Dynamic Capability and Technology Evolution in the Iot Environment

Journal of Strategic Management Studies Vol. 10, No. 1, 53–63 (October 2018) doi: 10.24760/iasme.10.1_53

Dynamic Capability and Technology Evolution in the IoT Environment

JUN NAKAMURA Professor, Graduate School of Engineering, Shibaura Institute of Technology Abstract Markets change dramatically as technology improves. For example, the smartphone was originally launched as a communication device, not as a camera, but it is now possible to take high-quality pho- tographs with its embedded image sensor. Similarly, borders between industries have become increasingly vague. How can a company adapt to such dynamic circumstances using its own technology and resources? To achieve this adaptation, the author considers two approaches: the ﬁrst examines solutions that depend on the external environment such as the Internet of Things (IoT) and deregulation. The second inspects the activity level of the company. This paper introduces a ‘Technology Deploy- ment Map’ (TDM) that extracts the activity levels and concludes with a perspective on dynamic capability through applications of the map.

Keywords: dynamic capability, technology deployment map (TDM), semantic diagram, business strategy, transformation

INTRODUCTION 30 companies/organizations from seven countries, including Japanese corporations such as Toshiba, Approximately 20 years have passed since the Fujitsu, Sakura Internet and NTT Communications, emergence of the Internet in the early 1990s. Today, are participants (OpenFog Consortium Architecture technology development connecting various devices Working Group, 2017). is greatly improved and we are currently experienc- There is an enormous amount of information ing the Internet of Things (IoT) era. accessible in the IoT era. So why do we not pay attention to how human beings psychologically feel “Internet of things devices likely will be ubiqui- about the world with such abundant information tous soon—in the home, offices, grocery stores available? Simon (1997) claimed that the decision- and hospitals—with many applications designed making processes of human beings are not the out- to improve our quality of life and make the ser- come of data analysis. People make decisions even vices we use more efficient” (Pretz, 2018). when the amount of information is limited, and they pick the most satisfying of the available choices The IoT is the movement that digitalizes the (Simon, 1997). Research on artificial intelligence analog world to which people have adapted with (AI) considers that the decision-making processes experience and intuition (Morikawa, 2017). Next- of human beings is to exploit fully the vast amount generation technologies, looking ahead to IoT of available data and knowledge. To illustrate this, prevalence, include thin client of cloud comput- the Internet provides services such as information ing and fog computing, which takes place between search engines, customer relationship management the cloud and a device. The OpenFog Consortium, (CRM) and social networking services (SNS); ma- which promotes fog computing, was founded in No- chine learning has played an important role in these vember 2015 by Cisco, ARM, Dell, Intel, Microsoft advances. The prevalence and practical use of sen- and Princeton University. Currently, approximately sor technology will be crucial to realizing the IoT

