Technology Strategy and Organizational Factors for Competitive Advantage

The assignment highlights the importance of organizational factors in complementing technology strategy to lead to innovation. It emphasizes that open communication channels and learning from customers, suppliers, and competitors are crucial for increasing knowledge depth and diversity. Training and development programs can also upgrade technological capabilities, while problem-solving capabilities of employees rely on their education, training, creativity, and motivation. The paper suggests that organizational characteristics such as job rotation and inter-divisional teams promote innovation, and change in procedures and cross-disciplinary learning within the organization are necessary for technology strategy execution. Additionally, incentive schemes and rewards for sharing knowledge encourage teamwork and enhance the organization's knowledge base.

1.0 Introduction
Management innovation alters the method of the work of the managers, this is done in
order to improve the organizational performance. With the suitable application of
innovation management, it could enhance in employee engagement and customer
satisfaction. Incremental, breakthrough or disruptive is also a part of Innovation.
Incremental implies to a company which needs to always recreate themselves, by doing so
this will help the company to thieve by refining the existing products, services and
processes regularly. A breakthrough innovation refers to technological advancements that can
boost the level of a product or service, within an existing category, ahead of its competitors.
Disruptive: Disruptive innovations are ideas that are capable of radically changing the market
behavior after being implemented.

2.0 Technology Strategy
Although, the concept of technology strategy has been a part of management of technology
literature since the late 1970s there is still a lot of debate regarding how to define technology
strategy. It can be briefly and broadly defined as a portfolio of choices and plans that a firm uses
to address the technological threats and opportunities in its external environment. According to
(Meyer, 2008), “The operational expression of a technology strategy is the set of projects that an
organization wants to implement. Determining a strategy is selecting the projects and the
portfolio of projects.” The broad objective of technology strategy is to guide a firm in acquiring,
developing and applying technology for competitive advantage.
Another important aspect of technology strategy is its implementation. Technologies are not
characterized by pre-determined level of efficiency. The level of operational efficiency attained
through a technology depends on the efforts made by a firm to assimilate and modify it to suit
specific requirements. (Deraniyagala, 2001).

2.1 Substance of Technology Strategy
2.1.1 Product and Process Development
According to (Krishnan & Ulrich, 2001), “Product development can be described as the
process that identifies a market opportunity and transforms it into a product available for sales.”
( as cited in Chroneer & Stenlund, 2006, p.238). Technology strategy is also enacted by
deploying technology to develop products.
While taking a decision to develop products firms need to take a decision whether
technology would drive the development of the product (technology push) or product
development and / or market development would drive the development of technology (market
pull) . Every product is composed of a number of technologies. Firms infuse technology into new
products either by bundling or by disruptive technologies. Through bundling, firms combine the
different elements of their product lines into bundles. Radical innovations, and sometimes
modular or architectural innovations, deploy disruptive technologies.
The benefits of information technologies like desktop software and web-based tools for
different stages of the New Product Development (NPD) process are being widely recognized.
However, it is essential for technology to be embedded into the people’s work and processes in
order that it is fully exploited and the benefits reaped. (Barczak, Sultan & Hultink, 2007.
Every activity / process in the value chain uses some technology to combine raw
materials or components and human resources to produce some output. Deployment of
technology in the value chain would enable an organization to exploit the technological
capabilities in operations. For example the adoption of enterprise resource planning (ERP)
systems across the value chain ( inbound logistics, operations and marketing and sales and
distribution ) can be used by a firm to not only improve its inventory and fixed assets turnover
but also lead to efficiencies in marketing, sales and distribution. (Matolcsy, Booth & Weider,
2005). The customer relationship management (CRM) value chain helps to improve the
efficiency of firms by organizing, aligning and integrating the organization processes along the
value chain between the customer, the firm and its extended enterprise. (Chan, 2005).

