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Technological Innovation and Role of Technology Strategy

Paper Type: Free Essay Subject: Business
Wordcount: 1329 words Published: 1st Jan 2015

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The given article relates the relationship between Technological Innovation and Role of Technology Strategy. Technology strategy plays a vital role in technological innovation for different organizations. Thus a model has been proposed to explore the relationship between them. Such type of models helps the managers to manage their innovations better by pursuing appropriate technology strategy.

Need of introducing innovations-

Organizations need to be changed both radically and incrementally and hence innovations are needed to be managed.

Even sustainable development cannot be happened without innovation.

Organization must change the way they operates and also change the products and services they provide.

Hence an organization that continuously encourages experimentation, constantly monitors the environment, evaluates own performance and is committed to continuously improve performance. Managing innovation involves diff aspects to be considered and involves various aspects.

A stream of research, i.e. which linked to one another, highlights the importance of various critical factors which enable the acquisition and application of knowledge to promote innovation. It mentions that suggested knowledge can be managed indirectly by managing various factors which contribute to an organization’s culture, structure, technology and leadership. According to this stream of research, innovation can be promoted by managing the understood and explicit knowledge embedded in these factors.

Effect of innovations –

Any factor may lead to change in the technology.

Continuously changing technologies contribute to the confused markets.

Moreover, technology being difficult to understand and measure, increases the potential of innovation management.

Ettlie & Bridges (1983) suggest that technology policy reflects the innovative attitude of an organization and its commitment to innovation. Although technology can play a vital role in any organization’s innovation process, but too much technology might even stifle innovation by standardizing the existing workflows and processes. The long run competitive position of any organization is therefore dependent on how prudently organizations manage their technological asset bases.

How firms can be differ from each othr in respect of technology strategory

By developing competencies in different technologies.

Asymmetries in knowledge endowments provide a basis for the technological heterogeneity.

On the other hand, firms may also differ in the way they exploit or deploy the available / acquired technology. (Nesta & Dibaggio, 2003).

“A company can use technology to create a competitive advantage by creating barriers that deter entry of rivals, introducing novel products or technology processes that attract new customers, or changing the rules of competition in the industry (Golder & Tellis, 1993; Zahra, Nash & Bickford, 1995)”

In general, no two organizations can think about the strategy in the same way.

A conceptual framework has been developed to explore the relationship between technology strategy, technological innovation and organizational factors, followed by the outcomes. The government rules and various policies also affect the technology strategy of the firm.

METHODOLOGY i.e. a sets of methods and principles used to perform a particular activity.


Innovation includes both product / service and process innovations. Product innovations are the products that are perceived to be new by either the producer or the customer; the latter includes both end-users and distributors. Process innovation refers to new processes which either reduce the cost of production or enable the production of new products. (Harmsen, Grunert, & Declerck, 2000) Service innovation involves change in the process of delivering existing services or the development of completely new kind of services. ( Leiponen, 2005).

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Patents are an important instrument for the protection of innovations. Industry surveys have revealed that firms use patents as an appropriability mechanism to meet their strategic motives of use of patents as negotiating levers, as tools for prevention of infringement suits or to block innovations from competitors and also to capture the extra value of innovative efforts. Firms also use the extra market power accumulated through patents to control the diffusion of innovation and results of research. ( Sampath, 2007). However, patents come with their own drawback. They provide innovators with longer monopoly periods and tend to increase monopolistic sectors within the economy. This deters both the improvement of existing products and the invention of higher quality goods by outside firms. (Horii & Iwaisako, 2007)..


INTERFACE BETWEEN INNOVATION AND TECHNOLOGY STRATEGY The firm’s innovative activities reflect the firm’s technology strategy and the enactment of technology strategy serves to further develop its innovative capabilities. (Burgelman, Christensen & Wheelwright, 2004). The technological innovation process can be broadly identified through four stages of problem recognition, technology selection, solution development and implementation while technology strategy can be understood through its substance and enactment. Successful technological innovation begins when a firm recognizes the potential of using technology to solve a particular problem or fulfill market need.


Government policy and various rules and regulations have an impact on the firm’s technology strategy and its efforts towards innovation both in terms of funding and provision of guidelines for a development. On a big level, some of the critical factors are policies undertaken to promote macroeconomic stability; policies ensuring resource allocation in accordance with comparative advantage; rapid accumulation of physical and human capital; development of agricultural sector and promoting competent bureaucracies and many other. ( Westphal, 2002). In India there is a need to balance innovation policies that support traditional industry and technology with policies that better respond to issues of competition and enterprise development. ( Chaturvedi, 2007). In China, the Government is committed to drive a number of regulatory reforms and institutional changes which are required to enhance Chinese knowledge creation and innovative capabilities. This gets manifested in the increase in R&D spending. Above all, the “open policy” practiced by the Government remains the real key to the change in growth dynamics and innovation. (Simon, 2007).

The regulatory barriers to entry also play an important role in determining the dominance of firms in certain sectors. ( Chataway, Tait & Wield, 2007).


Organizations, should no longer guard their knowledge in pyramidal structures, but should form learning networks which span geographical locations and organizational boundaries. This would enable them to be more agile and responsive to innovations. Organizational factors play a critical role in creating a learning environment to promote innovation. The outcome effects of technological innovation can be measured as organizational performance with respect to its operations and business impact with respect to profit.

Q1. How can managers manage their innovations better by pursuing appropriate technology strategy for innovation?

Q2.What is the need of managing technology innovations?

Q3. How firms can be differing from each other in respect of technology strategy?


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