Lecture-11

Technological Environment
Book
Book Reference
Reference :Aswathappa,K.(2009)
:Aswathappa,K.(2009)
Essentials
Essentials of
of business
business environment
environment
Page:
Page: 98-118
98-118
 What is Technology?

•“Systematic application of scientific or other organized

knowledge to practical tasks”
•The important feature of technology is its change and
then more change.
•Technological impacts are wide spread, reaching far
beyond the immediate point of technological impact.
 Features of technology

• The first feature of technology is its change and then more change.
Technology forces change on people whether they are prepared for it
or not. In the modern society, it has brought so much change that it
creates what is called future shock, which means that change comes
so fast and furiously that it approaches the limits of human tolerance
and people lose their ability to cope with it successfully.

• Another feature of technology is that its effect are widespread,

reaching far beyond the immediate point of technological impact.

• An additional feature of technology is that it is self-reinforcing. As

stated by Alvin Toffler," Technology feeds on itself. Technology makes
more technology possible”. This self-reinforcing principle implies that
technology acts as a multiplier to encourage its own faster
development. It acts with other parts of society so that an invention in
one place leads to a sequence of inventions in other places.
Impact of technology
 Technology

Social implications Economic implications Plant level changes

Organization structure
Increased Productivity
Technology reaches people
through business

Need to spend R & D Resistance to change

High expectations of consumers
Jobs become Intellectual
Fear of risk
System complexity
Problems of technostructure
Social changes TQM
Bioprofessional & multiprofessional
managers
Social Systems
Increased regulation & stiff opposition
BPRE

Demand for capital

Flexible manufacturing
system

Rise and decline of products &

organizations

Boundaries redefined
•The following three points highlight the top three impacts of technology on environment.

Impact # 1. Technology and Society:

The most dramatic influence of technology has been felt on society.
Technological development affects life of every human being.
The effects of technology on society can be studied as under:

1.Technology reaches people through

business
Business is an institution through which
man expects new discoveries to be converted
into goods and services. Managers of business
organization pool the necessary resources and
work on the new discoveries to convert them
into useful products.
 2. Consumers’ Expectations:

High expectations of consumers pose a challenge to

business community. Consumers expect that new
varieties of products, superior in quality, free from
pollution, more safe, more comfortable should be
produced and supplied to them at a short notice of time.
 3.System complexity

Technology has made the system more complex.

Though the modern machines work faster and better.
But they fail often because of their complexity.
Eventually technology might lead to simplicity and small
independent operational units, who work to fulfill of
dreams of a common man. A machine or a system is
composed of several hundred components. All parts
must work in tandem to accomplish a desired task.
 4. Social changes

The role of technology on social change can be examined in the following ways:
(i) First there is the change in social life which results from a change in a technological
process.
(ii) Technology directly changes the pattern of the social life. Technological advancement
tends to remove social differences, the differences between sexes and between parents
and children.
(iii) Technology flows to less developed countries mainly through MNCs. With vast
resources at their common. MNCs have carved places and images for themselves
distinct from local companies. People who are associated with the MNCs are better paid
than the people working with the local companies. These people behave like a class
apart by themselves.
(iv) In the last, our day to day life is affected by the technology. Even the language we
use is changing. New terms continue to emerge. So the way we cook, communicate, use
media and work are affected by technology.
 5. Social Systems

Technology creates distinct type of social system, viz.,

knowledge society. In knowledge society, use and
transfer of knowledge and information, rather than
manual skill, dominates work and employs the largest
portion of labour force.
 Impact # 2. Technology and Economy:

1. Qualitative and Quantitative Increase in

Productivity:
The most significant impact of technology is greater
productivity. The example of quantitative increase is
more production at less cost. In a hospital, the effect
may be qualitative such as maintaining electronic
monitoring equipment regardless of its cost.
As a result of increase in productivity, real wages of
employees increase and prices of some products
decline. Thus the benefit of technology spreads
throughout the whole social system. This results in the
demand for more technological advancement.
 2.Need to Encourage Research and Development:

Firms are required to consider, decide & take action on at least seven issues:
First, is the allocation of resources to R&D.
Secondly, technology transfer, the process of taking new technology from the laboratory to the
market place is equally important.
Thirdly, time factor is important in R&D i.e. the time between innovation & commercialization is
getting considerably reduced.

Fourthly, as new technology comes in, the old technology needs to be abandoned.
Fifthly, the firm must also decide on its own R & D or to outsource technology.
The sixth issue relates to the decision on product innovation or process innovation.
Finally, in the days to come, organizations will be required to spend vast sums of money
on R & D in the area of bio-technology.
Lecture-12
 3. More Intellectual and Upgraded Jobs:

A job which was earlier handled by an unskilled worker, now requires

the services of an educated and competent worker. Office jobs now
demand the services of computer experts. Thus the technological
development has made the jobs more intellectual and upgraded.
•Introduction of new technology dislocates some workers unless they
are well equipped to work on new machines. This makes it obligatory
on the part of business houses to retrain its employees & to
rehabilitate those displaced & untrainable.
4.Need for Highly Professionalized and Knowledgeable Personnel:

Not only jobs become more intellectual, even the

employees tend to become more professional. The
organisation shall need scientists, engineers and highly
skilled workers on its payroll. The organisation can boast
of a progressive and modern personnel.
But motivation of such jobs is a difficult task. They will
need attractive remuneration, job security and just
treatment. Job retention of such employees is another
difficult job. The company has to make several efforts to
discourage shifting of jobs by professionalised
employees.
 5. Need for Bio-Professional and Multi-Professional Managers:

