**2. Technology management**

is one of these emerging concepts. There has been considerable interest by researchers to peep inside manufacturing firms and explore the elements contributing to their performance. 'Over the last decade there have been many attempts to set out the elements of manufacturing systems and to understand their effects' [1]. Concepts such as virtual organisations, concurrent engineering, advanced manufacturing, flexible manufacturing systems and computer-integrated manufacturing have been applied at the company level. However, Hayes and Jaikumar [2] are of the opinion that 'investment based on these technologies frequently proved disappointing, not because of any fundamental weakness in these technologies, but because the links between these technologies and the needs of business were not well understood'. The repercussion of this has been, according to Womack et al. [3], a move by companies to lay more emphasis on soft issues like operations, quality, financial control, production control, change management and supply chain networks. It would be worthwhile to deduce that advanced manufacturing or smart manufacturing alone might not relate to performance of firms. The application of advanced technologies needs to align with the strategy of the firm, hence the need to consider technology strategy and technology management as the main drivers of smart manufacturing. It is almost impossible for firms to keep away from technology. Continuous development in various industries has relied heavily on technology. The manufacturing sector has also moved leaps and bounds in technology applications. The concept of smart manufacturing also relies on utilising state-of-the-art technologies to monitor and improve productive effectiveness. 'The primary fact about technology in the twentieth and twenty-first centuries is that it has a momentum of its own. Although the technological stream can to some extent be directed, it is impossible to dam it; the stream flows on endlessly' [4]. The development of the Internet and modern sensor technology has benefited most. These technologies can be 'directed' to able to monitor and control the production processes more effectively than is done by current systems which are a mix of manual and automatic parameters. The trend in the development of fast Internet and control systems has provided unique opportunities to introduce smart manufacturing. However, technology alone cannot provide a competitive advantage. The way these technologies need to be applied (technology strategy) and implemented (technology management) needs to be understood by both the academics and the practitioners. This concept of integrating the areas of engineering and management is a concept which this chapter looks into and is introduced by the author for the first time here as 'smart manufacturing management' and resembles with 'engineering management' and 'technology management'. It provides useful results based on a study undertaken in a high-technology manufacturing sector. Business strategy can be apprehended through its content or its processes [5]. Content research mainly focuses and investigates strategic typologies. Process research puts more emphasis on how the strategy is formulated and implemented ([6], p. 193). 'Strategic technology management' (STM) encompasses both the 'content' of technology strategy and the 'process' of technology management. Technological advances and the timing of their implementation have a considerable influence on the competitive standing of firms. Technology strategies could thus be regarded as important elements which could provide a competitive edge to organisations and also help in the development of their business strategies. Badawy ([7], p. 359) observed that White and Bruton use a similar definition for the management of technology, that is, 'the linking of engineering, science and management disciplines to plan, develop and implement technological capabilities to

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shape and accomplish the strategic and operational goals of an organisation'.

Technology management, according to Corey [8], is an integration between business and technical disciplines to develop technology capabilities in order to achieve operational objectives. He further elaborates that R&D is also an essential ingredient for incorporating technology into the products and processes of a firm. Jones, Green and Coombs [9] have defined technology management as the 'identification, development and application of relevant technical knowledge and expertise to achieve organisational goals'. This definition goes beyond the usual domain of R&D and is more strategic in nature.

The effect of employing such strategies has resulted in enhanced productivity of many firms where technology was once treated as a relatively low priority [10]. The importance of technological competencies is evident from the fact that NEC outperformed GTE simply because 'it conceived itself in terms of core competencies' [11]. Therefore, it can be concluded that for the advanced manufacturing industry, technological competencies are always going to be significant as effective *management* of technology is dependent on them (on this, see also [12–16]).

## **2.1. Missing links in technology management**

In order to determine the missing links in technology management, Gregory [1] conducted a critical literature review on this subject and concluded that 'all authors identify the need for a set of instruments, for a methodology to facilitate technology oriented decision making and none of the current approaches relates to general management concepts i.e. they do not lend themselves to integration in a unified concept of firm management'. Traditional approaches to technology strategy tend to focus on the identification of critical technologies and the allocation of R&D effort to the most important of these. Manufacturing firms tend to become multinationals, and technologies employed in the parent firm are similar to those employed by other countries, but it is unclear as to whether or not R&D is similar in the home and host countries. The firm exists to create value-added products. Wahab [17] reiterates that the 'performance of firms depends very much on innovation and R&D environment'. However, despite their similarities there are striking differences in the ways that different firms and organisations approach their technology management—the university system in the USA, for example, plays a different role from the one in Southeast Asia. Thus, technology management strategies applied in advanced manufacturing firms in the host country might be different than those applied in the home country—this is a missing link (gap), and this chapter in part has tried to address this gap.

