MGMT 544 Technology Management

1. MGMT 544Technology Management Portland State University Dr. Sharon Perot Week 6

2. Agenda - Developing a Firm’s Innovative Capabilities • Current news events • AR #5 • Turn in HW at the end of the class • Debate Intel Corporation Case BREAK • Lecture • SMTI pp. 549-562 • Article Discussion - #5 Note: Braun Case #2 due next week- 5/17 Mgmt 544 - Week 6

3. Debate Case Discussion Intel • Each team will prepare and present their arguments from one of the four options listed below. • Team 1 selects #1, 2 selected #2, and so on. • Options • 1) Drop DRAM business • 2) Stay in as niche player • 3) License technology to another company • 4) Invest in DRAM capacity at 1MB level and commit to low margin business Mgmt 544 - Week 6

4. BREAK Mgmt 544 - Week 6

5. Tonight’s Lecture Mgmt 544 - Week 6

6. Enactment of Technology Strategy:Corporate Innovation • Technology Strategy Recap • Foundation: technological competencies / capabilities • Evolution: forces within and outside the firm (gov’t, competitors, corporate strategy, economic) • Enactment of Technology Strategy • sourcing (R&D, licensing, joint ventures etc.) • development of new products, businesses • technical support / field service Mgmt 544 - Week 6

7. Evolutionary Framework of Strategy Making Process in Established Firms Autonomous strategic action Concept of Corporate Strategy Strategic Context Induced strategic action Structural Context Mgmt 544 - Week 6

8. What are the Strategic Rationales for Outsourcing? Improve Business Focus Lets company focus on broader business issues by having outside experts handle various operational details Provide Access to World-Class Capabilities The specialized resources of outsourcing providers makes world-class capabilities available to firms in a wide range of applications Accelerate Business Re-Engineering Benefits Achieves re-engineering benefits more quickly by having outsiders--who have already achieved world-class standards--take over process Share Risks Reduces investment requirements and makes firm more flexible, dynamic and better able to adapt to changing opportunities Free Resources for Other Purposes Permits firm to redirect efforts from non-core activities toward those that serve customers more effectively Mgmt 544 - Week 6

9. Induced Strategic Actions • Operates within the current strategic context • SWOT analysis to “find” new products/markets • “ends” are defined in the strategic objectives • Usually incremental or architectural innovations • Greatest short term challenge of the firm • a.k.a. New Product Development processes Mgmt 544 - Week 6

10. Autonomous Strategic Actions • Important for a firm’s long term survival as current industry matures • Occurs outside the scope of current corporate strategy • “means” are provided for in the corporate strategy • Usually radical innovations • a.k.a. corporate intrepreneruship Mgmt 544 - Week 6

11. Autonomous Process for Technological Innovations • Corporate Research (R&D Labs) • Usually limited to large, established firms • Watson, Bell, PARC etc. • Corporate Entrepreneurship • a continuum of structures ranging from new product departments to NVD, “skunk works” and complete spin-offs Mgmt 544 - Week 6

12. Corporate Research • Budgeted at 1 to 2% of sales (or higher) • Exploratory, high-risk, long range… • Management Issues: • how to know where / what to research for greatest ROI • how tightly to link research projects to business objectives • Can be used to support NPD (induced processes) OR “serendipity” efforts for discovering new business opportunities (autonomous processes) • Transfer of technology into “induced” areas is not a simple effort Mgmt 544 - Week 6

13. Corporate Research (cont.) • Linking R&D to corporate development strategy • Assess the opportunity • Use rating tool similar to page 499 questions • Roles in Corporate Research • Technicians • Bench scientists • Group leaders (1st mgmt level) • greatest tension between business needs and pure science • R&D managers (2nd mgmt level) • Director (head of function) • Use a “value” method for resource allocation Mgmt 544 - Week 6

14. Corporate Entrepreneurship: Exploring the boundaries between a firm’s competencies and corresponding product-market opportunities Key to success is choosing the RIGHT design that creates the linkage between the new business and the organization Exhibit 7…pg. 504 Mgmt 544 - Week 6

15. Implementing Corporate Entrepreneurship Designs • Execs need to asses common interests and dependencies to avoid “zero-sum” game • Establish a reward system that fits specific design • Be flexible…dynamic environment may require design to be modified Mgmt 544 - Week 6

16. Transfer of Technology Collaboration Article – Reading III-2 • Select the “BEST” point for your group • Select a spokesperson to present the point to the class • Repeat for “WORST” or least favorite point of first article • Select your teams favorite discussion question • Write down and exchange your question to team # (4 minus your team’s number) • Create a response to the question you are given and select a spokesperson to present Q/A to class Mgmt 544 - Week 6

17. Conclusions • You don’t have to be a start-up to be innovative • Established corporations play a key role in innovation • Funding of corporate research / R&D labs • Spin-offs (intentional and unintentional) • Internal entrepreneurial activities Mgmt 544 - Week 6