(Ikeda, Shimazu, Odawara, & Sakata, 2016). By ies on dynamic capabilities and focuses on those connecting sophisticated and flexible technologies aspects that provide the ability to apply the original such as AI’s core technology of inference, the IoT, technology to the new market. Then, other previous Robotech, and personalization, community build- studies are used to construct the TDM, demonstrat- ing and other combined technologies will be used in ing the relationships between the original technology various activities and services in our day-to-day life. of a company and the products/services that actually Self-driving and medical systems are good examples entered the new market. The third section constructs (Aso & Motomura, 2018; Koehler, 2017). Moreover, a TDM, noting how it differs from previous studies. changes in product-design are evident. The auto- A case study applying the TDM to Panasonic, one mobile industry tries to lower the cost of testing as of the largest appliance companies in Japan, is then much as possible, and has developed a model-based discussed. The TDM helps to visualize how new development technology to accomplish this (Fritz- products/services in the new market make the most son, 2015). of the original technology and know-how. Finally, There are endless examples of technology ad- the authors conclude with an analysis of the dynamic vancement. But what matters most from the corpo- capabilities of Panasonic based on its TDM. rate management perspective is how the company can adapt to environmental changes and execute re- ENVIRONMENTTAL CHANGE AND distribution and rearrangement of available resourc- DYNAMIC CAPABILITIES es. To survive in this competitive and rapidly changing world, there must be continuous innovation. The As noted above, technological improvements are author believes that a company must now simultane- increasing competitiveness and driving the need for ously follow two avenues: a strategic approach with a business to rapidly adapt to environmental changes which a company identifies the market and kind of in technologies, markets and competition. Under business in which to compete, and a resource-based such circumstances, contingency theory (Nystrom view whereby the capability of a corporation adapts & Starbuck, 1981) is applicable to organization ad- to the changing environment. Additionally, the for- aptation. Treating an organization as a living system mer approach is not achieved until a new market has (Laloux, 2014) in the rapidly changing world uses been exploited and novel products or services have a maturity model of a company that varies with cir- been provided. However, the resources of a com- cumstance. pany are limited. Hence, there is often no choice but However, adapting to a new environment is not to collaborate or ally with the technologies of other so simple. Investments in the development of new companies when entering a new market. Brand new products without leveraging the strengths of a com- ideas that are totally different from current concepts pany may lead to debt. What enables a company to are essential when considering market strategies maintain an edge against competitors is its “core that leverage the company’s original technology and competence,” and not the products themselves (Pra- know-how. halad & Hamel, 1990, 1994). The author believes This paper explores one aspect of dynamic ca- that core competence derives from management pability on the premise that strategic and resource capabilities that integrate various technologies and theories can be combined in a dynamic environment production capacity and can rapidly adapt existing into a framework that allows a company’s original businesses to potential business opportunities. What technology to develop in a market. The author calls features characterize such management capabilities? this framework the “Technology Deployment Map” When a market and technology increasingly (TDM). This map reveals relationships between new develop, inevitably, a situation arises in which the products or services and the company’s own technol- technology of a company becomes insufficient. ogy; these relationships are essential to achieving Open-minded projects achieved by collaborating improved strategies. and allying with external factors can help (Ches- This article begins by reviewing previous stud- brough, 2003). For example, the automobile industry

54 Dynamic Capability and Technology Evolution in the IoT Environment is working on realizing a “linked-automotive soci- equate by itself. ety” to link their industry with other industries such Helfat et al. (2007: p. 4) more recently made the as networking, insurance, security, entertainment following definition: and road-assistance (Wada, 2018). Entering an open, collaborated, new field is “A dynamic capability is the capacity of an orga- easier said than done, and comes with major hurdles nization to purposefully create, extend or modify to overcome. Since reformation within a com- its resource base.” pany cannot be conducted overnight, organizational memory needs to be considered (Govindarajan & This means that among the definition of capa- Trimble, 2010). That provides warnings based on bilities noted above, the capability of reconfiguring the execution of grounded theory (Glaser, Barney, & resources would fit this definition. This idea is now Anselm, 1967; Eisenhardt, 1989; Eisenhardt & Me- widely accepted. Moreover, Helfat et al. (2007) lissa, 2003) and the noting of obstacles in practice. A claimed that dynamic capability is developed by warning, for example, means as having a bias for in- means of a process. There are three aspects to this siders such as familiarity, comfort and expedience in process: 1) sensing: realizing the environmental op- the field of operation. Expedience means that finding portunity and recognizing threats, 2) seizing: making the best person for the job can demand a great deal the most of the opportunity, and 3) reconfiguring: of personal networking, or it may require building executing a rearrangement of a company’s resources a good relationship with an executive research firm. (Teece, 2007). This process resembles that of creat- The existing human resources within a company are ing competing strategies. It also became apparent often needed to maintain existing businesses. Hence, that dynamic capability deploys on the condition not it is often difficult to conduct strategic personnel only of rearrangement of resources but also of links changes to make the most of an organization’s ca- with strategies. There is a possibility that positioning pabilities unless leadership among the executives is theory (Porter, 1985) and resource-based viewing demonstrated. In other words, clinging to the same (Barney, 1991) are integrated. resources is insufficient to transform previous tech- To examine that possibility, a new theory of Dy- nology into a new one and, what is more significant namic Capability (DC) was developed: is the ability to identify resources that can absorb the DC=+ DSC DRC, new knowledge. Just as a company manufacturing carburetors shifted to making electric fuel injec- where DSC is the Dynamic Strategy Capability that tors using the same functions of the vehicle engine, refers to the capability for rearranging strategies and dynamic capability is also not open innovation DRC is the Dynamic Resource Capability that refers (Chesbrough, 2003): it is the capability to transform to the capability for reconfiguring resources (Kawai, abilities. 2013b). Dynamic capabilities have been studied exten- FIGURE 1 is the improved model suggested sively. Teece, Pisano, and Shuen (1997) defined by the author that indicates the paths from product dynamic capabilities consisting of 1) reconfiguring planning to resource activities in the product de- resources, 2) realizing a superiority in terms of com- velopment process (Nakamura, 2014). This model petitiveness, and 3) adapting to rapidly changing en- is based on the layer-structure model of strategy vironment. Yet, in later deployments of dynamic ca- and resources (Kawai, 2012) and clearly shows the pability theory, there was the criticism that dynamic gradual steps of “transformation capability,” i.e., the capability can achieve superiority in competition but linking of requirement analysis to functions, func- it is not sustainable (Eisenhardt & Martin, 2000). tions to mechanisms, and mechanisms to structures. Eventually, the capability of reconfiguring resources This article is object-oriented and focuses on what when adapting to the environment became the components to deploy throughout the process where- dominant definition (Kawai, 2013a). Regardless, in the original technology of a company transforms resource-based theory is no longer considered ad- into an actual product/service. The purpose of this

