Technology

Before we delve deeper into this unit let us look at scientific and technological developments that
have fundamentally distinguished the 21st century from the 19th century.
The 21st century has produced innovations such as;
 Smartphones and tablets
 Drone technology
 Electric cars
 Self-driving cars
 Social media
 Fiber optics
 3D Printing
Technology and innovation are new areas in management. However, they affect businesses and
must therefore be understood from the management perspective. In the past, the value of a
company was assessed largely on the basis of its capital and physical assets such as land,
buildings, equipment, and inventory. Today, the real value of a company is much more than the
value of its physical assets or its revenue. Technology adds value to the assets of a company.
The role of technology in fostering economic growth of nations and enhancing their industrial
competitiveness has been widely recognized, through its domineering influence over industrial
productivity. Further, technology has emerged as the most important resource that contributes
directly to socio-economic development. Hence, technology is viewed from various
perspectives: as an ‘engine for economic development’, as a ‘strategic resource’, and as a
‘competitive weapon’.
Technological development is becoming very important to all firms competing in global highly
competitive environment. The increasing of customer needs, demand, and expectations and with
the accelerated rates of technological change and development, business owners are becoming
more conscious of the strategic importance of technology in delivering value to their companies
and networks in which they operate. However, adopting new technologies should be aligned with
organization’s vision and strategic goals, and it should support the company’s sustainable
development and enhance its performance.
TECHNOLOGY: DEFINITION AND CHARACTERISTICS
Terms such as ‘technology’, “invention”, “design”, “innovation” and “entrepreneurship” are
most times used interchangeably. In this section we attempt to define these concepts.
Technology
Technology has been defined in a variety of ways. It is important to recognize these various
approaches to the definition before we build one to focus on in this text. This range of definitions
demonstrates that a variety of different perspectives on technology exist. A few of the major
definitions of technology include:
 The processes used to change inputs into outputs
  The application of knowledge to perform work
 The theoretical and practical knowledge, skills, and artifacts that can be used to develop
products as well as their production and delivery system
 The technical means people use to improve their surroundings
 The application of science, especially to industrial or commercial objectives; the entire
body of methods and materials used to achieve such objectives.

Technology therefore relates to the design, production and distribution of goods and services in
response to market needs. It is the knowledge, production, processes, tools, and systems used in
the creation of goods or in the provision of services.

Types and Forms of Technology

The technologies used in manufacturing firms may be classified as follows, while following their
features into account:
• Generic technologies: Highly consolidated production systems, characterized by relatively
simple operations and slow renovation.
• Advanced technologies: Production systems developed mainly after the Second World War,
characterized by complex, refined operations and a high speed of renovation.
• Hybrid technologies: Production systems in which the characteristics typical of advanced
technologies are prevalent, but not total, and which also include some characteristics of
traditional technologies.
• Intermediate technologies: Production systems in which the characteristics of traditional
technologies are prevalent, but which also include some characteristics of advanced
technologies.

Characteristics of technology
Inter-disciplinary
Exists in a historical context-influenced by and influencing culture and society
Uses and produces knowledge
Designed to enhance peoples capabilities and expand human possibilities
Purposeful intervention by design
Invention
An object, process, or technique which displays an element of novelty. Invention is the act of
creating something new and unique. Inventions are irrelevant unless they are put into practice.
Once an idea becomes a reality and economically relevant, it ceases to be an invention and
becomes an innovation.
Innovation, invention and creativity
Rubenstein defined innovation as “the process whereby new and improved products, processes,
materials, and services are developed and transferred to a plant and/or market where they are
appropriate. It is therefore broadly thought of as new ideas, new ways of looking at things, new
methods or products that have value.
The ability to generate new and useful ideas is termed creativity. Creativity is defined as the
ability to produce work that is useful and novel. Novel work must be different from work that
has been previously produced and surprising in that it is not simply the next logical step in a
series of known solutions. Innovation contains the idea of output, of actually producing or doing
something differently, making something happen or implementing something new. Innovation
almost always involves hard work; persistence and perseverance are necessary as many good
ideas never get followed through and developed.
Innovation is the entire process by which an organization generates creative new technological
ideas (invention) and converts them into novel, useful and viable commercial products, services,
and business practices for (potential) economic gain.

