The Effect of Technology Life Cycle on Technology ... - IEEE Xplore

The Effect of Technology Life Cycle on Technology Management WU Weiwei, YU BO School of Management, Harbin Institute of Technology, Harbin, China

Abstract - This study aims at providing theoretical and practical insights into the effect of technology life cycle on technology management. Based on literature review and analysis, we hypothesize that technology life cycle will exert influences on the mode and significance of MOT. To examine our hypotheses, we collected data by conducting a survey of 51 firms in China. Our analyses show that in different technology life cycle stages, task focuses of MOT will vary, and MOT will exert different influences on firm performance. Further, we conclude the mechanism of technology life cycle affecting MOT. The study culminates with a discussion of implications and further research. Keywords – technology management, technology life cycle, technological capability, firm performance

heavily on qualitative analysis and case studies, with a paucity of empirical studies measuring the impact of TLC on technology management. Thus, there are few scientific analyses that clearly construct the effect mechanism of TLC on MOT. In this paper, we use a rigorous survey methodology to answer the research questions. Specifically, we develop a set of hypotheses based on the literature to empirically test the effect. Thus, the paper is organized into four sections except the introductory one. Section II reviews literature, and formulates the empirical framework and lays out the hypotheses that will be tested. Section III makes the research design. Section IV gives the results, and we conclude in Section V.

I. INTRODUCTION

II. LITERATURE AND HYPOTHESES

With the advent of knowledge economy era, management of technology (MOT) becomes an important strategic instrument to improve competitiveness and create prosperity, and firms have engaged in initiatives that promote technology management capability to create efficiencies and gain a competitive edge [1]. Many theories and methods of MOT are developed to meet the needs of firms to effectively manage technology, and many researchers are devoted to this field [2]. Most of them apply environmental dynamics used in the standard thinking of organization theory to guide the choice between different theories and methods. Drejer, according to the two-by-two division of a firm’s environment, even divides the field of MOT into four schools of though: the R&D management school, the innovation management school, the technology planning school and the strategic MOT school [3]. However, the use of the overall environment and its dynamic is too simplistic a key to MOT theory [4]. Now most firms face the similar or the same environmental conditions, but does this mean that they should take the same modes or methods of MOT? Obviously not. The external environment of firms buries many internal factors of MOT, especially the condition of technology life cycle (TLC). Despite the widespread adoption of technology life cycle as a well-known part of the foundation of MOT theory, it is not clear whether technology life cycle has notable affects on technology management. This point towards the need for delving deeper into two other research questions which are the main subjects of this paper: Does TLC influence the mode of MOT? Does TLC influence the significance of MOT? Although some researchers have noticed these questions, much of the existing literature still relies

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A. Technology Management The beginning of MOT literature can be traced to the mid- 20th century according to the IEEE Transactions on Engineering Management [5], where it was referred to as R&D management, innovation management, engineering management and strategic management. In the 1980s, the term MOT emerged and different perspectives on the nature of MOT can be identified in the literature. The first perspective focuses on resources-based view which is based on the notion that MOT is to manage resources related with technology. Gaynor argues that MOT should deal with technologies and all the other business resources including marketing, financial, and human resource management and etc [6]. The second perspective holds the processes-based view and regards MOT as management of all technological activities. Gregory has proposed a framework for technology management, comprising five generic processes: identification, selection, acquisition, exploitation and protection [7]. Moreover, a comprehensive perspective focuses on capability which integrates resources-based view and processes-based view. The National Research Council (NRC) report defined MOT as follows: “Management of technology links engineering, science and management disciplines to plan, develop, and implement technological capabilities to shape and accomplish the strategic and operational objectives of an organization... ” [8]. We adopt the capability-based view and define technology management as the ability of a firm to plan, implement and control technological activities and resources to activate technological capability to achieve

