Principles of Management

Chapter 18 MANAGEMENT OF TECHNOLOGY AND INNOVATION

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 Learning Outcomes

After reading this chapter, you should be able to answer these questions:

1. What do we mean by management of technology and innovation (MTI), and why

is it crucial?
2. How do organizations develop technology and innovation?
3. What are external sources of technology and innovation development, and when
are they best used?
4. What are internal sources of technology and innovation development, and when
are they best used?
5. How and why do entrepreneurs develop MTI skills?
6. No matter what method is used, what skills do you need to successfully manage
technology and innovation?
7. How do you look into the future to keep pace?
 Exhibit 18.2 Technology and Innovation Defined

(Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license)

 Exhibit 18.3 Management of Technology

(Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license)

 Exhibit 18.4 Innovation Management

(Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license)

1. What do we mean by management of
technology and innovation (MTI), and
why is it crucial?
CONCEPT CHECK
1. How are management of technology and
management of innovation similar? How
are they different?
2. How can firms create value through good
management of technology and innovation?
3. How has Acer managed its technology and
innovation processes?
Creative Disruption and the Innovator's Dilemma

View this video and the

creator of this terminology, Dr.
Clayton Christensen (1952-
2020) explains in his own
words what this means,
providing examples in
electronics and other
industries.

“Creative Disruption & the Innovator’s Dilemma”, by

Startup Grind is licensed under CC BY-NC-ND 4.
 Creative Disruption and the Innovator's Dilemma
1. Which industries have recently been disrupted by some new product, process or service?
Hospitality by Airbnb? Transportation by Uber and Lyft? What others can you think of?
2. Perhaps more importantly, what industries would you imagine will face disruptive risks in
the near future?
3. Would you agree that any manager who accurately forecasts innovative disruptions is in a
superior position to gain competitive advantage over others in their market or industry?
 Exhibit 18.6 Key Management Activities

(Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license)

 Exhibit 18.7 Three Methods of Creating New
Technologies/Innovations

(Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license)

 Table 18.1 Advantages and Disadvantages of Creation Methods

Method Advantages Disadvantages

a.Requires bringing different firm
External Processes:
a.Quicker cultures together
M&A, joint ventures, contractual
b.Blending rather than discovering b.Often leads to perception of
relationships, cross-organizational
c.Often less costly winners and losers
projects, informal relationships
c.Not-invented-here syndrome

a.Clear ownership of the a.Often takes longer

technology/innovation b.Key personnel may leave at a
Internal Processes: R&D
b.Legal protections may be critical time
stronger c.Can be very costly

a.Usually more agile and flexible in a.Highest risk factor

the marketplace b.Lack of skills within the firm to do
New Business/Entrepreneurship
b.Dedicated leadership—it is their things besides innovation
“baby” c.Usually have very little slack

(Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license)

2. How do organizations develop
technology and innovation?

CONCEPT CHECK
1. How do managers develop technology
and innovation?
2. What are the advantages and
disadvantages of each creation
method?
3. What are external sources of technology
and innovation development, and when
are they best used?
CONCEPT CHECK
• Look at the Acer case at the beginning of
the chapter and respond to the following
items.
1. Identify the times Acer used external
methods of acquiring newness for their
organization.
2. What goals did they accomplish?
The Best and Worst Mergers

Watch this video which

presents what are claimed to
be the “Top 10 Business
Mergers and Acquisitions of
All Time”.

“Top 10 Business Mergers and Acquisitions of All Time”,

by WatchMojo.com is licensed under CC BY-NC-ND 4.
The Best and Worst Mergers

Now view this video,

which features the
“Top 10 Disastrous
Mergers &
Acquisitions”.

“Top 10 Disastrous Mergers and Acquisitions”, by

WatchMojo.com is licensed under CC BY-NC-ND 4.
 The Best and Worst Mergers
1. What were the two main reasons proposed in the early minutes of the "Best" video of
why these deals were made? In other words, what specific advantages was the acquiring
company trying to achieve by this “marriage”?
2. In the "Worst" video what happened to derail these attempts at blending two
organizations together?
3. What take-aways or rules for successful M&A could you develop after reading the Section
and watching these two videos?
4. What are internal sources of technology
and innovation development, and when
are they best used?

CONCEPT CHECK
1. Look at the Acer case at the beginning
of the chapter. Identify the times they
used internal methods of acquiring
newness for their organization.
2. What goals did they accomplish?
First Mover Advantage
Section 18.4 claims that Apple
Computer may have lost its
ability to achieve “first mover
advantage” when they lost
their iconic CEO, the late
Steve Jobs. View the video in
which the advantage of being
first is explained with a
number of examples of well-
known firms offered to bolster
this notion. Sounds
convincing, does it not?
“What is First-Mover Advantage”, by Market Business
News is licensed under CC BY-NC-ND 4.
First Mover Advantage
Watch this video where the
presenter, Professor
Fernando Suarez of
Northeastern University,
disputes that there’s always
an advantage to being first.

“The Half-truth of First-Mover Advantage”, by Life-Long

Learning On Demand & Northeastern University is licensed
under CC BY-NC-ND 4.
 First Mover Advantage
1. Why does Professor Suarez think that first mover advantage is
only a “half-truth”?
2. Under what circumstances should managers have faith in
their ability to move first, and in which situations would this
not really apply?
5. How and why do entrepreneurs
need to develop MTI skills?

CONCEPT CHECK
1. In the beginning, Acer was very
entrepreneurial. However, the firm
realized that if it was to continue to
grow, it needed to develop some
structures and processes. What
adjustments did Acer make to become
a global firm?
 Exhibit 18.9 Needed Skills for MTI

(Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license)

6. No matter what method is used, what
skills do you need to successfully
manage technology and innovation?

CONCEPT CHECK
1. What is organizational learning?
2. What are the differences between
leadership and followship?
3. What forecasting techniques are used
in the management of technology and
innovation?
 7. How do you look into the future to
keep pace?

CONCEPT CHECK
1. How do you keep up with a constantly
evolving environment of technology
and innovation?

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