Technology Absorption, Adaption & Improving Technology

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Technology Absorption, Adaption and Improving Technology

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Absorption, Adaptation and Improvement of Externally Acquired Technology:

Absorption, Adaptation and Improvement of Externally Acquired Technology Dr. G C Mohanta, BE(Mech), MSc(Engg), MBA, PhD(Mgt) Professor Al-Qurmoshi Institute of Business Management, Hyderabad - 500005

What is Technology Absorption? :

What is Technology Absorption? Technology Absorption refers to the acquisition, development, assimilation & utilization of technological knowledge and capability by a firm . It occurs between transferring & receiving entities. Technology absorbed without changing parameters of acquired technology is called Technology Adoption . Technology absorbed by changing certain parameters of acquired technology is called Technology Adaptation .

Reasons for Technology Adaptation :

Reasons for Technology Adaptation Technology Adaptation may arise due to following reasons: Non availability of supporting infrastructure To meet location/market specific needs To make it compatible with existing plant & machinery To meet n on availability of ancillary units for components To meet legal requirements To face p ressure from NGOs, environmentalist, human rights group

Structure/ Components of Technology Absorption:

Structure/ Components of Technology Absorption Technology Absorption involves following four basic components: Hardware – refers to particular physical structure and layout which are part of absorption process. Software - refers to ‘k now-how ’ of carrying out tasks to achieve goals & objectives . Brainware - refers to application & justification of hardware, software development, ‘ know-what ’ & ‘ know-why ’ of technology ; what to employ, how, when, where, and why? Support Net - refers to complex network of physical, informational and socio–economic transformations tha t support the proper use and functioning of given technology.

Differences between Technology Acquisition and Technology Absorption :

Differences between Technology Acquisition and Technology Absorption Technology Acquisition – It f ocus es on acquiring technology , i.e. becoming owner . Technology Absorption - Focus es on putting the acquired technology to use , i.e. reaping the benefits from technology acquired . Technology Acquisition - Leads to firm specific technological knowledge and advantage . Technology Absorption - Leads to market competitive advantage .

Differences between Technology Acquisition and Technology Absorption :

Differences between Technology Acquisition and Technology Absorption Technology Acquisition - Requires substanical costs for acquistion of technology . Technology Absorption - Inovolves some costs for putting the technology to use and leads to increase in revenues, improvement in efficienc y, etc. Technology Acquisition - Precedes technology absorption . Technology Absorption - Succeeds technology acquisition .

Management of Technology Absorption by Organizations :

Man a gement of Technology Absorption by Organizations O rganizations plan for technology absorption within reasonable time , a s it provides advantages , like – early use of acquired technology and reaping benefits there from and gaining technological competitive edge. Delays in technology absorption could be harmful to the organization. Therefore, technology absorption needs to be properly managed by the organization.

Management of Technology Absorption by Organizations :

Man a gement of Technology Absorption by Organizations Organizations take following steps to manage technology absorption: Developing good understanding and mutual trust between technology transferor and technology recipient organizations Proper, clearcut and well-defined agreement be there between technology transferor and technology recipient organizations Developing time-bound and target-oriented schedule for technology absorption Top management support to technology absportion .

Management of Technology Absorption by Organizations :

Man a gement of Technology Absorption by Organizations Use of multifunctional teams by the technology acquiring organization Regular review of the absorption progress by the highest level. Installation of effective communication system by the technology acquiring organization. Seeking workers’ particicpation, involving one and all in the absorption process;

Management of Technology Absorption by Organizations :

Man a gement of Technology Absorption by Organizations O vercoming the resistance to change through education and motivation through rewards , etc. Hiring of requisite skilled workforce , if same is not available . S eeking early training of current employees of transferee by technologists/technicians from the transferor enterprise. By actively complying with various government directives and requirements on technology upgradation and technology absorption.

Technology Diffusion:

Technology Diffusion Technology Diffusion means the spread of applications/usage of a new technology and its related products, services or processes from: one nation to another; one entity to another; one industry to another; the owner entity to user or its supplier; and current user to the prospective user. Technology Diffusion is also known as Diffusion of Innovation, as technology gets mainly diffused through its new usages or applications in the form of new products, services or processes.

Improvement of Externally Acquired Technology:

Improvement of Externally Acquired Technology For improvement of externally acquired technology, the focus should be on the following points: 1. Human Resource Development should be an integral part of the technology transfer process. If the companies purchasing technologies from external sources through licensing agreements, are at the “learning stage“, There should be manpower training program by transferee to enable the local engineers and technicians to assimilate the skills to exploit fully the transferred technology.

Improvement of Externally Acquired Technology:

Improvement of Externally Acquired Technology The firms transferring technology should be asked to commit to on-going manpower training, commensurate with the requirements of transferee to operate fully and manage the transferred technology. This training can be in the form of formal training programs at overseas offices belonging to the transferor, or through in-house training, or through setting up of a full-fledged training institute that can offer training for both employees of the firms as well as other workers. This concept of manpower training, if implemented through carefully designed guidelines, will help to improve the rate of skill development in the transferee.

Improvement of Externally Acquired Technology:

Improvement of Externally Acquired Technology 2. Research and Developmental Efforts – Transferee should work with the transferor to accelerate the pace of technology acquisition & adaptation with help of its own R&D.   This should be matched with transferee’s capacity to absorb, adapt, upgrade & innovate the acquired technology. There should be mechanisms to ensure effective transfer of 'know-how' and 'know why‘ to the transferee in the long term. R&D department of the transferee should take greater initiatives to understand the new technologies, have exposure to the practical problems and understand the needs of the marketplace, and explore opportunities to learn from the skills and knowledge of the transferor and other R&D institutions in the field.

Improvement of Externally Acquired Technology:

Improvement of Externally Acquired Technology The transferee may try to acquire 'know-how' and 'know why‘ of externally acquired technology in phases: Phase I : Mastering simple assembly techniques from completely knocked-down (CKD) kits supplied by the external source. Phase II: Replacing some parts or components of its own choice from sources other than the company that supplies full CKD kits, or modifying the engineering and design of the supplied model.

Improvement of Externally Acquired Technology:

Improvement of Externally Acquired Technology Phase III: Introducing new products with its own engineering force through reverse engineering process without relying directly on external firms; Phase IV: Applying reverse engineering process innovatively; Phase V: Reaching the stage of technological competence where innovation starts to appear throughout the company for new products or new production process.

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