The Open Management Journal, 2009, 2, 1-10 1

Open Access

Analysis of Technology Management Functions in Finnish High Tech

Companies

Hanna Kropsu-Vehkapera*, Harri Haapasalo and Jukka-Pekka Rusanen

Department of Industrial Engineering and Management, University of Oulu, Finland

Abstract: Technology management (TM) for companies is about sustaining and improving a company’s competitiveness
in the long-term. The aim of this study is to identify the common perception of TM functions in Finnish high tech compa-
nies, which elements are the most critical for them, and where the biggest d evelopment needs are in practice. Th e study
was realised qualitatively in 15 Finnish high tech companies. Interviews were held with persons responsible for company
management ac tivities i n t he ar ea of technology. The r esults show m any s imilar characteristics i n t he ca se companies,
such as the nature of the technology strategy, the mode of co-operation in technology development, or the ways of acquir-
ing technologies. However, differences were also identified mainly in the companies’ business models and company size.
None of the functions of TM, were evaluated as the most important by the case companies. However, certain functions of
TM were highly appreciated and are mostly related to the engineering activities, such as product development, technology
development, information and knowledge management, life cycle management, and production process management.
Key Words: Technology management, technology management functions, high tech companies.

INTRODUCTION Finnish companies have been well known for t heir tech-
nical e ngineering a nd produc t de velopment r elated c apabil-
The a im of t echnology management (TM) i s t o sustain
ity, but there are s hortcomings in the s trategic and bus iness
and im prove the competitive pos ition of a company’s tech-
management l evels [6]. T hus we decided t o c ollect knowl-
nology exploitation. The m anagement of te chnology s hould
edge a bout t he c urrent s tate of T M in F innish companies.
comprise th ree m ajor f actors: l eadership, m otivation o f em -
Before analysing the pra ctices, we outli ne the func tions o f
ployees and appropriate management of t echnology [1]. The
technology m anagement a ccording t o t he c urrent literature.
goal of T M is to create a synergy among all the factors (i.e.
After th at, w e ex amine these f unctions in p ractice an d id en-
research, development, planning, engineering, machines, soft-
tify the areas for development and importance of those. This
ware, produc tion, a nd c ommunication) t o m ake t hem wor k
approach is condensed into the following research questions:
together in th e m ost ef ficient w ay to p roduce p rofit f or th e
company in the long-term. RQ1. What are the m ain functions in T echnology Manage-
ment?
Companies are under constant pressure to be innovative,
to introduce new products and services to create difference in RQ2. How do t hese functions emerge in some Finnish high
the market, and to make process innovations to improve their technology companies?
business p erformance [2]. Rapid c hanges in t he bus iness The paper is organised as follows: first, the functions of
environment a nd gl obal c ompetition forc es companies to TM are defined; the methodology section describes how t he
understand the business opportunities and risks of ne w tech- empirical r esearch w as c arried o ut; the empirical r esults ar e
nologies, a nd how im portant te chnological innovations a re compiled and presented in r elation to the research question;
for i ndustrial c ompetitiveness [3, 4]. T echnological i nnova- finally, the results are discussed and conclusions are drawn.
tions c an i nvolve c hanges i n produc ts a nd s ervices o r
changes i n the wa ys of ope rating ( i.e. proc ess i nnovation) FUNCTIONS OF TECHNOLOGY MANAGEMENT
[5]. To c reate t hese c hanges, t echnology management i s a n
inevitable necessity for companies to survive in global com- Technology management (TM) or Management of T ech-
petition and s ustain their bus iness. However, there is ongo- nology (MoT) is extensively discussed in recent research and
ing discussion in the scientific community about what really literature. A wi de range of li terature on ne w product devel-
is t he content of T M. Al so the pra ctitioners i n i ndustry a re opment (NP D) m anagement, R&D management, s trategic
setting d ifferent pra ctices for m anaging technology. T his management, m anagement of i nnovation, long-range pl an-
makes th e s ituation more co mplicated in real management ning, technological forecasting etc. can be found in the jour-
situations. nals a nd te xt books . Ne vertheless, technology m anagement
is a s eparate fie ld of m anagement s cience s ince t he 1970s
and early 1980s. The National Research Council (NRC) and
*Address c orrespondence t o t his author at t he D epartment of I ndustrial U.S. industry orga nised a c ross di sciplinary works hop in
Engineering and Management, U niversity of O ulu, Finland; Tel: +358-44-
5445835; Fax: +358-8-553-2904; E-mail: hanna.kropsu-vehkapera@oulu.fi 1986 t o de fine a t heoretical founda tion for M oT [7]. Afte r

