Strategic Analysis of Technology Systems
Faculty
Alva H. Taylor , Philip C. Anderson
Objectives
Technology is nothing more than the knowledge of how to convert inputs into outputs in order to create functionality. Although a firm is a container for other kinds of knowledge as well (such as its understanding of its customers and its ability to execute administrative routines), technology occupies a special role in its strategy. In order to manage, managers must understand how technologies are created, copied, protected against imitation, and converted into competitive advantage.
In addition, today’s managers must understand how to identify new factors about the economy to consider, and what factors are repackaged hyperbole of traditional industry dynamics. As the cost of transmitting and receiving knowledge is falling toward zero, as is the cost of capturing unprecedented volumes of information from both products and processes. Consequently, you need an intellectual toolkit that helps you manage in an environment where firms and their products or services are embedded in an open network that tends more and more to every element of a truly global economy.
The purpose of this course is to ensure that every Tuck MBA is able to make an immediate impact in an organization where technology influences competitive outcomes. Virtually every modern enterprise must use technology (e.g. computing and communications) to create value for its customers. Additionally, most firms use software-enabled networks to link with both customers and partners. Finally, more and more enterprises also generate proprietary technological knowhow in order to serve customers better than do their competitors. Strategic Analysis of Technology Systems will prepare you to:
- Help your organization get the most out of its investments in technology
- Understand how your competitors and complementors are using technology to change the rules of the game
- Show your customers how to leverage their technological assets
- More accurately evaluate the strategic technologies of firms whose value you must assess.
We emphasize that this is a strategy course. It is not a course in information systems, research and development, or electronic commerce. Rather, it shows you how firms create and leverage proprietary technologies, particularly when these technologies are networked to one another as part of a larger knowledge system. The issues we cover apply to established firms as well as startups, and are applicable whether you are in a company attempting to implement strategies or as an outside consultant assisting in strategy formulation and decision-making.
Most of our cases feature venture capitalists and/or executives in entrepreneurial firms. The issues we cover apply to established firms as well as startups, but working with younger enterprises helps us expose you to cutting-edge technologies and business models. In addition, we hope that by tackling challenges that face entrepreneurs, many of you will gain insights that accelerate your progress on your Tuck General Management Forum project.
Instructional method
This course blends lectures, cases, and experiential learning from guided exploration of cutting-edge sites on the World Wide Web. Each session includes either readings or a case. As much as possible, readings are structured to provide necessary background material, especially factual information. Class sessions focus principally on communicating advanced material and on interactive problem analysis. Consequently, we will not spend classroom time reviewing the readings; rather, we will focus on elaborating and applying the concepts in them. Because the readings will not be rehashed in class, it is imperative that you work through them yourself; you cannot rely on the instructor to summarize their insights for you. Remember, a reading is not ‘the answer’ to a case or ‘the way’ to think about a situation, it is a vehicle to help you formulate your own ideas, which you then must apply to a managerial problem.
Materials
Course materials
All cases and other readings are contained in the course packet or are accessible through the course Web page. Tuck cases are proprietary and their text may not be shared with anyone not enrolled in the class without the professors’ permission. You may, however, discuss them orally with anyone you wish. Generally, each assignment has been gauged so that you can expect to spend roughly three hours preparing for each 90-minute class. If you are consistently spending more (or less) time, see the professors for help in consuming the readings more efficiently.
Office hours: Professor Taylor
The best way to ensure that you have uninterrupted time is to e-mail my assistant Melissa Snow to set up an appointment. You are welcome to drop by without an appointment, but you will have to rely on me being available for a meeting. Without a scheduled meeting I may not be able to allocate the time you need, due to class preparations, research meetings, or other administrative duties.
The best times for meetings with me are in the afternoons, especially 2:00-5:00 Wednesdays and Thursdays. Additionally, I will usually be in most other afternoons. My office is room 203B on the second floor of Tuck Hall.
Office hours: Professor Anderson
I will be available from 2:00-5:00 Wednesdays and Thursdays in the weeks that I am onsite. Additionally, I will usually be in most other afternoons. My office is room Woodbury 212. If you wish to see me in my office, please come by in the afternoon instead of the mornings. The best way to ensure that you have as much uninterrupted time as you need is to call or e-mail my assistant, Leslie Tait (646-9077), who schedules appointments for me. You are welcome to drop by without an appointment, but if another student is in the office, I will have to ask you to wait until s/he is finished.. I rely heavily on electronic mail; comments or questions sent to me via e-mail will get a very rapid response.