55 Vol. 10, No. 1 (October 2018)

FIGURE 1 Analytical Framework Integrating Strategy and Resources from Product Planning to Product Development paper is to clarify how a company’s products can technology and the product/service. Individual be deployed into new, different products by using functions are systematized in terms of purposes the existing, core technology of the company. This and means, and these functions are then ordered. paper concludes by discussing capability that can be In the case of a product, its purpose depends on the dynamically deployed. Essentially, the hypothesis intended use. Nevertheless, there must be a means is that the capability for deployment into something to achieve a purpose, and if this purpose is replaced new is a feature of dynamic capability. with another, another means will be needed. In this way, purposes and means are connected continu- CONSTRUCTION OF THE ously. TECHNOLOGY DEPLOYMENT MAPO In the case of running a business in the IoT environment, which is the theme of this paper, this way This section constructs the framework indicating of thinking is appropriate. Simply put, when the core how the original technology that a company owns technology of a company is transformed to means, can be deployed into a product/service. The TRIZ the purpose of the technology will be functions. toolbox (Altshuller, 1999) provides a number of Then, if we consider those functions as means, they excellent ways to design customized product devel- would conﬁgure a product. Put differently, an origi- opment processes and relevant algorithms. Of the nal technology of a company should be one of the extensive TRIZ-related research, the Nested Func- factors used to construct a product/service, or one of tion Model (Nähler & Gronauer, 2016) is the most the modules. Technology can be reused as an asset relevant to this paper. However, the range of the and play a functional role. model is limited in function and cannot provide an The Strategic Technical Area (STA) model is overview of the product as a whole. In the IoT era, based on a matrix of technology and products. It due to rapid rate of change, it is essential to obtain is a useful model for examining whether technol- a broad yet complete picture of components rela- ogy and specialization widely apply to products. tive to the market, products and technology that can STA arranges products vertically, and technology be rapidly incorporated into an agreement with the horizontally (Mitchell, 1986). Nonetheless, as noted stakeholders. Otherwise, the changing external envi- previously, between technology and products, there ronment can affect the overview. must be functions or functional parts that consist of Value Engineering (Mukhopadhyaya, 2009) is various functions. Hence, this model is not adequate helpful when considering what is between the core to extract and examine the capability that allows the