1874-9488/09 2009 Bentham Open

2 The Open Management Journal, 2009, Volume 2 Kropsu-Vehkapera et al.

that, a s ignificant amount of lit erature was produced on op - an industrial organisation (Fig. 1). This framework is a syn-
erationalising technology management into other approaches thesis of our t heoretical study and explains how t he technol-
in management (see e.g. [8-15]). Dussauge [13], Bhalla [16], ogy management functions are understood in this study.
Steele [8], and Be tz [11] a mong others introduced their ge -
neric MoT books from a strategic viewpoint, and defined key
considerations and concepts in the MoT ar ea. Steele [8] pre-
sented a c lassification of produc t, m anufacturing a nd i nfor-
mation te chnology. Mitchell a nd H amilton [17] propos ed a
model for t he s trategic pos itioning of R& D e fforts us ing
strategic technological options. Matthews [18] further devel-
oped the model to reduce technological uncertainty based on
Mitchell’s and Ha milton’s work. Aft er that Matthews [10]
introduced a h olistic co nceptual f ramework f or in tegrating
technology into business strategy. Dodgson [19] a nd Caray-
annis [20] c ombined te chnology m anagement, orga nisa-
tional, and a learning point of view.
Technology, especially in the s trategic context, refers to
technological competence or knowl edge r ather than explicit
technical solutions. Dodgson [12] c rystallized, technological
competence as simply competence with a technological basis
– an ability to compete with technology. Several technology
definitions s upport t his c onclusion. F or e xample, S teele [8]
defines the capability th at an en terprise needs. Burgelman et Fig. (1). The managerial functions of TM from the view point of the
al. [9] re fers to t heoretical and pra ctical knowl edge. Dus - industrial company.
sauge [13] propos es the application of s cientific knowledge.
In conclusion, the key implication is that the aim of technol- Technology Management involves management of all the
ogy management is to understand the real difference between key fa ctors of produc tion t o create we alth. T he main
competitive a dvantage achieved by te chnological c ompe- branches are r esearch, d evelopment, p lanning, en gineering,
tence and competitive advantage achieved by c ertain techni- machines, s oftware, produc tion, a nd communication. T he
cal solutions. When competence is core or strategic, it gives goal of te chnology management is to make everything work
a sustainable competitive advantage that cannot be copied or together in th e m ost ef ficient w ay to p roduce p rofit f or th e
imitated b y co mpetitors. F rom a co mpany’s v iewpoint, a n company in the long-term. In this respect, the emphasis is on
essential i ssue is that onl y by de veloping technology it self the word ‘l ong-term’. The goal of b ig profits cannot be pur-
can it learn about, and achieve this kind of profound compe- sued wi thout a fut ure. S ometimes, m anaging for t he s hort
tence. Another choice is to buy te chnology from an external term i s n ecessary, b ut to secure continuity o f th e company
source, but then an i ndividual c ompany i s d ependent upo n the long-term aspect is essential. For this reason, all the deci-
the competence, an d p erhaps loyalty, o f co llaborators an d sions must lie on a sound base and good business ethics, and
technology s uppliers. I t could e ven be said t hat technical ongoing organisational development must be planned. Accu-
solutions can be bought, but technology is impossible to buy. rately ha ndled m anagement c an c reate a huge a dvantage
[21]. against competitors, w hereas inadequate m anagement c an
damage a whol e c ompany. T here is no b enefit from goo d
Overall, T M ove rlaps s everal ot her a pproaches, s chools employees if the management cannot use them. Furthermore,
and pa radigms for m anaging te chnology a nd R& D i n t he managing a company is not always the same, it is dynamic in
strategic co ntext. However, tw o m ain streams of l iterature nature. It is not pos sible to just copy the management s tyle
can be identified in science and engineering (e.g. R&D man- from a s uccessful co mpany b ecause th ere ar e n o tw o id enti-
agement and innovation management), and in economics and cal companies. In addition, the culture of the firm affects the
management s cience (s trategic m anagement a nd bus iness management style too (see e.g. [23-26]).
administration). T he fie ld of t echnology m anagement ha s
also been approached from other management paradigms and To be as successful as planned, it is important to identify
areas of science (e.g., organisational theory and quality man- what to produce and how a nd have answers to the following
agement). A ccording to T alonen [ 21] it is f air to s ay th at issues: why t o be in the business, what customers’ problems
management of te chnology is m ore a s et of conceptual a p- can be s olved, bot h from a t echnology poi nt of vi ew, a nd
proaches than an exact paradigm or field of science. from a n e ngineering poi nt of vi ew. In ot her words : a com-
pany ne eds a s trategy. T he s trategy de fines the c ompany’s
Because of t he i nterdisciplinary e volvement a nd t he na - future. In simple terms, a strategy can be said to consist of a
ture of t echnology management, and lack of c ommensurable mission and a vision. The mission defines what the company
frameworks, there are several typologies and approaches for will do, and the vision defines where it is aiming. However,
defining functions in technology management. These differ- it is not enough to establish a fancy strategy, it has to be exe-
ent vie ws of TM func tions (s ee e.g. [2 ,8,9,12,22]) a re not cuted.
included in this article, because the approaches used are mul-
tiple and t hus t he func tion re presented a re a lways a conse- A s trategy c annot b e just de cided at the board of direc-
quence of the dominant mind setting. Therefore we outlined tors. It n eeds information to s upport its guidelines. For that
a t heoretical fra mework for func tions of TM especially fo r purpose t he bus iness e nvironment m ust be studied a nd a
Analysis of Technology Management Functions in Finnish High Tech Companies The Open Management Journal, 2009, Volume 2 3