Attendance
Since this class relies so heavily on participation, your attendance at each session is quite important. Please notify your professor before class by any means available if you are unable to attend a session due to illness, family emergency, or an unavoidable conflict. Unexcused absences from class will have a serious negative impact not only on your participation grade, but also on your ability to perform on the graded tasks in the class. No compensatory work will be permitted to make up for an unexcused absence.
Honor code
The honor code applies to this course. The Student Judicial Board has requested that Tuck faculty spell out the ground rules for each course to ensure clarity about a few common ‘gray areas.’ The following guidelines should help you interpret the honor code as it applies to this elective; please see me if you have any questions:
- You may consult with anyone in your section in preparation for class, including a tutor if you wish.
- You may not consult or discuss class materials with anyone outside your section in preparation for class.
- l Unless directed by the professor, no additional material or information should be gathered pertaining to the case discussions.
- If you use your laptop during class it is only to be used for class activities such as taking notes or other online activities as directed by the professor. You are not to connect the laptop to the network unless directed to do so, and should not be doing any non-class activities during class time.
- The cases in this course are confidential and are not to be reproduced without your professor's written permission. Copying any section of a case, or providing access to a case to someone who is not registered for the class is an honor code violation. You may freely discuss with others outside of Tuck what you learned from a case, but you may not quote extensively from the case without the professor's prior permission. If you would like to recommend to someone not registered for this class that s/he read a particular case, please refer him/her to your professor.
- The final examination, and the two written assignments are individual exercises. You may prepare for any of them with anyone you wish, but once an examination is made available to you, you may not discuss it with anyone until the deadline for turning it in has passed. In the case of short assignment, this means that once the assignment is available, you may no longer discuss it or prepare for it with anyone else unless it has been specifically assigned as a group assignment.
Miscellaneous
A student with learning disabilities or other special needs should contact his or her professor at the beginning of the term to discuss any accommodations that may be necessary.
A copy of most of the visual aids used in the class will be made available online.
INSTRUCTIONAL METHOD
This course blends lectures, cases, and experiential learning. Each session includes either readings or a case. As much as possible, readings are structured to provide necessary background material, especially factual information. Class sessions focus principally on communicating advanced material and on interactive problem analysis. Consequently, we will not spend classroom time reviewing the readings; rather, we will focus on elaborating and applying the concepts in them. Because the readings will not be rehashed in class, it is imperative that you work through them yourself; you cannot rely on the instructor to summarize their insights for you. Remember, a reading is not "the answer" to a case or "the way" to think about a situation, it is a vehicle to help you formulate your own ideas, which you then must apply to a managerial problem.
Topics
I. Dynamics of Technology Strategy:
This module introduces the importance of integrating technology and a firm's strategy, and tools for examining the the links between technology trajectory and strategic action. Also introduced are the key forces that determine the evolution of technology, and the competitive dynamics involving technology.
II. Organizing Structures for Managing Technology:
This module provides frameworks for how an organization and strategic initiatives can be structured to take advantage of technology. Of specific focus is the importance of organizing to exploit and generate valuable innovations.
III. Strategic Positioning of Technology and Organizations:
In this module the impact of distributed information and increased connectivity are applied to strategies in a networked world. Both external applications of the network perspective, and the internal organizing principles of networks are covered.
IV. Implementation and Exploitation of Technology Opportunities:
As a capstone, this module explores the issues that affect the implementation of the technology strategies that have been discussed, and provides frameworks for developing new technologies in fast changing environments.
Grading
Class Participation 10%
In this course, you are part of a community of learners who educate each other. Your questions and insights help your fellow students learn more than they would without your participation. Consequently, 20% of your grade depends on the degree to which you educated the rest of the community during the term, in the professors’ judgment.
Part of the participation will take the form of in-class exercises that may require prior preparation. You are expected to be fully prepared to participate in all aspects of any in-class exercise.
As an experienced student, you know that what you learn from your classmates depends on the quality of their contributions, not the quantity. The fundamental criterion for the participation grade is the extent to which your contributions advance the learning of all. Outstanding students display mastery of cases and readings, provide original and penetrating insight into the class of problems they represent, and are able in real-time to build upon and link together the ideas of their classmates.
Individual Assignments (2) 30%
Four written assignments are scheduled during the term. Each assignment will consist of applying the class concepts. Expect the assignments to assess your ability to understand and use the concepts, not regurgitate facts or lectures. Two of the assignments are individual assignments, with a page limit of 2 pages double spaced, with at least 10 point type, one inch margins, and no more than one page of exhibits.
