New system of organizing work based on new ideas in science, technology, and business
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Technology is a Greek word derived from the synthesis of two words: techne (meaning art) and logos (meaning logic or science). So loosely interpreted, technology means the art of logic or the art of scientific discipline. Formally, it has been defined by Everett M. Rogers as "a design for instrumental action that reduces the uncertainty in the cause-effect relationships involved in achieving a desired outcome". That is, technology encompasses both tangible products, such as the computer, and knowledge about processes and methods, such as the technology of mass production introduced by Henry Ford and others.
Another definition was put forth by J. Paap, as quoted by Michael Bigwood in Research-Technology Management. Paap defined technology as "the use of science-based knowledge to meet a need." Bigwood suggests this definition "perfectly describes the concept of technology as a bridge between science and new products." Technology draws heavily on scientific advances and the understanding gained through research and development. It then leverages this information to improve both the performance and overall usefulness of products, systems, and services.
In the context of a business, technology has a wide range of potential effects on management:
Reduced costs of operations. For example, Dell Computer Corporation used technology to lower manufacturing and administrative costs, enabling the company to sell computers cheaper than most other vendors.
New product and new market creation. For example, Sony Corporation pioneered the technology of miniaturization to create a whole new class of portable consumer electronics (such as radios, cassette tape recorders, and CD players).
Adaptation to changes in scale and format. In the early part of the twenty-first century, companies addressed how small devices such as cell phones, personal digital assistants (PDAs), and MP3 players could practically become, as well as how each product could support various features and functions. For example, cell phones began to support email, web browsing, text messaging, and even picture taking as well as phone calls.
Improved customer service. The sophisticated package-tracking system developed by Federal Express enables that company to locate a shipment while in transit and report its status to the customer. With the development of the World Wide Web, customers can find the location of their shipments without even talking to a Federal Express employee.
Reorganized administrative operations. For example, the banking industry has reduced the cost of serving its customers by using technologies such as automated teller machines, toll-free call centers, and the Web. As of early 2005, the cost of a bank transaction conducted by a human teller was approximately $2, compared to $1 for a telephone banking transaction, $.50-1.00 for an ATM transaction, and about ten cents for banking over the Internet. Automated Clearing House (ACH) or "checkless" check processing costs were $.25-.50 per transaction. This reduction in cost could be attributed primarily to reduction the amount of labor involved, which had a profound effect on employment and labor-management relations in banking.
Professor Michael Porter of Harvard Business School is one of many business analysts who believe that technology is one of the most significant forces affecting business competition. In his book Competitive Advantage (1985), Porter noted that technology has the potential to change the structure of existing industries and to create new industries. It is also a great equalizer, undermining the competitive advantages of market leaders and enabling new companies to take leadership away from existing firms. In a Grant Thorton LLP survey conducted during late 2004, 47 of 100 mid-size manufacturing businesses agreed that innovation had become increasingly import to the industry. As M.F. Wolff reported, corporate strategists were encouraging this by bringing product designers along on customer visits, offering rewards and recognition programs to employees with innovative ideas, including innovation as a priority in business strategies, setting revenue goals attributable to innovation, and looking for "willingness and ability to innovate" when making hiring decisions.