forecast m ade f or th e industry and its products. It should be fer, i nnovation a nd R&D. T hrough t hese ope rations input
noted that the industry, where the company acts, influences comes for new product development. R&D is a separate part
the competitive rules of the business as well as the strategies from ne w produc t d evelopment, and re fers m ore t o b asic
exploitable in a company [27]. research and advanced research to find new technologies, not
For a company to m ake the right decisions re lated to its to engineer products.
technology strategy, it needs reliable evaluations of the pos-
METHODOLOGY
sible direction of the technology. T his m eans c lose interac-
tion between the industry and other relevant parties like uni- The empirical s tudy wa s c onducted to obta in an
versities a nd i ndependent r esearch unit s. It is ne cessary to understanding of the current state of TM in Finnish high tech
study how t he c ompetitors a re a cting a nd how t he t echnol- companies. T he num ber of F innish high tech oriented com-
ogy w ill ev olve in th e f uture. I n th is s tudy, the issue of t he panies is extensive, but m any of t hese companies are m icro
community fore casting on te chnology is outs ide t he s cope companies and thus not re levant for this study. For that rea-
and c oncentrates on c ompany level fore casting a ctivities son, we selected the companies which represent average Fin-
which a re unde rstood a s a wa y of c reating i nformation for nish h igh t ech o riented companies. Th e co mpanies w ere s e-
the purpos e of T M and s trategic management [28]. Equally lected because of their clear high technology orientation, and
with the technology forecasting, it is important to know what thus have an interest in technology management issues.
the cu stomers n eed and h ow to serve th em b est. I t i s n eces-
Because of the limited resources, but in compliance with
sary to know the customers’ needs better than they do them-
the requirements of qualitative research, the selected compa-
selves. That knowle dge c reates c ompetitive a dvantage.
nies h ave to b e easily an d r eliably av ailable. I n to tal, 1 9 r e-
Moreover, t he company m ust know wha t is its’ most v alu-
sponses we re re ceived from the industry re presentatives via
able c apability, co re co mpetency. A ccording to Tee ce [ 27],
interviews or que stionnaire (Table 1). None of t he contacted
the w inning c ompanies i n hi gh technology i ndustries ha ve persons re fused an i nterview. The amount of re sponses is
rapid and flexible product innovation together with the man-
considered to b e s ufficient f or th is r esearch p urpose to in -
agement capability to ef fectively coordinate an d r edeploy
crease understanding of the studied field. The sample can be
internal and external competencies.
seen t o be re presentative a s, duri ng t he l ast i nterviews, we
When th e s trategy is d efined it g ives d irection to th e did not find any new and different information.
whole co mpany. Th e co mpany s tarts to concentrate to p ro-
duce its products leaning on its strengths. Needed technology Table 1. Background Information of the Respondents
is either produced in the company, or acquired or transferred
into t he c ompany. T he s trategy gi ves di rection t o t he de -
partments and defines how to execute it. Amount of Amount of
Companies Responses
In t he end, the management’s purpos e i s t o support t he
strategy. They ha ve to e nsure t hat the ri ght steps a re ta ken
Large companies (over 400 employees) 7 11
and things are done right. Success depends on the company’s
two key ingredients – technical resources and the capabilities Small companies (below 400 employees) 8 8
to manage those [5]. Managers have to create a good t arget-
In total 15 19
oriented a tmosphere, a nd m ake s ure t hat a ll t he ne cessary
material i s available for de veloping t he i ndividuals a nd t he
organisation. T he orga nisation m ust e volve all the time to Overall, the r esearch w as car ried o ut in 1 5 co mpanies. 7
remain co mpetitive in a tu rbulent b usiness en vironment. of th ese companies ar e c lassified as l arge companies, and 8
Controlling re sources a nd ri sk m anagement c an e nsure t hat represent s mall co mpanies. O f th e larger co mpanies, more
random backlashes do not jeopardise the company’s future. than 1 pa rticipant was usually interviewed to triangulate the
Information m anagement i s one important pa rt of m an- answers, but a lso t o ga in i nformation from t he di fferent
agement. Without a fast and func tional information s ystem, business units.
projects fail and delays or e ven cancellations reduce a com- The interviewed participants were chosen on t he basis of
pany’s profi t a nd re putation a s a r eliable manufacturer, c o- their profe ssional ba ckground and expertise. T he interview-
operator or s upplier. T he c ompanies de velop t heir i nforma- ees hol d re sponsible pos itions i n m anagement a ctivities re -
tion s ystems a ll the time – howe ver whe n orga nisations lated to te chnology a nd t hus h ave up-t o-date knowle dge o f
make im provements i n t he a rea of i nformation a nd knowl - the discussed topics. The job titles of the respondents include
edge management, they often make it only for explicit know- the fol lowing: t he CEO, C TO, De velopment Ma nager, Di-
ledge. However, they should notice that it is tacit knowledge rector of R& D, P roduct De velopment Manager, S enior D i-
which gi ves s trategic advantage [29]. Tacit knowle dge is rector of C ompetence Centre, Director of P roduct and Tech-
more complex to understand and handle. Companies require nology Management, He ad of T echnology and Architecture
solutions for t acit knowle dge m anagement be cause h ighly Management, D irector of Ri ch Int ernet S ervices, E ngineer-
tacit knowle dge indicates t hat the unde rlying s tructures a re ing and Site Manager, and the Head of Division.
not we ll unde rstood. An orga nisation c annot i mprove t hose
aspects which it does not understand [27]. The s tudy was carried out in s pring 2008 us ing the nor-
mative r esearch approach to improve existing knowledge o f
As presented in Fig. (1), strategy is affected by fore casts technology management. The research process started study-
and th e co mpany’s co re co mpetence. O n th e o ther h and ing t he fie ld of T M. The que stionnaire us ed w as structural
strategy a ffects technology development, a cquisition, t rans- and contained qualitative and quantitative parts. The qualita-
4 The Open Management Journal, 2009, Volume 2 Kropsu-Vehkapera et al.

