Presented by Gary Clarke Committee Chairperson: Professor Holden

1. Standards, Policies and Cultural Pluralism Promoting Strategies for Achieving Competitive Advantage Supporting the Future of Information Technology Presented by Gary Clarke Committee Chairperson: Professor Holden Committee Members: Professor Troell and Professor Cofield May 4, 2004

2. Thesis Statement • Future of Technology • More on Cultural Pluralism/Human Factors • Less on Technology • Result • Radical Technology and new innovation • Fostered by government, standards, global access to technology

3. Cultural Pluralism- Future of Technology • How standards organizations, open systems and policies set the foundation for Cultural Pluralism and the future of Technology. • How Competitive Advantage, Strategy, and Technological Innovation benefit from Cultural Pluralism • Case Studies

4. Thesis Statement

5. Standards Organizations • Standards and Policies • Create level playing field to foster national and international innovation • Standards Organizations • National Information Infrastructure (NII) • Under Clinton Administration • Evolved into NIST • National Institute of Standards and Technology (NIST) • Security standards, data exchange, measurements • Organization for Economic Cooperation and Development (OECD) • Standardize social and economic policies • Believes E-commerce improves social conditions • Institute of Electrical and Electronics Engineers (IEEE) • International Standards based organization • 150 Countries • Ensuring global communications standards • Example: Network protocol standards • European Union • 15 member countries • Promoting currency standards • International Telecommunications Union (ITU) • 189 member states, • Electronic Commerce for Developing Countries (EC-DC Project), • Believes that a countries economic development, based on technological development • Global Information Infrastructure Committee (GIIC) • Independent • Industry leaders • How to facilitate Global Electronic Commerce • International Standards Organization • Federal Express • Canon

6. Open Systems/StandardsShifts in Technology • Negroponte – Elimination of Proprietary Systems • Freeing one of space and time • Human-line Ubiquitous Systems • Cerf – TCPIP Protocol Standards • Shift from Propriety to Open Systems • Future of Technology based on common underlying protocol • Gilder – Microcosm to telecosm shift: CPU to the network • Convergence Fiber to the atmosphere • “This law ordains that the value and performance of a network rise apace with the square of the increase in the number and power of computers linked on it.” • Moore’s Law about the CPU • power of the transistor will double approximately every 18 months. • Technological Shifts occurring. Future shifts based on non-technology: Cultural Pluralism.

7. Competitive Advantage/Strategy • Traditional Theories • Porter – “Five Forces”--buyers, suppliers, competitors, new entrants, and substitutes. • Downes – Digitization, Globalization, Deregulation

8. Competitive Advantage/Strategy • Traditional Theories • Convergence/Shift towards new dimensions from existing traditional theories towards globalization and deregulation supported by standards organizations. • Strategic Fit affords Competitive Advantage through Strategic Alignment • Tasks must be in alignment with each other. • Collectively aligned with company goals and strategic direction.

9. Competitive Advantage/Strategy • Strategies – Strengthened by Competitive Advantage. • Porter - believes that strategy is enhanced when companies employ unique activities. • Unique Activities – germinate with pluralism and diversity. • Strategic positioning – • Variety based – Subset/Specialized (Ex. Glass/Oil). • Needs based – Ikea. • Access based – customers acquired through different marketing strategies.

10. Competitive Advantage/Strategy • Trade-offs (Porter) • Strengthens strategic plan – focus on core competencies. • Example: automobile glass vs. storefront. • Downes • Ideals shows a shift towards the future of technology. • digitization, globalization, deregulation. • Believes Porters ideals are outdated. • Downes enhances Porters Ideals • Moving from traditional towards pluralistic characteristics.

11. Competitive Advantage/Strategy • Porter to Downes – • shift towards globalization, deregulation, digitization. • Augmentation of traditional theories.

12. Competitive Advantage/Strategy • Core Competencies – “collective learning in the organization.” • Core Competencies and Competitive Advantage over time make it difficult for other companies to emulate. • Trade-offs may occur in the process • Re-engineering business – • Enhances existing business.

13. Competitive Advantage/Strategy Other Traditional theories fostering Competitive Advantage • Re-engineering business – Davidson’s 3 Phases • Automating existing activities. • Building on first and focusing on products. and customer service • Development of core competencies based the initial phases.

14. Competitive Advantage/Strategy Physical and Virtual • adds dimension to competitive advantage and supports strategic opportunity. • Physical – tasks performed to complete an activity. • Virtual - information processing component • Rayport (pioneer in digital strategy) “marketspace.” • Marketspace – products and services exist in digital information.

