Internal and external determinants of technology strategy

¶ … determinants technology strategy - focusing -topics: - explain internal external environments - Describe integrative mechanisms - Discuss generative mechanisms Structure report 1.

The determinants of technology strategy

The economic agents of the modern day business society have to respond to a wide array of challenges, emerging from both within as well as outside their organizational environments. At an internal level for instance, they face mounting pressures from the need to invest more in their personnel members, to better train and reward them. Additionally, they face pressures at the levels of resource allocation, planning or deadline completion.

At an external level, some of the new challenges for economic agents include the increasing demands of customers, the intensifying competition at both national and international levels or the mounting pressures for environmental responsibility. Aside from these, companies must also address the ongoing evolution of technology, which creates new challenges and opportunities on ongoing bases. In such a complex setting then, the economic agents come to develop and implement technology strategies aimed at capitalizing on the opportunities of technology, such as increased operational efficiency, improved competitive position, better customer relationships and so on.

2. The determinants of the technology strategy

The economic agents have to devise and implement complex technology strategies, through which they increase their chances of attaining their ultimate goals and scopes, namely that of generating financial profits. In the development and implementation of these technology strategies, the companies have to consider a series of determinants, such as those emerging from the internal and external environments, the integrative mechanisms of the generative mechanisms. All these aspects are discussed below.

Determinants in the internal environment

Within the internal environment, the elements which drive the implementation of the technology strategy are numerous and complex, integrating basically all elements which comprise the firm. Some of the more relevant examples in this sense include the following:

The financial capabilities of the firm in purchasing and operating the technology

The managerial philosophy regarding technology and firm's ability to implement change (e.g. resistance to change)

The processes within the firm and their ability to withstand technologic upgrades

The quality of the staffs in managing new technologies

The existence of a technological infrastructure within the firm, formed from both hardware and software (Sahlman, 2010).

Within the real life context of an economic agent, the role of the internal determinants will vary from one institution to the other, based on the specific particularities of each institution. For one company for instance, of an increased importance will be the financial considerations, whereas for another, more emphasis would be placed on the ability to integrate the technology within the business model.

Determinants in the external environment

Aside from the elements that influence the technology strategy from within the firm, there are also several determinants which impact it from the outside environment. Some notable examples in this sense include the following:

The level of technologic development accessible to the industry in which the firm operates

The applicability of the selected technologies within the context of the firm (such as ability to support company operations, to reflect the realities of the industry and so on)

The levels of technologic integration among the competitors of the firm

The overall level of economic development, with developing countries revealing lower levels of technologic integration than firms in the more economically developed nations (Narayanan and Bhat).

The generative mechanisms

The generative mechanisms refer to the elements which drive the production of newer and better technologies. These mostly occur at the level of technology firms, rather than regular economic agents, and can normally be identified as two categories: innovation and socio-economic change. At the level of innovation, this represents the driver of new technology strategy creation and the source of all developments (Schilling, 2006). In terms of the changes in the society, it is noticed that the populations evolve and reveal more needs, such as the need for more environmental responsibility, which in turn forces the development of greener technologies.

3. Conclusions

The economic agents of the modern day business society are forced to continually develop in order to respond to the increasing demands of the internal and external environments. Each firm defines its own mechanisms of coping with these mounting pressures, but a common method is represented by the implementation of technology strategies in order to strengthen the firm's competitive position within the market place.

The technology strategy is influenced by a series of elements from the micro and the macro environments, such as the financial capabilities of the firm, the technical skills of its staff members, the internal processes or the technical infrastructure in the firm. From the outside, the strategy can be influenced by elements such as the level of technologic innovation applicable within an industry or the levels of technologic integration by the firm's competitors.

In order to best deliver the technology strategy, economic agents employ integrative mechanisms, such as standardization, specialization, common goals or regulations. All these are aimed at ensuring the proper adoption of technology strategy within the firm. The technology generating firms also employ generative mechanisms, namely innovation and the observation of the social and economic changes.

References:

Narayanan, K. Bhat, S. Technological strategies and their determinants: a study of Indian basic chemical industry. http://www.econ.mpg.de/files/2006/workshops/india_workshop/papers/Narayanan.pdf accessed on January 25, 2013

Sahlman, K. (2010). Elements of strategic technology management. http://herkules.oulu.fi/isbn9789514262500/isbn9789514262500.pdf accessed on January 25, 2013

Schilling, M.A. (2006) Strategic management of technological innovation. McGraw-Hill/Irwin

Markgraf, B. Integration mechanisms in a matrix organizational design. http://smallbusiness.chron.com/integration-mechanism-matrix-organizational-design-25136.html accessed on January 25, 2013