There are a number of ways that organizations can develop and manage technology and innovation. We will focus on organization-level activities and the three strategic processes in this section of the chapter. Show
In order for a firm to develop a successful management of technology and innovation strategy, it is imperative that the organization be readied for the effort. This requires agility because changes and adjustments to products and processes are filled with risk and uncertainty. However, agility is inherently less efficiency if it is to be effective. Therefore, the management of technology and innovation must balance short-term efficiency with long-term effectiveness in the market if the firm is to add value and thrive in a changing environment. Strong dynamic capabilities are needed if the organization is going to be able to address the challenges of innovation and dynamic competition.4 There are four things the firm should do to balance the conflicting demands of being agile in a dynamic environment. These are:
Exhibit 18.6 Key Management Activities (Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license) There are three basic organizational processes—buying and partnering, developing newness within the firm, and entrepreneurially exploiting a space in the environment. Exhibit 18.6 delineates the three types. Buying and partnering includes mergers and acquisitions, joint ventures, contractual agreements, and other forms of acquiring technology/innovation from external sources. Internal sources of new technology/innovation for the organization include research and development of new products as well as reconfiguring or developing new processes—ways of doing things. This can be organization structure or redesigning an assembly line. Adding robotics to a manufacturing process may be an internally driven process, or a firm may buy a robotics manufacturer to acquire the capability to add robotics to the assembly process.
Exhibit 18.7 Three Methods of Creating New Technologies/Innovations (Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license) The third type of creating new technologies/innovations involves exploiting a space in the environment through entrepreneurial or new-business development activities. Michael Dell started Dell in his dormitory room at University of Texas. He wanted a better computer than he could buy, so he bought parts and assembled his own. Friends asked him to build one for them. He realized there was an innovative process of customizing computers and delivering directly from the manufacturer to the customer. Michael Dell’s exploitation of the custom-built, direct manufacturer-to-customer delivery led to a multibillion dollar business. Table 18.1 lists the advantages and disadvantages of each of the technology/innovation creation methods.
Table 18.1 (Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license)
Concept Check
Which of the following management of innovation includes both change management and managing organizational processes that encourage innovation?Invention, new product development, and process-improvement methods are all examples of innovation. Management of innovation includes both change management and managing organizational processes that encourage innovation.
Which of these is an advantage of external process creation method?The major advantage of using an external process is speed—for the focal firm, the time needed to blend an acquired technology or innovation is usually much shorter than the time required to try to make a discovery and bring it to market or implement it within the firm. Often, the external processes are less costly.
How do organizations develop technology and innovation?Internal sources of new technology/innovation for the organization include research and development of new products as well as reconfiguring or developing new processes—ways of doing things. This can be organization structure or redesigning an assembly line.
Which of these refers to the tendency of organizations to continue on their current trajectory?strategic inertia. The tendency of organizations to continue on their current trajectory.
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