tive que stions w ere us ed t o identify wha t e ach func tion o f guide this study. The qualitative part illustrates the common
TM means to the companies – how they describe the content perception o f T M in the case companies, b ut also an alyses
of each area of TM and what are the practical implications in the di fferences be tween t he c ompanies, a nd pos sible root
the specific function of TM. The quantitative part focuses on causes of these differences. The quantitative part of the study
identifying the importance of e ach subfield of T M and what concentrates on determining the importance and current state
is the current state of operation. The evaluation scale used in of certain functions of TM in the case companies.
this part was the Likert-scale 1-10, where number one is “not
important” (measure of importance) or “not practised” (cur- The Perception of Te chnology Man agement in F innish
rent s tate m easurement), and num ber te n i s “ extremely im- High Tech Companies
portant” or “a well established practice”.
The summary of the results from the qualitative questions
In the questionnaire w e briefly d efined all the TM func- about t he c ontent of c ertain func tions of t echnology m an-
tions p resented in th e th eoretical f ramework ( see F ig. 1), i n agement is p resented in Tab les 3 a nd 4. T he c overed func -
order to obtain valid information from the respondents. This tions o f TM w ere s trategy r elated as in Matthews’ [ 18] ap -
was done be cause T M consists of m any di fferent func tions proach i n groupi ng R& D pro jects whic h links t he s trategy
which are somehow related to each other. These descriptions and produc t de velopment a spects, technology de velopment
are presented in Table 2. and ut ilisation, i nformation a nd knowl edge m anagement,
technology a cquisition and transfer, technology fore casting,
RESULTS product development and innovation actions outside product
development, life cycle management, and production process
The r esearch is q ualitative b ut in cludes some n umerical
management.
data. The qua litative r esearch methods a nd r equirements

Table 2. Operationalised Definitions of the TM Functions of this Study

Technology Management
Definition of TM Function
Function

Technology strategy consists of the definition, development and use of those technological competencies that constitute the
company’s competitive advantage [12]. To define the technology strategy, organisational context, environmental context, and
Technology strategy
technology evolution are assessed according to the strategic decisions (e.g. make or buy, licensing in/out etc.) [2,9]. The tech-
nology strategy is the basis for the business strategy [9,12].

Technology development consists of basic and applied research, practical solution development, and technology enhancement
Technology development [22]. Technologies are utilised during product development, but on a wider scale than a single product or product family.
and utilisation Technologies can be also patented and offer intellectual property rights (IPR) for sale. Technology utilisation contains also the
elements of technology infrastructure.

Information and Knowledge management contains both tacit and explicit knowledge [30]. “Knowledge is the “key to control” over technology
knowledge management as a whole” [1]. Information is processed data whereas knowledge is context-related.

Technology transfer is the movement of technological capability (artefacts, information, rights, and services) [12], within a
Technology acquisition
company or from a company to another company. The ways of technology acquisition are multiple. It can take the form of
and transfer
internal R&D, joint venturing, contracting out for R&D, licensing in, and buying technology [22].

Forecasting is predicting future technologies and assessing an organisation’s capability to handle them [8] and thus decrease
the level of uncertainty. Forecasting includes continuous monitoring of technological developments leading to an early identi-
Technology forecasting
fication of promising future technology fields and validation of their potentials. Technology foresight is a tool assisting deci-
sion makers to optimise the decisions of R&D at a strategic level [31, 28].

R&D refers to the generation of basic research (for example technology development) and new ideas. Companies should have
Product development different types of R&D projects to ensure profits over a long period (see e.g. [18]). Product development aims to create a
saleable product (physical product, software, service etc.) (see e.g. [32-35]) but also to develop product technologies.

Technology life cycle consists of embryonic, growth, and maturity phases. “Most technologies will be replaced and most
efforts to replace them will fail”, [18]. When the natural limits of technology have been reached, the technology has become
Life cycle management
vulnerable to substitution or obsolescence. Discontinued technologies replace obsolete products on the market and developing
old technology is no longer worth it [2, 22].

Commercialisation involves delivering products from development to the market, and thus is not only a synonym of launch-
ing. Technology commercialisation includes finding applications for immature technologies, and captures the iterative nature
Commercialisation
of such efforts [36]. Commercialisation means also technological commercialisation including the aspects of IPR and licens-
ing activities, for example [12].