Information Technology used in the various processes of the value chain affects
positively the performance of the processes when it is not only strategically aligned to the
business strategy of the firm but also that its primary locus (the point in the value chain where
the impact of IT impacts are highest) is in processes that are considered essential for the
execution of each business strategy. For example, for superior performance the locus of strategic
alignment with information technology is in sales and marketing and customer relationships for
customer intimate firms. (Tallon, 2007).
Therefore, selection of technology in this domain focuses not merely on the choice of
specific technologies but also on the potential for technology integration. The extent to which the
technology is adapted or altered so as to suit the needs of the organization also determines the
level of operating efficiency attained by the organization. In fact, firms using very similar
technologies might differ in the level of efficiency depending on the technology strategy
followed after the initial adoption of technology (Deraniyagala, 2001, Zhang & Liu, 2007).
2.1.2 Technical Support
Information technology used as a means of technical support can serve as an important
means of cooperation between the different players across the value chain and the “end-users”.
One of such examples, the World Wide Web has emerged as an important tool to not only
provide information to potential customers but also enable easy processing of electronic
transactions. The use of the World Wide Web reduces search costs and the time required to
search for potential suppliers. “Transactional websites” include electronic catalogues, shopping
carts, payment systems and order tracking systems that offer buyers a convenient and cost-
effective way to support the procurement process by allowing for the identification and selection
of suppliers and the execution of business transactions. ( Benslimane, Plaisant & Bernard, 2005).
Extensive knowledge (new as well as prior) is required at various stages of the production
cycle. New software tools act as a means of capturing, representing and applying all types of
knowledge for effective design and technical support required for production.

3.0 Interface between innovation and technology strategy
The firm’s innovative activities reflect the firm’s technology strategy and the enactment
of technology strategy serves to further develop its innovative capabilities. (Burgelman,
Christensen & Wheelwright, 2004).
The technological innovation process can be broadly identified through four stages of
problem recognition, technology selection, solution development and implementation while
technology strategy can be understood through its substance and enactment. Successful
technological innovation begins when a firm recognizes the potential of using technology to
solve a particular problem or fulfill market needs. This recognition has to a certain extent; roots
in the business strategy of the firm which determines the extent to which technology can be used
as a source of competitive advantage. During the technology selection stage the company
evaluates different technologies which shall help the firm to come out with potential designs.
The choice of a particular technology apart from being dependent on the extent the firm wants to
use technology as a tool to compete also depends on the cost of technology, the resources the
firm wants to invest in the technology and the diversity of technology portfolio which the firm
feels competent to handle. The solution development stage can be identified as the
operationalization of the potential designs. This may proceed either by formulating a new
solution from within the firm by investing in internal R&D activities or by adopting a ready-
made solution from outside. This decision whether to develop solution internally or to source it
from external sources, to a large extent is dependent on whether the firm wants to have a
proprietary right on the solution developed which would give it a competitive edge as compared
to other players in the market and also on how the firm evaluates the “make or buy” decision.
The full benefits of technological innovation are never fully realized until and unless the solution
is implemented either in the form of new products in the market or in the form of cost reduction
from improved processes. The strategy of an organization with respect to the deployment of
technology drives the implementation of solution for technological innovation.
Taking this perspective, we can propose that technological innovation in an organization
not only reflects the technology strategy of the organization but looking at technological
innovation through the lens of substance and enactment of technology strategy we can propose

the following. Apart from business strategy, the substance of technology strategy drives the
technology selection stages of technological innovation, that is, in essence, the substance of
technology strategy helps to identify what of technological innovation. The enactment of
technology strategy by way of appropriation and deployment of technology reflects the solution
development and implementation stages of technological innovation, wherein it helps to identify
the how of technological innovation. The substance of technology strategy again drives the
firm’s decision with respect to development of a solution and implementation of the same. The
implementation of technological innovation should serve as a source of feedback to the firm to
refine and modify its technology strategy.
Organizations do not lay down their technology strategies in isolation. The government
and various policies and regulations are amongst the various environmental factors which affect
the organizations’ choice of technologies.

