Role of Technology in Modern Organisations - Wal-Mart, Samsung Electronics Company - Case Study Example

Role of Technology in Modern Organisations Name: University: Course Title: Instructor: Date: Executive Summary The underlying concern of this discourse is to interrogate the phrase that “Technology is a resource that, like financial and human resources, is pervasively important in organizations”. To underscore the importance of technology in modern organisation, the paper utilised numerous case examples and various theoretical works. To contextualise the discussion, the paper first examined what technology is and the role of innovation in delivering new technologies. In framing the same, the importance lies with the ability of creating competitive advantage by reducing cost of production that can be transferred to consumers and enhancing quality that can be used to differentiate products. In the first finding so as to affirm that resource is pervasively important in organizations, the paper established that technology aids in production of standardised products in mass in time for consumption. This is exemplified by Toyota Company that revolutionised production through lean management technology. Secondly, the paper established that technology contributes in streamlining of internal and external operation of a company in terms of logistics since it allows a company to create a seamless interface that enable business to interact with suppliers and buyers based on demand driven delivery. Lastly, it was observed in the discourse that technology can be used to churn out products of higher quality in terms of design, packaging and contents. Other findings established in the paper are that technologies like information system aids in communication and decision support processes. Equally certain technologies aid in enhancing output of works and managing human resources. Table of Contents Executive Summary i Table of Contents ii 1.0 Introduction 1 2.0 Innovation, Technology and Organisations 1 3.0 Importance of technology and Contribution to modern organisations 2 3.1 Mass Production of Quality, Standardised Products in Time (advanced production process) 4 3.1.1 Reflection 5 3.2 Streamlined Internal & External Operations in Logistics 6 3.2.1 Reflection 6 3.3 Improved Products 7 3.3.1 Reflection 8 3.0 Conclusion 9 References 10 1.0 Introduction Arpaci (2010, p.37) stresses the importance of technological innovation by noting that it has helped revolutionised how organisations conduct their operations, deliver services to clients and counter competition in the dynamic environment. Dauda (2010, p.96), notes that technology acquisition, utilization and maintenance are one of the major integral components in dictating the survival of an organisation. The rationale behind this observation is based on the fact that technology to a greater extent determines quality of goods developed, enhanced employee performance and thus, the overall performance and profitability. Carmen & Jose (2008, p.413) affirms this fact by pointing out that technology plays critical role in organisation’s innovation process. These observations are summed up by Burgelman, Christensen & Wheelwright (2004, p.237) that “Technology is a resource that, like financial and human resources, is pervasively important in organizations”. By utilising case examples to affirm or dispute the later observation, the aim of this discourse is to critically assess Burgelman, Christensen & Wheelwright (2004, p.237) and take a position on the importance of technology and its contribution to modern organisations. 2.0 Innovation, Technology and Organisations Today’s economy is reliant on knowledge thus, managing that knowledge becomes critical. Knowledge is part of the human capital that is used to create new ideas. Innovation system examines the linkages between various entities involved in innovation in terms of distribution and application of this knowledge (OECD, 1997, p.9). The innovative level of an organisation is significantly tied to how these actors relates. The reason why this concept becomes significant is because of the critical role knowledge plays in innovation (OECD, 1997, p.11) and the realisation that ‘technical change depends more on efficient diffusion than on being first in the world with radical innovations’ (Freeman, 1995, p.10 cited in Feinson, 2003, p.14). Organisations can create their technology through innovation or adopt one that has been created as result of technological diffusion. Innovation is chief to the creation of a new technology. Olawale and Garwe (2010, p.729) notes that innovation is the creation or introduction of new technologies and products. Innovation is critical for an organization in creation of customized technology need that suits their organizational goals. Dauda (2010, p.96) observes that technology “is the result of man’s learned and acquired knowledge or his technical skills regarding how to do things well”. The key focus of any technological development is acquisition, use and maintenance. Core to his conceptualisation is the realisation that technology involves systematic utilisation of physical forces for production of goods and services. Thus it encompasses knowledge, process, tools, methods and systems employed in churning out goods and services. 