technologies.
Training needs for technology - management interface.– More effective management of exploitation of
technology and how to introduce new products and processes.
– Conclusion: technologists, although enthusiastic and dedicated, exhibited naiveté in their approach to work which led to the creation of a new technology rather than the creation of a business opportunity.
© Hampson, 2000 13 School of Construction School of Construction Management and PropertyManagement and Property
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THEY PROPOSED A ...THEY PROPOSED A ...
2-phase remedy for shortfall:1. Postgraduate experience and training
designed to produce operational competence at junior to middle management levels in the organisation.
2. Encourage middle level managers to think like top management through Technology Management courses. Emphasis to be on strategic rather than on operating issues.
© Hampson, 2000 14 School of Construction School of Construction Management and PropertyManagement and Property
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INTERNATIONAL PERSPECTIVESINTERNATIONAL PERSPECTIVESNew Zealand New Zealand (Kirk, 1994)
Qualifications of senior management. – 6% of board members of top 200 companies were technically trained.
Individual senior management needs and attitudes. – Needs not covered by general management programs
Need for such topics as:– assessing and evaluating technological options– managing technical people and teams– strategic role of technology– technology project management– technology transfer and legal issues– managing change and innovation.
© Hampson, 2000 15 School of Construction School of Construction Management and PropertyManagement and Property
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INTERNATIONAL PERSPECTIVESINTERNATIONAL PERSPECTIVESUnited StatesUnited States (Construction Industry Institute, 1992)
Reviewed building construction projects: To remain competitive, creative and innovative ideas to
improve productivity must be explored. Innovation is a key for obtaining a competitive advantage
in any industry. For innovation to take place, an environment that
stimulates or encourages new ideas must be created by management.
Science, Maths & Engineering Degrees as apercentage of Total University degrees
05
1015202530354045
Ca
na
da
US
A
NZ
Au
str
alia
Ja
pa
n
Ire
lan
d
Ge
rma
ny
Fin
lan
d
Fra
nc
e
ScienceMaths & CompEngineeringTOTAL Science & Engineering
Ref: Education at a Glance - OECDIndicators - LB 2846.E247 - 1992
%
CHART 2
Agriculture’s share of exports
0
10
20
30
40
50
60
70
80
Ja
pa
n
Fin
lan
d
U K
U S
A
Ire
lan
d
Au
str
alia N Z
19751980198519901995 est
%
Ref: OECD Economies at a glance - 1996CHART 4
© Hampson, 2000 18 School of Construction School of Construction Management and PropertyManagement and Property
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Technology: Artifacts (products &
processes of production) and the
corresponding knowledge bases (ideas,
concepts & modes of inquiry) that firms use
to generate and maintain a particular level of
performance (Layton, 1974)
DEFINITIONDEFINITION
© Hampson, 2000 19 School of Construction School of Construction Management and PropertyManagement and Property
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Effectiveness Vs EfficiencyEffectiveness Vs Efficiency
© Hampson, 2000 20 School of Construction School of Construction Management and PropertyManagement and Property
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Strategies are both plans for the future and
patterns from the past (Mintzberg, 1987)
Technology Strategy: A pattern of decisions that
sets the technological goals and means for
achieving those technological goals and the
business goals of the organisation (Adler, 1989)
TECHNOLOGY STRATEGYTECHNOLOGY STRATEGY
© Hampson, 2000 21 School of Construction School of Construction Management and PropertyManagement and Property
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2 PRINCIPAL ECONOMICS RESEARCHERS 2 PRINCIPAL ECONOMICS RESEARCHERS STUDIED RATE OF ECONOMIC GROWTHSTUDIED RATE OF ECONOMIC GROWTH
1. R.M. SOLOW - 1957 PaperReviewed US economy 1909 -1949
87.5% of growth in output/worker unaccounted for
2. MOSES ABRAMOVITZ - 1956 PaperReviewed US economy 1869 - 1953
85.0% of growth in output/worker unaccounted for
LARGE COMPONENT OF INCREASE IN PRODUCTIVE OUTPUT CANNOT BE ACCOUNTED FOR BY A CORRESPONDING INCREASE IN TANGIBLE INPUTS
"TECHNICAL CHANGE""TECHNICAL CHANGE"
© Hampson, 2000 22 School of Construction School of Construction Management and PropertyManagement and Property
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TECHNICAL CHANGE - TECHNICAL CHANGE - ECONOMIC GROWTH ECONOMIC GROWTH
Researcher Average AnnualRate of Change
Schmookler (1869-78 to 1929-38) - GNP per unit of input
1.4%
Mills (1891-1900 to 1941-50) - GNP per manhour
3.6%
Schultz (1910 to 1950) - Agricultural output per unit of input
0.8 - 1.4%
Kendrick (1899 to 1963) - Private domestic output per unit of input
1.7%
Solow (1909 to 1949) - GNP per unit of labour
1.5%
(Source: Link, 1987)
CONSTRUCTION CONSTRUCTION INDUSTRY INDUSTRY PERSPECTIVESPERSPECTIVES
© Hampson, 2000 24 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
GROSS EXPENDITURE ON R&D/GDP GROSS EXPENDITURE ON R&D/GDP RATIO IN OECD COUNTRIESRATIO IN OECD COUNTRIES
Sweden 3.1% USA 2.8% Japan 2.8% Switzerland 2.7% … Australia 1.6% (15th)
© Hampson, 2000 25 School of Construction School of Construction Management and PropertyManagement and Property
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Major Trends Impacting Construction Major Trends Impacting Construction Products and ProcessesProducts and Processes (Tatum, 1988; CII, 1992; Gann, 1993)
Use of advanced IT in construction process and buildings themselves Mechanisation of construction activities Prefabrication and increased off-site fabrication New advanced materials More demanding owners and regulations Global markets for manufactured goods and engineering and
construction services, foreign competition and ownership New project delivery forms, eg. finance, design, build, own, operate,
transfer Resource constraints, eg. construction professionals, skilled trades,
permanent equipment and materials of construction
?
© Hampson, 2000 26 School of Construction School of Construction Management and PropertyManagement and Property
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TECHNICAL ATTRIBUTES OF TECHNICAL ATTRIBUTES OF FUTURE FACILITIES:FUTURE FACILITIES:
Decreased project size & greater emphasis on retrofit
Increased concern for employee and public safety Waste minimisation and environmental protection Increased quality and greater production flexibility Increased scope of mechanical & electrical
systems to conserve energy and improve indoor air quality (Source: CII 2000 Task Force, 1992)
© Hampson, 2000 27 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
TECHNOLOGICAL TRENDSTECHNOLOGICAL TRENDS
Increased benefits from computer applications– simulation, CAD
Increased automation and application of robotics– design for automation, human/machine issues
Advanced construction materials– composites, hi-strength steels and concretes
(Source: Tatum et al, 1992)
© Hampson, 2000 28 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
CONSTRUCTION INDUSTRYCONSTRUCTION INDUSTRY
A net importer of technology primarily from mining, materials
handling, motor vehicles and equipment sectors
Construction is critical to the economy employment and contribution to GDP
Advance in construction efficiency affects performance of other industries
© Hampson, 2000 30 School of Construction School of Construction Management and PropertyManagement and Property
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CONSTRUCTION INDUSTRYCONSTRUCTION INDUSTRY
Typically approximately 0.4% of sales invested as R&D cf. 5 - 10% in electronics
2 - 3%in manufacturing
Japan > 1% in construction Can this continue?
