Technological Environment of Business
A technology is the knowledge or methods that are necessary to carry on or to improve the existing production and distribution of goods, services, products or processes, and also include entrepreneurial expertise and professional know-how it is necessary to maintain Technological Environment.
Technological consists of a series of techniques. The development of techniques is essentially a historical process in which one technique with one set of characteristics replaces another in the light of the historical and economic circumstances of the time. Most of the technology used today has been developed in the western countries during the period of the last two centuries, (i.e. after the advent of the industrial revolution).
Technology has led to greater output, shorter working hours, and the creation of a lot of skilled jobs in design, maintenance, and engineering, safer working conditions, produce on of new and better goods of standardized quality with more efficient use of raw materials, etc.
Development of business as an ongoing process rests on the constant induction of the new technology and on the capacity to generate and absorb technical change.
Technological Variables Components
In short, necessary components of technological variables are as follows:
- Improvement in productivity.
- Better utilization of productive resources.
- Improvement in competitive strength.
- Improvement in profitability.
- Risk bearing capacity of the firm.
Technological Variables ensure following changes:
- Mechanization and automation of physical process.
- Mechanization and automation of certain mental process, the computer.
- Increased ability of master time and distance for movement of freight and passengers.
- Increased ability of generate, store, transport and distribute energy, electricity, nuclear power and laser.
- Increased ability to design new materials and improve the quality and properties of others.
Thus, the business units must analyze the changes in technological environment should quickly adapt the new technology.
Example: A few specific examples of the factors operating in the technological environment and their impact on business are provided here:
- Photocopying has bruised the carbon paper business.
- Artificial fibre cloth has almost killed the pure cotton textile industries in many countries. (c) Television has adversely affected radio and cinema industry.
- Seventy percent of food products currently available of housewife in highly industrialized countries were simple non-existent 50 years ago.
- Erratic power supply and frequent load shedding creates market for investors.
- Rising petrol prices have forced automobile manufactures to put emphasis on fuel economy.
- The contemporary trend towards introducing robots to improve productivity is closely monitored by many managers.
The technology chosen must be in tune with the firm’s overall strategies. A thorough analysis of all the firm’s available technologies is necessary to identify areas where there is scope for cost minimization or product differentiation. Technology development need not always occurs in a single organization. It can occur in interconnected networks of organizations such as industry-university co-operative research centers, R & D consortia and limited R & D partnerships also.
A technology transfer is said to be an internal transfer when a firm transfers technology to its affiliates that are under its ownership and control. It is said to be an external transfer when the recipient is a different firm.
In the 1990s, companies invested lot of resources in deploying new information technologies. They spent millions of dollars on sophisticated software packages, tele-conferencing equipment, broadband networks, mobile communications, and other digital technology. But now, firms have to be selective while choosing technologies. The business in a country is greatly influenced by the technological development. The technology adopted by the industries determines the type and quality of goods and services to be produced and the type of plant and equipment to be used. Technological environment influences the business in terms of investment in technology, consistent application of technology and the effects of technology on markets. Floor examples, in India, advancement in automation and importation technology have posed the challenging situation for the organizations in future.
The technological change of the country is fast changing. Thus, the managers have to work in an environment where technological change is the order of day. Its result is that they have to be more conscious to take the advantage of such changes.
The technological changes often create problems for business firms. A firm which is not able to adjust or cope up with the techno logical changes may not survive for long. Similarly, different technological environments of different countries may call for product modifications or adjustment.
- Ecosystem- Meaning, Management, Threats, Major Processes
- Social and Cultural Environment of Business
- Economic Environment- Economic, Financial System & Policies
- Political Environment of Business
- Business Environment – Definition, Micro & Macro Components
- Kinds of business environment
- Significance of business environment
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