CU-BBA-SEM-V-Business environment-Second Draft

competitive advantage. New products or improving existing product line and enhancing current competitive strategy will help to gain advantage in the competition. Thus, ensuring market share leadership is maintained. Each and every task in an organization uses and needs information which is the main function of information technology to keep the operations up to date. The process of planning, co- ordinating, scheduling, controlling and monitoring activities are taken care by the different application of IT. Also, the office or administrative work involves different types of applications that also uses IT in one or other way. Even Gordon Pearson has supported the Porter’s thought that maintaining competitive advantage is very important for organization’s survival and success. In Gordon’s view, organization should identify apt technology for manufacturing and supplying the products and services. Fresh technology offers more attributes like quality in performance, lower cost of production and improving the productivity of employees. Commercial utility defines the importance of innovation and inventions. Also, we cannot miss upon the negative aspect of technology as sometime it is unprofitable option. Technology is utilized in almost every stage of value chain and is directly related to production. So, if we assume that there will be low- technology employed in any industry to avoid associated complexity, it is not possible. Also increase in profit is not guaranteed by implementing high- technology. In reality, many complexities are involved with high- technology so such industries sometime suffer low profit. Application of technology may be restricted but competitive advantage is achieved with proper integration of technology in value chain. Porter a has also highlighted the fact that technology to an extent can impact its five-force model as well. Technological changes may have significant impact on nature of rivalry, bargaining power of suppliers and buyers, entry of new entrant and offering cost position or differentiation. Sometime technology act as a deciding factor to define the attractiveness of the industry. Unfortunately, sometime technology has an adverse impact on the structural changes which are dependent on the intensity of technology involved in different function. (Organization can opt for exclusive and customized softwares for Finance department, while no software for admin department). It is mandatory to fine tune technological strategies with industry structure. If the technology employed in value-activity becomes popular and accepted across the industry, it would be treated as an important determinant of overall industry structure. According to Porter, technological change by a firm will lead to sustainable competitive advantage under the following circumstances: The technological change itself lowers the cost of production or enhances the differentiation. Thus, the firm’s technological lead is sustainable. The technological change shifts costs or uniqueness drivers in favour of a firm. 251 CU IDOL SELF LEARNING MATERIAL (SLM)

Pioneering the technological change translates into first mover advantages besides those inherent in the technology itself. The technological change leads to improvement in overall industry structure. Sources of Competitive Advantage: There are many sources of competitive advantage that can result from the development and application of new technology stated as follows: 1. Block competitors from using the technology In India, Companies can resort to Patent’s Act, where they can patent the technology for at least 20 years. This will help them to safeguard their competitive advantage in the market. Also, with proper organizational policy in place can help to keep the trade secrets and the capability to maintain technical knowledge are also different options to safeguard competitive advantage in short and long run. 2. Make it difficult for competitors to use or duplicate the technology: The companies that are involved in developing technology might be within the organization or from external vendor can ensure that such technological development is almost impossible to imitate or difficult to use for. As organization develops very customized technology which is specific to their operations and functions itself. So, it become difficult for other companies to follow the same. Like some IT companies they generally develop such softwares which are highly customized as per their requirements. 3. Apply the technology quickly than competitors: If you are first in developing or implementing any technology which is not so expensive and then quickly upgrading the features helps in maintaining competitive advantages. Such strategy will help organization to influence particular categories of customers and thus stabilize the market share and profits. 4. Better application of the technology than competitors: Competitive advantage can be developed by implementing the technology with higher efficiency, maintaining cost effectiveness and much better way than the competitors. This strategy will work with skilled workforce and improved infrastructure that will ensure quality in the delivery. Such strategies will help organization to re-engineered the existing operations or adopt new methodologies. 252 CU IDOL SELF LEARNING MATERIAL (SLM)

5. Apply the technology to a greater proportion than competitors: When organization apply technology in broader sense that means incorporating technological applications across all the levels and departments it proves more beneficial then applying it to just one function. For instance, maintaining a centralized HRMS system where employees can mark attendance and apply for leaves easily, so it provides efficiency in maintaining employee records throughout the organization. 6. Derive more value than competitors Technology which is specifically applied to certain geographical factors that will help organization to maintain the competitive advantage. It will be very difficult for competitors to replicate it. For instance, crude oil extraction companies use specific technology like tools, machineries that are dependent on geological factors and there will be rise of allied industries which will be using by-products of crude oil distillation process. So, if business is industry specific then competitive advantage in terms of technology can be maintained. 7. Workforce motivation and development. Integration of technology in business functions present exciting upgradation opportunities for employees. Employees love to grow with organization. Such technological intervention helps to ease out the tedious task related to their job and also provides platform to expand their knowledge base. In case, organization offer such learning opportunities with the help of technical experts and institutions that provide employees certification for undertaking such trainings successfully. Even employees career path will also get boosted because there are high chances of promotion associated with it. So, overall productivity and motivation of workforces touches sky. 12.2.2 Levels of Technology The management of technology deals with its categorization and managing that system which enables its awareness, acquisition, adaptation, advancement and abandonment. Classification of Technology: Technology can be classified as follows- State-of –the-art-technologies: Technology which is equal to or surpasses the competitors. Known technologies: These technologies are common in nature and are aware to many organizations but the way it is utilized is unique. Proprietary Technologies: Technologies protected by patents or secrecy agreements that provide a measurable competitive advantage. Core Technologies: Technologies those are essential to maintain a competitive position. 253 CU IDOL SELF LEARNING MATERIAL (SLM)