PERCENTAGE GROWTH IN GDP: 1975-1997 in Constant 1989-90 Dollars
429.4
150143.8142.7131.2123.1121.5113.5113.4
94.577.276.8
69.168.859.858.341.3
0
50
100
150
200
250
300
350
400
450
500
Manuf
actu
ring
Who
lesale
trad
e
CONSTRUCTIO
N
Retail
trad
e
Agric/
fore
stry
/fishin
g
Gover
n ad
min
& def
.
Accom
m,c
afes
& re
st.
All ind
ust.
(GDP(P
))
Cult. &
recr
eat.s
ervic
es
Mining
Elect,
gas
& wat
er
Educa
tion
Health
& C
omm
ser
vices
Fin. &
insu
ranc
e
Trans
port
& sto
rage
Prop.
& b
us. s
ervic
es
Comm
un. s
ervic
es
INDEXES OF GROWTH IN GDP AT CONSTANT PRICES
0
100
200
300
400
500
600
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
Worst PerformingIndustry: Manufacturing
Construction
Best PerformingIndustry:Communicationservices
All industries(GDP(P))
© Hampson, 2000 33 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
CURRENT CONSTRUCTION PRACTICECURRENT CONSTRUCTION PRACTICE
Traditional construction delivery system Segmented industry Conflicting interests Great opportunities for advancement
© Hampson, 2000 34 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
Long term effect on GDP on reducing costs by Long term effect on GDP on reducing costs by 10% in a range of Australian service industries10% in a range of Australian service industries
Non-residential Construction
0 0.5 1 1.5 2 2.5 3
OTC
Gas
Repairs
Australia Post
Investment
WaterWater Transport
Insurance
Air TransportServices to Transport
Non-bank Finance
Mechanical RepairsTelecom
Defence
Rail TransportPersonal Services
BankingRoad Transport
Welfare
Electricity
Public Administration
HealthEducation
Residential BuildingBusiness Services
Construction is KEYConstruction is KEYto economic growthto economic growth
© Hampson, 2000 35 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
THE CONSTRUCTION FIRMTHE CONSTRUCTION FIRM
Definition of a Contractor …
A gambler who never gets to shuffle, cut, or deal.
(cf. Bid Opening: A poker game in which the losing hand wins)
or is this another case of the Victim Complex?
© Hampson, 2000 36 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
POSSIBLE TECHNOLOGY STRATEGIES POSSIBLE TECHNOLOGY STRATEGIES FOR CONSTRUCTION FIRMS FOR CONSTRUCTION FIRMS (Tatum 1988)
Not proud Efficiency expert Construction R&D heresy Work smarter Forward technical integration Backward technical integration
STRATEGIC STRATEGIC TECHNOLOGY TECHNOLOGY FRAMEWORKSFRAMEWORKS
© Hampson, 2000 38 School of Construction School of Construction Management and PropertyManagement and Property
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STRATEGIC TECHNOLOGY FRAMEWORKSSTRATEGIC TECHNOLOGY FRAMEWORKS
To focus our understanding of the concepts surrounding strategic technology management.
To use as a future tool for analysis and action.
© Hampson, 2000 39 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
EVOLUTIONARY PROCESS FRAMEWORK FOR EVOLUTIONARY PROCESS FRAMEWORK FOR TECHNOLOGY STRATEGYTECHNOLOGY STRATEGY
(Burgelman & Rosenbloom, 1989 and adapted by Hampson, 2000)
TECHNOLOGY STRATEGY
EXPERIENCETECHNICAL
CAPABILITIES
INTERNAL ENVIRONMENT
GE
NE
RA
TIV
E M
EC
HA
NIS
MS
INT
EG
RA
TIV
E M
EC
HA
NIS
MS
EXTERNAL ENVIRONMENT
BUSINESSSTRATEGY
TECHNOLOGY EVOLUTION
ORGANISATIONAL CONTEXT
INDUSTRY CONTEXT
Monitor, review and standardise
© Hampson, 2000 40 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
TECHNOLOGY STRATEGY FRAMEWORK TECHNOLOGY STRATEGY FRAMEWORK (Hampson, 1993)
TS = TECHNOLOGY STRATEGY
COMPETITIVE POSITIONING
SOURCING OF TECHNOLOGY
SCOPE OF TECHNOLOG
Y STRATEGY
DEPTH OF TECHNOLOG
Y STRATEGY
ORGANISATIONAL FIT
TSTS
© Hampson, 2000 41 School of Construction School of Construction Management and PropertyManagement and Property
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DIMENSIONS OF DIMENSIONS OF
STRATEGYSTRATEGY
INDICATORS OF INDICATORS OF COMPETITIVECOMPETITIVE
PERFORMANCEPERFORMANCE
Technology Evolution
Industry Context
COMPETITIVE COMPETITIVE PERFORMANCEPERFORMANCEDependent Variable
TECHNOLOGY TECHNOLOGY STRATEGYSTRATEGY
Independent Vble
EXTERNAL ENVIRONMENT
EXTERNAL ENVIRONMENT
EXPLORATORY STUDY EXPLORATORY STUDY
RESEARCH MODEL RESEARCH MODEL (Hampson, 1993)
© Hampson, 2000 42 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
TS MEASUREMENT FRAMEWORKTS MEASUREMENT FRAMEWORK
Scope of Technology Strategy
Competitive Positioning
Sourcing of Technology
Depth of Technology Strategy
Organizational Fit
• Emphasis of tech in overall business strategy• ...
• Acquisition of explicit technology• ...
• Breadth of technological capabilities• ...
• Emphasis on research and development• Depth of technical capabilities
• Rewards systems - Head office• ...
5 DIMENSIONS 29 MEASURES
© Hampson, 2000 43 School of Construction School of Construction Management and PropertyManagement and Property
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CP INDICATORSCP INDICATORS
4 CATEGORIES 14 INDICATORS
Contract Award Growth
Market Share Growth
Contract Value
per Employee
Weighted Average
Performance Index
4 Absolute Value - $M/year 2 Proportional Growth - %
4 Absolute Growth - %/year
3 Productivity Indicators - $/person
1 Subjective Self-Assessed Index
1990 1991 1992 1993 1994 1995
30
40
50
60
70
80
90
100
110
120
130
Music Box CustomersPredicted Growth
Years
Customers (in millions)
© Hampson, 2000 44 School of Construction School of Construction Management and PropertyManagement and Property
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TOTAL VALUE OF CONTRACTS AWARDED
Year
$0
$20M
$40M
$60M
$80M
$100M
$120M
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
Tota
l Con
trac
t Val
ue (x
1000
)
Typical annual contract award data for bridge construction firm
© Hampson, 2000 45 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
RESEARCH FOCUSED ON BRIDGE RESEARCH FOCUSED ON BRIDGE CONSTRUCTION IN CALIFORNIACONSTRUCTION IN CALIFORNIA
Large and rapidly growing market Discrete market with highly focused
firms Data available from Caltrans and firms Open competition Differentiation of technologies
A. Minor Modifications and Repair - “Minor Mods” B. Routine New Alignment - “Blow and Go” C. Special Projects - “Heavy Engineering”
© Hampson, 2000 46 School of Construction School of Construction Management and PropertyManagement and Property
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Example Use of Technology Strategy MeasureExample Use of Technology Strategy Measure
Dimension (d) Depth of Technology Strategy
Measure (ii) Depth of technical capabilities - Head office technical management team
1 2 3 4 5Low Medium
High
© Hampson, 2000 47 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
Level of Technical QualificationLevel of Technical Qualification RatingRating
Doctorate 6
Masters Degree 5
Bachelors Degree 4
Diploma - Military or Community College 3
Carpentry trade 2
Labor background 1
© Hampson, 2000 48 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
TS-CP EXAMPLETS-CP EXAMPLE
DEPTH OF TECHNOLOGY STRATEGY
CO
NT
RA
CT
VA
LU
E P
ER
TE
CH
NIC
AL
EM
PL
OY
EE
($M
/PE
RS
ON
)
0
0.5
1
1.5
2
2.5
3
4 5 6 7 8 9 10 11 12 13 14
RO
CK
GE
CK
O
KR
C
DU
ND
EE
RA
INB
OW
TS
CP
1983-1992
© Hampson, 2000 49 School of Construction School of Construction Management and PropertyManagement and Property
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Summary of results - TS-CP relationshipsSummary of results - TS-CP relationships
56 POSSIBLE RELATIONSHIPS0 - VE33 + VE
-6
-4
-2
0
2
4
6
8
10
12
14
# S
TR
ON
G R
EL
AT
ION
SH
IPS
CO
MP.
