Chapter 17 – Managing Technology and Innovation
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17
chapter
Managing Technology and
Innovation
Learning Objectives 2
Key Student Questions 3
Class Roadmap 4
Bottom Line 11
Social Enterprise 12
Lecturettes 13
Discussion Questions 16
Experiential Exercises 18
CHAPTER CONTENTS
Chapter 17 – Managing Technology and Innovation
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1 List the types of processes that spur development of new tech-
nologies.
2 Describe how technologies proceed through a life cycle.
3 Discuss ways to manage technology for competitive advantage.
LEARNING OBJECTIVES
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Student questions for this chapter tend to deal with the day-to–day pragmatic issues associated with man-
aging technology and innovation. For example:
1. “What are the advantages and disadvantages of developing new technologies
within the company?”
2. “What is the best way to keep up with rapid changes in the business envi-
ronment?”
3. “As a manager, what can I do to develop an innovative organization?”
Answers to Student Questions
1. The advantages to developing new technologies include: 1st mover advantages, little or no competi-
tion, greater efficiency, higher profit margins, the possibility of creating a sustainable advantage,
2. The best way to keep up with rapid changes in the business environment is to dedicate resources to
monitoring change on a regular basis, and then to use forecasting and innovation to try and stay ahead
3. As a manager, you can provide an environment conducive to innovation. The textbook cites 3M’s
rules for an innovative culture, which include: setting goals for innovation; committing to research
KEY STUDENT QUESTIONS
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Management in Action
How Tesla Motors Drives in Technology’s Fast Lane
Elon Musk, founder and CEO of Tesla Motors, goes where few car makers dare to go today: into
competition with the world’s big car companies and at the head of automotive technology. He
LO 1: List the types of processes that spur the development of new technologies.
A. Technology is the systematic application of scientific knowledge to a new product, process, or
service. Innovation is a change in technology; a positive, useful departure from previous ways of
doing things. There are three types of innovation:
1. Product
B. The forces driving technological development and the patterns they follow:
1. There must be a need, or demand, for the technology.
2. Meeting the need must be theoretically possible, and the knowledge to do so must be availa-
ble from basic science.
E.G.
Use Example 17.1 – Forces driving technological development here
LO 2: Describe how technologies proceed through a life cycle.
C. Technology Life Cycle
CLASS ROADMAP
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1. The technology life cycle is a predictable pattern followed by a technological innovation
starting from its inception and development to market saturation and replacement. (Exhibit
17.2)
2. The diffusion of technological innovations.
E.G.
Use Example 17.2 – Technology life cycle here
LO 3: Discuss ways to manage technology for a competitive advantage.
A. Technology leadership (Exhibit 17.4)
1. Advantages of technology leadership
a. First mover advantage
b. Little or no competition
2. Disadvantages of technology leadership
a. Greater risks
Multiple Generations at Work
Using Gamification to Boost Employee Engagement
Chapter 17 – Managing Technology and Innovation
Gamification is a process of digitally motivating people to achieve their goals. A well designed system
not only helps the individual, but also benefits the company in question. In 2015, about 25 percent of
Innovators and early adopters of gamification are experimenting by using this technology to increase the
engagement level of their employees. Motivating and retaining employees is a major challenge for organ-
E.G.
Use Example 17.3 – Cannibalization here
B. Technology Followership (Exhibit 17.5)
1. Technology followership depends on:
a. How a company positions itself to compete.
LO 4: Summarize how to assess technology needs.
A. Measuring Current Technologies
1. A technology audit helps to clarify the key technologies upon which an organization de-
pends.
2. The technique for measuring competitive value categorizes technologies as emerging, pacing,
key, and base.
a. Emerging – technologies that are still under development and thus are unproved
B. Assessing External Technological Trends
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1. Benchmarking is the process of comparing the organization’s practices and technologies with
those of other companies.
E.G.