Scouting Technologies: Formal tracking of potential product and process technologies for future study or application. Leveraging Technologies: Technologies that support several products, product lines, or classes of products. Supporting Technologies: Technologies that support the core technologies. Idealized unknown basic technologies: Technologies that, if available, would provide a significant benefit in some aspect of life. Pacing Technologies: Technologies whose rate of development controls the rate of products or processes. Emerging Technologies: Technologies that are currently under considerations for future products or processes. Following the classification, the management of technology involves carefully implementing the five stages as follows and shown in the figure 11.4.1 below: 1. Awareness Phase: It is the first phase of the technology cycle in which a formal mechanism of company is used to become aware of emerging technologies relevant to the company’s needs. Some companies have ‘Think Tanks system’ which includes engineers and scientists, who carries on the technology research across the world and collects information through books, magazines, journals, bulletin services, conferences and international exhibitions. After analyzing this information, it is compiled in a short internal report that is used as a reference by corporate strategic planners and technologies policy makers for the benefit of company. 2. Acquisition Phase: It is a phase where actual acquisition of a particular technology takes place. For this a group of Company’s technical team collaborates with the industrial engineering group which conducts technical feasibility study and economic feasibility study before acquiring a new technology, it is important to justify. 3. Adaptation Phase: If feasibility study gives positive results and proper justification, every enterprise ends up adapting an acquired technology for its particular needs. If the feasibility study is done correctly, then the transition from acquisition to adaptation becomes much smoother and less expensive or else great amount of rework and adaptation becomes necessary. The process of rework results in frustration of the people acquiring the technology, slow assimilation rate, major productivity losses and severe quality problems. 254 CU IDOL SELF LEARNING MATERIAL (SLM)

4. Advancement Phase: When there are limited funds, companies can’t opt for indiscriminately purchases and abandons technologies. It becomes very essential for companies to improve the acquired technologies as per their needs. Lincoln electric is an electric arc-welding equipment’s company which is world leader in its segment has come up with process of generating required technologies internally instead of acquiring them externally. Also, this company after successful invention and implementation of technologies eventually patenting them because it cannot find equipment’s among the vendors. With the strong team of its design and development engineers, it is advancing its technologies continuously. 5. Abandonment Phase: It is a very critical and last phase of the technology cycle because it deals with decisions regarding the obsolescence of a particular technology. New technologies are hitting the market at lightning speed so do the discarding of existing technologies is also faster which makes timing as a crucial factor for survival and winning in the business game. There are possibilities of suffering losses in revenues because of prematurely abandoning a product technology or waiting too long to abandon the existing technology and adopting a new technology because a customer can figure out a better alternative in competition. So this abandonment decision is not so easy or based on any kind of mathematical formula but it is improved using more information from different areas of the company, such as R & D, marketing and production. 255 CU IDOL SELF LEARNING MATERIAL (SLM)

Fig 12.1: The Technology Cycle [Reference: International Business 4th Edition K. Aswathappa- Tata McGrawHill] 12.3 IMPACT OF TECHNOLOGY ON BUSINESS 12.3.1 Impact of Technology on Society: Social Change: The technology advancement can bring about social changes in more than one way: - First, the changes in a technological process can change the social life. Like an invention may create more jobs and a new city and same invention can displace thousands of workers from specific location. Such technological changes create sort of turmoil in a society. Second, technology changes can directly affect the social life pattern. An invention can create new employment opportunities to women, new job avenues for youth, bring about the change in time spent at work & with family, increase available leisure time, open jobs to youth, & deny them to middle-aged or old workers. Technological advancement tends to smoothen out differences, as it creates a freer & egalitarian society. Third, technological advancement also creates the issue of status differences as technology flows from multinational companies to less developed countries. In our country India, the employees in Multinational companies are paid much higher than the employees working in the local Indian companies though they are doing the same type of job. Fourth, the way we speak, cook, dressed up and work are affected by technology. Even now a days our vocabulary has been upgraded with words like house-husband, surrogate mother and domestic partner, etc. The language we use in our day to day life is changing (like earlier we use to greet people by saying ‘Namaste’ and now we use ‘Hi’, ‘Hello’, etc.). The terms which were not even part of our lexicon have got common usage in our language recently. Thus, words indicate the social change, and when our language is changing then our behaviour will also. Fifth, technology also affects the religion in at least two different ways. First, religiosity has declined the importance of God and Goddesses as individuals rely more on technology for their well-being (Like medical science has come up with lots of treatment for deadly diseases). Second, modernization pressures against genetically modified foods which leads to wholesale rejection of western technologies by some of the religious fundamentalists. Sixth, education system is also being revolutionised by technology. Internet- a speedy and easiest option that has brought the world class knowledge available for everyone and round the clock. Internet and technology have given birth to the industries like e-learning, distance education, e-library and online books available for reading and these options are available to whole world. 256 CU IDOL SELF LEARNING MATERIAL (SLM)