PO
SIT
ION
ING
SC
OP
E O
F T
S
DE
PT
H O
F T
S
OR
GA
NIZ
AT
ION
AL
FIT
NOTE: Analysis treats Rainbow as outlier
© Hampson, 2000 50 School of Construction School of Construction Management and PropertyManagement and Property
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TECHNOLOGY STRATEGY AS A TECHNOLOGY STRATEGY AS A FUNCTIONAL STRATEGY FUNCTIONAL STRATEGY
( Adapted from Glueck, 1980 and Hampson, 1993)LEVELS OF STRATEGY FOR A DIVERSIFIED AEC FIRM
TECHNOLOGY STRATEGY
* Positioning * Sourcing * Depth * Scope * Organisation
CONSTRUCTION BUSINESS STRATEGY
MARKETING STRATEGY
* * *
PRODUCTION STRATEGY
* * *
FINANCE STRATEGY
* * *
HUMAN RESOURCE STRATEGY
* * *
OPERATION AND MAINTENANCE
BUSINESS STRATEGY
FABRICATION BUSINESS STRATEGY
DESIGN BUSINESS STRATEGY
CORPORATE LEVEL STRATEGY
© Hampson, 2000 51 School of Construction School of Construction Management and PropertyManagement and Property
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TECHNOLOGY STRATEGY INTEGRAL TECHNOLOGY STRATEGY INTEGRAL WITH FUNCTIONAL STRATEGIESWITH FUNCTIONAL STRATEGIES
LEVELS OF STRATEGY FOR A DIVERSIFIED AEC FIRM
TechnologyStrategy
integratedacross allfunctions
CONSTRUCTION BUSINESS STRATEGY
MARKETING STRATEGY
* * *
PRODUCTION STRATEGY
* * *
OPERATION AND MAINTENANCE
BUSINESS STRATEGY
FABRICATION BUSINESS STRATEGY
DESIGN BUSINESS STRATEGY
CORPORATE LEVEL STRATEGY
FINANCE STRATEGY
* * *
HUMANRESOURCESTRATEGY
* *
INDUSTRY INDUSTRY CONTEXT CONTEXT and and STRATEGIC STRATEGIC BEHAVIOURBEHAVIOUR
© Hampson, 2000 53 School of Construction School of Construction Management and PropertyManagement and Property
PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
EVOLUTIONARY PROCESS FRAMEWORK FOR EVOLUTIONARY PROCESS FRAMEWORK FOR TECHNOLOGY STRATEGYTECHNOLOGY STRATEGY
(Burgelman & Rosenbloom, 1989 and adapted by Hampson, 2000)
TECHNOLOGY STRATEGY
EXPERIENCETECHNICAL
CAPABILITIES
INTERNAL ENVIRONMENT
GE
NE
RA
TIV
E M
EC
HA
NIS
MS
INT
EG
RA
TIV
E M
EC
HA
NIS
MS
EXTERNAL ENVIRONMENT
BUSINESSSTRATEGY
TECHNOLOGY EVOLUTION
ORGANISATIONAL CONTEXT
INDUSTRY CONTEXT
Monitor, review, document and standardise
© Hampson, 2000 54 School of Construction School of Construction Management and PropertyManagement and Property
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5 FORCES DRIVING INDUSTRY 5 FORCES DRIVING INDUSTRY COMPETITION COMPETITION ( Porter, 1980 )
INDUSTRY
POTENTIAL ENTRANTS
BUYERS
SUBSTITUTES
SUPPLIERS
COMPETITORS
Technology affects Competition!Technology affects Competition!
© Hampson, 2000 55 School of Construction School of Construction Management and PropertyManagement and Property
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CLARK CLARK (1989)(1989)
Managers need to link the world of
technology with the world of business.
© Hampson, 2000 56 School of Construction School of Construction Management and PropertyManagement and Property
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ABELL ABELL (1980)(1980)
Technology is one of the three basic dimensions of business definition customer groups customer functions, and technologies.
This contrasts to the more traditional two-dimensional concept of product-market business strategy.
© Hampson, 2000 57 School of Construction School of Construction Management and PropertyManagement and Property
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BURGELMAN AND ROSENBLOOMBURGELMAN AND ROSENBLOOM (1989)(1989)
Technology, from a competitive point of view, can be used in a defensive role, sustaining achieved advantage in differentiation or cost, or, offensively, as an instrument of expansion, to create new advantage in established lines of business
© Hampson, 2000 58 School of Construction School of Construction Management and PropertyManagement and Property
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GENERIC GENERIC STRATEGYSTRATEGY
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BUSINESS STRATEGY ALTERNATIVESBUSINESS STRATEGY ALTERNATIVES
3 major generic strategies: Become the cost leader (supply the product
or service at lowest feasible cost) Differentiate on basis important to
customers (who will therefore prefer it to alternatives)
Find a niche in the market and focus activities on the requirements of this niche
© Hampson, 2000 60 School of Construction School of Construction Management and PropertyManagement and Property
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GENERIC STRATEGYOverall CostLeadership
Overall Differentiation Focus-SegmentCost Leadership
Focus-SegmentDifferentiation
TECHNOLOGICAL POLICIESProducttechnologicalchange
Product devt to reduceproduct cost bylowering materialscontent, facilitating easeof manufacture,simplifying logisticalrequirements.
Product devt to enhanceproduct quality,features, deliverability,or switching costs.
Product devt todesign in onlyenoughperformance forthe segment’sneeds.
Product design toexactly meet theneeds of theparticular businesssegmentapplication.
Processtechnologicalchange
Learning curve processimprovement.
Process devt to enhanceeconomies of scale.
Process devt to supporthigh tolerances, greaterquality control, morereliable scheduling,faster response time toorders, and otherdimensions thatimprove performance.
Process devt totune productionand deliverysystem to segmentneeds in order tolower cost.
Process devt totune theproduction anddelivery system tosegment need inorder to improveperformance.