### **2.2. Overemphasis on technologies in smart manufacturing**

If as Gregory [1] maintains that 'a strategy is only of value if mechanisms for its implementation and renewal are in place', it is surprising that no comprehensive framework for technology management has emerged. Many authors, including Hayes and Jaikumar [2], have highlighted that an overemphasis on technology, rather than on products and services, has led some companies to develop or acquire inappropriate technologies. 'There is a need, then, for a "language" which can represent and link the important dimensions of a business, including technology, in the context of customer requirements' [1]. However, if such a language of technology is developed, it should be common across all functions in the organisation. It should be noted as an example that 'accounting language tends to be the only common language of the firm while technological language fragments at lower operational levels, that is, in production engineering and R&D' [5]. The failure to *measure* technological capabilities is also a missing link in technology management; though the technology contribution factor (TCF) has been applied in research conducted by various researchers, it does not provide the necessary link between the various dimensions of technology management. Therefore, studies which can provide measures to establish this link should contribute to the existing knowledge. The concept of strategic technology management introduced in this chapter—a combination of technology strategy (TS) and technology management(TM)—attempts to address this issue in the sense that it measures the performance of firms in relation to various technology strategy and management dimensions. Acquiring smart manufacturing capability is a moderator in the performance of the firm, and strategic technology management is the driver.

Thus, technology does not enter into the strategy formulation process, and there is no clear direction on how to manage it. The authors further suggest that technology should be considered as the central part of a company's thinking. Evan et al. [22] go a step further and suggest that 'technology should be recognised as a strategic resource … to ensure new technologies provide sources of strategic advantage. This has tempted cutting-edge firms [to] increasingly integrate technology management with their management processes'. However, this approach on its own is not sufficient; it may confine firms to an inward-looking approach. There is also a need to explore those technology developments occurring outside the firm so that appropriate technologies can be matched to their management strategy. This emphasis by firms on both internal and external inputs—a key aspect of strategic technology management—is explored in this chapter, and both approaches are included as relevant variables in the survey instrument. Attaran [23] opines that technology in itself does not guarantee success in increased efficiencies and reduced inventory turnover times. He further states that 'management plays a fundamental role in the implementation of such initiatives which could include flexibility, customer service, employee welfare, quality and training'. Thus, allocation of appropriate resources and provision of capital, both for product (development) and services (welfare, training, etc.), are important for the implementation of technologies—a point which has been borne out by

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one of the results of the bigger research and does not form part of this chapter.

formulate and implement that company's overall strategy.

otherwise the results could be catastrophic'.

objectives of an organisation'.

Wilson [24] analyses the strategic management process of Bank of America and concludes that four major thrusts are included in the technology planning of its strategic management process. They are 'emphasis on focusing on technology to meet customer needs; investing in employees to build a diversity of skills and talent; applying technology to build a competitive advantage; and linking business and technology strategies to build a common value'. These values provide a useful set of strategic technology management strategies for researchers. Wilson's understanding of the subject is supported by Sahlman and Haapasalo [25] who regard strategic technology management as the management of those technology activities which interact with a company's socio-economic and technological environment and help to

According to Thomas and McGee [21], 'the evolutionary theory of the firm also provides an important framework for the strategic management of technology because the strategic capabilities evolved through experience reflect the ability of the organisation to adapt to changing technologies which provides profitability'. Although not exclusively naming the approach as strategic technology management, Corey [4] proposes that 'technology management must accept the responsibility for managing its process with the associated strategic perspective

One of the definitions of technology management which integrates the elements of strategic management comes from the NRC Report (cited in [26]): 'Management of technology is a linking block amongst engineering, science and management disciplines to plan, develop and implement technological capabilities to shape and accomplish the strategic and operational

One of the key recommendations of the Strategic Management of Technology Conference [27] was that firms needed to create a sustainable competitive position, one which requires strong

#### **2.3. The strategic content in technology management**

The rapid change in technology over the last two decades has raised concern on two major issues. These have been defined by Mitchell [18] as (1) poor linkage between technology and strategy planning and (2) over-reliance on short-term measures, both of which masks the more strategic plans. Strategic importance of technology has been recognised as helping to provide competitive advantage. However, Mitchell [18] states that strategic management of technology has certain practical problems, which are:


Hence, there are opportunities to explore how technology strategies are formulated by firms, how they are subsequently implemented and how they contribute towards the firm's growth, especially those which employ advanced manufacturing.

