Determining key capabilities in technology management using fuzzy analytic hierarchy process: A case study of Turkey
Introduction
Today’s markets are creating a new competitive environment which causes manufacturing firms to shift from industrial systems driven by hard-automation to post-industrial systems where success depends on quick response to customer requirements for customized, high quality products [6]. In the post-industrial environment; high quality, reliability, timely delivery, enhanced customer service, rapid new product introduction, flexible systems, and efficient capital deployment are the primary sources of competitive advantage.
Since technology is a major driver of global economic development, business professionals seek better ways to manage technology development. Burgelman et al. [3] emphasize that technology is a resource, which, when managed for competitive advantage, requires the integration with the firm’s strategy. Hayes and Pisano [7] argue that firms have to initiate a number of technologies to improve their competitive advantage. To be truly strategic, the challenge is to identify appropriate technology and formulate strategic plans that are consistent with their investment. When assessing the firms’ technological needs, managers need to consider their firms’ technological resource skills and competencies. However, managers do not necessarily possess all the skills required to develop a portfolio of technologies. As a result, this has translated into a critical need for people who are trained in managing different types of technological assets in varied commercial and non-commercial contexts.
The management of technology is a vital determinant of long-run success or failure of organizations. It allows organizations to enter new markets, renew existing product lines and keep up with rapid technological developments in the environment where they survive. Among all of the influences in an organization’s environment, technology management is the key factor that may provide long term competitive advantages which must be kept under control by a firm. For a recent survey on this topic we can refer to the paper by Liao [15].
In this work, we propose a framework to explore the links between competitive advantages, competitive priorities and competencies of a firm in the context of technology management. Understanding these links may help firms to identify appropriate technology and formulate their strategic plans accordingly. Technology management decisions require a special type of knowledge and expertise. We have used a fuzzy analytical hierarchy process (AHP) model as a tool of decision making to overcome the multi-criteria decision making issues regarding the technology management. Briefly, we investigate the effects of the following performance dimensions of the technology management:
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Competitive advantages: Sales growth rate, profit, return on investment;
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Competitive priorities: Cost, price, quality, flexibility (product range, changes in quantity) and, time (speed of design, production and distribution);
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Competencies: Product technology, process technology, and technology management.
In the next section, we formulate main research objective and define the competitive advantages, competitive priorities and competencies of a firm. We also discuss their relationships in the context of the technology management. In Section 3, we present the fuzzy AHP. In Section 4, we present the application of fuzzy AHP to the technology management.
Section snippets
Management of technology in a fuzzy group decision making environment
Besides the upcoming new technologies, the number of technologies that exist throughout a firm makes the management issues more complicated. In order to effectively manage the technology, one remedy is to diversify the technology. Hence, incorporating technological considerations in strategic decisions requires a balanced assessment of product, process and management technology. In this paper, we examine the perception of a group of 16 managers from different Turkish firms regarding the
Fuzzy AHP
Despite of its wide range of applications, the conventional AHP approach may not fully reflect a style of human thinking. One reason is that decision makers usually feel more confident to give interval judgments rather than expressing their judgments in the form of single numeric values. As a result, fuzzy AHP and its extensions are developed to solve alternative selection and justification problems. Although fuzzy AHP requires tedious computations, it is capable of capturing a human’s
Application of the fuzzy AHP to technology management
In order to perform a pairwise comparison among the parameters, a linguistic scale has been developed. Our scale is depicted in Fig. 3 and the corresponding explanations are provided in Table 2. Similar to the importance scale defined in Saaty’s classical AHP [18], we have used five main linguistic terms to compare the criteria: “equal importance”, “moderate importance”, “strong importance”, “very strong importance” and “demonstrated importance”. We have also considered their reciprocals:
Conclusion
In this paper, we propose a model that helps understand the links between competitive advantages (growth, profit and ROI), competitive priorities (cost, price, quality, flexibility and time) and competencies (product technology, process technology and management of technology) of a firm. The key competencies are compared using the fuzzy AHP based on the input from the group of 16 managers from different Turkish firms.
Investing in one technology (product or process technology) may result in a
Acknowledgements
The authors would like to thank the anonymous referees for their valuable suggestions and comments that have substantially improved the paper. We are also mostly grateful to Mr. Trevor H. Jones, lecturer, from the University of New Brunswick, and Dr. Tolga Bektaş, post-doc fellow, from the University of Montréal—Centre for Research on Transportation (CRT), for their contributions to the presentation of this paper. The second author acknowledges the grant of “TÜBİTAK-BAYG Yurt Dışı Doktora
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