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By Mel Horwitch

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Extra resources for Technology in the Modern Corporation. A Strategic Perspective

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In both cases, these efforts required significant departures from usual practice to succeed. Patterns of resource commitments at various stages in technology and product development, underlying technical bases, potential competitors, and likely critical success factors in the marketplace differed significantly between A's and B's traditional businesses and the new efforts. In both cases, however, it was clear that the new efforts would not be devoid of consequences in terms of technology, manufacturing and competitive dynamics to the existing businesses.

But since it can easily take five or 10 years to develop a new technology, this is often the best time to begin the move by shifting the focus of R&D. Managers intent on lowering break-even points and improving profits are normally inclined to build bigger plants and spread their overhead over more products. They segment markets to squeeze maximum profit out of customer groups. They work to reduce fixed and overhead costs. All these measures help to maximize profits. And increasing profits tend, in turn, to justify further investment — especially when decisions are based on accounting and financial criteria alone.

25. See Herbert H. Simon, Administrative Behavior (New York: The Free Press, 1945); and Michel Crozier, The Bureaucratic Phenomenon, op. cit. 34 Technology in the Modern Corporation 26. See William G. Ouchi, "Markets, Bureaucracies and Clans," Administrative Science Quarterly (March 1980); also see Rodney Clark, "Aspects of Japanese Commercial Innovation," Technical Change Center Working Paper no. TCCR-84-010. 27. K. Prahalad and Yves Doz, The Work of Top Management (New York: The Free Press, forthcoming, 1986).

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