(Porter, 1983)
TECHNOLOGICAL POLICIES AND TECHNOLOGICAL POLICIES AND GENERIC COMPETITIVE STRATEGIESGENERIC COMPETITIVE STRATEGIES
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MICHAEL PORTER’S MATRIXMICHAEL PORTER’S MATRIX
High
LowDEG
REE O
F M
AR
KETIN
G
DIF
FER
EN
TIA
TIO
N Outstanding success
Disaster Cost leadership
Niche/focus
2 3
4 1
HighRELATIVE COSTS
Low
© Hampson, 2000 62 School of Construction School of Construction Management and PropertyManagement and Property
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Market /Technology MatrixMarket /Technology Matrix
MARKETS
TE
CH
NO
LO
GIE
S
Existing Expanded New
Existing
Expanded
New
MARKET/TECHNOLOGY MATRIX
Strategicanalysis
Strategicdirection
Strategychoice
Strategyimplementation
Strategyevaluation& control
Analysis of the external environment
Analysis of internal skills and resources
Analysis of stakeholder needs andexpectations
Formulate strategic objectives
Identify performance measures
Generate strategic options
Choose a preferred strategy
Measure strategic objectives
Take corrective action
Develop appropriate systems
Acquire and utilise skills and resources
Develop appropriate organisationstructure
Manage the culture
ST
RA
TE
GIC
IN
FO
RM
AT
ION
SY
ST
EM
VIS
ION
MIS
SIO
N V
AL
UE
S
The Strategic Management Process(Source: Viljoen and Dann, 2000, p47)
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LEADERSHIPLEADERSHIPVSVS
FOLLOWERSHIPFOLLOWERSHIP
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TECHNOLOGICAL LEADERSHIPTECHNOLOGICAL LEADERSHIP
High technological opportunity Unique technology skills First mover advantages Relatively continuous
technological change Protection through patents
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TECHNOLOGICAL FOLLOWERSHIPTECHNOLOGICAL FOLLOWERSHIP
Rapid changes in process technology or customer purchasing behaviour
Technological discontinuities/uncertainty Irreversibility of investments Leadership externalities Dissemination of technological information
through product inspection, reverse engineering, suppliers, customers, ex-employees.
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DETERMINANTS OF THE LEADERSHIP - DETERMINANTS OF THE LEADERSHIP - FOLLOWERSHIP CHOICEFOLLOWERSHIP CHOICE
Industry structural characteristics: opportunity to influence cost or differentiation the uniqueness of the firm’s technological skills first mover advantages the continuity of technological change rate of change in process technology or customer purchasing
behaviour irreversibility of investments uncertainty, and leadership externalities.
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LEADERSHIP EXTERNALITIES LEADERSHIP EXTERNALITIES
Gaining regulatory approvals and code compliance Winning customers away from substitutes
(marketing costs, penetration prices) Customer education on product usage Investments in infrastructure such as supply
sources, machinery, training repair and service personnel
Investments to improve the performance price or availability of complementary goods.
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Technology Evaluation MatrixTechnology Evaluation Matrix
Imp
o rt a
nc e
of
tech
nol
ogy
in i n
du
str y
Technology leader
Catch up or get out
Technology adopter
De-emphasise technology
Leader Laggard
Technology position of the firm in industry
Op
erat
ion
alS
trat
egic
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Paul CookPaul Cook (FORMER FOUNDER AND CEO OF RAYCHEM CORPORATION - (FORMER FOUNDER AND CEO OF RAYCHEM CORPORATION -
Taylor, 1990)Taylor, 1990)
A different, and I think more powerful, way to compete is to avoid competition altogether. The best way to avoid competition is to sell products that rivals can’t touch. No partnership or joint venture can substitute for technology leadership.
© Hampson, 2000 71 School of Construction School of Construction Management and PropertyManagement and Property
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TECHNOLOGICAL LEADERSHIP-FOLLOWERSHIP TECHNOLOGICAL LEADERSHIP-FOLLOWERSHIP AND GENERIC STRATEGIESAND GENERIC STRATEGIES
Technological Leadership Technological FollowershipOverall costleadership
First mover on lowest cost productor process technology.
Lower cost of product or processthrough learning from leader’sexperience.
Overalldifferentiation
First mover on unique product orprocess that enhances productperformance or creates switchingcosts.
Adapt product or delivery systemmore closely to market needs (orraise switching costs) by learningfrom leader’s experience.
Focus—lowestsegment cost
First mover on lowest cost segmenttechnology.
Alter leader’s product or process toserve particular segment moreefficiently.
Focus—segmentdifferentiation
First mover on unique product orprocess tuned to segmentperformance needs, or createssegment switching costs.
Adapt leader’s product or process toperformance needs of particularsegment or create segmentswitching costs.
(Porter, 1983)
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PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
Technological Leadership Technological FollowershipOverall costleadership
First mover on lowest cost productor process technology.
Lower cost of product or processthrough learning from leader’sexperience.
Overalldifferentiation
First mover on unique product orprocess that enhances productperformance or creates switchingcosts.
Adapt product or delivery systemmore closely to market needs (orraise switching costs) by learningfrom leader’s experience.
(Porter, 1983)
TECHNOLOGICAL LEADERSHIP-TECHNOLOGICAL LEADERSHIP-FOLLOWERSHIP AND GENERIC STRATEGIESFOLLOWERSHIP AND GENERIC STRATEGIES
TECHNOLOGICAL CHANGE TECHNOLOGICAL CHANGE AND INNOVATIONAND INNOVATION
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EVOLUTIONARY PROCESS FRAMEWORK FOR EVOLUTIONARY PROCESS FRAMEWORK FOR TECHNOLOGY STRATEGYTECHNOLOGY STRATEGY
(Burgelman & Rosenbloom, 1989 and adapted by Hampson, 2000)
TECHNOLOGY STRATEGY
EXPERIENCETECHNICAL
CAPABILITIES
INTERNAL ENVIRONMENT
GE
NE
RA
TIV
E M
EC
HA
NIS
MS
INT
EG
RA
TIV
E M
EC
HA
NIS
MS
EXTERNAL ENVIRONMENT
BUSINESSSTRATEGY
TECHNOLOGY EVOLUTION
ORGANISATIONAL CONTEXT
INDUSTRY CONTEXT
Monitor, review and standardise
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PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management
TECHNOLOGY, INVENTION & INNOVATIONTECHNOLOGY, INVENTION & INNOVATION
Innovation is the first application of the invention (a technology) in production (Link)
3 phases in the process of technological change: invention, innovation, and diffusion (Schumpeter)
Inventive activity a new combination of available knowledge (Kuznets)
Science focusses on: the understanding of knowledge
Technology focusses on: the application of knowledge
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INNOVATIONINNOVATION
“Innovation is described as the process of bringing any new problem-solving idea into use. Innovation is the generation, acceptance and implementation of new ideas, processes, products or services.” - Kanter, 1983, p20
Idea - Continuous Aim Firing “What one man could do partially and unconsciously,
perhaps all men could be trained to do consciously and completely.”
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TECHNOLOGICAL INNOVATION IS A TECHNOLOGICAL INNOVATION IS A COMPLEX ACTIVITYCOMPLEX ACTIVITY
Technological innovation is a process made up of diverse parts, varied participants, complicated patterns of evolution and information feedback loops.