Group Assignments (2) 30%
The group assignments have a page limit of 4 pages doubled spaces, with at least 10 point type, one inch margins, and no more than two pages of exhibits. You will need to form self-defined groups of 3-4 people at the beginning of the quarter for the first group assignment. For the second assignment you will once again choose self-defined groups but you cannot work with anyone who was in your group initially.
For the written assignments you can discuss the material with anyone in the class prior to beginning writing the assignment. However, at the point of writing any part of the assignment (e.g. analysis, exhibits) you can no longer discuss the assignment with anyone in the case of the individual assignment, and with anyone outside of your group in the case of the group assignment.
Final Examination 30%
This will be a take-home final. At the end of the term, you will be given a packet of readings and the examination questions. You may spend as much time as you like on the readings, but may not spend more than 6 hours total writing your answers to the examination questions. You will then be given until noon on May 31st, to e-mail your analysis of the case problem to Melissa Snow. Your analysis may not exceed five pages (excluding a maximum of 2 pages of exhibits) double-spaced in at least 10-point font with one-inch margins. Late submissions will not be accepted.
The entire examination is open-note, open-book. You may use any aids you wish (e.g. calculator, computer). You may prepare for the exam with anyone you wish. However, you may not discuss the examination with anyone else between the day the exam is available, and the due date on May 31st at noon.
Schedule
I. Dynamics of Technology Strategy:
Session 1
Integrating technology and strategy
This session defines what technology is and describes when and why can it create a competitive advantage. Why does any firm invest in developing proprietary technology? If ideas can be copied, particularly by hiring the people familiar with them, why not let others invest in research and free ride on their investment? On the other hand, if ideas are hard to copy, how can you leverage research outputs across different businesses?
Technology is a particular kind of knowledge system. We will discuss how proprietary technical knowledge is created, protected, and transferred. We also examine how these processes produce unintended consequences. For example, research efforts often become decoupled from market needs, creating "technology for technology’s sake." We explore why this happens, and why the distinctive cultures of scientific and technical professions often create friction between researchers and managers.
Finally, we’ll examine how technology is created inside modern enterprises. We will explain how firms organize knowledge production and what successful managers do to bridge the functional and corporate/divisional tensions that can emerge.
At the end of this session, you will understand why and how organizations generate proprietary technical knowledge. You will learn how effective general managers link with technology creators and overcome predictable problems that arise in these relationships.
Technology and Strategy: A General Management Perspective, Strategic Management of Technology and Innovation, Robert Burgelman, Modesto Maidique, and Steven Wheelwright, 2001, p. 3-14.
Strategy Innovation Takes Imagination, Robert Tucker, Journal of Business
"A cautionary tale," Philip Evans & Thomas S. Wurster. Blown to Bits: How the New Economics of Information Transforms Strategy. (pp. 1-7)
Our 10 Principles of the New Economy, Slightly Revised, Jerry Useem, Business 2.0, August/September 2001.
Session 2
Case: Novartis Agricultural Discovery Institute
This case provides a starting point to discuss the specific issues in the strategic management of technology systems. In it you will analyze the options for organizing a technology driven organization. You will observe how the specific strategic requirements of technology companies drive operating decisions, and how the new networked economy affects organizations.. You will also use your frameworks to evaluate the strategic options the company faces.
Novartis Agricultural Discovery Institute, Inc (A), HBS 9-601-010
Prep Questions for the Novartis case: 1. The case conveys the conviction that Novartis must invest in building a plant genomics R&D capability, and the chief question is how to do it. We will start by probing this assumption from a general management perspective. a. Do you agree that the firm should commit significant resources to plant genomics R&D? Would you be worried if Novartis' competitors significantly outspent it in this area? Why or why not? b. What ought to be the mission of Novartis R&D with respect to plant genomics? Provide an illustration of one concrete type of activity that Novartis plant genomics should undertake, and one type of actitivity that it should not undertake. c. What are two or three metrics you would use as a general manager to evaluate periodically whether Novartis plant genomics R&D is fulfilling the mission you set out for it? 2. The case lays out three general models that Novartis could employ in organizing plant genomics knowledge production. These are labeled the Monsanto, DuPont, and 'networked organization' approaches. a. Lay out your own strategic design. You may adopt one of these three approaches; combine elements from more than one of them; or propose an alternative not discussed in the case. b. How would you organize knowledge production in order to fulfill your R&D mission (from 1b above)? How many organizational units do you need, what does each do ?
Session 3
Strategic management of knowledge
Once a firm has created technical knowledge, it must decide whether to keep it proprietary or license it. If the firm decides not to license or share its intellectual property, it can protect it as a trade secret, copyright it, or patent it. Furthermore, it is often easy for rivals to skirt patents unless they are part of a strong patent portfolio.