How strategy-technology is gaining importance in innovation?

In strategic management, attention is increasingly given to the importance of technology and innovation at the macroeconomic level. In strategy-technology management researches, technology has also been suggested as an important consideration (Drucker, 1985; Frohman, 1985; O’Connell and Zimmerman, 1979). The suggestion being made is not that technology should replace any existing tool but that ‘a critical link between technology and strategy exists’ (Kantrow, 1980) and that the attempt should be made to view technology in strategic terms.

Researches on strategy-technology relationship

Researchers believe that technology can play a role in enhancing a business’s performance. The strategy-technology relationship has been analyzed from a different perspective in many kinds of research. This is because it can actually alter the structure of an industry and ‘is important because it affects competitive advantage’ (Porter, 1985). Technology has strategic importance because it often represents either an opportunity or threat, which should be considered during the scanning effort (Grinyer, Al-Bazzaz and Yasai-Arde-kani, 1986, O’Connell and Zimmerman, 1979).

Chaos control

Quinn (1985) has suggested that its real value lies in controlling ‘chaos’ through the achievement of a degree of congruency between strategy, structure and technology. This position was echoed by Smart and Vertinsky (1984) who found that technology might be a useful dimension that should ideally be used during competition during crisis situations.

Managerial and strategic practices

Other strategy-technology researches have explored its role in inducing innovation (Kanter, 1982; Ronstadt and Kramer, 1982), helping to tie manufacturing to the strategy formulation process (Hayes and Wheel-Wright, 1979; Hyer and Wemmerlov, 1984; Skinner, 1986), and its impact on the degree of vertical integration (Balakrishnan and Wernerfelt, 1986). At the implementation stage, concerns have ranged from the impact that technology has on existing managerial practices, to industrial relations issues, to exploration of the relationship between technology and other factors associated with the successful implementation of a new product (Leonard-Barton and Kraus, 1985). The thrust is to look at technology and innovation to determine if it can be identified for its incorporation into the strategic management process.

Technological interdependence

Another group of researchers seek to explain the underlying patterns of technology. This second stream may prove valuable to the strategic management process because it allows incorporating, into their planning framework, considerations related to the evolution of technology. The concept of technological interdependence was first developed by Rosenberg (1982). The pattern of technological innovation, with respect to a given product or process, has been theorized to be the result of many different factors. These factors include demand (Myers and Marquis, 1969), public and governmental support, imitation and research intensity. When attempting to explain the technology, the patterns which emerge can be used to provide support for the causal factors selected, or methodology advocated, by the researcher.

Flexibility in operations

What many approaches tend to ignore are in-depth explanations of how the evolution of technology might be important to strategic management. Managers can position their business to maximize opportunity if they can correctly interpret, or have the power to act on. These technological signals enhance flexibility (Kanter, 1982) but the exact prescriptions for doing this have been vague. Several attempts have been made to develop more comprehensive, multiple-factor theories to explain the underlying patterns of technological innovation.

Planning and goal-setting in strategy-technology

When attempting to examine the time frame and process by which technology develops, these approaches take into account many factors. Innovation patterns that emerge, with respect to a product or process, are used to support strategic positions. Though these approaches have concentrated more on explanation and less on using innovation as a policy input variable, there is a possibility to exploit the strategy-technology by considering technological innovation as part of an evolutionary process. These theories suggest an enlarged scope for planning, which relates goals developed in the formulation process to technological explanations. The product-process life cycle theory (Abernathy and Utterback, 1978) and the meta-learning concept (Sahal, 1981) are two attempts to explain the actual pattern of technological progress. The attempt by Rosenberg (1982) to explain productivity improvement at the macro-level, through technological inter-dependence and ‘learning by doing’. This serves as a useful vehicle to help understand the compatibility.

Role of the government in strategy-technology

It is important to understand the role of government in shaping the innovation policy by strategy-technology without steep social learning curve would be of no use. It has long been understood that the technological environment plays an important role in the implementation of strategies, especially in case of the service industry. However, one has to understand that developing such a framework is a time-consuming affair. Due to the very nature of the issue and nature of analysis required to address those issues. Policy-makers are of opinion that the emergence of modern regional innovation policy into the mainstream of public policy is a result of more than four decades of analysis. In fact, the idea has reshaped understanding of the role played by innovation in case of economic development. It’s interesting to note that the journey from the early policy approaches to the current policy framework is the culmination of various shifts, both in analytical and empirical thinking.

References

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  • Balakrishnan, S., and Wernerfelt, B. (1986). Technical change, competition and vertical integration. Strategic Management Journal, 7 (4). Pp 347-359.
  • Frohman, A. L. (1985). Putting Technology into Strategic Planning. California Management Review27(2), 48–59. https://doi.org/10.2307/41165129
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  • Hyer, N. L., and U. Wemmerlov. “Group Technology and Productivity.” Harvard BusinessReview, 1984, vol. 62, no. 4, 140-149.
  • Kanter, R. M. “The Middle Manager as Innovator.” Harvard Business Review 60, no. 4 (July–August 1982): 95–105.
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  • O’Connell, J. J., & Zimmerman, J. W. (1979). Scanning the International Environment. California Management Review22(2), 15–23. https://doi.org/10.2307/41165317
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  • Skinner, W. (1986). The Productivity Paradox. Harvard Business Review, July issue.
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