Industrialization: Advancement of technology has led the growth of industries or the process of industrialization. Industrialization is a general term that indicates the growth in a society hitherto mainly agrarian to modern industry with all its economic and social circumstances and problems. It also describes in general term where the major role is played by manufacturing industry for the growth of a society. The features of an industry are like large- scale standardized production process, heavy machineries, huge fixed capital investment in plant and building, and application of science to industrial techniques. From the 18th century, the Industrial Revolution had initiated the unprecedented growth of industries. Industrialization is associated with the factory system of production i.e. mechanization of production which has improved the quality of products, maximized their output, provides huge employment opportunities which has given rise to worker class and brought down the prices of commodities. The family or traditional business has lost its economic importance and thus, the traditional skills have declined and good number of artisans has lost their work. The overall process of industrialization has an impact over the nature, character and the growth of economy and also contributed to the growth of urbanization. Urbanization: Urbanization basically indicates a diffusion of the influence of urban centres with the rural hinterland. It can be described as a process of becoming urban i.e., moving to such cities which are changing from agriculture to industrialised sector and such other pursuits common to cities that leads to the change in behavioural patterns respectively. Hence, in other words when a large population of inhabitants in an area come to cities urbanization is said to occur. It has become a world phenomenon today. In many countries, the growth of industries has contributed to the unprecedented growth of cities in terms of numbers and population. Industrialization has created huge number of employment opportunities and people from different region move in such areas which leads to the development of industrial areas into towns and cities. Modernization: Modernization is a process which refers to the adopting of the modern ways of life and values or changing the habits related to foods, dress, style of speaking, preferences, recreational activities and so on. It also indicates the way people who are custom-bound to adapt themselves to the present conditions, needs, styles and ways in general. The process of modernization emphasizes the use and application of science and technology (Like we have electronic Roti maker nowadays instead of making roti’s on conventional gas stoves). The scientific and technological inventions has installed new ideologies in the place of traditional ones and brought about remarkable changes in the whole system of social relationship, thus modernized societies in various countries. 257 CU IDOL SELF LEARNING MATERIAL (SLM)

Transformation in the economy and the evolution of the new social classes: The introduction of the factory system and manufacturing units of production has changed the agricultural economy into industrial economy. The industrialization has divided the society into two dominant class-the capitalist class which is the owner of the industries and the working class- which is employed in these industries. Because of mutually opposite interest, these two classes are always at conflict with each other. Also in the course of time, middle class which is an intermediary class between the capitalist and the working class has evolved. Development of the means of transport and communication: The tremendous development of the means of transport and communication has led the growth of national and international trade on a large scale. The means of transport like roads (express ways), modern trucks and goods carrier vehicles, the speedy trains, organized train routes as well as modernized stations, technology integrated ship ports, ships of new generation and inexpensive services offered by air transport system has revolutionized the movement of men and material goods. Communication has become faster and easier with the development of technology that has given us the options of e-mails, virtual meeting and conference system, video calling, digitalization of televisions and media and so on has change the lifestyle of individuals and society. The continuous development and inventions in space research and the launch of various communication satellites by different countries has further facilitated the great developments and brought the world closer. Unemployment: Rapid technological advancement cannot be thought without the concomitant of unemployment problem. Machines have reduced lot of manual work that was common in early industrialization phase, so lot of employees had lost their job and their skill set become out of date which has resulted in technological unemployment. Changes in social institutions: Technology has profoundly altered social institution like family, religion, morality, marriage, state and modes of people’s life. Modern technology has completely transformed the family organization by taking away its functions via other agencies. Technology has not only elevated the status of women in the society by creating lots of opportunities with flexibility and other benefits but it has also contributed to the stresses and strains in the relations between men and women at home which is one of the reason why Marriage has lost its sanctity. It is merely treated as a civil contract than a sacred bond and 258 CU IDOL SELF LEARNING MATERIAL (SLM)

that’s why Marriages are becoming more and more unstable. Instances of divorce, desertion and separation are increasing at an alarming rate. Inventions and discoveries in science have shaken the strong foundations of religion and religion has started losing hold over the members. People are becoming more secular, rational, practical and scientific but less religious in their outlook. Because of modern technology, lots of improvement and positive aspects can be seen around in the society like the broad function of the state or the field of state activity that are successfully implementing the programs like -the protection of the aged, the weaker section and the minorities making provision for education, health care etc. With new inventions and development that has changed the face of Transportation and communication across the countries, are also leading to a shift of functions from local government to the central government of the whole state. Technology has not only strengthened the nationalism but also enforce the modern governments which used to rule through the bureaucracy to further impersonalize the human relations. Cultural Lag: The concept of ‘Cultural Lag’ was coined by W.F Oguma in his book of Social Change (1922). He has made a differentiation between ‘material culture’ that includes technology & invention and the ‘non-material culture’ which includes ideas, values, beliefs, norms, customs, laws & social arrangements. The ‘material culture’ changes rapidly than ‘non- material culture’ as its aspects of persists longer because of strength and intensity of resistance to change than material aspects. So, when any change occurs in material culture it stimulates the change in non-material culture wherein non-material culture lags behind the changes in the material culture. The time gap between the appearance of new trait (material culture) and the completion of its enforced adaptation (non-material culture) is known as ‘Cultural Lag’. Moreover, different parts of culture changes at a different speed and time. Ogbum has explained this concept with example like people have adopted new methods and machineries for cultivating their lands to improve the quality and production but the property rights of the land have not yet changed. Technology and non-material culture are cumulative, when efficient method or tool is invented which is consistent with the values and beliefs of the society, the old one is replaced. Technology and war: Advancement of technology in defence has bought fear and anxieties to the mankind. The new type of machines and missiles developed for warfare is very dangerous as it can destroy 259 CU IDOL SELF LEARNING MATERIAL (SLM)