15. Competitive Advantage/Strategy Physical and Virtual • Barnes & Noble – creates strategic opportunities but does not replace desire to purchase from the actual bookstore • Marketing information gathered on-line creating new opportunities • Online Banking – “space-based relationship” created or virtual customer relationships

16. Competitive Advantage/Strategy Strategic Alignment • Aligns business with Information Technology • Affords Strategic Fit. • Enforces core competencies • Reinforces corporate strategies and awareness. • Trade-offs – strengthens a company

17. Competitive Advantage/Strategy Source: http://hsb.baylor.edu/ramsower/acis/papers/papp.htm

18. Competitive Advantage/Strategy • Developed by N. Venkatraman and J.C. Henderson • Various Alignment perspectives support strategy and function • Strategy execution. • Technology potential. • Competitive potential. • Service level.

19. Competitive Advantage/Strategy Federal Express – Strategic Alignment Marriage of Business with IT • Family of companies. • Transporting packages and data enhancing services. • Foster competition with UPS – 60 year old company. • Online Tracking. • “This is business networking in action. It is also technology and it is also people.”

20. Competitive Advantage/Strategy • Federal Express – cont. • Physical and virtual to gather customer information. • People – importance to be an effective global organization.

21. Competitive Advantage/Strategy Federal Express • Diversity • External - Models customer base. • Internal – contributes to innovative thinking. • Attracts foreign investment. • Cultural Pluralism – localized service recognizing differences creating strategic opportunities.

22. Competitive Advantage/Strategy • Federal Express – Standards • ISO 9001 – Quality Management and Assurance • Promotes international trade. • Established competitive advantage standardizing systems for international compliance.

23. Competitive Advantage/Strategy • Federal Express – Future • Effective use of IT. • Technology Transfer – to public and customers. • Newer company. • more fluid and dynamic. • Able to change direction easier. • Cultural Pluralism. • Recognizing differences. • Supporting diversity within Company. • Result – localization creating Strategic Opportunities.

24. Competitive Advantage/Strategy • Privatization and Liberalization • Melding of public with private sector. • Government funding of private research. • Knowledge transferred to public sector. • Japan technological growth– • Despite natural disasters and WWII. • Government investment in technology. • 1996 goal – invest 2x in R&D by 2000.

25. Competitive Advantage/Strategy • Privatization and Liberalization – Cont. • Japan technological growth– • Eliminate lifetime employment. • Expand to include foreign research. • Upgrade university and national laboratories. • 1993 – 47% of technology exported to Asia. • Historically – 1st non-Western country to achieve industrial parity; technological parity inevitable.

26. Competitive Advantage/Strategy • Privatization and Liberalization – Cont. • Japan technological growth– • Government Involvement • Negotiate technological importation. • Preferential tax measure encouraging importation. • Restricted market access of foreign companies informally and formally.

27. Competitive Advantage/Strategy • Privatization and Liberalization – Cont. • Japan – Attitude of People – 1995 • 80.6% agreed that scientific research necessary. • 73% believe international competition on the forefront of Japanese culture. • 51.8% believe that healthy and comfortable society will develop of technological advancement.

28. Competitive Advantage/Strategy • Privatization and Liberalization – Cont. • Japan – Attitude of People – 1995

29. Competitive Advantage/Strategy • Technology Transfer - Japan • Science and technology transferred to public • 3 Reason (Prof. Katsuyo Tamai – Univ. Tokyo • Accountability of universities to taxpayers. • Increase competition amongst universities. • Realization of the importance of university based R&D.

30. Competitive Advantage/Strategy Privatization/Liberalization/Technology Transfer • Results • Balance between public and private sectors to promote technology transfer. • Realization that globalized technological transfer is important to the future of technology. • Japan Technology Group – supports technology transfer within Pacific Rim and between Japan and the United States.

31. Cultural Pluralism- Future of Technology • Digitization, Globalization, Privatization, Liberalization coupled with Standardization support Cultural Pluralism paving the way for the future of Technological Innovation • Competitive Advantages and Strategic Opportunities are created when there is an understanding of the changing environment • Technologically. • Strategically. • Culturally.

32. Cultural Pluralism- Future of Technology • What is Cultural Pluralism? • “the idea that people’s separate identities should be maintained and accepted by others as they work alongside each other.” • Diversity • The foundation for radical technology and innovation • means to Competitive advantage and strategy - Race for Opportunity (RFO) • “…a positive impact on creativity when there are differing views and cultures in the mix.”

33. Cultural Pluralism- Future of Technology • Cultural Pluralism • Promotes personal growth. • Supports the “understanding” of diversity. • Customer standpoint. • Vendor standpoint. • Employee standpoint. • Promotes international interest. • Customers are diverse. • Enhances Strategic Opportunities and Competitive advantage.

34. Cultural Pluralism- Future of Technology • Cultural Pluralism – 4 Conditions • Diversity must be present within society. • Interactions must exist between groups. • Coexisting groups must share equal educational, political, economic opportunities. • Purpose of standards and standards organization. • Government involvement. • Privatization/Liberalization. • Society must value cultural diversity.