Production process Selection of the inputs, operations and methods (process technologies) that transform the inputs to desired outputs [37]. A
management production system creates deliverables as defined in product development.
Analysis of Technology Management Functions in Finnish High Tech Companies The Open Management Journal, 2009, Volume 2 5

In Tables 3 and 4, th e p ractices o f TM are s ummarised. status is evaluated us ing a range from 1 t o 10. Even though
On th e T M f unction level, there ar e similarities w ithin th e the scale used is ordinal, the mean value is used in the analy-
case companies, although differences between the companies sis, as is ofte n us ed in t his ki nd of re search. By us ing t he
are visible too (Tables 3 and 4, third column). The company mean va lue, we a re s implifying t he re sults a nd t hus losing
size seems to play an important role in the differences which part of the s tatistical information. However, it is not the aim
arise about how a particular company addresses technology to be very specific in this respect, when the main objective of
management. the re search is t o identify the m ain s treams of te chnology
management func tions s o a s to ga in a be tter unde rstanding
In a ddition t o company s ize, t he n ature of t he bus iness
about t he current situation of te chnology m anagement in
causes differences between companies depending on whether
Finnish h igh t ech co mpanies. The m ean v alue tells more
the company is an I CT company o r n ot. F or ex ample, th e
business c lock s peed i s a ffected i n t he ra nge of t echnology about the relative order of the evaluated TM functions and is
the basis for the gap analysis presented later.
planning period, i.e. in ICT companies the planning period is
shorter than in th e o ther case h igh t ech ( non-ICT) co mpa- In summary, none of the functions is ranked as extremely
nies. important or not im portant a t all. A ll of t he func tions, e x-
cluding t echnology commercialisation, a re evaluated be-
Evaluating the Importance of TM Functions tween 7.1 to 8.6 and thus prove that most of the operations of
TM a re important a nd t here is not just one m ost im portant
Tab le 5 p resents th e q uantitative r esults o f th e r esearch.
area. Howe ver, it s hould be not ed t hat w e ha ve a lready
The importance of a certain func tion of T M and c urrent

Table 3. Description of Technology Management Functions in Finnish High Tech Companies (Part 1)

Function of TM Common Perception Differentials

Technology 85 % of the companies have a technology strategy and about 70 % 2 companies reported being a subcontractor so they are fulfilling
strategy can clearly define it. In most of the cases the strategy is strongly customers’ needs and thus do not need their own technology strat-
based on the customers needs and it is mostly executed as part of egy. And in 2 other companies the meaning of technology strategy
the annual planning process. seems to be a little different to that understood in this study gener-
ally.
60 % clearly stated that the business and technology strategies go
hand in hand and the technology strategy supports the whole busi-
ness strategy and its needs.

Technology 47 % of the organisations, which develop technology, has a clear Only 1 response showed that one organisation does not have a clear
development and formula for technology development. These companies generally formula for technology development, even though they are devel-
utilisation do not sell developed technologies, at least not systematically. oping technologies.
Almost 80 % of the respondents reported having co-operation with Non-ICT firms are doing much less co-operation with other com-
other companies. Especially all the small firms co-operate as a way panies than ICT firms.
to get competence, technology, and special skills.

Information and The results of tacit information management were reflected as Also the importance of managing tacit knowledge was questioned
knowledge poorly controlled in all the companies. in some companies.
management Explicit knowledge appeared to be controlled very well, at least in Even small companies use very formal documentation and the
most of the companies. All the companies have databases, wikis, importance of created knowledge is understood.
version control systems, intranets, and so on, to manage explicit
data. Many systems and methods are in use to make communica-
tion flow more easily between the departments.
Communication inside companies is seen to be problematic on Communication related problems arise because of personnel’s
some level but almost all the interviewees regard the communica- attitudes towards communication (communication between de-
tion with customers as in good condition. partments is seen to be unnecessary in some cases) and also physi-
cal distance creates challenges for communication (location and
time differences).

Technology 47 % of the respondents reported not developing their own tech- Only 2 companies are selling technologies, and 3 large companies
acquisition and nology. These companies, without technology development, are are licensing them out. Small companies cannot sell technology
transfer mainly small companies and the bigger ones, without technology because more often they do not develop it.
development, are non-ICT companies.
The most common way for technology acquisition is to buy needed Large companies have the possibility of buying other companies to
technology, tools, etc. in all the case companies. Also licensing in acquire certain technology
is a very common way of acquiring technology and is more often
used in small companies.
6 The Open Management Journal, 2009, Volume 2 Kropsu-Vehkapera et al.

Table 4. Description of Technology Management Functions in Finnish High Tech Companies (Part 2)

Function of TM Common Perception Differentials

Technology About 60 % of the interviewees regard technology forecasting The methods and approaches to forecasting are varied. The most
forecasting as a systematic operation in their organisation. mentioned were the conversations with the vendors, customers
Almost all the companies use some kind of competitor analysis and partners. Others are more company specific tools: collabora-
in their forecasting activity. tion with universities and independent research centres, publica-
tions, consultants, observing trends and patents, analyst sessions.
Some of the firms divided technology into smaller parts to facili-
tate observation, and roadmap techniques were used too.

