Last updated: April 14, 2019
Topic: BusinessBusiness Operations
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Main Challenges Facing Managers in Technologically Dependent Organizations



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Technologically dependent organizations can be defined as those organizations whose competitive advantage and business depends so much on technology and much, if not all, of its operations and processes are technology-based. These organizations either manufacture and invent technology itself or dependent on technology and the benefits it provides. Examples of organizations that invent technology are Intel which develops microprocessors and integrated circuits for computers; Hewlett-Packard, makers of personal computers; and Microsoft, inventors of softwares and operating systems. Examples of organizations in which most of their business operations depend on technology are banks which the quality of their services depends on ATMs and other developmebnt in information and communication technology; credit card companies (e.g. Visa); and e-businesses (e.g. e-Bay, Amazon) which will not be possible without the development of Internet and related online services.

With so much dependency on technology, managers of technologically dependent organizations faced various challenges in managing such kind of business. These challenges are brought about primarily by the rapid changes in technology, followed by the huge amount of information that needed to be carefully and effectively managed to be used for the advantage of the organization. The main challenges, therefore, that the managers of technologically dependent organizations faced are: (1) managing changes and uncertainties due to technological change; and (2) knowledge management that needed particular attention so that important information can be used effectively.



The two main challenges identified above are based on the theories of various academic research studies. According to Orlikowski and Hofman (1997), change process is affected by the interdependence of three dimensions: (1) technology; (2) organizational context which includes the culture, structure and roles; and (3) the change model which is used to manage change. These three dimensions are important to be aligned with each other in order to manage uncertainties associated with  technological changes. This is because as technology change, technologically dependent organizations also change their products, processes or methods, tools, and/or equipments. Relatively, the organization itself including its culture, structure, and employee skills and behavior must be adaptive to such changes with the help of an effective change model.


Moreover, knowledge management is another big challenge to the managers of technologically dependent organizations. Knowledge management according to Marwick (2001, p. 814) is “ the name given to the set of systematic and disciplined actions that an organization can take to obtain the greatest value from the knowledge available to it”. From this, it can be viewed that innovative ideas, designs, protocols, new processes and methods conceptualized by the human resources of an organizations (e.g. technologists, engineers) can be classified as knowledge along with the business strategies, history of the organization, supplier and customer information as well as its external environment. Technology brings various knowledge to the organization that are needed to be effectively communicated across the organization.


The literature review that follows discusses the various findings of research studies that led to these hypotheses. It includes research studies related to the effects of technology on organizations and how these effects serve as challenges to managers.


Literature Review

Generally, technological innovation requires product and manufacturing process transition or change after another that although beneficial to the organization adapting to such innovation, poses uncertainties and risks (Hopman, 2005, p.175). In a study conducted by Hopman  (2005) for Intel, he identified four sources of uncertainty due to transition: market, product changes, marketing actions, and systems. Market pertains to the external environment of the organization that determines the demand, supply, and industry trends. Most technological dependent organizations look at the situation in the market before introducing new products or processes or before adapting newer technology. Intel for instance, is able to maintain its technological advantage in the microprocessor industry by carefully forecasting the needs of its customers (Antoniou & Ansoff, 2004, p.286). Intel has learned to anticipate the right time to introduce new products by either determining the needs of the consumers or influencing their needs. Right timing and influencing the need of customers for newer technology are tough challenges to the managers of technologically dependent organizations.


Moreover, product changes poses uncertainties such as whether new products that features the latest technology will become as successful as the previous products, or whether the new product will be competitive against the products of the competitors. Marketing action on the other hand involves advertising campaigns and price move that have improbable exact results while systems pertains to the tools and processes used to manage the business (Hopman, 2005, p. 176). The systems includes the financial resources, human resources, strategies, and plans as well as information that seem to be vital to the business.