Research highlights the key role of people, as champions, inventor/entrepreneurs, or technology-familiar managers, in promoting and accelerating the implementation of innovation.
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THE PRODUCT OR TECHNICAL THE PRODUCT OR TECHNICAL CHAMPIONCHAMPION
Innovation consists of two parts: new technology and a real or potential market.
The product champion: convinces management that new product or
process is feasible and worthy of significant investment.
conceptualises a technical vehicle so the corporation can develop a new product or service.
Sees relationship between scientific developments and market needs.
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THE ORGANISATIONAL OR THE ORGANISATIONAL OR POLITICAL CHAMPIONPOLITICAL CHAMPION
Establishing and maintaining contact with top management, keeping them informed, and developing their enthusiasm for particular new activity
Organisational champion is able to relate parameters and potential of new venture persuasively to ultimate goals of the corporations
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TECHNOLOGICAL ADVANCETECHNOLOGICAL ADVANCE
Driven by the combination of chance or random events (variation), the direct social, political action of individuals and organisations in selecting between rival industry standards (selection), and the incremental, competence-enhancing, puzzle-solving actions of many organisations that are learned by doing (retention). (Anderson and Tushman, 1990, p606)
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THE TECHNOLOGY CYCLETHE TECHNOLOGY CYCLE
(Source: Anderson and Tushman, 1990, p606)
Era of Ferment•Design competition•Substitution
Era of Incremental Change•Elaboration of dominant
design
TIME
Technological Discontinuity 1
Technological Discontinuity 2
Dominant Design 1
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COMMON MISCONCEPTIONS COMMON MISCONCEPTIONS ABOUT TECHNOLOGY ABOUT TECHNOLOGY 1/21/2
Misconception Reality1 “Best possible” determines the
choice of technology.“Good enough” is the basisfor choice.
2 Choice of technology results fromrational analysis.
Choice strongly influenced byconvention and past practice.
3 Technology advances ordiscoveries are usually adopted.
Most don’t succeed - andshouldn’t.
4 The biggest hurdle is making theoriginal discovery - downstreamdevelopment is just a matter ofapplying the necessary effort
Most of what is not yet knowabout a new discovery isprobably bad and requirescreativity to overcome.
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MISCONCEPTIONS MISCONCEPTIONS (cont)(cont) 2/22/2
Misconception Reality5 Technological advances have
intrinsic value.The customer determines value.
6 Radically new advances will win. New is not necessarily better.7 The power of a new technology
determines its success.Infrastructure required to supportit is often the determining factor.
8 Progress in technology comesprincipally from continuing toimprove performance.
Progress requires establishingstandards, imposing constraints,and achieving routine.
9 A new technology can be graftedonto an existing business.
The new product and the businesssystem developed to produce itshould be created together.
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TECHNOLOGY MATURATION SEQUENCETECHNOLOGY MATURATION SEQUENCE(Arthur D. Little, 1981)
AgeingAgeing
MatureMature
GrowingGrowing
EmbryonicEmbryonic
TEC
HN
ICA
LTEC
HN
ICA
LA
DV
AN
CE
AD
VA
NC
E
TIMETIME
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TEC
HN
ICA
LTEC
HN
ICA
LA
DV
AN
CE
AD
VA
NC
E
TIMETIME
Era of Capital IntensityEra of Capital Intensityand Finance Dominationand Finance Domination
Era of Process ImprovementEra of Process Improvementand Manufacturing Dominationand Manufacturing Domination
Era of Product InnovationEra of Product Innovationand Engineering Design Dominationand Engineering Design Domination
Natural Limit of Technology
TECHNOLOGY MATURATION TECHNOLOGY MATURATION (Steele, 1989)
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INDUSTRY MATURATION INDUSTRY MATURATION (Utterback, 1987)
NU
MB
ER
AN
D I
MP
AC
TN
UM
BER
AN
D I
MP
AC
TO
F I
MP
RO
VEM
EN
TS
OF I
MP
RO
VEM
EN
TS
Product InnovationProduct Innovation
Process InnovationProcess Innovation
TIMETIME
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INNOVATIONS MAPINNOVATIONS MAP(Clark, 1985)
NicheCreation Architectural
Regular Revolutionary
Mar
kets
/Cu
sto
mer
Lin
kag
esM
arke
ts/C
ust
om
er L
inka
ges
Production SystemsProduction Systems
Radical
Conservative
Ra
dic
al
Co
nse
rvat
ive
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INNOVATIONS MAPINNOVATIONS MAP(Clark, 1985)
IMPACT ON CAPABILITIES: PRODUCTION SYSTEMSIMPACT ON CAPABILITIES: PRODUCTION SYSTEMS
Systems/Organisation
Skills
Materials/Suppliers
Capital
Knowledge/Experience
Entrench Neutral Obsolete
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INNOVATIONS MAPINNOVATIONS MAP(Clark, 1985)
IMPACT ON CAPABILITIES: MARKETS/CUSTOMERSIMPACT ON CAPABILITIES: MARKETS/CUSTOMERS
Customer Base
Customer Applications
Channels of Distribution and Service
Customer Knowledge
Modes of Communication
Entrench Neutral Create New
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INNOVATIONS MAPINNOVATIONS MAP(Clark, 1985)
NicheCreation Architectural
Regular Revolutionary
Mar
kets
/Cu
sto
mer
Lin
kag
esM
arke
ts/C
ust
om
er L
inka
ges
Production SystemsProduction Systems
Radical
Conservative
Rad
ical
Con
serv
ativ
e
Plot the locationof the proposedtechnological change
Determine the management implications of the change
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INNOVATION AND COMPETITION: INNOVATION AND COMPETITION: IMPLICATIONS FOR MANAGEMENTIMPLICATIONS FOR MANAGEMENT
Revolutionary innovation requires focus on technical excellence disciplined by market realities, a focus on project management and dedication of resources to critical areas.
Niche innovation requires highly responsive manufacturing, an aggressive and creative marketing organisation and high level of integration between them.
Architectural innovation requires synthesis of science-based technical developments with insight into emerging worker needs.
Regular innovation thrives where analysis is thorough and planning rigorous and disciplined.
TECHNOLOGICAL TECHNOLOGICAL TRENDS TRENDS and and FORECASTINGFORECASTING
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WHAT IS TECHNOLOGICAL FORECASTING?WHAT IS TECHNOLOGICAL FORECASTING?
A technological forecast is a prediction of the future characteristics of useful machines,
procedures, processes, or techniques.
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TECHNOLOGICAL FORECASTINGTECHNOLOGICAL FORECASTING
Man cannot predict the future, but he can invent it. … ?? (Dennis Gabor, 1964)
Technological forecasting aims at predicting long-term technological trends and other important environmental features. The description of prediction of foreseeable
technological innovation, specific scientific refinement, or likely scientific discovery, that promises to serve some useful function, with some indication of the most probable time of occurrence.
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the technology being forecast the time of the forecast characteristics of technology concerned
probabilities associated with the forecast.