not only the present human race but also had its effect on coming generation.(The impact of Nagasaki and Hiroshima missile attack is still visible in the generation of Japan). Thus, Technological advancement is also associated with the negative aspect that can endanger whole mankind. 12.3.2Technology and Economy The relationship between Economy and Developments in technology has different implications for business. This relationship presents many opportunities and threats for the business as follows: - Increased productivity: The most significant impact of technology is greater productivity in terms of both quality & quantity that leads to increment in the real wages of employees & decrement in the prices of some products. This is the main reason why technology is adopted at all levels. Need to Spend on R&D: Research & Development (R&D) assumes to be the centre of technological developments considerably. Firms are required to consider, decide & take action on at least six issues. First, the efficient allocation of resources to R&D enables to develop synergies among product lines & business units that helps to improve the corporate performance. Second, when companies are unable to undertake innovation for some reasons then the process of technology transfer i.e. the process of taking new technology from the laboratory to the market place is becomes important. Third, time factor is critically important in R&D as competition will not allow the companies to recoup their investment. Fourth, it is very important for R&D manager to determine the appropriate time to adapt the new technology and when to abandon the present technology. The process of replacing the old by new technology is known as technological discontinuity. Such discontinuity occurs when a new technology enhances the current technology to yield better performance. Fifth, it is also very important decision for companies whether to opt for outsourcing the technology. It is beneficial if a company buys commonly available technologies from market and develop such technologies which are valuable and hard to imitate or have no close substitutes (Most of the company’s manufacturing smart phones buy Android OS from market as it is common platform while Apple IPhone has unique OS developed by the company itself). In addition, outsourcing technology may be appropriate when: The supplier has proprietary technology The supplier’s technology is better &/or cheaper & reasonable that is easy to integrate into the current system 260 CU IDOL SELF LEARNING MATERIAL (SLM)

The technology is of little significance to competitive advantage. The technology development process requires special expertise and new resources. Sixth & the final issue is all about related with the decision on product innovation and process innovation. The product’s physical attributes & capabilities affect financial performance of the company so the product innovations are most important aspect. Also process innovations is meant to improve the manufacturing facilities, increasing product quality and faster distribution is important for maintaining the economic returns. Jobs Become Intellectual: The development of technology has upgraded the jobs that required the service of an educated & component worker, while earlier jobs were handled by an illiterate & un-skilled worker. This makes it obligatory on the part of business houses to retrain its employees & to rehabilitate those displaced & untrainable employees as introduction of new technology has dislocated them. Equal is the responsibility of the government to provide training & educational facilities to its citizens. The jobs will be rewarding for those employees who pick up & acquaint themselves with the new technology as they can contribute in increased productivity & reduced prices which will increase their real wages. Also, these intellectual jobs play an important role to improve the human interaction and activity i.e. human relations. Problem of Techno-structure: The scientific & professional workers constitute, the techno- structure of an organization. Now a days, incumbents have become more professional and highly knowledgeable as jobs have become more intellectual. There are certain issues linked with this aspect for an enterprise as follows: Firstly, to motivate the new generation of employees is a challenging task for the organization as they need to grow faster in their career, requires highly challenging job and incentives like attractive remuneration, job security, & just treatment, hardly inspire the enlightened workforce. Secondly, as today’s workforce is quite ambitious so they easily opt for good and growing opportunities and retaining & retraining such employees has become a difficult job. The company has to make several exceptions for its professional employees:- Regular attendance & punctuality have to be relaxed. Attendance at professional get-togethers has to be sponsored. Dual promotion ladders have to be established for outperforming technical people to give them better growth options. Profit-sharing/ financial stake in the company for creative persons so that they have rewards for their creativity. Writing professional articles has to be encouraged & special assignments & part-time teaching may be allowed. 261 CU IDOL SELF LEARNING MATERIAL (SLM)