Product development Excluding the big ICT companies, which invest a lot in product Some of the case companies understood that they do only product
development, there is no common picture about the amount of development, so all the investment goes into product develop-
investment in product development. ment. Non-ICT, large companies do not invest much, compared
with their turnover, in product development.
Parallel technology development is not used: companies do not 3 of the companies reported that they use parallel development in
have resources for it and thus it is thought to be impossible small details inside technologies etc.
especially in the small companies.
87 % of all the companies use platforms in their product devel- Only 2 of the companies did not use platforms at all and the main
opment. The small companies regard the platforms as being reasons were because of the nature of the industry where they
very important. operated.
68 % of all the companies use the Matthews’ "blue box" Big differences appear between the big and small companies: 10
(grouping R&D projects) model and which describes ICT com- of 11 big company representatives said that the Matthews’ "blue
panies approach to R&D and product development activities. box" (grouping R&D projects) model is used, but only 3 of 8
However, in the ICT companies, the time scale of the small companies said this kind of model is used. Clearly the non-
Mathews’ original “Blue Box” –approach was clearly too long. ICT respondents were more familiar with the approach than the
40 % of all interviewees said that the time scale is shorter than respondents the ICT firms.
in the Matthew’s model.
Twofold results on innovation activities: the big companies Innovation outside product development did not seem to be very
have at least some kind of innovation activities outside product systematic, but there were some exceptions for example a com-
development but none of the small companies have innovation pany having extensive innovation council etc.
actions separate from the product development.

Life cycle The importance of life cycle management was regarded as In big companies, it was regarded as important to control a prod-
management equally important in both groups of companies. In several uct portfolio. It was also about respecting green values and the
companies lifecycle management is a very important part to environment.
handle, but not enough effort has been invested in it currently.
Lifecycle management was regarded as linear from the research
of product to end of its life. It included maintenance and devel-
opment as well as timing to markets and pricing. Old technolo-
gies should be able to get grip of early, because they incur costs
even after they are not longer used in the form of maintenance
and spare part deliveries.

Commercialisation Commercialisation was much more important for the small The understanding of commercialisation was fragmented. Also
companies, but it was regarded as the least important field by the importance and current state in both groups varied greatly.
both groups. Partly this can be explained by the different interpretations of
what commercialisation means.
Interviewees in the big companies were thinking commerciali- Technology commercialisation was regarded in small firms in
sation as the way to make profit from the know-how. two ways: (1) some of the respondents of the small firms thought
it meant selling their own product, and (2) some thought it could
be selling and licensing self developed architecture and patents.

Production process Production technology was seen mostly as machinery and The respondents of the small companies regarded production
management methods for producing products. It is important to keep the technology as the control of a production process and techniques.
costs of big volume production down and stay competitive. It includes also tools used to make and maintain products. In
One respondent included a whole delivery chain under produc- addition, the type of product affects the production technology.
tion technology.
Lifecycle planning should take into account the whole chain
from raw materials to cast-off products.
Analysis of Technology Management Functions in Finnish High Tech Companies The Open Management Journal, 2009, Volume 2 7

selected the m ost important functions from the literature re- found, regardless of the group of respondents. Both small
view for the e valuation, and t hus t he im portance of a ll t he and l arge companies va lue produc t d evelopment h igh a nd,
functions of TM presented in this study is already assumed. therefore, product development is number one on the lists of
Deviation among the respondents is not high and mostly all the respondents. The second important function, on all the
companies’ lists, is technology development, and the third is
less than 2 units. The definitions of certain functions by the
information and knowledge management.
interviewees e xplain s ome o f t he d eviations. For e xample,
production process management and its sub-part, production The commercialisation of technology is evaluated as the
technology, a re va riously unde rstood – s ome i nterviewees least significant within small and large companies. It is also
are closely bound to the production process and methods, or interesting to note th at th e commercialisation is m uch le ss
even to the whole d elivery chain, w hen some o thers r egard valued by the l arge companies than the small companies. In
interconnections between a product and production technol- addition, the current status of technology commercialisation
ogy s o t hat t he produc t a ffects t o produ ction t echnology. is r egarded a s m ost critical ( i.e. t he lowest r ate). T hese r e-
Deviation in the concept of t echnology s trategy arises from sults a re quit e c ontradictory s ince t he re spondents r egard
the industry where the company operates – non-IC T compa- commercialisation a s t he m ethod by whi ch t o ga in profi ts
nies a nd a lso t he s ubcontractors do not re gard t echnology from the knowledge.
strategy as important at all, which appears also in the results
The gaps between the importance of certain functions of
presented in Tables 3 and 4.
TM and the current status are not very deep overall (see Fig.
2). Howe ver, c ertain di fferences be tween la rge a nd s mall
Table 5. Importance a nd C urrent S tatus o f t he F unctions o f companies are v isible ( see T able 7). S mall c ompanies c on-
TM in Finnish High Tech Companies sider that their biggest gaps are in: technology commerciali-
sation, technology development, and product development –
Importance Current Status even when they are engineering technology oriented organi-
Function of TM sations.
(1-10) (1-10)

