Core of Social System - Natural and Social Environment

Core of Social System – natural and social environment
Chapter 5
NATURAL AND
TECHNOLOGICAL
ENVIRONMENT
prince dudhatra-9724949948
 The natural and technological environments present the impulsive potential for
development while the other environments like the economic, social, and political
and government factors represent the propulsive potential for development.
 Natural Environment : Resources And Constraints

 Technology – through tools and processes
Natural Env Technology Env
To degrade or deplete or enhance through tech.
Impulsive and Propulsive Factors Affecting Business
Determines extent of exploitation
Of developmental potential, direction, pace & pattern
of development
 Given the natural and technological environments, the
propulsive factors determine the extent of exploitation of
the development potential and the direction, pace and
pattern of development.
Links Between Human Dev And Tech (UNDP)
Building Human
Capabilities
For Resources
Employm For Edn, health
ent
Knowledge Economic Advances in
Creativity Growth Science/ Tech
Resource Producti
s vity
for tech Gains
Dev
Technological Change
Natural Environment
 “It is the source and support of everything used by
business (and almost any other human activity) –
every raw material, every energy source, every
life-sustaining factor and even every waste
disposal site”- Warwick and Wood.
 Resource availability is the fundamental factor in
the development of business societies.
Factors – Natural Environment
 Geographical – natural endowments
 Ecological – natural resources depletion, pollution, eco bal
 Weather and Climate
 Location
 Topography
 Differences in geographical conditions – call for a change
in the marketing mix. E.g industries with a high material
index will be located near the raw material sites.
 Earthquake prone regions – choice of buildings - Gujarat
Technological Environment
 Technology is one of the important determinants of
success of a firm as well as the economic and social
developments of a nation.
 Technology includes tools – hard(machines) and
soft(ways of thinking) technology – to solve problems and
promote progress between, among and between societies.
 UNCTAD’s draft TOT Code-”systemic knowledge for the
manufacture of a product, for the application of process or
for rendering of a service and does not extend transactions
involving mere sale or lease of goods.”
Technology – Includes…
 Knowledge And Methods necessary to carry on or to improve
existing production of goods and services
 Entrepreneurial Expertise – provides that essential Competitive
Advantage
 Professional Know-how - provides that essential Competitive
Advantage
 Type, level and speed with which tech developments are adopted
and diffused.
 Technology considered one of the eight factors in GCI – WEF-
email, e-commerce – huge cost savings in B2B
 Internet
Innovation
 Determines competitive advantage and consequently
determines success.
 “Significant advances occur in economy in disharmonious
leaps and spurts as entirely new horizons are exploited.
Entrepreneur is the central figure” – Joseph Schumpeter
 Introduction of a new product
 Use of new method of production/opening of new market
 The conquest of a new source of raw material supply
 The reorientation of an industry
Innovation
 Innovation is a very important factor that provides competitive
advantage and, consequently, determines success. Incr Mkt share.
Tin can v/s Aluminum can
 In the business context – “ Innovation means the technical,
industrial and commercial steps which lead to marketing of new
manufactured products and to commercial use of new technical
processes and equipment.
 Technical Innovation(Betz)
 Radical Innovation(steam boat/engine)
 Incremental Innovation(governor)
 Next Gen Technical Innovation(jet engine)
Calantone and Cooper have identified six major reasons for the
new product failures.
1. The better mousetrap no one wanted (mismatch with Mkt Research).
Industrial cust will not offer better price but demand better product.
2. The me-too product meeting a competitive brick wall – entrenched companies already
there.
3. Competitive one-upmanship – poor mktg. Better firm may loose out.
4. Environmental ignorance – rules/ regulations,cust pref. right from conception of product.
5. Technological dog products – fail on quality or other attribute.
6. The price crunch – mismatch between value and perceived val
Rates of Product and Process Innovations
Basic level –
awkward,
dangerous, poor
performance , Technology S Curve
Exponential
--Betz
Linear
Phase
Technological Leadership & Fellowship
 Tech Leadership – “A firm seeks to be the first to introduce
technological changes that support its generic strategy.
Leadership can be established in technologies employed in any
value activity.”
 Tech Followership – “Refers to a conscious and active strategy
in which a firm explicitly chooses not be the first one on
innovations.”
 Which Choice ?(Porter) – Three factors
 Sustainability of Tech Lead
 First Mover Advantages
 First Mover Disadvantages
First Mover – Run faster!
 Advantages  Disadvantages
 Reputation  Pioneering costs(getting
 Preempting a positioning approvals, code compliance,
 Switching Costs educating buyers, high costs of
early inputs, scarcity of supply,
 Unique access for a new product
small needs,)
 Proprietary learning curve  Demand uncertainty
 Favourable access to new facilities  Changes in buyer needs
 Inputs or other scarce raw materials
 Specificity of investments to early
 Definition of standards generations
 Institutional barriers against  Factor costs
limitations
 Tech discontinuities
 Early Profits
 Low cost imitation
Technology And Competitive
ADVANTAGE
 “Tech Change” is one of the principal drivers of
competition(Porter)- key equaliser, changer
 Innovation – key weapon for sustaining
competitive advantage (Pearson)- greater qual at
lower costs.
 Technological Change may worsen a firm’s
competitive advantage. Innovation may not mean
technology innovation alone for competitive edge.
So What Does Porter Suggest – Desirable
Tech Change for Competitive Advantage?
 Tech change itself lowers cost/enhances
differentiation and tech lead is sustainable.
 Tech Change shifts cost or uniqueness drivers in
favour of a firm.(can reverse too in favor of
competitors)
 Pioneering the tech change translates into first
mover advantage besides inherent benefits of tech.
 Tech change improves overall industry structure.
Science & Technology Policy(S&T)
Sources of Technological Dynamics
 Innovative drive of the company. R&D
 Customer needs/Expectations- companies could be compelled to be innovative.
 (India’s R&D scene- page 88-89)
 Demand Conditions
 Suppliers Offerings – the constr companies for Italian tile indusrty
 Competitive Dynamics – Japan climate and Indian climate -within
 Substitutes – a fn of relative value of price of competing products and switching
costs associated with new products.
 Social Forces
 Research Organizations/Technical Facilities (ICSR, CFTRI –baby food –>Amul)
 Govt. Policy
Innovative Drivers
Our S&T Policy
 It has to be based on global synergies
 Must meet industrial, economic, trade and societal
challenges
 Must benefit all sections of the society
 Establish linkages between and R&D institutions
 TIFAC (Technology Information And Forecasting
Council)
 Interaction with global R&D organizations-
involving SMEs
Our S&T Policy
 Value Additions in products through:
 Endogenous Resource And skills
 Environmental clean and economically viable process
 Closely held technologies that are denied
 Strategic/dual use technologies
 Technology packages as available from commercially operating
units
 Process/product up gradation and incremental productive
improvements
 Strategic alliances with partners abroad for gaining
market/technology advantage /dominance
Time Lags in Technology
Introductions/Absorption
 Example of TV in India
 Electronic Typewriter – advent of computer
 Pushing obsolete technology to developing
countries – case of importing second hand plants.
 Adoption and diffusion time lags. Even in
developed countries
 Food packaging industry – SCM have improved
marketability of products in the agri sector.
Appropriate Technology and Tech Adaptation-1
 Tech suitable in one environment may not be suitable in