Use Example 17.4 – Benchmarking & scanning here
LO 5: Identify alternative methods of pursuing technological innovation.
A. Anticipated Market Receptiveness – the first consideration that needs to be addressed when de-
veloping a strategy around technological innovations is market potential.
E.G.
Use Example 17.5 – Pursuing new technology here
Management in Action –
Progress Report
Ecstatic reviews greeting the launch of Tesla’s Model S suggest that the company has mastered electric
car technology. But success as a business requires more. Tesla needs to sell enough of the vehicles at a
sufficient profit. So besides designing vehicles, it is innovating in marketing, distribution, and providing
access to recharging stations. The company has opened stores instead of participating the nation’s net-
work of car dealerships, and it has been building a network of Superchargers to deliver free recharging of
car batteries in under an hour.
• What are the advantages and disadvantages to Tesla Motors in being a technology leader?
Like other technology leaders, Tesla has the potential to earn high profits on its early luxury brands. If its
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• How has Tesla Motors addressed market receptiveness, technological feasibility, and economic viabil-
ity?
It addressed market receptiveness by designing a vehicle that is a pleasure to drive and addressing a key
A. Make-or-buy decision is the question an organization asks itself about whether to acquire new
technology from an outside source or develop it itself. (Exhibit 17.6)
1. Internal Development – keeping technology proprietary (exclusive to the organization).
2. Purchase – simplest, easiest, and most cost-effective way to acquire new technology.
LO 6: Define key roles in managing technology.
A. Chief information officer (CIO) – executive in charge of technology strategy and development;
also often called the chief technology officer (CTO).
V. Sourcing and Acquiring New Technologies
VI. Technology and Managerial Roles
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E.G.
Use Example 17.6 – Executive champions here
LO 7: Define the elements of an innovative organization.
A. Organizations can exploit for innovation (e.g. increase production speed) or can explore new
knowledge (develop new products) (Exhibit 17.7)
B. Unleashing Creativity (Exhibit 17.8)
1. Intrapreneurship is important for organizational innovation
C. Bureaucracy Busting
1. Bureaucracy busting fosters innovation, but pure organic structures can have efficiency costs.
E.G.
Use Example 17.7 – Bureaucracy busting here
LO 8: List characteristics of successful development projects.
D. Implementing Development Projects
1. Development project is a focused organizational effort to create a new product or process via
technological advances.
3. Technology, Job Design, and Human Resources
a. Sociotechnical systems are an approach to job design that attempts to redesign tasks to
optimize operation of a new technology while preserving employees’ interpersonal rela-
VII. Organizing for Innovation
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Management in Action –
Onward
Launching an innovative car company has exposed Tesla Motors to formidable competition in an industry
that requires a major investment just to get started. Still, Tesla sees an advantage in being able to focus
entirely on electric vehicles, which are a sideline for the established competition. The company also
doesn’t have to pay some of the expenses that have become entrenched at the older competitors. As a
start-up, Tesla has been nimble and has been able to ramp up production quickly as the Model S begins to
sell. If it succeeds, its challenge will be to maintain its advantages as it becomes larger.
• How does Tesla Motors source and acquire new technologies?
• What are the advantages of this approach?
Tesla relies heavily on internal development of technologies. The main advantage is the chance to keep
• How would you advise Tesla’s managers to continue unleashing creativity as the company grows?
They should create and maintain an organizational culture that encourages innovation. Ways to do this
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p. 562: Why does innovation matter for a service business?
Innovation is more than designing and selling the latest gadget (an invention). A service company can
p. 566: How can innovation support a low-cost strategy?
p. 569: How can being a follower help reduce costs?
The follower can learn from the leader’s experience, avoiding the costs and risks of developing something
p. 572: What are some limits on benchmarking as a source of technology ideas?
Companies in the same industry will tend to be reluctant about sharing details of their technology. Also,
p. 575: Say an innovation is exciting but unprofitable. What are the risks of pursuing it anyway?