56 Dynamic Capability and Technology Evolution in the IoT Environment

FIGURE 2 Schematic Diagram of the Technology Deployment Map (TDM) transformations required for new products or the too simple. The general idea of creating a purpose technology required to plan a new service. out of technology may be valid, but it is not neces- Sanno University (2004) suggested a “technology- sarily the technology that achieves the purpose/us- based product concept creation method” as a tech- age. Other components and a number of parts own- nology marketing approach for commercialization. ing certain functions may also be influential. In some There are four parts to this method: analyzing the cases, to complete the product planning or deploy- progress of product and technology, using S-curve- ment of a technology, it is essential to identify those based future prediction, technology configuration functions and elements that the company lacks and and technology usage creation. Of these four as- identify a “new usage” for the new product/service. pects, the ‘technology configuration method’ forces The TDM suggested in this paper is straightfor- idea creation by compulsorily combining both inter- ward (FIGURE 2) and is a framework that com- nal and external technologies to reach a new market, bines “technology configuration” with “technology product and technology. The “technology usage usage creation.” It can be readily customized to suit creation method” is similar to Value Engineering, any market, corporation and product. which creates value by pioneering a new field where The TDM enables rapid building of consensus the existing technology can step in and a new market among stakeholders. The more complex a figure, the where existing technology can develop further to more difficult it is to perceive the global picture and build a new market and update the technology. purpose. The structure of FIGURE 2 helps to obtain The author accepts the principles of the “tech- the big picture and perceive the whole structure, nology configuration” method, which is the idea from technology to components to products. of prioritizing a technology of a company and rearranging it. However, the author believes that CASE STUDY OF THE TECHNOLOGY more steps are needed before usage deployment. DEPLOYMENT MAP: PANASONIC For example, the former configuration experi- CORPORATION ment revealed that various product/service ideas evolved by applying the framework expressing The Panasonic TDM is used as a case study. In “technology→functions→purpose” into the product/ March 2018, Panasonic celebrated its 100th anni- service from different fields (Nakamura & Teramoto, versary and is now working on new business growth 2015a, 2015b). strategies. There are four internal companies within The latter ‘technology usage creation’ method is Panasonic: AP (Appliances), which is in charge

57 Vol. 10, No. 1 (October 2018) of development, manufacturing and sales of elec- infotainment systems, secondary cells, Pana home tronic appliances (e.g., flat televisions, refrigerators, and televisions. The infotainment systems and tele- washing machines, beauty products, microwaves, vision businesses account for approximately 30% of audios, video recorders, vacuums and rice cookers) Panasonic’s business. Vice President Ito noted that and air conditioning; ES (Eco-solutions), which is this is because the core audio and video technolo- in charge of development, manufacturing and sales gies developed for the television industry can also of lighting, cables, solar-power systems, interior be applied to infotainment systems. Mr. Ito noted building materials and air cleaners; CNS (Connected (Nikaido, Inoshita, Miyamoto, 2017: p. 35): Solutions), which develops, manufactures and sells equipment, and provides solutions for various fields “Our weapon is the technology of digital appli- including aviation, manufacturing, entertainment, ances such as televisions and cell phones. It is transportation and public services; and AIS (Auto- possible to make the most of technology that motive Industrial Systems), which is in charge of improved TV screen quality and apply it to a tech- development, manufacturing and sales of automotive nology that deletes snow captured in a blurry pic- businesses (infotainment-related products, electronic ture taken on a snowy day to clarify the picture.” devices for cars), energy businesses (primary and secondary cells) and industrial businesses (electronic So how was the technology used in the TV busi- devices, mechatronics/controlled devices, electronic ness developed into the automobile business? In materials, semiconductors, liquid-crystal panels and this case, not only the technology but also the indus- motors). It is evident that business has been conduct- trial standard mattered. FIGURE 3 is the visualized ed across a wide range of fields (Panasonic, 2017). TDM for the process. Panasonic is active in seven large business seg- This figure illustrates that many of the technolo- ments: air conditioners, lighting, housing systems, gies applied to image processing can also be used

