principles of management

1. Module: PRINCIPLES OF Management
Code: PCPM01

2. SCHEME OF WORK
THE ENVIRONMENT IN WHICH PEOPLE WORK
PRINCIPLES OF GENERAL MANAGEMENT
HUMAN RESOURCE MANAGEMENT
IMPACT OF EMPLOYMENT RELATIONS AND LABOUR LEGISLATION ON AN ORGANISATION
MANAGING PEOPLE AND TEAMS
LAW OF CONTRACTS
MANAGING TECHNOLOGY AND INNOVATION

3. Chapter 7 MANAGING TECHNOLOGY AND INNOVATION
Learning Outcomes
• Explain why innovation is important for business and the economy
• Define and describe the discipline of technology and innovation management
• Classify and understand the differences between the various types of innovation.
• Understand what organisational factors support the creation and maintenance of an innovative
organisational environment
• Describe the elements of a technology
• Understand the factors that contribute to successful new product development and be able to
describe the main process used when developing new products
• Describe the ways in which the benefits of innovation can be appropriated
• Understand the mechanisms and processes involved in the various statutory protection
mechanisms

4. Introduction and the Role of Innovation
• The aim of this chapter is to introduce readers to the body of knowledge that is concerned
with the commercialization and development of new technologies.
• This chapter focuses on how to make profits from innovations
• Innovation, more specifically technological innovation characterizes the fast changing
industries.
• Toyota, Microsoft, etc., are the examples of companies that spend large sums of money
on research and development (R&D)
• The high level of R&D spending is the price that companies have to pay if they want to be
market leaders in a very competitive environment.
• The high level of R&D spending can also be associated with greater diversity of products.
• There are many aspects that need to be considered for profit to be made from innovation.
• Manufacturers try to ensure that they cover all the different market needs and consumer
tastes that may be profitable. The result of short product life cycles is rapid obsolescence.
Such rapid obsolescence may create environmental problems.

5. Other aspects of the Management of Technology and Innovation
• How should innovation be managed?
• What should an organisation do to benefit from its innovations?
• What options are available to an organisation when an invention is taken to
the market?
• How can the necessary technical competencies/capabilities be developed?
• How does the technical environment impact on business strategy formulation?
• How should a technology strategy be designed?
• How can technological trends be forecasted/predicted?

6. Defining Technology Management
• Technology is the system application of scientific knowledge to a new product, process or
service.
• Innovation has two parts: (1) the generation of an idea or invention, and (2) the
conversion of that into a business or other useful application.
• Thus: Innovation = invention + commercialisation.
• Another definition for innovation: innovation is invention converted into a product, an
industrial process or a service for marketplace (Haour, 2004:1).
• Management of technology can be defined as the subject that links engineering, science
and management disciplines to plan, develop and implement technological capabilities to
shape and accomplish the strategic and operational objectives of an organisation.
• Innovation management complements and expands on the other technical management
disciplines by focusing on the body of knowledge concerned with the creation and
commercialisation of new technologies.
• Generate ideas and invention is mainly concerned with R&D and commercialisation is
mainly concerned with marketing and production of new products and processes.

7. The Innovation Process
The innovation process can be broken down into a number of steps that are common to
most innovation activities.
• Basic research: this is based on one or more of the natural sciences and involves studies
that involve the understanding of how the laws of nature regulate the world around us.
e.g.: the human genome project, which identifies the genes in human cells. It may or may not
have commercial possibilities.
• Applied research: this takes the research one step closer to a commercial product by
looking at a potential application for the basic research. The output of applied research is
often called technology
• Idea generation: at some point in the process, an idea for a potentially marketable product
or process results from the research.
• Product and/or process development: this is the development of a product up to stage of
being marketable and manufacturable.
• Market entry: production and marketing of the product are commenced during this phase.

