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Chapter 12 The Macro Environment –
Technological Influences
By the end of this chapter you should have a better
understanding of:
• the term ‘technology’;
• key aspects of technological development;
• the nature of technological influences and their impact
on organisations;
• some of the current and emerging ethical and
international issues in the technological environment.
Chapter 12
Unlocking the Business Environment
What do we mean by the term
‘technology’?
• Technology is a broad term that refers to the
application of science and/or knowledge for a specific
purpose.
• In a business context that specific purpose might be
the development and production of a product or
service.
• Technology is concerned with the development of:
1. Materials.
2. Products.
3. Processes.
Chapter 12
Unlocking the Business Environment
What do we mean by the term
‘technology’?
• Technological developments, e.g. innovative product
features of existing products/materials or new
products/materials, will lead to technological change.
• Technological change is closely linked to the key
relationship between technology and research and
development (R&D).
• Process technological change concerns innovations in
how products/materials are made and how
organisations are managed.
Chapter 12
Unlocking the Business Environment
Key technological influences –
technology and change
• Technological advances have led to both new
products and processes. For example:
1. Developments in motion and gravity sensors
made the Nintendo Wii possible.
2. Developments in laser technology made possible
Blu-Ray-enhanced photo and audio quality.
3. Developments in robotic technologies led to
changes in methods of production and made
possible robotic assembly lines for car
manufacturing.
Chapter 12
Unlocking the Business Environment
Key technological influences –
technology and change
• Technological advances have led to:
• changes in distribution methods;
• changes in the storage and dissemination of information;
• changes in administrative processes.
• Technological change can offer a new strategic
direction for an organisation, or involve changes to
operational procedures.
Chapter 12
Unlocking the Business Environment
Key technological influences –
information technology
• IT has had an ever-increasing and dramatic effect on
the way we work and in our personal lives.
• Technological developments have transformed the
industrial landscape.
• Some products are in severe decline as a result of
technological change, for example DVD has largely
replaced the production of the video.
• There are opportunities where new types of industries
have been created, for example the development of
the electronic gaming industry.
Chapter 12
Unlocking the Business Environment
Key technological influences –
information technology
• IT has made possible almost-instant communications
globally – a key feature of the rapid rate of
globalisation over the last 25 years.
• IT impacts on organisations’ administrative systems.
Chapter 12
Unlocking the Business Environment
Key technological influences –
artificial intelligence
• Artificial intelligence refers to a branch of computer
science that aims to create intelligent machines (or in
layman’s terms, a computer that can think for itself).
• To try to simulate something as complex as the human
brain in order to create intelligent machines involves a
highly complex array of different systems and
programming.
• Artificial intelligence is in the early stages of
development. A key aim is the development of a
humanoid robot.
Chapter 12
Unlocking the Business Environment
Key technological influences –
biotechnology
• Biotechnology can be defined as: ‘The application of
science and technology to living organisms, as well as
parts, products and models thereof, to alter living or
non-living materials for the production of knowledge,
goods and services.’ (OECD, 2005).
• The applications of biotechnology are broad –
including uses in medicines, agriculture and food
science – and will change over time.
Chapter 12
Unlocking the Business Environment
Key technological influences –
biotechnology
• The importance of the biotechnology sector in the UK
is reflected both in terms of the research and
development undertaken and of the high levels of
investment currently made in the sector.
• Applications of biotechnology can be seen, inter alia,
in the areas of genetic engineering, gene therapy and
nano-biotechnology.
Chapter 12
Unlocking the Business Environment
Key technological influences –
nanotechnology
• Nanotechnology involves the creation of new methods
of manufacturing, controlling matter at an atomic
scale.
• It is often referred to as the field of nanotechnologies
because of the wide variety of different materials and
technologies involved.
• The potential for application of nanotechnologies is in
a variety of fields, including IT, electronics and
medicine.
• Nanotechnology can benefit society with applications
in industry, environment and health.
• Research needs to be conducted into
nanotechnologies to fully understand the potential
benefits and potential harm.
Chapter 12
Unlocking the Business Environment
Key technological influences –
research and development
• Research can either be applied or theoretical (pure).
• Development is the application of research in the
production process.
• Universities undertake most of the pure (theoretical)
research in the UK.
• The private sector undertakes most of the applied
research and development.
• Technological innovation can lead not only to an
organisation’s economic growth, but also a nation’s,
hence the amount of R&D undertaken is crucial.
Chapter 12
Unlocking the Business Environment
Current and emerging ethical and
international issues
• There are both costs and benefits to technological
development. Often, the perspective taken is from an
individual viewpoint.
• It is likely that both biotechnology and nanotechnology
could impact positively on our lives – but can anyone
really say at what cost?
• Any risk analysis or cost–benefit assessment may be
made with business interests underpinning them.
Strong independent bodies are therefore needed to
advise the policy and regulator makers (government
bodies) to ensure due process.
Chapter 12
Unlocking the Business Environment
Current and emerging ethical and
international issues
• Some of the fear lies in the ‘fear of the unknown’, the
fact that the outcomes of using some of these
technologies long term are not yet fully understood.
• The pragmatic approach is to carefully assess the
risks and benefits, and in the absence of full scientific
knowledge, to proceed with caution, i.e. do not
introduce any new science and/or technology if there
is a possibility that the costs outweigh the benefits,
even if there is no evidence yet available to
demonstrate that this is so.
Chapter 12
Unlocking the Business Environment
Current and emerging ethical and
international issues
• Technology has been a major feature of economic
growth – and hence increase in living standards.
• The more that economic growth occurs the more
technological development there is.
• The technology gap between developed and
developing economies is one area of concern.
• To close the technological gap, a combination of ‘low
tech’ and ‘high tech’ solutions are needed.
Chapter 12
Unlocking the Business Environment
Summary
• The term technology is the application of science
and/or knowledge to the development and production
of a product or service.
• Technology is concerned with the development of
materials, products and processes.
• Technology impacts on organisational change in terms
of potential changes to products, methods of
production, distribution methods and administrative
processes.
• Change to organisations can be strategic or
operational.
Chapter 12
Unlocking the Business Environment
Summary
• The main sources of current and potential future
technological change are: IT, artificial intelligence,
biotechnology and nanotechnology.
• The majority of technological change arises from
research and development.
• Research can be applied or pure (theoretical).
Development is the application of research in the
production process.
• Technology can pose both opportunities (such as the
creation of new industries) and threats (such as job
losses).
Chapter 12
Unlocking the Business Environment
Summary
• There are both costs and benefits to technological
development. Often the perspective taken is one from
an individual viewpoint.
• Technology plays a significant role in economic growth
and helping to raise people’s living standards.
• Technology is needed by developing countries to
narrow the gap between ‘rich and poor’ nations.
• People in developing countries can use ‘low tech’
solutions for incremental development to help lift them
out of poverty.
Chapter 12
Unlocking the Business Environment