How Firms Make Technological Improvement: Observation from a Field Study

Ramanarayan S

IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: The paper presents observational data impressionistic accounts emerging from a study aimed at understanding the determinants of technological dynamism, and the role that publicly funded technology institutions play in facilitating product or process innovations in industrial firms. The study covered 23 foundries, 13 polymer units, and 3 technology institutions. Firms were found to obtain new technologies largely through foreign collaborations. They focused their technology efforts on assimilation of technology and adaptation for local conditions or local volumes. Several factors were found to be inhibiting technology development efforts: short term planning horizons of the management; perceived absence of connection between technological sophistication and commercial success; inadequate attention to development of markets to utilize the benefits flowing from technology development; high costs of modernization; and absence of reliable quality inputs and infrastructure which keeps managers mired in routine, survival concerns. The study identifies some factors which contributed to technological fervour: inclusion of technology concerns on the management agenda and conscious attention to technological aspects; processes and mechanisms for encouraging technological innovation; attention to linkage and integration processes to institutionalize technological changes; upgradation of technological capability through careful HRD efforts; new and exciting corporate strategies that can serve as frameworks for technology plan; and active networking with technology institutions, suppliers, customers, industry associations etc. The paper examines the implications of the findings for roles of senior managers. To meet the technological challenges, two sets of roles become very important: entrepreneurial role that is aimed at discovering new possibilities and displaying high level of initiative to implement innovations, and leadership role that is oriented to meeting the needs of change by mobilizing and energizing members toward a common vision.

Date: 1993-12-01
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