TECHNOLOGICAL FORECAST TECHNOLOGICAL FORECAST HAS 4 ELEMENTSHAS 4 ELEMENTS:
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by identifying limits a technology can go by establishing feasible rates of progress by defining alternatives
FORECASTING IS AIMED AT IMPROVING FORECASTING IS AIMED AT IMPROVING THE QUALITY OF DECISION MAKINGTHE QUALITY OF DECISION MAKING
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maximise gain from events external to the organisation minimise loss associated with uncontrollable events
external to the organisation offset the actions of competitive or hostile organisations forecast demand develop infrastructure plans and policies ie, maximise gain and minimise cost
WE MAKE TECHNOLOGICAL WE MAKE TECHNOLOGICAL FORECASTS TO:FORECASTS TO:
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INPUTS TO THE FORECASTING SYSTEMINPUTS TO THE FORECASTING SYSTEM
Information from the past.
Knowledge of the present.
The ability of the human intellect:
logical thought process insight, and judgment.
?
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The Technology S - CurveThe Technology S - CurveLimit of performance
Time
Par
amet
er o
f P
erfo
rman
ce
1
2
3
1 Period of slow initial growth.2 Rapid exponential growth.3 Growth slows as performance approaches a natural physical limit
asymptotically.
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FORECAST FROM HISTORICAL DATAFORECAST FROM HISTORICAL DATA
Ultimate limit of capability
Per
form
ance
Time
Today
ForecastHistory
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Lag Times for Automotive InnovationsLag Times for Automotive Innovations
Source: Joseph P. Martino, University of Dayton, OhioCommunicated at PICMET 1999, Portland Oregon:
Workshop on Technology Forecasting
0 2 4 6 8 10 12 14 16
Turbocharger
Plastic Structural Parts
Prestige - massDemo - Prestige
Plastic Body Shell
Fuel Injection
Electronic Ignition
Electronic Engine Ctrl
YEARS
INN
OV
AT
ION
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Minimum Risk Policy for Possible Minimum Risk Policy for Possible Alternative FuturesAlternative Futures
Future A Future B
Future C
The Present
R &
D P
olic
y 1
R & D
Poli
cy 2 Time T
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Relevance TreeRelevance TreePollution-free road
transport
Electric car Piston-engined petrol car
Wankel-engined petrol car
Possible solutions
Energy Source Motor Transmission
MotorFuel cellEnergised external
source Internal Combustion
A B C D K L P Q R V W X Y Z Projects
Functions to be performed
Possible solutions to functional need
Specific research projects to solve
particular problems
Objective
(Source: Twiss, 1982)
Forecasting the future is risky, butForecasting the future is risky, butcontemplating the future is the contemplating the future is the
first step to progress.first step to progress.
A finished plan is useless, but its A finished plan is useless, but its preparation is essential.preparation is essential.(A slight misquotation of a very successful general)
FO
RE
CA
ST
ING
EX
AM
PL
EF
OR
EC
AS
TIN
G E
XA
MP
LE
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FORECASTINGFORECASTING
The question should not be whether or not to forecast, but:
To what extent is it necessary to forecast?
Which are the most appropriate techniques, given the limitations of what can be afforded?
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TECHNOLOGICAL FORECASTING ...TECHNOLOGICAL FORECASTING ...
Cannot enable decision maker to predict the future with certainty. But it can assist in refining judgments.
Value of forecasts highly dependent upon quality of information and calibre of minds applied to it.
The brush paints only as well as the painter’s hand can. Sophisticated forecasting techniques can only be aids,
and care should be taken to guard against technological forecasting absorbing greater resources than can be justified in economic terms.
ORGANISATIONAL ORGANISATIONAL CONTEXT: CONTEXT: MANAGING MANAGING THE THE TECHNICAL TECHNICAL FUNCTIONFUNCTION
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EVOLUTIONARY PROCESS FRAMEWORK FOR EVOLUTIONARY PROCESS FRAMEWORK FOR TECHNOLOGY STRATEGYTECHNOLOGY STRATEGY
(Burgelman & Rosenbloom, 1989 and adapted by Hampson, 2000)
TECHNOLOGY STRATEGY
EXPERIENCETECHNICAL
CAPABILITIES
INTERNAL ENVIRONMENT
GE
NE
RA
TIV
E M
EC
HA
NIS
MS
INT
EG
RA
TIV
E M
EC
HA
NIS
MS
EXTERNAL ENVIRONMENT
BUSINESSSTRATEGY
TECHNOLOGY EVOLUTION
ORGANISATIONAL CONTEXT
INDUSTRY CONTEXT
Monitor, review and standardise
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ORGANISATIONAL CONTEXT OF ORGANISATIONAL CONTEXT OF TECHNOLOGY MANAGEMENTTECHNOLOGY MANAGEMENT
Core Capabilities Staffing the Technical Function
Personal characteristics Management challenges
Organising for Innovation Organisational Learning
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TECHNOLOGY AND TECHNOLOGY AND APPROPRIATE MANAGEMENTAPPROPRIATE MANAGEMENT
Often technology is applied at the enterprise level as a productivity driver without attention to the other attendant issues of organisation, competence and work force commitment. Consequently, the benefits of technology are curtailed. (Scott, 1994, p55)
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People don’t resist technology - People don’t resist technology - they resist the effects (or they resist the effects (or
perceived effects) of technology perceived effects) of technology
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A FIRM'S CORE CAPABILITYA FIRM'S CORE CAPABILITY “The knowledge set that distinguishes and
provides a competitive advantage.” It is the core capabilities that differentiate
a company strategically. 4 dimensions to this knowledge set:
employee knowledge and skills technical systems managerial systems values and norms Leonard-Barton (1992, 113)
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ABSORPTIVE CAPACITYABSORPTIVE CAPACITY
The ability of an organisation to recognise the value of new information, assimilate it, and apply it to commercial ends.
Possession of relevant knowledge and skills of individuals gives rise to creativity, problem-solving skills and technological linkages that may have never been considered before. (Cohen and Leventhal, 1990)
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Effective Technology MonitoringEffective Technology Monitoring
Effective Technology Effective Technology MonitoringMonitoring
Product and Equipment Vendors
Owners/Clients
Customers/Tenants
Universities
Research Centres
Consultants
(Upstream & Downstream)
Publications (Academic,
Associations, Industry and
Generic)
Conferences/Seminars/EducationInterest Groups
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Chance favours the prepared mindChance favours the prepared mind(Steven Seagal in Under Siege II)
… Be prepared!… Be prepared!(Lord Baden Powell)
FIRMS CAN BE MORE PROACTIVEFIRMS CAN BE MORE PROACTIVE
“EXCELLENCE is
NEVER an
ACCIDENT”
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EFFECTIVE INITIATORS OF CHANGEEFFECTIVE INITIATORS OF CHANGE((Rosabeth Moss Kanter 1982)Rosabeth Moss Kanter 1982)
Characteristics of Innovative Middle Managers
•Desire for change - tolerance for uncertainty
•Foresight, vision, clarity of direction
•Thoroughness - complete preparation
•Political astuteness
•Participative management style
•Persuasive
•Pushes to the limits of his/her discretion
•Persistence.
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3 PHASES OF AN INNOVATION LED BY 3 PHASES OF AN INNOVATION LED BY A CORPORATE ENTREPRENEUR A CORPORATE ENTREPRENEUR (Kanter, 1983)(Kanter, 1983)
1. Problem Definition- Gaining and applying information to shape a feasible project- Listening to managers, staff, suppliers, customers- Seeking political information- Obtaining data to demonstrate need
2. Coalition Building- Clearing the resistance with bosses- Preselling and making “cheer leaders”- Horse Trading with other staff, managers and departments- Securing the blessing of higher level officials- Formalising the coalition.
