3. critical factors - mot

MOT - Prof.V.Seshadri Ref 1 Ch 3 1

MOT – Critical factors

Prof. V. SeshadriSVKM’s NMIMS


MOT – Critical factors

• Timing & Time taken to act• The vision to change strategy• Managing Change• Productivity, Effectiveness and

Competitiveness• Leaders vs Followers


Critical factors in MOT

• The most critical factor in technology is human creativity

• The creation of technology; developing new products/processes/services with this technology and successfully deploying. marketing them calls for great creativity along with the system to exploit it and the needed investment/resources.


TIMING – Osborne Case• Osborne Computer Company, pioneered the portable

computer concept in July 1981• However, Osborne failed to come up with an improved

version ( 60 to 80 print column version) on time.• Their competitor M/S Kaypro developed one by end 1982

resulting in Osborne being left behind and eventual closure.

• Also, Osborne developed their 80 column computer a little later and prematurely announced in the market, even when they had huge inventory of the old version

• There were no takers for these, as the market awaited the new version. This caused great damage to Osborne’s financial health.


TIMING

• Timely creation and introduction into marketplace of new technology is important.

• All products have a life span which depends on the competition and market.

• Equally important is the timing of introduction of follow-up technology that will enhance performance.

• A revolutionary new product changes people’s habits and hence alters the old market.

• Capital formation, financing sources and cash flow are important for a growing business.


TIMING -TBC

• For manufacturing and service organizations, Time Based Competition (TBC) is an important competitive weapon for achieving world class status.

• TBC focuses on the entire value delivery system to reduce the time required to deliver a new product or service (e.g. JIT by manufacturing firms)


The Vision to change strategy – IBM Case

• E.g. IBM , the leader in the mainframe computer market failed to respond quickly in the early 1980s to the emerging technologies (personal computers). Apple, a start-up company took the market by storm with it’s PC and IBM had to contend with a follower position in this technology. However, IBM had the Vision to change it’s strategy to align with the emerging PC based technology, which it outsourced and got right back into the race. But IBM lost the leadership in this vital sector. The resulting loss to IBM was pegged at $90 billion.


The Vision to change strategy

• Management tend to overlook environmental changes that will affect the company’s competitive position, particularly when the “going is good”. Sometimes this can prove suicidal.


The Vision to change strategy

• When a new technology threatens an existing one, it is better to take the risk of investing in developing the new technology. Otherwise, the cost of delay in responding could be high.

• Management must always be on the lookout for new technologies on the horizon.

• Management must develop a strategy to bring in the new technology at short notice. For this purpose, it is not necessary to develop all technologies in-house; one could consider the option of outsourcing also.

• However, outsourcing of technology may result in losing one’s leadership position in the market.


Managing Change – Microsoft Case

• Microsoft was the leader in the PC software with it’s most successful and useful Windows 95

• In 1996, when the “internet” based systems appeared in the market ( web browsers by Netscape; Yahoo’s software for searching in WWW; Sun Microsystem’s Java software language for the web); Bill Gates took the strategic decision to change the focus of Microsoft from the existing PC related to the emerging Internet related technologies.


Managing Change

• ‘Managing production’, improving productivity’, operational efficiency’ etc. were the focus in the past.

• While these are still important, they focus has shifted to ‘Managing Change’. Business environment has become very dynamic and needs constant review and change.

• Generating new ideas, creating new products, dealing with new breed of competitors and customers, have become the challenges facing today’s Managers.

• The solution lies in creating a flexible , competitive, vibrant organization to manage this changing scenario.


Leaders vs Followers vs Laggards

• Leaders are “ first to market”. They have capacity to lead in developing new technologies and the resources to stay ahead.

• A Follower is the firm which misses the initial wave but recognizes the potential quickly and ‘changes it’s strategy’. Often, it may even surpass the leader.

• A Laggard realizes a potential new technology quite late but seldom influences technolog’s use. It is a ‘me-too’ player.