FIGURE 3 Visualized Technology Deployment Map (TDM) for Panasonic Corporation

58 Dynamic Capability and Technology Evolution in the IoT Environment for in-vehicle displays. We watch televisions and television decks that are supposed to be immobile, in-vehicle displays; the only difference is “where” vehicles usually need a design technology with a we watch them. Just as in FIGURE 3, it helps to “moving” mechanism. But the focus here is the “in- visualize the co-relationships between two different vehicle system,” not the car body. Hence, Panasonic products, to build consensus and examine business is not responsible for the moving mechanism since strategies among stakeholders. Examining business the moving mechanism is not a Panasonic core tech- strategies includes identifying which market has po- nology. Paying attention to the “in-vehicle part” is tential as a white space, whether there are sufficient what the DSC does, and the capability for strategic market opportunities, what kind of company to ally management is the DRC, i.e., whether reconfiguring and work with, and which technology to use. And resources is applicable to an “in-vehicle” part. Ac- most importantly, in the new market, it is vital to cording to Kawai (2013b), the DSC offers the capac- identify whether it is possible for the strongest tech- ity to focus on “in-vehicle,” and the DRC the capac- nology of a company to be configured as a core part. ity of reconfiguring strategic resources of television Needless to say, the greatest and most obvious dif- to those applicable to in-vehicle. ference between televisions and in-vehicle screens is A similar trend can be seen in cameras regarding the required safety level. A higher level of security is image processing. Nikon is developing its camera required for in-vehicle displays, and they must pass business. The size of the camera market (FIG- other requirements such as compliance with the ISO URE 4) is shrinking dramatically since peaking in 26262 standard. Moreover, functions dealing with 2010 (CIPA, 2018). The surrounding market is no heating and vibration should be realized by an open longer dynamic, and is turbulent. The graphs show innovation (Chesbrough, 2003); these are far less that the start of the decline coincided with the avail- important for televisions. ability of smartphones with camera functions. That Despite these differences, signal-processing tech- could have been the time when slight differences in nology that enables televisions to display images business strategies would have had a great effect. is similar to the technology required for in-vehicle Just as Panasonic started leveraging technology in systems. Therefore, it is important, first, to identify the camera and television industries to in-vehicle commonalities. Transferring technology to another displays, technologies in the camera market could field that is different but similar to the original field, have been used in other fields. Had some renova- and moreover, putting functional component in place tions been made, such as those related to internal (DSC), is crucial (as indicated by the dotted lines resources (transposition of technology, organization in FIGURE 3). Additionally, unlike televisions or reformation, personnel changes), Nikon could be

FIGURE 4 Camera (Film and Digital) and Interchangeable Lens Market Trends

59 Vol. 10, No. 1 (October 2018)

Left Side: Panasonic. Right side: Nikon. The Size of the Companies is Clearly Evident from the Scales of the axes. The Figure Visualizes the Dynamic Trend in Profitability. FIGURE 5 Operating Profit (y-axis) as a Function of Turnover (x-axis) what Panasonic is today. However, Nikon appears to ing business tends to keep excellent human resourc- have remained focused on cameras, perhaps obliged es in a department around him/her when reorganiz- to do so, since the management resources are more ing teams internally. That means that innovations limited than those available at Panasonic. There may require the capability of persuading managers when have been strategies that were not sufficiently flex- business strategies for the new market are planned. ible to accommodate the limited resources and apply This might be challenging for some people, especial- the existing crucial technology, the know-how of op- ly managers who do not want to lose particular staff tical configurations, to a new market. Put differently, members, yet the capability required for forming Nikon stuck to the camera market as its DSC, and new teams and conducting innovation is definitely has invested its management resources in camera one of the key elements of dynamic capability. technology as its DRC. Nikon's strength, however, is FIGURE 5 contrasts the diversified management its optical design though where the company focuses at Panasonic with the management at Nikon. The on the development of Semiconductor Lithography left side of the figure corresponds to Panasonic and Systems which use a screening system with lenses. the right side to Nikon. The declining Nikon sales Another strength is high-precision measurement coincided with the declining size of the camera mar- technology, which leads to a position detection sys- ket, which indicates that their entire sales depended tem and this technology is applied to the sensing on cameras themselves. Its product lineup had been field including as a three-dimensional image mea- primarily cameras and, as the size of the market di- surement and a three-dimensional scanner. Examples minished, its sales declined. In contrast, Panasonic above show that while Panasonic focuses on a prod- began reshaping the internal company (from the uct innovation in the B2B market, Nikon focuses on CNS company into the AVC Networks Company) to a process innovation in the B2B market such as the specialize in audio sound and visuals. In particular, sensing field required in the manufacturing process. its B2C products were transferred to the AP Com- In other words, when describing both Panasonic pany and engineers at the AVC Company were also and Nikon on the same the TDM, out of the whole transferred to other companies, including the AIS process of core technology, function, parts, and pro- Company. Personnel changes and transformation ductions, it turns out that Nikon considers that core of the technology were conducted simultaneously, technology and function (or functional part) as main and this profound shift now supports the current in- fields of business strategies. vehicle business owned by the company. In their observations of a company that was about to carry out certain innovations based on grounded CONCLUDING REMARKS therory, Eisenhardt (1989) and Eisenhardt & Melissa (2003) reported that a business manager of an exist- This paper developed TDM, which focuses on us-