•Today’s business needs bio-professional and multi-

professional managers. To fill up a factory manager’s
post, for instance, the desired qualification stipulated is a
degree in engineering & MBA from a recognized
institution. The need for managers well versed in
different fields of knowledge is greatly felt now than ever
before.
 6.Government Regulations and Public Opposition:

Another impact of technological development is the

ever-increasing regulations imposed on business by the
Government and stiff opposition form the public.
Government has the power to investigate and ban the
products which are harmful for a section of society.
Sometimes these developments invite stiff opposition
from public who fear that new innovations are a threat to
ecology, privacy, simplicity and even the human race.
But the public must be enlightened that the technology in
not always harmful. It can be corrective as well as
curative also.
D 7. Demand for capital

Today’s technology is characterised by its insatiable

demand for capital. Huge investment of money is
required for:
(i) Acquisition or discovery of new ideas & their adoption.
(ii) Education and training of the managers and other
related employees.
(iii) Several other related areas.
Business organisation should not only raise huge
amounts of capital, but proper utilisation of the funds for
gainful purposes is also a must. This calls for an efficient
and effective financial management along-with qualified
and competent financial managers.
 8. Impact of Changes on Products and Organizations:

Technology refers to change and more change. This poses another throat to
business community. A new technology may develop a new industry but
destroy an existing one.
In this changing world, every product is like a mortal human being, subject to a
life cycle as shown in the diagram:
Even the organisation which is associated with a particular technology will have
the same life pattern as that of the technology.
The use of such an organisation will have the following stages:
In this eight step sequence an organisation takes birth, dies and has its last
rites. Thus a new technology have two side of coin which is creative as will
destructive.
An organization will go in sequence through the introductory, growth , maturity
& decline phases. The life of such an organization may be composed of the
following stages. (i) Birth (ii) Growth (iii) Policy (iv) Procedure (v) Theory (vi)
Religion (vii) Ritual (vii) last rites.
Impact of Changes on Products and Organizations:
 9.Boundaries redefined
(i) Technological change may broaden or narrow generally accepted industry
boundaries.
(ii) Technological changes affect the individual companies also in the industry.
Due to these changes, the companies may find themselves in different
business.
(iii) Technological changes also give rise to product substitution and product
differentiation. For example, plastics have replaced many uses of steel.
(iv) For multiproduct companies, technological change may have multiple
impacts. Technological changes can create new things and obsolete the
existing ones. Thus technological change influences industry boundaries and
structure, product substitution and differentiation, price and quality relationship
between products.

Thus it suggest that technological change is a

dominant force in shaping competitive dynamics in
many industries.
 Impact # 3. Technology and Plant Level Changes:

1. Impact on Organisational Structure:

Technology in an organisation will have significant
impact on the organisation structure, length of the line of
command and span of control of the chief executive. No
doubt, other factors also influence the organisational
structure but the impact of technology is most
considerable. Where companies use technology which is
fast changing, matrix structures are more common.
 2. Resistance to change

•New technology poses new problems which may not

be to the liking of the organizational employees.
•Fear of loosing job, increased work load, makes people
to resist the technological change.
 3. Fear Of Risk

There is always the fear of risk. Take the case of

DuPont’s corfam-the company abandoned one of its
project after an investment because of quality & cost
problems.
 4. Total quality management(TQM)

TQM has been introduced in almost all the

organisations. TQM means total commitment of an
organisation to quality.
It has the following principles:
(i) Meet the consumers’ requirements on time, the first
time and 100% of the time.
(ii) The work should be error free.
(iii) To follow the policy that prevention is better than
corrections.
(iv) To measure the cost of quality.
 5.Business process reengineering(BPRE)

Michael Hammer is the father of this process named

BPRE which essentially involves considering how things
would be done if the organisation were to start all over
from the scratch. BPRE helps the organisation in cutting
down its costs, eliminating wastes and in improving its
quality.
This concept is considered essential in modern
competitive world. BPRE will affect the employees
considerably because now the jobs will require wider
range of skills, more interaction with customers and
suppliers, greater challenge, increased responsibilities;
but we should remember that its price is very higher.
 6.Flexible Manufacturing System:

Under FMS machines are designed to produce batches of different products with flexible
manufacturing.
When management wants to produce a new part, it does not change machines, it needs
to change only the computer programming because a unique feature of FMS is the
integration of computers aided designs, engineering and manufacturing with this they on
product low volume products for consumers at a cost comparable to what had been
previously possible through mass production.
Under FMS, workers and employees will need more training and higher skills. Moreover,
it will need the total restricting of the organisation so that the authority could be
decentralised into the hands of the operating teams.
 Constraints on the technological growth

Pollution of biosphere

creates

inconsistent
Traditional social
with
institutions and values
Technology

• may deplete

Industrial resource
base
 (i) Pollution
•Pollution is an unavoidable consequence of industrial
production. Smoke, smell, noise, effluents and dust are
generated by industrial establishments.
 (ii)The industrial resource base
Industrial resource base comprises minerals,
different forms of energy, water supplies,
skilled labour force and human knowledge.
There is limit to the availability of these.
 (iii)Social institutions
•A third factor limiting technology is social
values and institutions that may be
inconsistent with the full productive potential
that is present in technology.