As a result of these uncertainties, the organization  must be flexible enough to handle transition or changes. Basically, because technology is rapidly changing, it can be expected that technologically dependent organizations are also prone to changes. Technology challenges the capability of an organization to adapt and continuously improve its products or services using its chosen technology (Tushman & Anderson, 1986). Therefore, one of the main challenges faced by managers is to develop an organization whose members have the right skills, behavior and attitudes towards the nature of the business. It involves the task of choosing the right people, assessing their capabilities and motivating them by creating processes, roles, systems, structures and culture that can effectively create the attitude needed by the organization (Walden, 2003, p. 13). Walden (2003, p.14) added that “the key management job is to find the best characteristics and capabilities of members of the team and to make the best use of them”. Generally, employees have different levels of capability and areas of capability.


Also, employees can be more functional when its organizational structure is designed based on the needs of the organization. As a consequence of adapting new technology, organizations are required to take on innovative activities and process as a response to environmental change and to maximize the benefits provided by technology (Tushman & O’Reilly, 1997). For instance, due to the emergence of computer aided designs along with intranet, many organizations were restructured in such a way that different functions and departments can easily collaborate with each other in order to decrease the time to develop new products. Ford Motor for example changed from bureaucratic to matrix type of organizational structure in which the company’s R&D can easily collaborate with its production, engineering and marketing departments on project basis (see “The Strategy and Structure of International Business”).


Technology also resulted to the creation of various knowledge and information vital to the organization. Knowledge within an organization can be classified as tacit and explicit. Tacit knowledge is the knowledge that can be converted into valuable products and is critical to innovation while explicit knowledge is easy to be communicated and can be represented by artifacts such as documents, files and videos (Marwick, 2001, p. 814). Basically, the most important knowledge for technologically dependent organizations is the tacit knowledge which they used in new product development and in the applications of technologies on their products or services.  Thus technologically dependent organizations give emphasis on knowledge work which pertains to “solving problems and accomplishing goals by gathering, organizing, analyzing, creating, and synthesizing information and expertise”, (Mack et al, 2001, p.925).

Technology therefore challenges organization to create and use knowledge in order for technology to be of best use to the organization. Although most organizations have the capability to create knowledge through their technologists, engineers and designers, managers are still facing the challenge of effectively managing the knowledge available for the organization, both tacit and explicit. Mack et al (2001, p.925) defined knowledge management as the methods and tools for organizing knowledge, information and expertise and making them accessible across the organization. Managers then should be able to formulate strategies that will integrate various knowledge and effectively align different areas or functions within the organizations. As noted, knowledge management is concern in organizing knowledge in order to solve a problem or achieve the objectives of an organizations. Therefore, effective knowledge management helps managers implement collaboration and better communication among the different functions of the organizations which is important making the organization adaptive to changes.


Based on the various research studies, technologically dependent organizations are prone to changes thus the managers of such organizations faced various challenges. Two of these challenges are the challenge of managing change and the challenge posed by knowledge management. These challenges cannot be considered as problems for technologically dependent organizations; in fact, they create opportunities for the organizations: the opportunity to continuously improve their business as technology develops, and the opportunity to apply technology provided that they have the available knowledge and capabilities. However, these challenges may turn into serious problems when managers did not give particular attention to these challenges. Because technologically dependent organizations relies so much on technology, they must be able to be adaptive to changes as technology changes and develops.



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Intel Technology Journal Volume 9 Issue 3, 175- 183

Mack, R., Ravin, Y. and Byrd, R.J. (2001) Knowledge Portals and the Emerging Digital Knowledge

Workplace, IBM Systems Journal Volume 40, No. 4, 925-955

Marwick, A.D. (2001) Knowledge Management Technology

IBM Systems Journal Volume 40 No.4, 814-830

Orlikowski, W. and Hofman, D. (1997) An Improvisational Model of Change Management: The Case

of Groupware Technologies, Sloan Management Review, Winter

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Date retrieved: March 13, 2007

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