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the enterprise performance. Since the object of MOT is technological capability which is the integration of technoware, humanware, inforware and orgaware [9], our technology management capability construct includes a broad set of managerial capabilities of elements including human resource, fund, equipment, information, technological result, organizational structure, culture, quality, standardization and technological risk. These elements can be concluded into three categories— resource (including human resource, fund, equipment, information and technological result), organization (including organizational structure and culture), and quality (including technological quality, standardization and technological risk) [10]. Thus, technology management itself is the result of managing the three categories of elements, and it can be measured along three dimensions: resource management (RM), organization management (OM) and quality management (QM). Each dimension’s capability reflects the management condition of elements it includes. The capability of the three dimensions indicates the overall condition of technology management. B. Technology Life Cycle The concept of technology life cycle (TLC) which is originated from product life cycle (PLC) has been well developed in the literature, and its theoretical as well as empirical validity has been firmly established. TLC is represented in the form of an S curve which illustrates the evolution of technical characteristics. Technical characteristics are referred to the features of interests of technology users [11]. Technical characteristics change with the time and three stages are distinguished: introduction & growth, maturity and decline. 1) Introduction & growth. A new technology is invented and is introduced into the marketplace. The degree of it satisfying the customers’ needs increases with the development of the technology. Successive incremental innovations increase the technology performance rate of the product. In this stage, the technology is developing, and to secure successful technological innovation is the main task. 2) Maturity. The technology is accepted by most of the customers, and can meet the demand furthest. The possibilities of increasing product contributions are limited. And innovations are less frequent. The technology performance rate stabilizes. In this situation, the task here is to configure a set of technologies constituting a product within the time available. Thus the information of the market and technology, investment and human resources is emphasized to achieve economic benefits in the market. 3) Decline. The technology loses its advantages in its characteristics, which can no longer attract the attention of customers, and becomes the “routine technology”. The rate of technology performance shows the decline trend. There will be technological rivalry between an old and a new technology, where at some point, a dominant design

emerges as one variation ‘wins’ the selection process. The firm can not rely on the technology to gain benefits but should develop new technologies, which requires an effective organization structure and the innovative corporate culture. Passing these stages, technologies go through a life cycle. In different stages, different technological problems encountered, and hence, the actual management of technology needs to vary in the course of the technological life cycle. In the first stage, problems will be of a technical character which is related to innovation quality [12], whereas later, as the technical problems are solved, problems will be of a more organizational character related to elements of resource and organization [13]. Therefore, the main task of management of technology will be different as technologies evolve, which means that TLC will affect the task focuses of MOT. This leads to the following hypothesis. Hypothesis 1: In different stages of technology life cycle, task focuses of MOT are different. From the perspective of capability-based view, technology management and technological capability can be regarded as the most important factors which influence firm performance (FP). Applying the form of CobbDouglas production function, the relationship among MOT, TC and FP can be expressed by the following formula:

FP = TC a MOT b

(1) Where a is the elasticity of technological capability and b is the elasticity of technology management capability. The a and b indicate the percentage change in firm performance due to a percentage change in technological capability or technology management, which imply the influence degree of MOT and TC on FP, and they may vary with the evolution of technologies. In introduction & growth stage, developing and exploiting technologies faster than its competitors is the most important factor for the firm to develop target market and acquire first-move advantage. In maturity stage, the firm focuses on production innovation and process innovation, and it has been proved that MOT and TC have almost the same influences on innovation performance [14]. In decline stage where both market and technology change at the same time, the previous technological superiority can not support the development of the firm, and a new design concept as well as new components needs to be designed. This means that everything must be designed simultaneously — product (concept and detailed construction), market, processes, administration, and so on. But before the design is accomplished and the new technological superiority is established, MOT is the most important competitiveness of the firm. Therefore, based on the above arguments, we propose the second hypotheses. Hypothesis 2: In different stages of technology life cycle, MOT exerts different influences on the firm performance.

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III. RESEARCH DESIGN

study for they are quite familiar with the holistic conditions of firms and can provide effective information. The results of the pretest confirmed that the overall research methodology was valid.

A. Research steps The following steps represent the action plan taken in this study: 1) Design the questionnaire; 2) Select samples and conduct the survey; 3) Process data and make analysis; 4) Provide suggestions and recommendations for continuous MOT improvement. These steps can be repeated on a regular basis aiming at measuring and comparing an organization’s MOT practices.

C. Sample

B. Questionnaire design The questionnaire involves three parts. Part one is about technology capability of the firm which includes human capability (HC), information capability (IC), equipment capability (EC) and organization capability (OC) [15]. And in this part, 13 statements are set to measure technology capability. Part two is concerned with MOT, and it has 58 statements. And part three which has 14 statements is used to measure the firm performance which can be divided into: 1) management performance (MP) including utilization rate of equipments, product quality, reliability, production efficiency, customer satisfaction, cost, and adoption of new technology; 2) market performance (MRP), including market share, profitability, and sales revenue; and 3) R&D performance (RDP), including R&D capability, technology precedence, success ratio of production development, and product development cycle [16]. Table I shows how these statements of the questionnaire are distributed across TC, MOT and FP and their dimensions. All statements are assumed to have the same weight. A scale of five choices, ranging from “disagree completely” (1) to “agree completely” (5), is adopted to measure the responses. The scores for each statement are averaged to determine the score for each dimension. The scores of TC and FP are determined by averaging scores of their dimensions. The questionnaire has been pretested on two enterprises in order to confirm its validity. Top or middle managers of these firms are invited to participate in the