The need to create and use new technology to provide a competitive advantage has been ever increasing and has been a source of growth for many firms. This requires strategic thinking about technology beyond the simple development of new products and services. Hence, 'the task of managing technology is integral to, and essentially synonymous with, strategic management' [19].

Since 1980, the relationship between technology and business strategy has been considered important by companies, but its implementation has not. As highlighted by Chiarmonte [20], 'technology, although very important, was still often not considered in the process of strategy formulation, the essential reason being the trend that technology development takes longer time compared to other functions of the company like marketing'. Thus, more than recognition of this issue is needed to determine what linkage mechanisms need to be established to provide the technology strategy fit.

Contrary to this argument, Thomas and McGee [21] suggest that the strategy literature treats technology as an implementation issue, that is, the technology to be used is defined by strategy. Thus, technology does not enter into the strategy formulation process, and there is no clear direction on how to manage it. The authors further suggest that technology should be considered as the central part of a company's thinking. Evan et al. [22] go a step further and suggest that 'technology should be recognised as a strategic resource … to ensure new technologies provide sources of strategic advantage. This has tempted cutting-edge firms [to] increasingly integrate technology management with their management processes'. However, this approach on its own is not sufficient; it may confine firms to an inward-looking approach. There is also a need to explore those technology developments occurring outside the firm so that appropriate technologies can be matched to their management strategy. This emphasis by firms on both internal and external inputs—a key aspect of strategic technology management—is explored in this chapter, and both approaches are included as relevant variables in the survey instrument.

common across all functions in the organisation. It should be noted as an example that 'accounting language tends to be the only common language of the firm while technological language fragments at lower operational levels, that is, in production engineering and R&D' [5]. The failure to *measure* technological capabilities is also a missing link in technology management; though the technology contribution factor (TCF) has been applied in research conducted by various researchers, it does not provide the necessary link between the various dimensions of technology management. Therefore, studies which can provide measures to establish this link should contribute to the existing knowledge. The concept of strategic technology management introduced in this chapter—a combination of technology strategy (TS) and technology management(TM)—attempts to address this issue in the sense that it measures the performance of firms in relation to various technology strategy and management dimensions. Acquiring smart manufacturing capability is a moderator in the performance of the firm, and strategic technology management is the driver.

The rapid change in technology over the last two decades has raised concern on two major issues. These have been defined by Mitchell [18] as (1) poor linkage between technology and strategy planning and (2) over-reliance on short-term measures, both of which masks the more strategic plans. Strategic importance of technology has been recognised as helping to provide competitive advantage. However, Mitchell [18] states that strategic management of technology

**3.** There is no appropriate financial framework for allocating resources for strategic positioning.

Hence, there are opportunities to explore how technology strategies are formulated by firms, how they are subsequently implemented and how they contribute towards the firm's growth,

The need to create and use new technology to provide a competitive advantage has been ever increasing and has been a source of growth for many firms. This requires strategic thinking about technology beyond the simple development of new products and services. Hence, 'the task of managing technology is integral to, and essentially synonymous with, strategic

Since 1980, the relationship between technology and business strategy has been considered important by companies, but its implementation has not. As highlighted by Chiarmonte [20], 'technology, although very important, was still often not considered in the process of strategy formulation, the essential reason being the trend that technology development takes longer time compared to other functions of the company like marketing'. Thus, more than recognition of this issue is needed to determine what linkage mechanisms need to be established to provide

Contrary to this argument, Thomas and McGee [21] suggest that the strategy literature treats technology as an implementation issue, that is, the technology to be used is defined by strategy.

**1.** There is no generally accepted language for defining the critical technologies.

**2.3. The strategic content in technology management**

has certain practical problems, which are:

96 Digital Transformation in Smart Manufacturing

management' [19].

the technology strategy fit.

**2.** There is no way to manage these technologies.

especially those which employ advanced manufacturing.