3. Mobilisation and Completion- Handling opposition and blocking interference- Maintaining momentum with team building- Secondary redesign by bending or breaking rules and systems- External communication - managing the press- Delivering on promises.
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ENTREPRENEURIAL ATTRIBUTESENTREPRENEURIAL ATTRIBUTES(Timmons, 1989)
(a) Total commitment, determination and perseverance(b) Drive to achieve and grow(c) Opportunity and goal oriented(d) Taking initiative and personal responsibility(e) Persistent problem solving(f) Veridical (truthful) awareness and a sense of humour(g) Seeking and using feedback(h) Internal locus of control(i) Tolerance for ambiguity(j) Calculated risk-taking and sharing(k) Low need for status and power(l) Integrity and reliability(m) Decisiveness, urgency and patience - in balance(n) Dealing with failure(o) Team builder and hero maker.
If I had thought about it, I wouldn't have If I had thought about it, I wouldn't have done the experiment. The done the experiment. The
literature was full of examples that said literature was full of examples that said
you can't do this.you can't do this.
Spencer Silver The originator of Post-it Notepads
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You can train people technically, but you can't teach them curiosity. The desire to
innovate comes partly from the genes you're born with it. It also comes from your early life,
your education, the kind of encouragement you got to be creative and original. Innovative people come in all shapes and sizes and in
all personality typesPaul Cook, founder and former CEO of Raychem
Corporation
INNOVATIVE PEOPLEINNOVATIVE PEOPLE
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… people who genuinely want to serve the customer, who want to build products superior to anything that's come before, who are willing to stick their necks out to do new things. That means learning how their minds work, what they think about, what excites them, how they approach problems. The person who can combine deep knowledge of the technology with deep knowledge of the customer is the rarest person of all—and the most important person in the process of innovation
Paul Cook, founder and former CEO of Raychem
Corporation
FINDING THE RIGHT PEOPLEFINDING THE RIGHT PEOPLE
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INTRAPRENEUR’S TEN COMMANDMENTS INTRAPRENEUR’S TEN COMMANDMENTS (Pinchot, 1985)
1. Come to work each day willing to be fired2. Circumvent any orders aimed at stopping your dream3. Do any job to make your project work, regardless of your job description4. Find people to help you5. Follow your intuition about the people you choose, work only with the best6. Work underground as long as you can - publicity triggers the corporate
immune mechanism7. Never bet on a race unless you are running in it8. Remember it is easier to ask for forgiveness than for permission9. Be true to your goals, but be realistic about the ways to achieve them 10. Honour your sponsors
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MANAGEMENT STYLE FOR INNOVATIONMANAGEMENT STYLE FOR INNOVATION
Strong association between innovation and participative-collaborative management style: Persuading more than ordering, though managers may
use pressure as a last resort. Building a team with frequent staff meetings and
considerable sharing of information. Seeking inputs from others - asking for ideas,
soliciting suggestions, welcoming peer review. Acknowledging others' stake or potential stake in the
project - being politically sensitive. Sharing rewards and recognition willingly.
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REMEMBER ‘MACHIAVELLI’S REMEMBER ‘MACHIAVELLI’S ASYMMETRY’ASYMMETRY’
The innovator makes enemies of all those who prospered under the old order, and only lukewarm support is forthcoming from those who would prosper under the new.
‘Burgelman’s Paradox of Corporate Culture’:
Even a corporate culture orientedtoward innovation is somewhatresistant to change.
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BUILDING OWNERSHIPBUILDING OWNERSHIP
Having a voice in 5 critical features of the project planning and management process: Providing opportunities to help shape project. Allowing time for team members to build
ownership. Setting acceptable and reasonable priorities. Defining project objectives that continue to be
regarded as attainable as work progresses. Creating appropriate rewards and penalties.
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Team DevelopmentTeam Development (Montebello, Work Teams that Work; Skill for Managing Across the Organisation, 1995)
Building Strong Relationships
Managing Productive Meetings
Promoting Open Communication
Making Rational Decisions
Managing Conflict & Disruption
Storming Performing
Forming Norming
High
HighLowGe
ttin
g T
hin
gs
Do
ne
D
irec
tio
n,
Str
uct
ure
an
d
Org
anis
atio
n
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MEASUREMENT AND REWARDMEASUREMENT AND REWARD
Systems must reflect the importance associated with technology development
What gets measured, gets done The most important factor is individual recognition - more
important than salaries, bonuses, or promotions. We don’t just reward success; we reward intelligent
effort. We’ve paid sizeable bonuses to people who have worked day and night, with remarkable proficiency, on a year-long project - only to find the market had disappeared. (Cook, in Taylor, 1990)
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PROJECT MANAGEMENTPROJECT MANAGEMENT
Functional Project Management (serial) tossing the bear over the wall
Multifunctional Project Management (parallel) identify all of skills and resources required for project
completion. Skills are assembled, or committed, at the outset, and the project manager’s responsibility is to complete all phases of the project—not to hand it off to some other group at some predetermined point.
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SEQUENTIAL DEVELOPMENT PROCESSSEQUENTIAL DEVELOPMENT PROCESS
Marketing
Design Engineers
Process Engineers
Manufacturing
Marketing
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PARALLEL DEVELOPMENT PROCESSPARALLEL DEVELOPMENT PROCESS
Design Engineers
Process Engineers
Manufacturing
Marketing
ProblemDefinition
ProductHandover
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TRADITIONAL BUILDING PROCUREMENTTRADITIONAL BUILDING PROCUREMENTActivity Client Consultant Contractor
Establish needObtain advice
Decision to buildProcurement decision
Consultant(s)selection
Procure DesignServices
Consultant(s) appointed
Procurement/Establish brief Brief agreed Contract
confirmedDesign and costdevelopment
Agreement ofprocurement/contract
Design/costdevelopment
P3 – product,program, priceagreement
P3 - agreed
Tenderdocumentationcontractor(s)selection
Contractor(s)qualification
ProcureConstructionServices
Tendering invitationand acceptance
Bidding
Constructioncontract made
Signing Signing
Construction Interim payments Administration Construction
Completion Occupation Acceptance Completion
(Turner 1990, p49)
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IMPORTANCE OF MANAGING EARLY IMPORTANCE OF MANAGING EARLY PROJECT PHASESPROJECT PHASES
TimeTime
Ability to influence Ability to influence Performance/ResultsPerformance/Results Cost to ChangeCost to Change
Initiation & ConceptInitiation & Concept
Project Planning & DesignProject Planning & Design
Procurement & ConstructionProcurement & Construction
Completion & HandoverCompletion & Handover
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A RIGHT ROYAL QUOTE!A RIGHT ROYAL QUOTE!
HRH the Duke of Edinburgh:
The first problem is to define the problem
(Turner, 1990, p16).
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ORGANISATIONAL LEARNINGORGANISATIONAL LEARNING
Learning and unlearning (Burgelman & Maidique, 1988)
Learning by doing (Arrow, 1962)
Learning by using (Rosenberg, 1982)
Learning by failing (Maidique & Zirger, 1988)
The illiterate of the eighties was the person who could not read or write …
The illiterate of the nineties is the person who cannot learn, unlearn, and relearn.