The target firms for the survey are selected from the following industries: Aerospace Industry (AI), biopharmaceutical industry (BI), Vehicle Manufacturing Industry (VMI), Petrochemical Industry (PCI), Iron and Steel Industry (ISI), Railway Transportation Manufacturing Industry (RTMI) and Paging Industry (PI), for the industrial technologies in these industries are in different life cycle stages. AI and BI are the typical high technology industries, and aerospace technology and biopharmaceutical technology develop very quickly which indicates they are in the growth stage. Then we select 17 firms in the two industries. Industrial technologies in VMI, PCI, ISI and RTM are regarded as mature, and we select 21 firms in them to reflect technology management practices in mature stage. And PI is in its decline stage where pagers can no longer meet most people’s requirements of communication and is replacing by mobile telephones, and 13 firms are selected in this industry. Table II shows the distribution of firms in different industries and technology life cycle stages. IV. RESULTS We use factor analysis to get the principal factor of three dimensions of MOT, which can represent the condition of technology management. The factor score coefficient of each dimension denotes its contribution to MOT, or, we could say, the degree of its effect on MOT. The factor score coefficient matrix is shown in table III.

TABLE I. THE DISTRIBUTION OF STATEMENTS Terms Dimensions Numbers of statements RM MOT

TC

FP

TLC Stages

TABLE II. FIRMS IN SURVEY Industry Number of Firms AI

Introduction & Growth

Maturity

32

OM

10

QM

16

HC

4

IC

3

EC

2

OC

4

MP

7

MRP

3

RDP

4

Decline

16

BI

1

VMI

6

PC

12

ISI

1

RTM

2

PI

13

TABLE III. FACTOR SCORE COEFFICIENTS IN DIFFERENT TLC STAGES MOT Introduction & Maturity Decline Dimensions Growth

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RM

0.355

0.400

0.349

OM

0.361

0.377

0.392

QM

0.380

0.354

0.360


In table III, we can see that scores vary in different technology life cycle stages. In introduction & growth stage, QM scores the highest (0.380) and RM scores the lowest (0.355), which indicates that quality issues are the key in this stage and should be paid more attention. While in maturity stage, RM with the score of 0.400 plays a more important role in MOT than OM and QM, thus the resource-oriented mode of MOT is more applicable to this case. OM is emphasized in decline stage since its score is the highest among all dimensions, which reveals the mode of MOT should be organization oriented. It can be concluded that the change of scores of dimensions implies that the working emphasis of MOT varies in different technology life cycle stages, or in other words, TLC determines the optimal mode of MOT. Thus, Hypothesis 1 is supported. We can calculate the weighted average of RM, OM and QM to determine the score of MOT since the coefficients in table III can be used as the weights of dimensions. According to (1), we get the elasticity scores of TC and MOT in different technological life cycle stages by regression analysis technique. Table IV shows the results. Table IV tells that MOT exerts greater influences on FP than TC because b is always more than a. But in different stages, the degree of influence is not the same all the time. In introduction & growth stage and decline stage, b is far more than a, which illustrates the notable significance of managerial issues compared with technological issues. It is an interesting finding for many people argue elasticity score “a” of introduction & growth is likely to be largest. Although we can never emphasize the importance of technological innovation too much, it must be noticed that lack of management will result in low efficiency and even failures. Shi and Gan have proved that only the active part of technological capability can contribute to innovation [17]. MOT aims to activate technological capability by converting more parts into active capability. So, effective MOT is the prerequisite to secure successful innovation which is of more significance. Especially in the conditions of exploitation of existing technologies and disruptive technological change, MOT is the determining factor of innovation success and affects FP more remarkably. While in maturity stage, there is not too much difference between a and b, and TC plays almost the same role as MOT, when the firm performance comes from scale merit generated by increasing production scale and technological potentiality cultivated by effective machines to a great extend. Thus this difference supports Hypothesis 2 and we

