Business Decision Making in technology management

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Business Decision Makingin technology management

• What is it and what does it depend on?

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Basis for Business

• Business decisions deal with two major inputs
• 1) facts the science part
• 2) judgment the art part
• Analysis depends on using both and most decisions
  involves both

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First things first

• Business decisions are based on
• Economic factors economics, business
• Behavior of people (Psychology, Sociology, )
• Analysis of data (Math Stats)
• The three are linked creating demand for the
  Apple iPhone based on number of people who
  own/like iPods, might replace Blackberry devices
  (motivation?) and major design improvement
  (what?)

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Technology

• It is no different than any other
  business/management field except that it deals
  with technology
• The business of technology (technology as a major
  input for your product, process or service) in
  business areas is impacted by the economics of
  the situation and the behavior of people and can
  be studied by analyzing numbers of users,
  competitors, etc.
• We look at theories, studies and cases.

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Economics

• Basically, we use inputs (capital, labor,
  resources including technology) to produce goods
  and services
• People make decisions about
• What they want? Bundles of goods/services
• How much they pay for it? Demand/supply
• Choices

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Major issues in economics

• People tend to maximize utility function (money
  is a major part but typically not only part)
• Utility is the idea that a person wants to
  maximize a goal (include money/income, leisure,
  quality of life, family, beliefs, etc..)
• This is an individual choice and can explain why
  different people make different decisions in the
  same situation
• Example diffusion of innovation.

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Markets

• The position a company occupies in market
  (leader, follower, major player, small start-up,
  etc..) affects their ability to influence the
  market and to compete with others
• analysis of market position
• Analysis of market size and type of customer
• Analysis of competition

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Customers

• Who are they?
• What do they want?
• Where are they?
• Where do they buy?
• When do they buy?
• Why do they buy?
• How do they buy?

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Competition

• Who are the competitors?
• What is their relative size and power (in terms
  of market share and resources)?
• What are their strengths and weaknesses?
• What is their target market?
• What is their strategy?

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Financial Position

• The financial position of a company is related to
  its market position but there are also industry
  issues (new industries have higher margins as an
  example)
• Companies with deep pockets (cash, high earnings,
  etc.) have better odds at taking calculated risks
  in new markets and competing with others

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Case analysis in this course

• Whenever possible (if information is available),
  examine market and financial issues of firms that
  we are analyzing
• This helps you in understanding their decisions
  regarding risks in new technologies

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Behavioral Science

• Psychology and Sociology of human interaction in
  business we focus on work related dynamics such
  as motivation, satisfaction, etc.
• Personality types
• Link to economics
• Link to decision making
• Example teams, innovative culture, etc.

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Psychology/Sociology of Work

• Companies like individuals have personalities
  (culture of the organization, motivation of
  leaders, leadership versus management in orgs,
  etc.)
• Analysis of company culture, past experiences,
  etc. helps us in understanding their decision
  making

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Case analysis in this course

• Whenever possible (if information is available),
  examine culture, past experience, leadership
  style of firms that we are analyzing
• This helps you in understanding their motivation
  and focus in dealing with change (such as new
  technologies, competition from others, etc..)

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Mathematics

• Collection, analysis of data and making decisions
• As is true in all situations data can be used to
  analyze situations and draw conclusions
• If data is not available, one has to make
  assumptions

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Case analysis in this course

• Whenever possible (if information is available),
  look at the data with a critical eye are there
  trends, can conclusions be reached using the data
  given (sales, new customers. financials or any
  other quantitative measures)
• This helps you in understanding their situation
  and why they are taking certain actions

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Technology in Business?

• Both in large and in small firms
• Both in global and in local firms
• Both traditional and revolutionary in approach
  and philosophy.
• Is motivated by many different purposes.

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What is the Purpose of Business?

• There are many possibilities
• Profit
• Shareholder value
• Customer value
• Market dominance
• Number of workers employed (jobs)

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Case Analysis
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Case Analysis

• Used to depict a real-life situation
• Not trying to show what is a good or bad activity
  but trying to describe situation in which
  companies find themselves
• Attempt to get us to
• Identify issues good and bad
• Suggest alternative directions
• Analyze situations pros and cons

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Case Analysis Reading the case

• Identify important facts of the case list these
• Markets, Industry and competitors effect on the
  company
• Financial information effect on company
• Data

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Issues presented by case

• What are the issues
• Is there a problem/weakness?
• Is there an opportunity for improvement/strength?
• What are the business and technology management
  principles/theories in question?
• Strength and weakness of the possible solutions
• Recommendation
• Note that there is no right or wrong solutions
  but the justification of your thinking is
  essential

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Case Analysis lessons learned

• What are the lessons learned from the case? Does
  it apply to all businesses or is it a special
  situation. These lessons typically emanate from
• Customers needs, market conditions, financial
  position
• Economic, behavioral or statistical issues
• Ideas and common sense