3.0 Importance of technology and Contribution to modern organisations A company is able to distinguish its products/ services in a competitive market by providing customers greater value, either by means of lowering prices or through providing greater benefits and services that will justify higher prices. According to Michael Porter, there are two basic types of competitive advantage, which include cost advantage and differentiation advantage (Porter, 1998, p.46). Thus, for a technology to be considered as a resource that is pervasively important in organizations, it has to address the two objectives by helping organisation meet the demands and expectations of the customers by doing things better than its rivals (Thompson & Martin, 2010). The position of technology in a firm relates to its ability of ensuring reduced cost of production, production of quality products that allows a firm to differentiate its products in the market and thus profitability (Thatcher and Oliver, 2001, p.1). Equally integral is the role of technology in managing human resources by aiding in the productivity and management thus, making technology a competitive advantage/ key success factor in an organisation. To underscore the importance of technology in an organisation, this section utilises various examples of technological developments/ innovations formulated over time by companies or individuals and how it has contributed to internal efficiencies, enhanced outputs, reduced cost of production and improved logistics so as to increase the competitiveness of a company within a given industry in the economy. Over the years, organisations have been able to apply different technological developments. The first that come in limelight are those technological developments that aid in production process/ operations. These can be both software and hardware. Such technologies include plants/ machines for mass production and those for checking quality and so on. Such technologies help in reducing of cost of production per head, increase productivity & speed, increase quality and designs among others. The second category is technology that is tied human resource management. These are critically in managing and aiding workers in enhancing their productivity. The last category relates to information technology. In this context, they aid in communication such advertisements, internal communication and communication between suppliers and the firm or buyers and the firm. These technologies equally aid in decision making and data storage and so on. 3.1 Mass Production of Quality, Standardised Products in Time (advanced production process) Technology is important in ensuring standardised production process and total quality management. In this regard, technology helps an organisation to reduce defects since the process is seamless (Rani, Duhan & Deshwal, 2012, p.13). The hope is based on the premise that once the products have fewer defects, the firm will be able to compete effectively in the market since it will have improved brand image in terms of quality (Bon & Karim, 2011, p. 13 & 14). Such examples of technological advancements include sigma six approach where products are produced to perfection of 99.9% as causes of defects are removed from start to end. Technology advancements in processing like assembly as outlined by ford have helped increase the output per hour. This is because such processes ease the work. The goal of Fordism is to correct irregularities in production by eliminating waste, systemising work flow process and most importantly the creation & maintenance of a production system that runs repetitively in a manner identical to the previous time period (Katayama & Bennett, 1996, p. 9) A case example of how such technological development can enhance productivity and quality of a firm is best exemplified by Toyota Company. The Toyota Production System enables Toyota Company to coordinate how the motor vehicles are manufactured and interaction with suppliers and customers (Beckford, 2009, p.130). Kiicho Toyoda, Taiichi Ohno and other engineers after World War II, started the Toyota production system where they considered introducing a series of simple innovations to provide both continuity in process flow and make a variety of products within the same system. The company is known for lean management in the form of Just in Time Production and Kaizen, which stands for Total Quality Management (Funaru, 2010, p.10). The lean manufacturing system, aka Lean philosophy, was derived from the Toyota Production System (TPS) in the early 1990s. The root of the Toyota Management system dates back to the early 1890s, when Sakichi Toyoda designed and patented the original idea of improved worker productivity and quality through a manual that he designed (Emiliani, 2006). Since then Lean management became an important route for improving performance by reduction of costs, improving quality, reducing lead times, and increasing market shares, developing new products and human resources (Monden, 1986 cited in Emiliani, 2006). The approach enabled the company to rise and be one of the leading vehicle manufacturing firms whereby it has dominated the automobile market in sales and market share globally (Abdullah, 2003).The Toyota production system or the just in Time system has emerged as one of the most reliable operation strategy in the manufacturing industry. The concept is driven by the need to make more with less, while making sure that quality, reliability and flexibility of the system is maintained (Clarke, 2005, p.93). In this regard, the technology has helped Toyota differentiate its products and at the same time enjoy low cost advantage. 3.1.1 Reflection The one thing that has been realised is with reduced defect there is improved reliability. The other expected benefit and exhibit for implementation of TQM is reduction of production cost. The essence is that once the production process has been optimised so as to achieve efficiency, the production and operation cost will be reduced (Yaacob, 2010, p.1845). Moreover, once all departments are synchronised, unwanted delays and performance gaps are eliminated. This results into efficiency and thus, reduced costs. The benefits of reduced cost are that it can be transferred to ultimate customer. This low cost production strategy enables the firm to lock in customers while locking out the competitors (Yaacob, 2010, p.1846). 