In the Classroom: Technology Meets Strategy
While the functional disciplines of accounting, finance, organizational behavior and new product development all play a critical role in the success of a company, strategy is key, says Glenn Hoetker, associate professor of Business Administration. Hoetker teaches a new course with the Masters of Science in Technology Management Program (MS Tech) called Technology Strategy, which just concluded over summer 2007 semester. To his students, he offers this definition of strategy:
The art and science of combining a firm’s structure, resources and capabilities, and strategic positioning to gain a sustainable competitive advantage given the environment in which the firm operates.
Strategy asks how a firm uses its functional activities to develop and sustain competitive advantage, and takes on particular importance in the presence of technology change, said Hoetker. “Looking at the definition above, it becomes clear that technology affects almost every aspect of a firm’s successful strategy. It changes the nature of advantage, competition, the firm’s environment and the sustainability of advantage. It changes the resources the firm has at its disposal, the definition of the firm’s position and the structure of the firm.”
One of Hoetker’s favorite case studies he shares with students is Wal-Mart, which shows how a non-technical company is able to use technology to reshape itself and its competitive landscape to its advantage.
“Wal-Mart is a company you don’t necessarily think of as a high technology company, but that has really developed technology to its competitive advantage and thus extends its overall corporate strategy,” said Hoetker.
“The company has a very cohesive strategy and an IT system that masterminds everything. Wal-Mart’s scanners at the front counters are directly linked to its supplier and instruct what inventory or products and brands to send, how much, and where to ship. This in turn has helped increase its customer base, and has helped Wal-Mart on Wall Street.”
Hoetker emphasizes to his students that technology matters tremendously in every aspect of business, and that they need to be prepared to understand how technology affects a firm’s way of doing business, even if they end up on Wall Street.
“If you’re working in a non-technology sector, as an analyst for example, and you’re following Target, you may ask yourself ‘Are Target’s investments in IT are going to have the same affect on performance as Wal-Mart’s?’” This has little to do with technology itself, and more to do with Target’s overall corporate strategy, and whether that technology generates value in the context of that strategy.”
Hoetker brings a background of corporate experience and shares firsthand case studies with his students. In previous positions, he has helped U.S aerospace researchers gain access to leading-edge technology throughout the world as an international policy analyst, and performed research on Japanese technology and commerce for a number of Fortune 500 companies and the U.S. Government.
Most students have at least some professional experience in dealing with strategy before taking the class, and it allows for some animated class discussions centered around what has and hasn’t worked for them.
When it comes to forming corporate alliances as part of a company’s strategy, technology alliances are among the most tricky and there are more balls you have to keep in the air, said Hoetker.
“Technology alliances are usually centered on knowledge in some form or another, and are a much harder beast to manage than an alliance involving a brand name, equipment or materials.” He explains: “It’s typically easier to write a contract using a brand name, for example, as these are fairly straight forward. With technology, it’s harder to specify the desired outcomes of the alliance and how the parties will get there. The firms have to share enough knowledge to make the alliance succeed, without giving away their technological ‘crown jewels’.”
“The challenge is that contracts are not very good at managing this sort of knowledge exchange,” added Hoetker. “Most successful technology alliances combine contracts with activities to strengthen the relationship. It helps if you have taskforces and exchange personnel between the firms, helping to build communication and trust.”
Hoetker said one goal of the class is to allow students to put whatever work they are doing into the context of a company’s overall strategy.
“I hope what I teach will allow them to see how their work connects to their firm’s overall strategy. That multiplies the benefits of the functional training we’ve given them and prepares them to move up the corporate hierarchy.”
Professor Glenn Hoetker - Faculty Profile