Technology Strategy 7,7 6,7

Gaps
Technology Development 8,3 7,0
Production process management
Technology Utilisation 8,0 6 ,9
Commercialisation
Information and Knowledge Management 8,2 7, 4 Life-cycle management
Product development
Technology Acquisition 7,7 7, 4
Technology forecasting
Technology Transfer 7,1 6,5 Technology transfer
Technology acquisiton
Technology Forecasting 7,8 6,9
Information and knowledge management

Product Development 8,6 7,1 Technology utilisation

Technology development
Life cycle Management 8,2 6,8
Technology strategy
Commercialisation 6,4 5, 3
0 0,2 0,4 0,6 0,8 1 1,2 1,4 1,6 1,8
Production Process Management 8,1 6,8 Size of gap

All Big companies Small companies

According to the results, the most important functions of

technology m anagement va ry be tween the large and s mall
companies ( Table 6). In t he list of t op five of t he m ost im- Fig. (2). The gaps between the importance and current status of TM
portant func tions of T M, t he s ame three func tions c an be functions in Finnish high tech companies.

Table 6. Most Important Functions of TM Wide

Priority All Respondents Large Companies Small Companies

Product development &

1P roduct development Technology development
Production process management

2 Technology development Product development

3 Information & knowledge management Life cycle management Technology utilisation

4 Life cycle management Information & knowledge management Information & knowledge management

5 Production process management Technology development Life cycle management

8 The Open Management Journal, 2009, Volume 2 Kropsu-Vehkapera et al.

Table 7. The Biggest and Smallest Gaps Between the Importance and Current Status from the Group of Respondents

All Respondents Large Companies Small Companies

1. Product development 1. Life cycle management 1. Product development

2. Life cycle management 2. Production process management 2. Technology development &
Biggest 3. Technology development 3. Product development Commercialisation
Gap 3. Production process management &
4. Production process management 4. Technology utilisation
Information and knowledge manage-
5. Technology utilisation 5. Technology strategy & Technology development
ment & Life cycle management

1. Technology acquisition 1. Technology acquisition 1. Technology acquisition

2. Technology transfer 2. Technology transfer 2. Technology transfer
Smallest
3. Information and knowledge management 3. Information and knowledge management 3. Technology strategy
Gap
4. Technology strategy 4. Commercialisation 4. Technology utilisation & Technology
5. Technology forecasting 5. Technology forecasting forecasting

Among t he la rger c ompanies, t he d ifferent func tions of tween order-delivery and product creation proc ess from the
TM are regarded as follows: life cycle management, produc- organisational perspective.
tion process management as well as product development are
The produc t and e ngineering re lated T M func tions a re
the most challenging operations followed by t echnology de-
highlighted. Finnish companies have a very strong engineer-
velopment, te chnology s trategy a nd t echnology ut ilisation,
ing ba ckground [6] whi ch c an be s een also in these re sults.
which a re re garded a s be ing e specially re lated t o t he te ch-
Product de velopment a nd produc tion proc ess m anagement,
nology infrastructure.
developing technology, t he e ngineering-linked li fecycle as-
Technology t ransfer a nd a cquisition func tions we re re - pect together with technology utilisation and information and
garded a s be ing managed quit e we ll i n all the companies. knowledge m anagement a re the most h ighly va lued func -
Acquiring technologies was not considered a problem as the tions of TM. The view of technology utilisation and informa-
results show, and technology transfer is in good shape. tion management is very application-related.