Alvin Toffler
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EVOLUTIONARY PROCESS OF STRATEGY EVOLUTIONARY PROCESS OF STRATEGY MAKING IN ESTABLISHED FIRMSMAKING IN ESTABLISHED FIRMS
Burgelman's (1983) research centred on Internal Corporate Venturing (ICV) process in a major diversified high-technology manufacturing firm.
Examined relationship between project development and business development within the firm.
Found that interaction of entrepreneurial activities of middle managers produced corporate entrepreneurship.
Organisational forces at corporate level also influenced entrepreneurial activities of individuals.
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EVOLUTIONARY STRATEGY MAKING EVOLUTIONARY STRATEGY MAKING PROCESS IN ESTABLISHED FIRMSPROCESS IN ESTABLISHED FIRMS
(Source: Burgelman, 1983)
AutonomousStrategicBehaviour
StrategicContext
StructuralContext
InducedStrategicBehaviour
Concept of
Corporate
Strategy
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ORGANISATION DESIGNS FOR ORGANISATION DESIGNS FOR CORPORATE ENTREPRENEURSHIPCORPORATE ENTREPRENEURSHIP
(Burgelman, 1984)
OP
ER
ATIO
NA
L R
ELA
TED
NES
S
STRATEGIC IMPORTANCE
VERY IMPORTANT UNCERTAIN NOT IMPORTANT
STRONGLY RELATED
PARTLYRELATED
UNRELATED
Design alternatives
1. Direct Integration
2. New Product/ Business Dept
3. Special Business Units
6. Independent Business Units
5. New Venture Division
4. “Micro” New Ventures Dept
9. Complete Spin-off
8. Contracting
7. Nurturing and Contracting
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TECHNOLOGY STRATEGY AS A TECHNOLOGY STRATEGY AS A FUNCTIONAL STRATEGY FUNCTIONAL STRATEGY
( Adapted from Glueck, 1980 and Hampson, 1993)LEVELS OF STRATEGY FOR A DIVERSIFIED AEC FIRM
TECHNOLOGY STRATEGY * Positioning * Sourcing * Depth * Scope * Organisation
CONSTRUCTION BUSINESS STRATEGY
MARKETING STRATEGY
* * *
PRODUCTION STRATEGY
* * *
FINANCE STRATEGY
* * *
HUMAN RESOURCE STRATEGY
* * *
OPERATION AND MAINTENANCE
BUSINESS STRATEGY
FABRICATION BUSINESS STRATEGY
DESIGN BUSINESS STRATEGY
CORPORATE LEVEL STRATEGY
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TECHNOLOGY STRATEGY INTEGRAL WITH TECHNOLOGY STRATEGY INTEGRAL WITH FUNCTIONAL STRATEGIESFUNCTIONAL STRATEGIES
TechnologyStrategy
integratedacross allfunctions
LEVELS OF STRATEGY FOR A DIVERSIFIED AEC FIRM
CONSTRUCTION BUSINESS STRATEGY
MARKETING STRATEGY
* * *
PRODUCTION STRATEGY
* * *
OPERATION AND MAINTENANCE
BUSINESS STRATEGY
FABRICATION BUSINESS STRATEGY
DESIGN BUSINESS STRATEGY
CORPORATE LEVEL STRATEGY
FINANCE STRATEGY
* * *
HUMANRESOURCESTRATEGY
* *
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EVOLUTIONARY PROCESS FRAMEWORK FOR EVOLUTIONARY PROCESS FRAMEWORK FOR TECHNOLOGY STRATEGYTECHNOLOGY STRATEGY
(Burgelman & Rosenbloom, 1989 and adapted by Hampson, 2000)
TECHNOLOGY STRATEGY
EXPERIENCETECHNICAL
CAPABILITIES
INTERNAL ENVIRONMENT
GE
NE
RA
TIV
E M
EC
HA
NIS
MS
INT
EG
RA
TIV
E M
EC
HA
NIS
MS
EXTERNAL ENVIRONMENT
BUSINESSSTRATEGY
TECHNOLOGY EVOLUTION
ORGANISATIONAL CONTEXT
INDUSTRY CONTEXT
Monitor, review, document and standardise
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TECHNOLOGY STRATEGY TECHNOLOGY STRATEGY FORMULATION FORMULATION (Porter, 1985)(Porter, 1985)
1. Identify all distinct technologies and sub-technologies in value chain.
2. Identify potentially relevant technologies in other industries or 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 technologies 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 strategies at the corporate level.
FUTURE FUTURE TRENDS TRENDS and and CONCLUSIONSCONCLUSIONS
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FUTURE TRENDS FUTURE TRENDS (Steele, 1989)(Steele, 1989)
A relentless shift from selling tools, which customers use to solve problems, to selling solutions based on specific knowledge of customers’ needs and customised responses to those needs.
Global markets, global competition, and global operations must become the starting point for all management planning.
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FUTURE TRENDS FUTURE TRENDS (Cook in Taylor, 1990)(Cook in Taylor, 1990)
Intellectual property is key Must develop a critical mass of different skills.
For a small company this means focussing on one core technology
For a large company taking advantage of the technology scale and scope to push frontiers of adopted technology.
Innovation is a global game today - both on the supply side and on the demand side. Multi-disciplinary and multi-national teams working
together are seen to produce the best global solutions.
Central to the advancement of Central to the advancement of human civilization is the spirit of human civilization is the spirit of open enquiry. We must learn not open enquiry. We must learn not
only to tolerate our differences, we only to tolerate our differences, we must welcome them as the richness must welcome them as the richness and diversity which can lead to true and diversity which can lead to true
intelligenceintelligence
Albert Einstein
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BUSINESS STRATEGIES FOR THE FUTUREBUSINESS STRATEGIES FOR THE FUTURE
((Construction Industry Institute, 1992)Construction Industry Institute, 1992)
Responsibilities of upper management: provide a working environment that stimulates
innovation and caters to needs of employees developing organisationally to allow quick
movements into or out of markets concentrating more on being a salesperson to
clients, with less emphasis on merely managing subordinates and more emphasis on single point responsibility for projects
Managers need to link the world of technology
with the world of business (Clark, 1989)
… And partnerships between participants is likely to provide the
best solutions.
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THE R&D EFFORT PORTFOLIOTHE R&D EFFORT PORTFOLIO
TEC
HN
ICA
LTEC
HN
ICA
LO
PP
OR
TU
NIT
YO
PP
OR
TU
NIT
Y
MARKET OPPORTUNITYMARKET OPPORTUNITY
Hig
hM
od
era
teLow
HighModerateLow
SelectiveEmphasis
LimitedSupport
HeavyEmphasis
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Dynamics of organisational changeDynamics of organisational change
LEVEL OF LEARNING REQUIREDLEVEL OF LEARNING REQUIRED
TIME TO ADJUSTTIME TO ADJUST MAGNITUDE OF CHANGEMAGNITUDE OF CHANGE
Skills
Procedures
Structure
Strategy
Culture
Small LargeWeeksMonthsYears
(Adler & Shenbar, 1990)
“Change is a whole lot easier to make when
you’re the change artist”
They that will not apply new They that will not apply new remedies must expect new remedies must expect new
evils; for time is the greatest evils; for time is the greatest innovatorinnovator
Francis Bacon from Essay on Innovations (1625)
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CLOSECLOSE
Review Questions Feedback
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One machine can do the work of fifty ordinary men.
No machine can do the work of one extraordinary man.
Elbert Hubbard, author, editor, printer (1856-1915)
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