Thirdly, the techno-structure which are more action oriented influences management’s decision-making process without considering the social aspects of business decision and thus, tries to control the organisation. Management is, therefore, in a very tight position to balance the ruffled feelings of technocrats & the social consequences of business decisions. Increased Regulation & Stiff Opposition: Nowadays regulations have been increased on business by the government of the land as it has the powers to investigate & ban products that are directly harmful. Also new technology needs to face stiff opposition from the public to avoid the direct harm against the sentiments of a section of society. Rise & Decline of Products & Organisations: Change is constant and thus change of technology is in evident that possess problem to the business in general. Technological changes may spawn a major industry but it may also destroy an existing one. Transistors has replaced the vacuum- tube industry & similarly, xerography had replaced carbon paper business. A typical product is associated with the cycle that includes: introduction, growth, maturity, decline, & abandonment whereas an organisation that is associated with particular technology will go through the following stages :- (i) birth, (ii) growth, (iii) policy, (iv) procedure, (v) theory, (vi) religion, (vii) ritual, & (viii) last rites. Technological change in the form of process and material innovation, is a potent force in broadening or narrowing the industry boundaries. Also, prevailing business definition of individual companies has a significant impact of technological changes as the consequences of those impacts that affects the whole industries. Technological change is a dominant force that shapes competitive dynamics, give rise to product substitution & product differentiation, influences industry boundaries & structure, price quality, relationship between products and so on. Finally, for multi-product companies technological change may have multiple impacts. Indian Context: Significantly, India is positioned itself as among the top five nations in the field of space exploration and one of the topmost countries in the world in the field of scientific research. It has been regularly undertaking space missions to the moon and the famed Polar Satellite Launch Vehicle (PSLV). ISRO's Polar Satellite Launch Vehicle, PSLV-C26, successfully launched IRNSS-1C, the third satellite in the Indian Regional Navigation Satellite System (IRNSS), on October 16, 2014, from Satish Dhawan Space Centre, Srihari Kota. This is the twenty seventh consecutively successful mission of PSLV. Lot of initiatives has been focused on encouraging the scientific temperament in India’s youth by setting up of numerous technical universities and institutes, both in the private and the government sector. India presently has 16 Indian Institutes of Technology (IITs), 30 National Institutes of Technology (NITs), 162 universities awarding about 4,000 doctorates and 35,000 post-graduate degrees, and about 40 research laboratories run by the Council of Scientific and Industrial Research (CSIR) all over the country. 262 CU IDOL SELF LEARNING MATERIAL (SLM)

Market size India is among the top 10 nations in the world in the number of scientific publications. Position-wise, it is ranked 17th in the number of citations received and 34th in the number of citations per paper across the science and technology field (among nations publishing 50,000 or more papers). It is also ranked ninth globally in the number of scientific publications and 12th in the number of patents filed. Backed by the government, there has been a lot of investments and developments in different sectors such as agriculture, healthcare, space research and nuclear power through scientific research. For instance, India is gradually becoming self-reliant in nuclear technology through the commercial success of the indigenous reactors like the Dhruva reactor at BARC, which achieved criticality on August 8, 1985. Investments According to the latest available statistics by the Government of India, the Indian investment in science and technology in terms of Gross expenditure on Research and Development (GERD) during 2011-12 has been US$ 36.2 billion Purchasing Power Parity (PPP). India invested 0.88% of its Gross Domestic Product (GDP) towards Research and Development (R&D) whereas USA and South Korea spent 2.76% and 4.04% respectively during 2011-12. India and the United Kingdom have agreed to scale up their bilateral research & innovation relationship to a greater level. In a meeting held between Dr Harsh Vardhan, Minister for Science & Technology, and the UK’s Minister for Universities, Science and Cities the Rt Hon Greg Clark MP, it was decided that a new be known as the Newton-Bhabha Fund worth £ 50 million (US$ 77.76 million) will be taken to further the relations. MOL, world's largest ship operator with over 900 ships, has in partnership with an Indian company setup a cutting edge simulation centre for training seafarers, and said it would step up the number of Indians recruited for its merchant navy. The initiative named marine advanced simulation training (MAST) centre is among the most advanced simulation centres in the world, and would be part of the ongoing efforts of MOL and its partner Synergy Group, a ship management firm with over 100 vessels under its management and MOL's partner in the initiative, to step up recruitment of seafarers from India. A memorandum of understanding (MoU) between the Earth System Science Organization- Ministry of Earth Sciences (ESSO-MoES) and the University Corporation for Atmospheric Research (UCAR), USA was signed here in New Delhi last month for cooperation in Earth System Sciences. Dr Shailesh Nayak Secretary M/o Earth Sciences said on the occasion that since Weather and climate affects all our activities, this collaboration will act as a step to bring together academia and application scientists to come together 263 CU IDOL SELF LEARNING MATERIAL (SLM)

Patna University, in its centenary decade, is planning to set up a number of study centres with a view to expanding its academic horizon and boosting up research activities. An announcement to this effect was made by PU vice-chancellor Y C Simhadri at the university's convocation held recently. To facilitate genetic research, the university has initiated steps for setting up a research centre on the pattern of the Centre for Cellular and Molecular Biology, Hyderabad. 12.3.3 Plant Level Implications: The impact of technology at the plant level is also significant. Technology &Organization Structure: The impact of Technology and its changes has considerable influence on the organisation structure, line of command and span of control. Matrix structure has become more popular because of fast changing technology. No doubt, besides technology, other factors like the personalities of the people who founded the firm and managed it subsequently and history and background of a company also influences the organization’s structure. The common structures of an organization are: Production is routine & process based - Lines of command tend to be lengthy, Decision- making is highly centralized. Production is customized-- Lines of command tend to be short, more use of specialist and decision- making gets delegated. For mass production-- the number of people whom an executive controls tends to be larger. Any technological advancement will result in:- a) Substitution of capital for labour, leading to higher productivity & lower costs b) Increases in sales or power for the innovating organisation relative to its competitors c) The expanded availability of a range of products & services d) Initiation of changes in behaviour among customers, suppliers, employees, or society, and e) Side-effects on the quality of physical environment. Resistance to Change: Resistance to any kind of change is natural phenomena which is faced by the businessman who is investing for new technology as it involves risk factor and related expenses. Also, the manager of a given business unit also confronts such resistance to change as new technology poses new problems. The resistance to change is often psychological that stems from the following reasons: - 1. Psychological or social commitments to existing products, process & organisation, 2. Low profits & reduced rate of growth, 264 CU IDOL SELF LEARNING MATERIAL (SLM)