4.0 How it impacts on the organizational sustainability and performance
A review of literature on innovation has brought out the importance of various organizational
factors which create a learning environment which promotes innovation.
Transition to a new technology within the organization faces not only financial barriers but a lot
of cultural and political barriers too. Process technologies are intimately linked not only to the
product technologies but also to organizational factors. (Rycraft, 2006). An organizational
environment and culture which promotes learning and development of employees; open
communication channels and learning from customers, suppliers and even competitors is in a
better position to innovate. It is through learning that an organization is able to increase the depth
and diversity of knowledge. In fact, higher the learning ability of a firm, higher is the level of
company’s competitiveness, innovativeness and product introduction success. (Yeung, 1999;
Morales, Moreno.& Montes, 2007.).
Training and development programmes though not considered as innovative inputs, could be
explicitly regarded as one of the main channels to upgrade the technological capabilities of firms.
(Sirilli & Evangelista, 1998). The problem solving capabilities of knowledge workers lie in their
education background, professional training, creativity and motivation. Approved and focused
training programs help in production of new knowledge which thereby leads to innovative
solutions and management of change. (Egbu, 2006). Training of employees and development of
champions also enables advanced tools to become embedded in the products and processes of the
organization. (Barczak, Sultan & Hultink, 2007) Irrespective of organization’s strategy to
develop technology inside or to source from outside, it should provide users with sufficient and
appropriate education and training on the new technology so as to make the adoption sustainable.
Change in the mind-set of employees from “Not Invented Here Syndrome” to “Invented
Anywhere Syndrome” also promotes harnessing of external technology for innovation.
(Witzeman, Slowinsky, Dirkx, Gollob, Tao, Ward & Miraglia, 2006).
Technology deployed in the value chain requires inter-functional integration. Therefore
organizational characteristics which encourage job rotation and inter-divisional teams will ensure
that all the employees are seamlessly integrated in a supply chain and are constantly learning
with an aim to promote innovation. These teams develop a tacit knowledge of how to handle

critical situations. Shared between its members, this tacit knowledge may also determine the
efficiency of the company. (Chroneer & Stenlund, 2006).
Execution of technology strategy so as to lead to innovation requires change in the set
procedures in the organization. It also promotes cross-disciplinary learning both within and
across boundaries of the firm. Heterogeneity of knowledge, know-how and expertise available
can increase the creativity level of employees. (Rodan & Galunic, 2004). Organizational
knowledge which is embedded in the interactions between employees of the firm and also
between employees and external stakeholders are an important source for project ideas that
provide input for technology strategy. (Meyer, 2008).
Additionally incentive schemes and rewards for sharing knowledge are important mechanisms to
encourage employees to share information and experiences with each other. It not only enhances
the organizations knowledge base but also enhances the spirit of teamwork. It also helps
employees to understand where they fit into the collective dimension of the workplace. (Hsu
2006; Rezgui 2007). Another important organizational factor which has a profound impact on the
innovative activity is the overall organization structure.
It is the top management which plays a very important role in building a culture of learning and
innovation. The attitudes, backgrounds and personalities of the Chief Executive and the group of
senior executives who surround him determine the culture, traditions and personality of the
corporation. “When the top management is rigid, conservative, driven by the numbers and the
ROIs, one is not likely to see the element of risk taking that an innovative company demands.“
( Goldman, 2005, p.9). Innovation leadership requires a lot of communication and convincing
until the vision has been absorbed throughout the organization. Effective leaders also play an
important role in encouraging the organization to incorporate external sourcing of technology for
innovation into the very fabric of the firm. They articulate visionary goals of complementing
internal sources with external sources to achieve innovation and growth. These leaders reward
employees for effective use of external sources. (Witzeman, Slowinsky, Dirkx, Gollob, Tao,
Ward & Miraglia, 2006).

5.0 Conclusion
This paper has proposed a model for exploring the relationship between technology strategy and
technological innovation. Technology strategy cannot work in isolation to lead to innovation. It
should be complemented by various organizational factors for competitive advantage.
Technology strategy of an organization can be understood by analyzing the technological
innovation process. The paper highlights the importance of combining strategic and operational
levels of analysis.
This model would help managers to manage their innovations better by pursuing appropriate
technology strategy for innovation. HR and training & development policies can be modulated so
as to support the technology strategy for innovations. A synergy between management of
technology and management of softer aspects would benefit the organization.
However, since the model has been proposed on the basis of literature review it needs to be
elaborated and refined through systematic research.

Reference
https://hbr.org/2007/10/management-innovation-defined
http://searchcio.techtarget.com/definition/innovation-management