60 Dynamic Capability and Technology Evolution in the IoT Environment ing the components of a specific item to capture one human beings have the capability of predicting the perspective of dynamic capability in the IoT era. The future based on past data. This capability leverages TDM builds on former processes and frameworks the “senses” and has nothing to do with the IoT era; that simultaneously connect strategy with organiza- among the activities between strategy and resources tion. in FIGURE 1, that capability could be the most sig- It is inevitable that the elements of TDM vary nificant factor for identifying human resources and depending on the application. Also, perspectives can performing assignments effectively. change depending on how much technology can be explained or from what industry they derive. The REFERENCES interpretation of words can vary from person to person, and the same word can have different meanings Altshuller, G. (1999). The innovation algorithm. depending on the different senses, knowledge and TRIZ, systematic innovation and technical cre- experiences of different individuals (Kitagawa, Nai- ativity. Technical Innovation Center, Inc. to, & Terada, 2012). This is also true when discuss- Aso, H. & Motomura, Y. (2018). Next generation AI ing technology. Once the constituting elements have technology based on big data in the real-world. been divided into parts and visualized, decisions Journal of the Japanese Society for Artificial must be made such as which components should be Intelligence, 33(2), 132–139. combined, how to deal with manufacturing, and how Barney, G. G., & Anselm, L. S. (1967). The discov- to systemize the delivery of quality. ery of grounded theory: Strategies for qualita- Furthermore, how should one choose an external tive research. Aldine Publishing Company. technology, functional components and hard/soft Barney, J. (1991). Firm resources and sustained products? Iyengar (2010: p. 191) states: competitive advantage. Journal of Manage- ment, 17(1), 99–120. “Expertise enables people to understand options Chesbrough, H. (2003). Open innovation, The new on a more granular level, as the sum of their char- imperative for creating and profiting from tech- acteristics rather than as distinct and individual nology. Harvard Business School Press. items. … This additional level of detail lets people CIPA (Camera & Imaging Produces Association). sidestep their cognitive limitations on informa- (2018). Statistical results & outlook. CIPA, Re- tion processing in several ways, resulting in sig- search & Statistics Working Group. nificant benefits for the amount of choice they can Eisenhardt, K. M. (1989). Building theories from handle.” case study research. Academy of Management Review, 14(4), 532–550. Dynamic capability is the capability to decide Eisenhardt, K. M. & Martin, J. A. (2000). Dynamic which market to pioneer as a new settlement (discus- capabilities: What are they? Strategic Manage- sions on strategies) and how to redistribute management Journal, 21(10–11), 1105–1121. ment resources to transform the original technology Eisenhardt, K. M. & Melissa, E. G. (2003). Theory owned by that company (theory of organizations). building from cases: Opportunities and chal- The former and latter capabilities should be linked. lenges. Academy of Management Journal, In a turbulent environment, there is no need to 50(1), 25–32. state that employees should have the expertise to Fritzson, P. (2015). Principles of object-oriented identify which part of the original technology should modeling and simulation with MODELICA 3.3, be developed. It is crucial to locate human resources A cyber-physical approach. (2nd ed.). IEEE who have know-how and flexibility, and headhunt PRESS. those talented people. At the beginning of this paper, Govindarajan, V. & Trimble, C. (2010). The other the author reported that, “The IoT is the movement side of Innovation: Solving the execution chal- that digitalizes the analog world to which people lenge. Harvard Business Review Press. have adapted with experience and intuition.” Yet Helfat, C. E., Finkelstein, S., Mitchell, W., Peteraf,