Advantage of being a Leader

1. Name recognition: E.g. Xerox, Coke, Frigidare, Detol, Amrutanjan

2. Better market position3. Chance to define Industry standard4. Head start in Learning Curve5. Protective Barriers6. High Profit7. Delayed customer switching8. Favorable response by outsiders


Disadvantages of being a Leader

• Absorbs larger initial costs• Needs resources to maintain the lead• Expenses on changes required based on

customer’s experience has to be borne by the leader

• Market uncertainty• Target for competition


Pilkington ( Float Glass)

G.D.Searle ( Nutra sweet)

Du-Pont ( Teflon)

IBM (PC)

Matsushita ( VHS format for VR)

Seiko (Quartz Watch)

Xerox (Star)

R.C.Cola ( Diet Cola)

EMI (Scanner)

Kodak ( Instant photography)

DEC (PC)

Northrup (F20)

Leaders vs Followers - Outcome

WIN

LOSE

LEADER FOLLOWER


Elements of Technology

1. Materials/Natural Resources2. Product Concept/Design3. Production/Processes & Operations4. Information & Communication5. Marketing6. Service and Customer satisfaction7. Safety & Environment


Enablers of Technology

A. Technical & Financial ResourcesB. Business EnvironmentC. Structure & Management of OrganizationD. Project Planning & ManagementE. Human Resources


Role of Enablers in MOT

• The five enablers (A to E) identified, play a key role in each of the elements ( 1-6 ) of the Technological process.

• Hence the efficient MOT involves the study and effective management of each of these enablers ( A-E) in each of the elements (1-6) of the technology.

• This can be seen as a matrix of relationship


Technology & its Enablers

A B C D E1

2

3

4

5

6


Enablers in MOT – (A)Resources

• The efficient use of technological resources is a critical aspect of the techno-economic enterprises.

• Resources include: Instruments, Tools, Materials, methods, software, skilled labor, information, intellectual assets and financial resources.


(A)Resources

• Changing trends in Industrya) Life Cyclesb) Competitionc) Marketd) Qualitye) Productionf) Organizationg) Information and Communications


Impact of new trends on Management of Technology Resources

• Methods of performance assessment• Measure of performance of a Technology• Measure of benefits from R&D activities• New tools for Optimizing decisions• Alliance as an alternative to Rivalry


New Tools for Optimizing Decisions

• Improving methodologies of Technology Forecasting

• Developing a new set of criteria to optimize the performance of a hi-tech firm

• Determining the optimum mix of high tech vs traditional products in a large business.


Alliances as alternatives to rivalryCase: IBM, Apple & Motorola

• I,A & M are traditional rivals in the PC market.• A introduced Apple II PC in the early 1980s with

considerable success. I lagged behind and found it hard to make up in a short time

• Meanwhile, Intel and Microsoft were leading in the microprocessor chip and operating system and software areas and I, A & M feel threatened.

• So, I, A, & M got together to start a JV “Somerset” to develop and manufacture the chip and the operating system.


The Business Environment

• Organizations operate in a socio-techno-economic environment and constantly interact with it.

• The ultimate measure of success or survival of a company is the market acceptance of its products and services.

• To enable this, the company should translate market indicators to strategic decisions and operational plans

• The technologies employed by competitors should also be benchmarked for future strategic decisions.


Structure & Management of hitech Organizations

• Empowering technologies for decision making • Less hierarchical and more flat organization structures• Computer integrated information and manufacturing

systems leads to possibility of virtual organizations• Organizational structures designed along functional lines

should not impede effective integration of R&D and operations from the early stages itself.

• The installation of technological gatekeepers, internal entrepreneurship and increase in joint ventures have great impact on the organization structure of these companies.


Structure & Management of hitech Organizations - examples

• Texas Instruments, a hitech player, had a complex interdependent matrix structure in managing it’s Product Customer Centres (PCC). However, in a major revamp, the PCCs were consolidated into product groups and given more autonomy for better effectiveness.

• 3M, another hitech conglomorate, known for making it’s employees as entrapreneurs, integrated all the autnomous units into four market groups


Structure & Management of hitech Organizations examples

• HP recently reorganized into five groups , each with it’s own strategic responsibilities and integrating of product and market functions within each group.