The basic risk is that the organization will lose money because it pursued an unprofitable idea. It might be
p. 578: What is the main downside of this way to acquire technology?
p. 584: Name one way to “bust bureaucracy.”
The ideas mentioned in the text are to establish temporary project structures operating under their own
BOTTOM LINE
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Detecting Landmines and Saving Lives
1. How would you classify Bibak’s work? Does it represent a process or product innova-
tion (or both)?
Student answers will vary, but process, product or both make sense in this scenario.
2. To what degree has Bibak created an innovative business model?
Bibak is an innovative business model whereas cheap tools are put together to create an
SOCIAL ENTERPRISE
Chapter 17 – Managing Technology and Innovation
LECTURETTE 17.1: Intuition and Innovation
INTUITION DEFINED
Intuition may be defined as a way of knowing, a way of perceiving alternatives, the ability to see the big
picture, the ability to have a sense of what is going to happen and the ability to react accordingly. Intuitive
INITUTION AND DECISION-MAKING
1. Confronted by a world of accelerating change, corporate America is finding that old techniques and
old processes simply will not meet the test of competition. The conditions and players in the market-
2. Until recently, managers formulated future actions based on left-brain, analytical techniques such as
3. Intuition is a brain skill that is especially appropriate for decision-making when (I) there are limited
facts; (2) the facts themselves do not provide directional answers; (3) there are a number of plausible
alternatives; (4) variables are not scientifically predictable; (5) time is limited; (6) there are few, if
any, precedents; (7) there is a high degree of uncertainty; and (8) there is pressure to be right.
4. Management education and training have historically been based on the teaching of deductive, analyt-
ical, linear “left brain” skills, with little, if any, attention devoted to the teaching of inductive, rela-
LEFT AND RIGHT BRAIN SKILLS
1. The left hemisphere of the brain is responsible for verbalizing-for providing an organized approach to
thinking through the application of symbols, numbers, and logically ordered processes. The left brain
is adept at the rational, deliberate, step-by-step linkage that represents logical thinking.
2. On the other hand, the right brain has poor verbalizing skills, so is more prone to freely analyze many
LECTURETTES
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THE INTUTIVE MANAGER
1. Experience suggests that the following characteristics are typical of the intuitive manager: (1) positive
self-image; (2) curiosity; (3) independence; (4) inner-directed personality; (5) risk-taker; (6) prefer-
DEVELOPMENT INTUTIVE SKILLS
1. Intuitive managers suggest that subordinates can learn to be more intuitive by following a five-step
decision-making process:
STEP I Learn to recognize the intuitive experience.
STEP 2 Become aware of the soft facts (feelings and impressions) as well as the hard facts (data).
2. Intuitive managers usually employ a variety of techniques designed to further develop their intuitive
senses. Such techniques include:
1. Playing freely with ideas without a specific goal in mind.
2. Practicing guided imagery.
3. Analytical exercises designed to improve intuitive thinking include: (1) discussing issues with those
with different perspectives; (2) concentrating on listening to not just what is said but how it’s said; (3)
LECTURETTE 17.2: eBay CEO Outlines Winning Strategies
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MEG WHITMAN REVEALS KEYS TO AUCTION GIANT’S CONTINUED SUCCESS
1. eBay’s growing customer base, category and geographic expansion and a stronger emphasis on fixed-
price purchases as areas of focus for the successful Internet marketplace.
SUCCESS MODELS FOR THE FUTURE OF E-COMMERCE
1. Two winning e-business models for the future:
EXPANSION IN COMPUTERS AND ELECTRONICS
1. eBay’s expansion of its computers and electronics categories. .
WHITMAN TALKS TO TECH TV
1. IT portion of eBay’s business would be a very important part of eBay’s future growth strategy.
2. eBay will continue its geographic expansion, focusing on developing its existing international
sites.