One key task of the general manager is to acquire, develop, and allocate an organization's resources. Technology is a resource of paramount importance to many organizations; managing this resource for competitive advantage entails integrating it with the firm's strategy. A second key task of the general manager is to develop and exploit the firm's capacity for innovation. This requires that thegeneral manager be able to assess the firm's innovative capabilities and identify how they may be leveraged or improved. We provide here a set of tools the general manager can use to accomplish both of these major tasks.
Three sections follow. The first defines a set of key concepts concerning technological innovation and then outlines their interrelations. This step is important becausestrategic management of technology and innovation is a young field, and the domains of different, partly overlapping concepts are still somewhat in flux. Though we do not claim that the definitions and interrelations presented here are definitive, they are generally accepted by scholars and practitioners in the field, and they are useful for organizing the discussion of cases and readings that follows.The second section discusses the integration of technology with business and corporate strategy. The third section presents a framework for auditing and assessing the firm's innovative capabilities-. A brief conclusion follows the third section.
KEY CONCEPTS AND THEIR RELATIONSHIPS
At the origin of the technological innovation process are inventions ordiscoveries. As Webster points out, "We discover what before existed, though to us unknown; we invent what did not before exist." Inventions and discoveries are the result of creative processes that are often serendipitous and very difficult to predict or plan. For instance, Aspartame, a sweetener used in many food and beverage products, was a chance discovery. Researchers in universities, thegovernment, and industrial labs following the canons of modern science—as well as idiosyncratic tin- kerers in a garage—play a role in these processes. Basic scientific research refers to activities involved in generating new knowledge about physical, biological, and social phenomena. Applied scientific research is geared toward solving particular technical problems. The cumulative body of systematic andcodified knowledge resulting from scientific research forms the substratum for many, but not all, inventions and discoveries (e.g., the wheel was not the result of scientific research).
The criteria for success regarding inventions and discoveries are technical (Is it true /real?) rather than commercial (Does it provide a basis for economic rents?). Through patents, inventions and discoveriessometimes allow their originators to establish a potential for economic rents with subsequent innovations (see below), but there may be a significant time lag (ten years or more) between doing scientific research and using the inventions and discoveries to create successful innovations (superconductivity and genetic engineering are examples).
Technology refers to the theoretical and practicalknowledge, skills, and artifacts that can be used to develop products and services as well as their production and delivery systems. Technology can be embodied in people, materials, cognitive and physical processes, plant, equipment, and tools. Key elements of technology may be implicit, existing only in an embedded form (e.g., trade secrets based on know-how). Craftsmanship and experience usuallyhave a large tacit component, so that important parts of technology may not be expressed or codified in manuals, routines and procedures, recipes, rules of thumb, or other explicit articulations. The criteria for success regarding technology are also technical (Can it do the job?) rather than commercial (Can it do the job profitably?). Technologies are usually the outcome of development...
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