DISCUSSION The reasons for such a low valuation of technology strat-

egy b y th e cas e co mpanies m ight b e b ecause o f, es pecially,
When e valuating t he i mportance of di fferent T M func - the experiences of small firms. They feel they are not able to
tions, it became clear that some functions are not so relevant make no table de cisions themselves concerning te chnology
in cer tain ty pes o f co mpanies. F or ex ample, software d evel- choices. M ost of t he te chnological c hoices c ome from the
opers do not va lue production process m anagement and es- bigger players, and the small firms merely have to follow the
pecially produc tion te chnology, or technology de velopment given directions. This does reflect on, and influence, not only
because m ost o f th ese co mpanies ar e n ot d eveloping th e the technology strategy decisions but the forecasting as well.
technology utilised. Furthermore, the software developers do When t he gui delines a re s et by t he bi gger pl ayers, it i s not
not regard their operative process as “ software production”. seen as important f or th e s maller p layers to f orecast th e f u-
From a bus iness m anagement poi nt of vi ew, this i s ra ther ture. How ever, every c ompany ne eds to unde rstand t hat
strange, because this process “should” be operative as a “or- changes i n te chnologies c reate n ew bus iness opport unities
der-delivery proc ess” from t he orga nisation poi nt of vi ew. [3] a nd t hus c ompanies ne ed t o ha ve s ome k ind of vi sion
Also t he im portance of t he t echnology s trategy a nd e spe- about t he evolving te chnologies to c ompete also i n t he fu -
cially the strategy time span relates to the industry in which ture. On e possibility is to co-operate in networks and there-
the company operates, and thus a common and general per- fore have a better vision of future technologies.
ception of TM is elusive.
The c ommercialisation of t echnologies i s ge nerally re -
The m ost va lued func tions of T M i n t he c ase F innish garded as difficult and most new technology based business
high tech companies w ere product d evelopment, technology ideas w ill f ail in the market [37], because they are th ere to o
development, and t echnology utilisation. Al so t he li fecycle early a nd do not ful fil customers’ n eeds bu t m erely s atisfy
approach a nd produc tion proc ess m anagement a re a mongst engineering de sires. F innish companies do h ave a s trong
the most highly valued. However, small and large companies engineering a nd t echnical dri ve whe n de veloping produc ts
have di fferent challenges, whic h c an be s een in t he ga p and this study confirms the fact that Finnish companies’ un-
analysis. derstanding of t he c ommercialisation of technology i s not
The i mportance of t echnology de velopment i s conflicts fully internalised.
with the f act that a lmost h alf o f the case companies d o n ot In this s tudy, the interviewees were all working in pos i-
develop te chnology t hemselves a nd t he t echnology a cquisi- tions where management decisions regarding technology are
tion is experienced as being well managed. One explanation made. Howe ver, technology m anagement nowa days re lates
might b e that they just do not understand the difference be- to general m anagerial tasks and should not be taken in one
Analysis of Technology Management Functions in Finnish High Tech Companies The Open Management Journal, 2009, Volume 2 9

specific de partment a nd t hus t he s ame ki nd of s tudy is high t echnology c ompanies. I t s eems these ope rations a re
needed in o ther co mpanies to as sess th e importance o f th e vitally important in T M, and one explanation of t his can b e
technology m anagement s egment from a bus iness manage- the re spondents’ technology orientated way of t hinking and
ment point of vi ew. Moreover, the number of i nterviews per also the fact that at th e core of F innish h igh tech companies
company s hould be hi gher t o unde rstand t he company a s a is a product, more than technology. This could partially ex-
whole not just via one or a few persons. plain why F innish fi rms ha ve traditionally ha d s ome prob-
lems e ntering gl obal m arkets: t he produc ts may h ave be en
CONCLUSIONS superior but t here ha s be en a la ck of c ommunication with
potential c ustomers wh ile de veloping t he produc ts a nd a lso
The area of TM is very wide and offers multiple theoreti-
the unde rstanding of t he customer ne eds might be i nade-
cal frames to practitioners. This study shows that none of the
TM func tions is m ore important than another when m anag- quate. Based on that, it is interesting to note that the techni-
cal pe ople do not v alue the c ommercialisation ve ry h ighly
ing technology. One reflection on R Q1 (see Fig. 1, Tab le 2)
even though it is regarded as the way to make profit.
should be that the frame is not the purpose in itself, it is more
relevant t o unde rstand t he c ontext i n m anaging t echnology. Commercialisation w as clearly s een a s th e l east impor-
Furthermore th e co ntent an d es pecially th e em phasis o f a tant function of TM in this study. It can be explained, at least
certain function of TM are company related. There was a gap partially, by the r espondents’ technology orientation, where
of 2 u nits be tween t he va lues of t he func tions i dentified a s product de velopment is s een pure ly a s a te chnical a ction
the m ost and t he l east i mportant func tion of T M. T his t o- without c onnection t o marketing. Howe ver, the f indings
gether with some significant deviations among the responses from the literature indicate that commercialisation should be
related t o s ome of t he s tudied func tions c onfirms t he fi nd- an integral part of t he new product development. Therefore,
ings in th e literature that the importance of cer tain functions linking c ommercialisation t o ne w produc t de velopment
depends on t he c ompany’s bus iness m odel, a nd a ll t he T M should be given more attention.
functions a re not a s i mportant to e ach c ompany. None the-
The purpose of this study was to obtain an understanding
less, s ome common characteristics can be determined about
of t he c oncept of technology m anagement in F innish hi gh
how Finnish high tech companies understand TM functions.
tech co mpanies an d analyse th e cu rrent s tatus o f T M. Th e
Almost al l th e c ase co mpanies h ave a c learly d efined studied area is v ery wide and during the r esearch it became
technology s trategy whi ch is i ntegrated wit h t he bus iness clear that the terms and concepts were variously understood.
strategy. The s trategic p lanning pe riod is a t le ast in ICT This ra ised a c hallenge for t he a nalysis. T his s tudy wa s not
companies s horter th an th at p resented f or ex ample in Mat- intended to b e a ll-inclusive, b ut r ather to create a b etter u n-
thews’ theories. 6 0 % o f the studied co mpanies make t ech- derstanding of t he c urrent s tatus of T M in pra ctice. A s t he
nology forecasts, an d almost a ll th e co mpanies use competi- sample was small, a wider set of i nterviews might have pro-
tor a nalysis a s one m ethod. Ot herwise t he t echnology fore - vided a somewhat different view.
casting methods are quite varied.
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Received: September 20, 2008 Revised: December 1, 2008 Accepted: December 5, 2008

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