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The Linkage of Business Diversification and Corporate-level Technology Strategy the Case Study of Iran Khodro Corporation
Noori, Javad | 2013
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- Type of Document: Ph.D. Dissertation
- Language: Farsi
- Document No: 45818 (44)
- University: Sharif University of Technology
- Department: Management and Economics
- Advisor(s): Arasti, Mohammad Reza; Tidd, Joe
- Abstract:
- This research that examines bi-directional linkage between technology strategy and corporate strategy, addresses both of forward-path and backward-path linkages. In forward path, corporate strategy is the main and starting point and technology has a supporting role for firm’s corporate strategy. On this way, technology strategy is developed based on the corporate overall strategy. On the other way (backward-path), technology (or any other resource in general) is the driving force and basis for corporate strategy. In this way, overall strategy is developed and formulated based on technology strategy. So, this research and its achievements have reported and followed in two distinct parts according to these paths. In forward path, positioning and outside-in approach is proper approach and also more capable to cope with the issues of this path. This approach gives authenticity to the external environment and believes that firm’s decisions is affected mainly by environmental trends and events and firms should strive to acquire or strengthen their internal capabilities to respond appropriately to environmental challenges. According to this approach, technology strategy is developed in alignment with and in order to support overall strategy. This paper intends to answer two main questions in its forward path as these: “Which strategic decisions are made on technology at corporate level?” and “How technology strategy is formulated based on corporate overall strategy?” We responded to the first question by literature review, mainly qualitative investigation of existing theories with a persuasion and argumentative logic and in interaction between theory and field. Consequently we could cite two types of decisions for technology strategy at corporate level:
A.General technology strategy decisions including technology selection, acquisition and timing. But despite the similarities between titles, these decisions at the corporate level have different content from technology strategy at business level and functional level.
B.Specific technology strategy decisions at the corporate level including technology based business diversification strategy and horizontal technology strategy.
The second question of the research that is placed in forward path, deals with the process of corporate level technology strategy formulation in alignment with the corporate overall strategy. There are two main aspects in this regard: linking pins in both sides (technology strategy and overall strategy of corporate) and the linkage paths of these pins.
A.In first aspect we determined points and areas of two sides that link to each other. Practically, determining these pins means to determine components of technology strategy and components of corporate overall strategy.
B.Then, we determined how this linkage is formed. In other words, we determined that how, in what way and by what means these linkages are formed. Which of the items such as organizational structure, strategic plan, intermediate products and technologies, middle strategies, shared vision, managers and employees, organizational culture or procedures link these two areas to each other?
In contrast, backward path constitutes the complementary part of the research and investigates the alignment of corporate strategy with technology strategy. Because the main decision in corporate strategy is to determine business portfolio or diversification strategy, so the study’s main objectives are exploring the nature and dimensions of business diversification strategy and specifying the linkage between this strategy and technology strategy and different types of technological & non-technological capabilities. In this path we responded to this research question: “How business portfolio diversification occurs and which factors affect diversification?”
Based on this study, diversification process has two types:
1.Diversification which is based on common resources, linkages and in general every commonalities between existing businesses & new business; namely operational commonality, commonality in markets and common competencies & technologies among others.
2.Diversification which is based on corporate general resources, parent company’s resources and/or one of the existing businesses’ resources. Among them we can cite: competitive position, general and negotiation capabilities, properties and specifications of firm’s managers, brand & superiority in position and reputation.
According to this research, we conclude that all diversifications are formed based on some type of firm’s resources. This research also claims that it is possible to explain the reason and “why” of different diversifications by resource-based & dynamic capability views. Meanwhile, this study develops the concept of dynamic capability and helps better operationalization of this theory with proposing new concepts and frameworks. We have also examined applicability of suggested concepts and frameworks through analysing some real cases which describes and clarifies the story of diversification in Iran Khodro industrial group and TAM Company.
- Keywords:
- Diversification Strategy ; Theme Analysis ; Case Study ; Technology Strategy ; Contextual Factors ; Content Analysis ; Iran Khodro Industrial Group
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