8. The Innovation process
Innovation model may be science-push approach or demand-pull approach.
• Science-push is the process which starts with scientific discovery.
• Demand-pull approach starts with the needs of customers. Both approaches share some common steps
such as development
The innovation-development process
1. Needs/problems
2. Research (basic and applied)
3. Development
4. Commercialisation
5. Diffusion & adoption
6. Consequences
The innovation process is rarely simple and straightforward and often requires one to backtrack
after following paths that turn out to be dead-ends.
In particular, the research steps sometimes yield technologies that are never commercialised, or
are used in unexpected ways many years into failure.

9. Classification of Innovation
The first classification of innovation is incremental innovation, radical innovation or transformational innovation.
• Incremental innovation: occurs when small improvements are made to a product or the process used in
manufacturing a product.
• Radical innovation: occurs when an innovation is very new and different from other solutions to a problem or
need.
• Transformational innovation: occurs when the innovation is of such a fundamental nature that it enables the
development of many other innovations.
Another classification of innovation is into the categories of product innovation, process innovation or service
innovation.
• Product innovation results in new or improved products.
• Process innovation: occurs when manufacturing processes are developed to make the production of existing
products cheaper or when new processes are developed specifically for making a new or improved product.
• Service innovation occurs when new ways of delivering services are developed. An example of this form of
innovation would be the use of automatic teller machines (ATMs) in banks to replace human tellers.
• Other classifications include architectural innovation changes the overall design of a system or the way its
components interact with one another.

10. Technology Strategy
• The technology strategy of a company cannot be seen in isolation and needs to be tightly
integrated into the financial, human resource, manufacturing and marketing strategies of a
company.
• Technology strategy involves choices between alternative new technologies, the criteria by
which they embodied into new products and processes, and the use of resources to
accomplish this.
• It involves choices in six areas:
 The timing of market entry
 The technologies forming the portfolio:
 The level of expertise in each technology
 The source of the technology
 The level of investment in R&D
 The organisation policies and practices

11. The Timing of Market Entry
• The first-to-market strategy aims to get new products to the market before the competition.
• It aims to achieve early entry in the growth phase of the market by imitating the innovations of
others.
Among the advantages of this strategy:
 Brand loyalty and exploitation of switching costs
 Reputation for innovation
 Establishment of entry barriers
 Occupying best market niches
 Little or no competition
Disadvantages
 Greater risks – high failure rate of market pioneers
 High costs related to technology development
 Possible cannibalization of existing product

12. Innovation Organisation
• The balance between tight and loose, rigid and free is one of the main themes of
organisational theory in innovation environments.
• Organisation in different industries or different phases of the innovation or technology cycle
will find different balance points between these extremes
• The following areas need to be considered in managing this balance:
 Vision, leadership and the will to innovate
 Appropriate structure
 Key individuals
 Effective teamwork
 Innovative climate
 The learning organisation
 Customer focus

13. Managing Knowledge and Intellectual Property
• One of the greatest challenges to innovators is to be able to protect and enjoy the benefits of the revenue
stream that results from innovation.
• This is the so-called appropriability problem.
• Over and above patent protection, various other means can be used to appropriate these benefits.
• Patents are, in certain circumstances, a poor way of protecting innovation.
Non-statutory Mechanisms
• The most common is simply to use secrecy as a way of keeping the technology from others.
• The use of non-disclosure agreements, restraint of trade and other contractual agreements, as well as
measures such as disclosing technology of staff on a need-to-know basis.
• In the absence of other measures, secrecy is not a very effective strategy.
• More commonly in the technology field, tacit knowledge and product complexity are used to appropriate the
benefits of technology.
• Tacit knowledge is the knowledge embedded in the people and processes in the company that is difficult to
codify and transfer to others
• Another strategy is to use first-mover advantage to establish industry standards based on your particular
architecture.

14. Statutory Protection Mechanisms
• In addition to patent protection, there are a number of other legal mechanisms
to protect your intellectual property. These include copyright, registered
designs and trademarks.
• Most information can be obtained from the companies and Intellectual
Property Registration Office (CIPRO)
• The following protections are available:
 Patents
 Copyright
 A registered design
 Trademark