• These examples signify that these firms recognize both organizational integration and enterpreneurial culture and second that periodic change is required for environmental adaptability


Project planning and management

• Complex R&D projects require the mobilization of large resources and the coordination of activities at different firms and locations. Hence formal and appropriate project management systems are needed.

• R&D projects are carried out by highly qualified and specialized personnel and they work in high risk and uncertain environments.

• Project managers need to adopt appropriate flexible and specially tailored project systems.


Management of Human Resources

• Personnel working in R&D are highly qualified and specialized and they work in high risk and uncertain environments.

• Other business groups in development, marketing, manufacturing, finance etc. which work to convert the developed technologies into marketable products , also work in uncertain and risky operating conditions.

• The pace of change in these areas is getting increasingly frenetic.

• Hence they require specialized skills and qualification which differ widely from one another in content and approach


Management of Human Resources – organizational perspective

• The effect of technological change on the skill requirements of the workforce

• Matching and training the skilled workforce to meet the requirements of new technologies

• Obsolescence of professional staff and the need for their continuous up gradation.

• The role of technological gatekeepers and intrapreneurs

• Social consequences of technological change


MOT guiding principles for managing modern enterprises

1. Value creation2. Quality3. Responsiveness4. Agility5. Creativity & Innovation6. Integration7. Team working8. Fairness


1. Changing paradigms – Old vs New

Management’s primary focus should be:• Reducing direct costs of production • Reduce Indirect costs of the enterprise;

improve competitiveness



Management should be primarily regarded as the decision makers and labor as passive followers of instructions

Decentralized, multi functional and multi disciplinary enterprise teams should decide and operate productive activities



• Operations of an enterprise can be regarded as a stable set of unit operations

• Operations of an enterprise should be flexible, agile, and continuously improvable



Production economies require large volumes of standardized products and automated processes

Along with the above, Mass Customization is the key. Short product life cycles require flexible operations with appropriate automation.



• Single critical –technology based product lines will have long product life times.

• Multi core technology product lines will have shorter product lifetimes and should be planned as a generation/platform of products and organization should be flexible and flat with high level of IT/Communication support


6.Changing paradigms – Old vs New

• World markets can be divided on a national basis with national firms dominant in the domestic markets

• World markets and technology are now global and enterprise should be globally based to think globally and act locally.


7.Changing paradigms – Old vs New

• Technology development is directly linked to Product development in a serial way and it is the revenue from the new product/process/service which is the measure of value generated by the new technology

• Technology development is viewed as an independent activity which forms a pool of new knowledge for future exploitation in several new products/processes/services or as a base for creation of newer technologies. So, the new technology knowledge base is viewed as an Intellectual property in itself which is recognized by the State.


Intellectual Property Rights

• IPR is a statutory right/ownership conferred on an inventor or the employer/applicant for an exclusive right which can be traded just like property owned.

• In turn, the owner is required to prove that the claimed new knowledge is indeed ‘new’ and has both ‘Novelty and Inventive content’. The invention should have an application of value.

• The owner is also required to make a full disclosure of the features/elements of the new invention such that it can be used by any person well versed in the art.

• The owner can prosecute any imitator/infringer who copies his/her claimed invention without his prior permission and agreement.


Intellectual Property Rights

• IPR can be in the form of • Patent• Trademark• Copyright• Design registration etc.IPR is a regional right and provides protection in those

countries where the right has been granted only. However, no one can get a patent on a matter where a

patent has already been granted in some other country or where there is a prior art available.


Intellectual Property Rights - Strategy

• Today, modern enterprises give top priority to generating IPRs as an invaluable asset towards better competitiveness.

• Companies also keep track of the IPRs generated in their areas as this is a pre indicator of new products by competitors.

• Companies also keep track of infringements on their IPRs by rivals and the prosecution of such cases is simple now as it is handled directly by the IPR department of the country who have the necessary statutory powers.


syllabus• 4• Critical factors in Managing Technology• • 4.1 • Creativity and Innovation- an overview • 4.2• Competitiveness and Innovation – an overview • • 4.3• Sociological and environmental issues • • 4.4 • Intellectual Property Strategy• 4.4 • Global trends

3. critical factors - mot

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