another environment
 Natural factors
 Income levels
 Scale of operation
 Demand conditions
 Use facility characteristics
 Customer characteristics
 Case of Japan- most appropriate tech form abroad and
source and adapt with a large pool of scientists in the govt.
Appropriate Technology and Tech Adaptation-2
 Ltest , most sophisticated tech may not be

appropriate.
ICT AND MARKETING
 Advances in information and communications technology are
revolutionalising the modus operandi of marketing and the business
system. The business horizon is humming with buzzwords like
internet, world wide web (www), cyberspace, information
superhighways etc. which are changing the way of contacting
customers; order receiving and processing; and networking and
integrating business system. The revolutionary changes being
ushered in by the internet are indeed exciting.
Transfer of Technology
 Technology transfer is the process by which commercial technology

is disseminated. This will take the form of a technology transfer
transaction, which may or may not be a legally binding contract,27
but which will involve the communication, by the transferor, of the
relevant knowledge to the recipient.
Levels of TT
 Operational Level: At the bottom level are the simplest ones, needed for
operating a given plant: these involve basic manufacturing skills, as well
as some more demanding troubleshooting, quality control, maintenance
and procurement skills.
 Duplicative Level: At the intermediate level are duplicative skills, which
include the investment capabilities needed to expand capacity and to
purchase and integrate foreign technologies.
 Adaptive Level: At this Technological Self-reliance level, imported
technologies are adapted and improved, and design skills for more
complex engineering learned.
 Innovative Level: This level is characterised by innovative skills, based
on formal R&D, that are needed to keep pace with technological frontiers
or to generate new technologies.

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Core of Social System - Natural and Social Environment

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Core of Social System – natural and social environment

 Natural Environment : Resources And Constraints

To degrade or deplete or enhance through tech.

 Tech suitable in one environment may not be suitable in

 Ltest , most sophisticated tech may not be

 Technology transfer is the process by which commercial technology

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