61 Vol. 10, No. 1 (October 2018)

M. A., Singh, H., Teece, D. J., & Winter, S. G. ing certiﬁcation. SAGE Publications Pvt. Ltd. (2007). Dynamic capabilities: Understanding Nähler, H. T. & Gronauer, B. (2016). Using en- strategic change in organizations. Blackwell hanced nested function fodels for strategic Publishing. product development. In L., Chechurin (Ed.). Ikeda, Y., Shimazu, S., Odawara, K., & Sakata, R. Research and practice on the theory of inven- (2016). Shoki wa sensor ni ari [A chance to win tive problem solving (TRIZ) (pp. 39–75). is in sensor]. Nikkei Bijinesu [Nikkei Business], Springer. 24–43. Nakamura, J. (2014). Ru-tin katudou niokeru dain- Iyengar, S. (2010). The Art of Choosing. Twelve, amizumu: Senryaku purosesu nouryoku no Hachette Book Group. ninchi [Dynamism on routine activities: Rec- Kawai, T. (2004). Dainamikku senryaku-ron [Dy- ognition of capability in strategy processes]. namic theory of strategy]. Tokyo, Japan: Senryaku Keiei Journal [Journal of Strategic Yuhikaku. Management], 3(1), 47–73. Kawai, T. (2012). Dainamikku kyousou-senryaku- Nakamura, J. & Teramoto, M. (2015a). Exploring ron nyumon [Introduction to dynamic theory of capabilities in concept design: merging data competitive strategy]. Tokyo, Japan: Yuhikaku. with awareness. Proceedings of workshop at Kawai, T. (2013a). An Introduction to the Special International Joint Conference on Artiﬁcial In- Issue on Strategic Management and Dynamic telligence (IJCAI). Capabilities. Journal of Strategic Management Nakamura, J. & Teramoto, M. (2015b). Concept de- Studies, 5(1, 2), 1–10. sign for creating essential hypothesis, rules, and Kawai, T. (2013b). A new framework of dynamic ca- goals: Toward a data marketplace. Open Jour- pabilities including dynamic strategies—With nal of Information Systems (OJIS), 2, 15–25. an illustration of the Flat-Panel TV Wars. Jour- Nikaido, R., Inoshita, K., & Miyamoto, N. (2017). nal of Strategic Management Studies, 5(1, 2), Panasonic 100nenme no siren [Panasonic’s 11–30. challenge on 100th year]. Shukan Toyo Keizai Kitagawa, K., Naito, T., & Terada, K. (2012). Poly- [Weekly Toyo Keizai], Dec.16, 2017. semy of light in text description of building. Nystrom, P. C. & Starbuck, W. H. (1981). Handbook transactions of AIJ. Journal of Architecture. of organization design: Volume 1 Adapting Planning and Environmental Engineering, organizations to their environments. Oxford 77(680), 2345–2353. University Press. Koehler, C. (2017). Bosch private eCall—A global OpenFog Consortium Architecture Working Group. approach for borderless service. Journal of (2017). OpenFog reference architecture for fog the Society of Automotive Engineers of Japan, computing. OpenFog Consortium. 71(12), 31–35. Pretz, K. (2018). Standard to boost quality of life of Laloux, F. (2014). Reinventing organizations: A IoT Devices. The Institute, 42(1), 15. guide to creating organizations inspired by the Panasonic. (2017). Annual report. Panasonic Corpo- next stage of human consciousness. Nelson ration. Parker. Porter, M. E. (1985). Competitive advantage. The Mitchell, G. (1986). New approaches for the strate- Free Press. gic management of technology. In M. Horwich Prahalad, C. K. & Hamel, G. (1990). The core com- (Ed.). Technology and the modern corporation: petencies of the corporation. Harvard Business A Strategic perspective. Pergamon. Review. Morikawa, H. (2017). IoT digital transformation. Prahalad, C. K. & Hamel, G. (1994). Competing for Journal of the Society of Automotive Engineers the future. Harvard Business School Press. of Japan, 71(5), 12–17. Sanno University, Technology marketing research Mukhopadhyaya, A. K. (2009). Value engineering project. 2004. Technology marketing. Sanno In- mastermind: From concept to value engineer- stitute of Management Publication Dept.

62 Dynamic Capability and Technology Evolution in the IoT Environment

Simon, H. A. 1997. Administrative behavior—a study of decision making processes in adminis- Jun Nakamura is a Professor of Graduate trative organizations (4th ed.). The Free Press. School of Engineering Management at Shibau- Teece, D. J. (2007). Explicating dynamic capa- ra Institute of Technology, and a board member bilities: The nature and microfoundations of of Persol AVC Technology Co., Ltd., which is (sustainable) enterprise performance. Strategic an engineering company to develop Audio & Management Journal, 28(13), 1319–1350. Video devices. He graduated from the Univer- Teece, D. J., Pisano, G., & Shuen, A. (1997). sity of Tokyo, Graduate School of Engineering, Dynamic capabilities and strategic manage- Department of Technology Management for In- ment. Strategic Management Journal, 18(7), novation with highest honors. The areas of his 509–553. research are innovation management and cogni- Wada, K. (2018). Towards the creation of new val- tive science. ues emerging from realization of connected E-mail: [email protected] vehicle society. Journal of the Society of Auto- motive Engineers of Japan, 72(5), 4–9.