3. Complacent top management, 4. Small size or fragmented activities, 5. Industry norms & associations or cartels that perpetuate industry-bound thinking, 6. Sizable capital investments in long-life single-use facilities, 7. Lack of successful entrepreneurial models to emulate, & 8. Powerful labour resistance to changes in methods. Fear of Risk: There is always the fear of risk. A research oriented-company like DuPont Corfam, an intended substitute for the forecasted shortage of shoe leather, after an investment of $3000 million, abandoned the project in 1971 because of quality & cost problems. Telecommunications: The new technology in telecommunication sector is an obvious for the development of other industry as it is treated as very important. The development in terms of 3G, WIFI, broadband, MMS, instant messengers and application of smartphones are welcomed by both domestic and global businesses. E-commerce: The phenomenal growth of the internet & the associated World Wide Web has made e-commerce possible. E-commerce is contributing to a growing percentage of cross- border transactions as it rolls back some of the constraints of location, distance, scale, & time zones. The Web allows, both small & large businesses, to expand their global presence at a lower cost than ever before instead of their location and size. Modern factories are now able to produce goods in a short period of time & with improved quality with minimum defects. The main focus of e-commerce is on marketing & sales process, E-business emphasizes on integration of systems, processes, value chains, organizations, and markets. Integration is done with the help of Internet based software’s and also it helps build new relationships between businesses & customers. The benefits associated with the internet & e-business are as follows: - 1. Convenience in conducting business worldwide; 2. Facilitating communication across borders that brings markets closer; 3. An electronic meeting & trading place, which adds efficiency in the operations; 4. Consumers has access to limitless options & price differential 5. Efficiency in distribution Transportation: The technological advancements in the field of transportation since World War II has improved the connectivity at reasonable rates. While the advent of commercial jet 265 CU IDOL SELF LEARNING MATERIAL (SLM)

has reduced the travel time of businessmen, containerization has lowered the costs of shipping goods over long distances. Globalization of Production: Development of Technology have facilitated the globalization of production like a satellite based communications system allows Texas Instruments (TI) can co-ordinate on a global scale, its production planning, financial planning, human resource, marketing, customer service and cost accounting. Markets: Along with the globalization of production, technological innovations have facilitated the internationalization of markets like containerization has made it more economical to transport goods over long distances, thereby creating global market. Low-cost global communications networks such as the World Wide Web and smartphone applications are helping to connect the global market places through internet. In additions, low-cost air travel has increased the mass movement of people around the world that has facilitated in the setup of MNCs across different countries that has reduced the cultural distance and brought about convergence of consumer tastes & preferences. Thus, global communications networks & global media are creating a worldwide culture, which is creating a world market for consumer goods. Technology Transfers: It is a process that permits the flow of technology from a source to a receiver through published material that includes:- i) Internal transfer of technology from the R&D or engineering department to the manufacturing department of a firm based in a country; ii) The same transfer of technology from a laboratory or operations of an MNC in one country to its laboratory or operations located in another country; iii) The transfer of technology from a research consortium supported by many firms to one of its members. iv) Purchase & sale of machinery, equipment & inter- mediate goods, transfer of data & personnel; & interpersonal communication. 12.3.4 Technology and Globalization: Technology is a very important facilitating factor of globalization and technological advances have tremendously fostered globalization as it substantially increasing the scale of economies and the market scale required to break even. Trade Liberalization and the development in technology like containerisation, super tonnage cargo ships, improved logistics and value chain system that has considerably reduced the costs of transportation has encouraged global sourcing. Thus, revolution in transport and communication sector by advent of technology has given a great impetus to globalization and reduced the limitation associated with natural barriers like distance and costs. Technology, monopoly, like possession of patent technology, encourages internalization because the firm can exploit the respective demand without any competition. The IT revolution has led to the 266 CU IDOL SELF LEARNING MATERIAL (SLM)