3.2 Streamlined Internal & External Operations in Logistics Technology is equally important in streamlining logistics of an organisation. An example of this can happen is exemplified in Wal-Mart Success. Wal-Mart plays a significant role in its supply chain by controlling the product life cycle and technological life cycle. Wal-Mart influences suppliers manufacturing processes and product life cycle right from raw material distribution to processing and manufacture. Wal-Mart has allowed Suppliers to access its data so that they can continuously monitor and replenish products. Wal-Mart has adopted the Collaborative planning, forecast and replenishing strategy (CPRF). This is a planning model forecast at sharing vital information with the supply chain. Wal-Mart shares all information on promotions, inventory level and daily sales with its suppliers, in a real time basis (Safizadeh, Ritzman and Wood, 2002, p.1577). The Wal-Mart vendor managed inventory (VMI) enables suppliers to monitor inventory at each distribution centers. When Suppliers have inventory records, they are able to minimize any supply chain problems. 3.2.1 Reflection Wal-Mart supply chain management system enables the firm to have full control on product flow throughout the supply system. This enables Wal-Mart to coordinate automatically with specific suppliers, and constantly maintain its inventory levels in all distribution stores. Wal-Mart ensures maximum value addition to its gods and services in all the stores worldwide. This includes timely delivery, longer product life cycles and high quality standards. This shows how technological systems in networked inventory system can help a firm become dominant and streamline its supply operations. Critical to such improvements is the information technology system. These technologies in real time basis can help synchronize internal and external operations in a ubiquitous manner. 3.3 Improved Products Thatcher and Oliver (2001, p.1) observes that technological innovation can help in development of a new product with new features which directly enhances people’s urge to consume those goods and services. Various companies have applied innovations and technology so as to improve the quality of their products thereby allowing them to differentiate from competitors. In marrying art with technology, Apple has been able to come up with better products compared to its competitors. These include the Mac (Pro, Mini, iMac, MacBook, Air, Pro, and Xserve), iPhone, and the iPod (Shuffle, Nano, Classic, and Touch) (Modi et al, 2010). All these unique products are a result of marrying technology with art. As such, Apple has branding machine able to product numerous products rather than coming up with a single one. Mourdoukoutas (2011) “This marriage of art and technology transforms the company from a computer and iPhone maker into a branding machine that churns families of blockbuster products rather than single products”. The other case example that can be used to show how large organisations are objective oriented in innovation is Samsung. In the first stage of Samsung Electronics Company’s science and technology policy adoption and implementation, the company focused on purchasing technologies from overseas. Some of the technologies that Samsung Electronics Company imported were design and after-fabrication technologies which were more complicated and difficult. However, with time Samsung Electronics Company accumulated the necessary technologies for the manufacture of the DRAM, home appliances, as well as other consumer electronic products. In the second stage, Samsung Electronics Company imported the design technology for the 256 K DRAMS from Micron technology. The electronics company also adopted wafer fabrication and assembly technologies. It is during this stage that Samsung Electronics Company started receiving technology training and advice from experts (OECD, 2009, p.88). In the last stage of the adoption and implementation of Samsung Electronics Company science and technology policy, acquisition of design technology was based on technical information from advanced companies, reverse engineering, as well as other relevant DRAM designs. Other developments during this stage included the use of internally accumulated knowledge to develop wafer fabrications assembling technologies, minimizing time for commercialization of new electronic products, mass production lines and joint ventures in product development (OECD, 2009, p.88). 3.3.1 Reflection Technology is critically in creation of innovative products and thus a critical pervasive resource in an organisation. Technology aids organisation in designing products that are trendy and wows the customers. Such advantages allow the firm to lock in customers while locking out competitors. For instance, in the case of Apple, the management has taken advantage of core capabilities to shift the company’s focus from making innovative and user-friendly products to “wow” consumers with product design. Thus, consumers feel good when they have Apple products. However, the key factor behind having products with a “wow” effect on consumers the way these products are designed. By embracing technology, the company develops products that are “fashionable and of state-of-the-art” (Wooten, 2010, p. 7). 3.0 Conclusion The ultimate concern of this paper was to critically analyse the statement that “technology is a resource, like financial and human resources, is pervasively important in organisation”. In order to affirm or refute this statement, the discourse utilised numerous case examples to show the importance of technology in modern organisation. The first realisation of the integral nature of technology relates to the fact that it aids in production of standardised quality products in mass with limited defects. For example technological developments like lean management have helped Toyota gain world dominance in automobiles. Secondly, the paper established that technology can be used to streamline internal and external operations by enhancing handling of logistics within organisation as exemplified by Wal-Mart. Lastly, technology helps in improving product quality standards. Thus in a nutshell, technological advancements in organisation helps in reducing cost of production, enhancing quality of products produced and thus point of differentiation which will imply a competitive strategy that guarantees profitability. References Arpaci, I. (2010). E – government and technological innovation in turkey: case studies on governmental organisations. Transforming Government, People, Process and Policy, 4 (1): 37-53. Bon, A. 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