argue that technology life cycle exerts influences on the significance of MOT. V. CONCLUSION, IMPLICATION AND FURTHER RESEARCH This study addresses the important questions about the role technology life cycle in technology management: 1) does TLC have a significant impact on MOT? 2) how does TLC affect MOT? According to our analysis, we find that MOT is greatly affected by TLC, and TLC’s effects on MOT lie in two aspects:1) TLC determines the mode of MOT; 2)TLC exerts influences on the importance of MOT. These effects originate from the change of technological tasks with the evolution of technology. Different technological tasks bring different managerial problems, which results in the variation of managerial tasks of MOT. And different MOT modes are required to fulfill these tasks and in this process MOT will have various degrees of influences on the firm performance. Thus, we can conclude the mechanism of TLC affecting MOT in Fig. 1. These conclusions can provide beneficial managerial implications from two aspects. Firstly, in the study of MOT, technology life cycle should be taken into consideration as an important influential factor, and such issues as characteristics and rules of MOT should be analyzed by a contingency approach related with technology life cycle. The second aspect is about the practice of the firm. Managers should realize that technology management is a key factor influencing the firm performance, even more important than technological capability. Therefore, increasing attention should be paid to the promotion of technology management capability. Most important of all, different modes should be applied according to the change of technology life cycle stages in managing technologies, and further, the equilibrium of managerial modes of technologies in different stages should be also taken into account. Technology life cycle Technological tasks Managerial problems

Managerial tasks

TABLE IV. THE ELASTICITY SCORES OF TC AND MOT IN DIFFERENT TLC STAGES TLC stages a b Introduction & Growth

0.39

0.66

Maturity

0.50

0.56

Decline

0.31

0.74

MOT mode MOT significance

Fig. 1. Mechanism of TCL affecting MOT

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In our study, when we examine the effects of MOT on the firm performance in different stages of technology life cycle, we only focus on MOT and technology capability in terms of internal factors. External factors such as competition environment and industrial policies also play a role in the firm performance. By including these factors, we can develop a broader frame of reference, which would allow more exact insights into the mechanism of technology life cycle affecting MOT. ACKNOWLEDGEMENT The work described in this paper is supported by a grant from the Ph.D. Programs Foundation of Ministry of Education of China (No. 20050213027). REFERENCES [1] Khalil, Tarek M,. Management of Technology: The Key to Competitiveness and Wealth Creation. The McGraw－Hill companies, Inc., 2000, pp.35-46. [2] T. Brady, H. Rush, M. Hobday, A. Davies, D. Probert, and S. Banerjee. “Tools for technology management: an academic perspective”, Technovation, vol.17, no.8, pp. 417–426, 1997. [3] Anders Drejer, “The discipline of management of technology, based on considerations related to technology”, Technovation, vol.17, no.5, pp. 253–265, 1997. [4] Anders Drejer, “Towards a model for contingency of management of technology”, Technovation. vol.22, pp.363–370, 200. [5] Allen, T., "50 years of engineering management through the lens of Portland International Conference on the IEEE Transactions," IEEE Transactions on Engineering. July 2003, pp. 22–26, 2003. [6] Gaynor, G. H., Achieving the Competitive Edge through Integrated Technology Management. NewYork: McGrawHill. 1991, pp.86–108.

[7] Phall R, Paterson C. J, and Probert D. R., “Technology management in manufacturing business: process and practical assessment”, Technovation,. vol.18, no.8/9, pp. 417–426, 1998. [8] NRC, Management of Technology: The Hidden Competitive Advantage. National Academy Press. Washington, D.C. 1987. [9] Asian and Pacific Centre for Transfer of Technology of the Economic and Social Commission for Asia and the Pacific, A Framework for Technology for Development, Banglore, India. 1988. [10] WANG Jiliang, WU Weiwei, and YU Bo, “Technology management maturity of enterprises: an analysis based on four industries in China”, in Papers presented at PICMET'07, August 2007. [11] V.K. Narayanan, Managing Technology and Innovation for Competitive Advantage. Prentice-Hall, Inc., August 19, 2000. [12] Udo-Ernst Haner, “Innovation quality— a conceptual framework”, International Journal of Production Economics, vol.80, pp. 31–37, 2002. [13] Anders Drejer, “Frameworks for the management of technology: towards a contingent approach”, Technology Analysis & Strategic Management, vol.8, no.1, pp. 9–20, 1996. [14] BAO Gongmin, and YANG Jing, “The role of technological management in technological innovation— based on the enterprises in Zhejiang”, Studies in Science of Science. vol. 10, pp.546–561, 2004. [15] Fransman M, “Conceptualizing technological change in the third world in the 1980’s: an interpretive survey”, Journal of Development Studies, vol. 21, no. 4, pp.572–652, 1989. [16] Venkatraman N, and Ramanujam V. “Measurement of business performance in strategy research: a comparison of approaches”, Academy of Management Journal, vol. 11, no. 4,pp.801–814,1986. [17] SHI Hui, and GAN Renchu, “The disciplinarian study and case study of hi-tech corporate technological competence evolution”, Science & Technology Progress and Policy, vol.10, pp.75–78, 2006.

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