emergence of global village concept. The World Wide Web has bought the World much closer and opened up global avenues of growth and development for everyone. The invention of global satellite television, for example, has exposed consumers to global advertising. Consumers are also aware of what is available in other countries, and are keen to give it a try.Thus, technology has changed the consumer tastes by opening the World market available at the ease of click. Thus, the pace of globalization has been accelerated by several establishing technologies. 12.4 STATUS OF TECHNOLOGY IN INDIA: After Independence, India has a basic problem like poverty, unemployment and development of India. Indian Government has taken many following steps for technological development. Technological Development in India: Jawaharlal Nehru aimed \"to convert India’s economy into that of a modern state and to fit her into the nuclear age and do it quickly.\" Nehru understood that India had not been at the forefront of the Industrial Revolution, and hence made an effort to promote higher education, and science and technology in India. Nehru's Planning Commission (1950) fixed investment levels, prescribed priorities, divided funds between agriculture and industry, and divided resources between the state and the federal governments. The result of the efforts in the year from 1947 to 1962 saw the area under irrigation increase by 45 million acres (180,000 km2), food production rise by 34 million metric tons, installed power generating capacity increase by 79 million kilowatts, and an overall increase of 94 percent in industrial production. The enormous population rise, however, would balance the gains made by Nehru. On 18 August 1951 the minister of education Maulana Abul Kalam Azad, inaugurated the Indian Institute of Technology at Kharagpur. Defense Research and Development Organisation was formed in 1958. Radio broadcasting was initiated in 1927 but became state responsibility only in 1930. In 1937 it was given the name All India Radio and since 1957 it has been called Akash Vani. Limited duration of television programming began in 1959, and complete broadcasting followed in 1965. The Indian Government acquired the EVS EM computers from the Soviet Union, which were used in large companies and research laboratories. Tata Consultancy Services – established in 1968 by the Tata Group – were the country's largest software producers during the 1960s. The roots of nuclear power in India lie in early acquisition of nuclear reactor technology from a number of western countries, particularly the American support for the Tarapur Atomic Power Station and Canada's CANDU reactors. The Indian space program received only financial support from the Soviet Union, which helped the Indian Space Research Organisation achieve aims such as establishing the Thumba Equatorial Rocket Launching Station, launching remote sensing satellites, developing India’s 267 CU IDOL SELF LEARNING MATERIAL (SLM)

first satellite—Arya Bhatta, and sending astronauts into the space. India sustains its nuclear program during the aftermath of Operation Smiling Buddha – India's first nuclear tests. Though the roots of the Steel Authority of India Ltd. lie in Hindustan Steel Private Limited (1954), the events leading up to the formation of the modern avatar are described below: In 1981, the Indian Antarctic Programme was started when the first Indian Expedition was flagged off for Antarctica from Goa. More missions were subsequently sent each year to India's base Dakshin Gangotri. Indian agriculture benefited from the developments made in the fields of Biotechnology, for which a separate department was created in 1986 under the Ministry of Science and Technology. Both the Indian private sector and the government have invested in the medical and agricultural applications of biotechnology. Massive Biotech parks were established in India while the government provided tax deduction for research and development under biotechnological firms. On 25 June 2002 India and the European Union agreed to bilateral cooperation in the field of science and technology. A joint EU-India group of scholars was formed on 23 November 2001 to further promote joint research and development. India holds observer status at CERN while a joint India-EU Software Education and Development Center is due at Bangalore. On 18 November 2008, the Moon Impact probe was released from Chandrayaan-1 at a height of 100 km (62 mi). During its 25 minute decent, Chandra's Altitudinal Composition Explorer (CHACE) recorded evidence of water in 650 mass spectra readings gathered during this time. On 24 September 2009 Science journal reported that the Chandrayaan-1 had detected water ice on the Moon The Mars Orbiter Mission (MOM), also called Mangalyaan was launched on 5 November 2013 by the Indian Space Research Organisation (ISRO). It is India's first interplanetary missionmaking ISRO the fourth space agency to reach Mars, after the Soviet space program, NASA, and the European Space Agency and the first Asian nation to reach Mars orbit, and the first nation to do so on its first attempt. IT and IT enabled services: On the basis of the NASSCOM report, clocking revenue growth of about US$ 76 billion, contributing 19% in the fiscal year 2011 has been estimated and recorded more than the anticipated growth in the IT sector, as hailed by the NASSCOM. Estimation of revenues from exports in the financial year 2011 summing up to US$ 59 billion that brings about 26% of its contribution to total Indian exports including products and services by a research report. Internal revenues from IT-BPO exclusive of hardware have been estimated at a growth rate of nearly 16% touching US$ 17.35 billion in the year 2011. 268 CU IDOL SELF LEARNING MATERIAL (SLM)

According to the IDC India report, the nation's data centre services market has been expected to reach almost US$ 2.2 billion at the end of the year 2011 that was aggregated at US$ 1.39 billion in 2009. Domestic BPO industry is targeted at US$ 1.4 billion in 2011 that was US$ 1.1 billion in 2010 whereas it has been forecasted to touch US$ 1.69 billion and 2.47 billion by 2012 and 2014 respectively. Measures undertaken by the Government of India to encourage Technological Development: 1. Establishment of technological and research institute: Indian government has established 500 technological institutes for providing education to Indian students. It has also established 1080 research institutes. These institutes consists space research centre, Medical research centre and Agricultural research centres which has contributed in the technical development of India. 2. Positive Technical Policy: India has a strong and positive technical policy for technological development. This policy has facilitated the import of technology from foreign countries for increasing agricultural and industrial developments. 3. High Growth Rate of Information Technology in India: In India, the IT sector is developing with 35% growth rate and we are at second position after China who is involved in usage of internet at large scale for e-commerce, e-education and e- accounting. 4. Incentives for promoting Technology in India: Indian Government has given 100% income tax exemption incurred in research of Technology. State Financial Corporation is uplifting domestic technology by providing finance to domestic industries. IT and IT enabled Service Sector Measures: The Technical Advisory Group for Unique Projects (TAGUP) has been set up and Mr. Nandan Nilekani, one of the founders of the outsourcing jumbo, Infosys has been appointed 269 CU IDOL SELF LEARNING MATERIAL (SLM)