Attaran [23] opines that technology in itself does not guarantee success in increased efficiencies and reduced inventory turnover times. He further states that 'management plays a fundamental role in the implementation of such initiatives which could include flexibility, customer service, employee welfare, quality and training'. Thus, allocation of appropriate resources and provision of capital, both for product (development) and services (welfare, training, etc.), are important for the implementation of technologies—a point which has been borne out by one of the results of the bigger research and does not form part of this chapter.

Wilson [24] analyses the strategic management process of Bank of America and concludes that four major thrusts are included in the technology planning of its strategic management process. They are 'emphasis on focusing on technology to meet customer needs; investing in employees to build a diversity of skills and talent; applying technology to build a competitive advantage; and linking business and technology strategies to build a common value'. These values provide a useful set of strategic technology management strategies for researchers. Wilson's understanding of the subject is supported by Sahlman and Haapasalo [25] who regard strategic technology management as the management of those technology activities which interact with a company's socio-economic and technological environment and help to formulate and implement that company's overall strategy.

According to Thomas and McGee [21], 'the evolutionary theory of the firm also provides an important framework for the strategic management of technology because the strategic capabilities evolved through experience reflect the ability of the organisation to adapt to changing technologies which provides profitability'. Although not exclusively naming the approach as strategic technology management, Corey [4] proposes that 'technology management must accept the responsibility for managing its process with the associated strategic perspective otherwise the results could be catastrophic'.

One of the definitions of technology management which integrates the elements of strategic management comes from the NRC Report (cited in [26]): 'Management of technology is a linking block amongst engineering, science and management disciplines to plan, develop and implement technological capabilities to shape and accomplish the strategic and operational objectives of an organisation'.

One of the key recommendations of the Strategic Management of Technology Conference [27] was that firms needed to create a sustainable competitive position, one which requires strong linkages between the company's business environment and the way that company develops and maintains its technological base. Despite this, the main focus remains on the way of acquiring new technology and how to improve the existing ones to gain competitive advantage. The underlying task remains how to find an answer to match technology to market. This is relevant in the case of smart manufacturing whereby employing only modern technologies in terms of IoT (Internet of Things), and data analytics might not be able to provide the competitive advantage.

**4. Strategic technology management in advanced manufacturing:** 

management within the firm and the policy planners at the national level.

**2.** To develop products to replace those threatened by substitutes.

**3.** To differentiate products from those of competitors.

which pioneering patents can be obtained.

Investment in R&D contributes to technological innovation, and to manage these innovations requires the development of technology strategies. So, why do firms invest in R&D? Shane

**4.** To create strong intellectual property positions by making fundamental discoveries on

Competition amongst firms lays the foundations of business strategy and is a driving force in the establishment of R&D strategy. 'R&D strategy' is often used interchangeably with 'technology strategy' in the literature. As such R&D management has dominated in technology-intensive and advanced manufacturing industries. This R&D emphasis is quite common in the US industries; this is in contrast to the European model which stresses acquisition, diffusion and transfer of knowledge [20]. R&D strategy needs to be integrated with the other strategies of the firm. And, indeed in recent times, there has been a 'shift from an R&D management focused attitude, towards a wider perspective of the issues facing innovation management, and, more

**1.** To create new technologies that can serve as the basis for new products and services.

**5.** To create absorptive capacity to recognise and use knowledge from elsewhere.

recently, towards a combination of innovation, technology and strategy' [20].

**4.1. Influence of R&D on technology strategies**

[34] highlights five reasons for this:

A study was carried out to determine the influence of STM on the performance of firms in technology-intensive advanced manufacturing sector of the economy. This was a mixedmode study and employed a survey instrument comprising both quantitative and qualitative questions. The respondents were the chief executive officers, technology managers and senior management in 101 high-technology firms who were considered to be part of strategies at the firm level. The responses were analysed using statistical tools. The variables included in the questionnaire were reduced by performing factor analysis. The relationship between the variables of interest was determined using regression analysis. The factors were grouped into TS and TM dimensions. These were then used to determine their influence on performance of firms. Sales revenue growth (SRG) was selected as the performance measure. Two of the factors, namely, *key positioning* and *strategic R&D*, were found to relate with performance, while the other five factors, namely, *technology leadership*, *up-to-date plants and facilities*, *technology consciousness*, *formal planning* and *external technology acquisition*, were not correlated with performance. Multinational corporation and joint venture firms were found to have acquired the factors of key positioning and strategic R&D, whereas foreign and locally owned companies were found less likely to acquire these factors. These results have implications both for

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**analysis of a research study**