35. Cultural Pluralism- Future of Technology • Cultural Pluralism – Ways to Participate. • Cultural groups have equal opportunity to reflect preferences on Local, National, and Global level. • supported by standards organizations. • Basic human needs are satisfied. • supported by government involvement. • Every member should be able to gain access. • supported by national policy organizations.

36. Cultural Pluralism- Future of Technology • Cultural Pluralism – Western Digital Case Study • Based in California w/ Manufacturing in Malaysia and Thailand. • Founded in 1970. • 10,000 employees worldwide. • 2003 revenues: $2.7 billion. • $135 million devoted to R&D.

37. Cultural Pluralism- Future of Technology • Cultural Pluralism – Western Digital Case Study • Rebecca Dooley examined cultural differences within Malaysia (Malay, Chinese, Indian) with American counterpart. • Main Workshop Exercise. • Place like cultures in homogenous groups. • communications easier but less creative ideas. • Not able to adapt to change easy. • Ethnocentric behaviors towards those unlike them. • Mixed group. • Developed ways of communicating over time. • More fluid dynamics. • More creative ideas.

38. Cultural Pluralism- Future of Technology • Cultural Pluralism – Western Digital Case Study Source: Dooley, Rebecca. Part 1.

39. Cultural Pluralism- Future of Technology • Cultural Pluralism – Western Digital Case Study The example of an American male meeting an ethnic Malay woman for the first time in a business context illustrates this learning process. • Unconscious Incompetence - The American attempts to shake the hand of an ethnic Malay woman, who recoils nervously. • Conscious Incompetence - After a few times of experiencing very awkward moments, the American becomes aware there is something generally wrong with the attempted gesture. • Conscious Competence - The American finds out that Muslim Malay women prefer not to shake a man's hand because of religious beliefs, and consciously withholds the handshake. • Unconscious Competence - After many months, the American is fully adapted at an unconscious level. He is further able to assess each situation and determine automatically whether to shake the hand of an ethnic Malay woman or not. "Unconscious competence" also includes what we know about our own culture but don't realize what we know. (Dooley, part 1)

40. Cultural Pluralism- Future of Technology • Cultural Pluralism – Western Digital Case Study • Results • Unconscious Competence not achieved by default. • multiculturalism does not guarantee understanding of differences. • Realization that creativity and innovation are not guaranteed because of diversity unless there is an awareness of the differences leading to unconscious awareness or Unconscious Competence.

41. Cultural Pluralism- Future of Technology • Cultural Pluralism – Western Digital Case Study • Results: • Misconceptions existed amongst all groups. • Style of interaction with upper management differed. • Values on Collectivism vs. Individualism. • Productivity results from case study. • - 20% productivity increase in 2000.

42. Cultural Pluralism- Future of Technology • Cultural Pluralism – Australia Case Study • 19 million people – descendants from China during 1850 gold rush, United Kingdom, Asia. • Population represents 160 countries. • Aborigines – 2% of population.

43. Cultural Pluralism- Future of Technology • Cultural Pluralism – Australia Case Study • Conducted by Ian Wilkinson and Constant Chen. • Australian society reflective of the real world. • Study on Product and Services reflective of Technological Innovation – based on similar principles. • Government involvement. • Global standards. • Cultural diversity.

44. Cultural Pluralism- Future of Technology • Australia – Case Study • The Three Components of Multicultural Marketing. • Product focused but has IT relevance. • Multicultural Market segment and International Markets – relationship of domestic and international multiculturalism. • Multicultural Resources – reflective of the real world both internal to Australian society and internationally.

45. Cultural Pluralism- Future of Technology • Cultural Pluralism – Australia Case Study

46. Cultural Pluralism- Future of Technology • Cultural Pluralism – Australia Case Study • Results - Australia: • Multiculturalism – promotes feeling of belonging. • Promotes internal/external market opportunities. • Key to International business success – recognizing diversity as a benefit.

47. Cultural Pluralism- Future of Technology • Cultural Pluralism – Australia Case Study • Results – Australia • Australian Industries that have adapted business strategies utilizing cultural makeup as a means to opportunity. • Health Care • Banking • Telecommunications • Media

48. Cultural Pluralism- Future of Technology • Xerox – Eastern Europe • 1993 – losing market position in 10 Eastern European countries. • Lacking knowledge of equipment demand. • Lacking knowledge of cultural differences. • Lacking good marketing strategy. • Hired Aspen (business communications agency). • To analyze data. • To develop marketing campaign.

49. Cultural Pluralism- Future of Technology • Xerox – Eastern Europe • Results • Localized advertisement (not use American translation). • Implemented training for sales manger on cultural differences and to appreciate diversity. • 80% sales growth by 1994. • Strategies in Cultural Pluralism to effectively market.

50. Cultural Pluralism- Future of Technology • HyperNet - Japanese ISP • Founded 1991 by Yuichiro Itakura. • Within 3 years - backed by Japanese securities firms and major banks. • 1996 – won New Business Award. • Potential partnerships with Microsoft. • 1997 – Filed Bankruptcy.