Schumpeter’s distinction between “Invention” and “innovation”

• An ‘invention’ is an idea, a sketch or model for a new or improved device, product, process or
system. It has not yet entered to economic system, and most inventions never do so.
• An ’innovation’ is accomplished only with the first commercial transaction involving the new
product, process, system or device. It is part of the economic system
Entrepreneurship
Entrepreneurship is the capacity and willingness to develop, organize and manage a business
venture along with any of its risks in order to make a profit.

The initiator of the technology and innovation is an entrepreneur. Entrepreneurs are responsible
for creating new products, services, markets and the means through which these products are
made, services produced and markets reached. Entrepreneurs are often responsible for creating
new forms of organization and new ways of managing people. The entrepreneur operates by
introducing such changes directly by having the ability to organize physical information and
human resources to bring out innovation.
The relationship between an entrepreneur and an innovator is that entrepreneurs identify business
opportunities, seize these business opportunities, seek the resources to transform opportunities
into profitable business and the innovator identifies the ideas that are profitable and
commercializes the ideas into practical things, processes, goods and services that can be
commercialized and sold to earn profits. There is therefore a very thin line between an innovator
and an entrepreneur.

UNIT TWO: TECHNOLOGICAL ENVIRONMENT

The technological environment portrays an organization’s potential in terms of the availability of
raw materials and machinery which is required for the manufacture of goods. No company can
possibly control the global environment and hence adaption of technologies may seem to be
quite essential for the businesses to ensure a competitive advantage. This section will essentially
focus on making one understand why technological environment is important for a business to
flourish both nationally and internationally, what are the advancements in technology that can
help a business expand and finally what are its impacts in the global market.
Technology is crucial for the entire global business world. Even though lowering of trade
barriers have theoretically helped expand markets and production potential worldwide, the
advent of technological innovations has added a practical reality to it. In today’s world, almost
every business operation and transaction involve a significant use of technology. Let us look at
some of the important aspects of technological integration to business.
1. Business Necessity- In the earlier days, everything in business was performed manually.
Introduction of technology has helped revolutionize the business concepts and models, thereby
bringing tremendous growth in trade and commerce. It has provided a faster, more convenient
and more efficient way of performing business transactions. Some of the technological uses in an
international business environment include accounting systems, management information
systems, logistics tracking systems, customer relationship services, point of sales systems, etc.
These have enabled businesses to expand globally as well.
2. Communication with Customers- In today’s world, technology has a great importance in
building relationships with customers. In a global business environment, quick and clear
interaction with the clients (globally) is a necessity as websites take hours to respond to customer
queries. Alongside, technological innovations in the transportation services have enabled fast
shipment disbursal in a shorter span of time across national borders. Language translation
systems have enabled employees of a business/organization to interact with customers
worldwide, understand their concerns and resolve their issues. This is how a global business
environment benefits from a stronger communication system globally.
3. Efficient Business Operations- Technological advancements in a global business environment
have helped them understand their cash flow needs, needs for free flow of shipment, needs for
proper inventory management, need for proper tracking and monitoring of shipment and need for
proper communication with clients in a much more efficient and faster processes, thereby saving
time and physical space. Low-cost internet services and World Wide Web have also enabled
businesses to grow internationally and cater to global needs easily.
4. Impact on Business Culture and Relations- With the advent of technology, stronger
communications are being facilitated among employees of a business, customers, shipment
coordinators and all those who are associated with a global business environment, directly or
indirectly. This has helped to keep aside all social tensions, distrust and formation of cliques
which might have a negative impact on the business to a large extent. Instead, it has helped
develop a strong bond between the employees and customers of a business.
5. Business Security- Businesses are often subject to threats. In order to expand globally,
businesses have started expanding online through internet services. This gets them exposed to
cyber-crime threats. With the technological innovations in line, especially in the form of
Artificial Intelligence (AI) and Machine Learning (ML), businesses can now monitor and secure
financial, transaction, client related data, various confidential reports and other proprietary
information. With the help of cloud computing, employees can now access to all business and
client related data along with communicating with their clients and other employees, while
travelling or working remotely, even without direct active management of data.
6. Research Capacity- All businesses need to expand – both the line of production capacity and
client base. Technology helps meet the business with newer opportunities by facilitating enough
Research and Development (R&D). This enables a business realize new dimensions to expand
both domestically and internationally, along with facing competition in the world market.
Internet has enabled businesses to access data on global markets without facing the costs of
travelling or risks of creating separate production plant abroad.