as a chairman of this project to develop IT infrastructure in major areas inclusive of the issuance of unique ID to Indian citizens, new pension system and goods and services tax. Constitution of National Task Force on Information Technology and Software Development to make a framework of long-term IT policy nationally. Legislation of the Information Technology Act to furnish a legal patronage facilitating electronics business and trade. Establishment of Software Technology Parks of India to augment software exports of the country and 51 STPI centres have been set up at present with certain exemptions and benefits. Projects to develop Information Technology Investment Regions invested with good infrastructure to derive maximum benefits of networking and greater efficiency. 12.5 SUMMARY The Technology and technological environment is very important external environment factor that has impact on business, business environment, nation economic growth and development. Various elements of technological environment have different implication which is of critical importance to succeed and achieve the position in rising global village. Not only the awareness or knowledge of new technology or technological upgradation alone is sufficient but effective implementation, utilization and control is also at most necessary to achieve competitive advantage on the global platform. Technology is like an edge to establish the economy and the business globally. 12.6 KEYWORDS  Technology - can be most broadly defined as the entities, both material and immaterial, created by the application of mental and physical effort in order to achieve some value.  Urbanization basically indicates a diffusion of the influence of urban centres with the rural hinterland  Industrialization is a general term that indicates the growth in a society hitherto mainly agrarian to modern industry with all its economic and social circumstances and problems  Proprietary Technologies: Technologies protected by patents or secrecy agreements that provide a measurable competitive advantage  Pacing Technologies: Technologies whose rate of development controls the rate of products or processes 270 CU IDOL SELF LEARNING MATERIAL (SLM)

12.7 LEARNING ACTIVITY 1. Why Porter has acknowledged technology's role as one of the principal drivers of competition? ________________________________________________________________________ ________________________________________________________________________ 2. How Competitive advantage can be achieved because of the development and application of technology? ________________________________________________________________________ ________________________________________________________________________ 12.8UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. What is Technology? 2. What are the types of Technology? 3. Explain - The impact of Technology and its changes has considerable influence on the organization structure. 4. What is Industrialization? 5. State the measures undertaken by the Government of India to encourage Technological Development. Long Questions 1. Give a brief introduction of Technological Environment. 2. Discuss the status of Technology in India. 3. Elaborate different dimensions to highlight the impact of Technology on Business 4. Write a note on different phases of Technology and its management. 5. Justify Competitive advantage and Technology B. Multiple Choice Questions 1. The ability of company to apply the technology better than competitor depends on__________ a. Both B & C b. Quality of People 271 CU IDOL SELF LEARNING MATERIAL (SLM)

c. Resource at the disposal d. Quality of Machine 2. In which technology whose rate of development controls the rate of products or processes? a. Intangible technology b. Pacing Technology c. High technology d. Low labor-intensive technology 3. What are the reasons for resistance to change? a. High Profits b. Fragmented Activities c. Increased rate of growth d. Business Commitments 4. In which phase of technology cycle a company has a formal mechanism to become aware of emerging technologies relevant to the company’s needs? a. Acquisition Phase b. Adaptation Phase c. Awareness Phase d. Advancement Phase 5. Which type of technologies supports several products, product lines, or classes of products? a. Leveraging Technologies b. Core Technologies c. Scouting Technologies d. Known Technologies Answer 272 CU IDOL SELF LEARNING MATERIAL (SLM)

1-a, 2-b, 3-b, 4-c, 5-a 12.9 REFERENCES Text Books:  Francis Cherunilam , Business and Environment, Text and Cases, [Himalaya Publishing House],  C. Fernando, Business Environment Kindle Edition, Pearson  K.Aswathappa, Essentials Of Business Environment, Himalaya Publishing House  SHAIKH SALEEM, BUSINESS ENVIRONMENT, Pearson  Ian Worthington, Chris Britton, The Business Environment, Financial Times/ Prentice Hall. Reference Books:  Dr. Durga Surekha, 2010, Consumers‟ Awareness about Rights and Grievance Redressal, Abhijeet Publications.  Akanksha Rana, Consumer Claims, Eastern Book Company  Morrison J, The International Business Environment, Palgrave  MISHRA AND PURI, Indian Economy, Himalaya Publishing House, New Delhi  Business Environment Raj Aggarwal Excel Books, Delhi  Strategic Planning for Corporate Ramaswamy V McMillan, New Delhi Open Text Source:  www.yourarticlelibrary.com  https://courses.lumenlearning.com/ 273 CU IDOL SELF LEARNING MATERIAL (SLM)