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An Analysis of the Strategic Management of Technology in the Context of the Organizational Life-Cycle

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An Analysis of the Strategic Management of Technology in the Context of the Organizational Life-Cycle An Analysis of the Strategic Management of Technology in the Context of the Organizational Life-Cycle by Steven W. Klosterman BSEE (1983), University of Cincinnati Submitted to the System Design and Management Program in partial fulfillment of the requirements for the degree of Master of Science in Engineering and Management at the Massachusetts Institute of Technology June 2000 C 2000 Steven W. Klosterman. All rights reserved. The author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic copies of this thesis document in whole or in part. Signature of Author --------- System Design and Management Program. June, 2000 Certified by Thomas Kochan George M. Bunker Professor of Management Thesis Supervisor Accepted by Thomas Kochan Co-Director, System Design and Management Program Sloan School of Management Acceptedby Paul A. Lagace Co-Director, System Design and Management Program Professor of Aeronautics and Astronautics MASSACHUSETTS INSTITUTE OF TECHNOLOGY EN JUN 1 4 2000 LIBRARIES I Acknowledgements I would like to thank the individuals and organizations that have helped me pursue this thesis and my MIT education: To the System Design and Management (SDM) program for providing the vision of flexible, distance learning as an enabler for mid-career engineers to study at one of the world's foremost centers of learning. To Tom Magnanti, Tom Kochan, Ed Crawley, John Williams, Margee Best, Anna Barkley, Leen Int'Veld, Dan Frey, Jon Griffith and Dennis Mahoney, I cannot sufficiently express my gratitude for being given the privilege of becoming a member of the MIT community. To my fellow students in the SDM program for providing the support, encouragement and help, I am honored to be associated with you. To Rick Maybury for being my impartial sounding board during the development of this thesis. Thanks for keeping me on the path! To my colleagues at Sun Microsystems who endured undue pain, hardship and suffering to enable me to attend MIT. To Steve Doherty, Wayne Bolivar, Alex Pappas, Jon Simon, Ken Weiss, Nicholas Laplaca and Heidi Peabody, I will be forever in your debt. To Marco Riera, Willis Hendley and Ed Debarros, thank you for the encouragement. To the other members of the Workgroup Server Division at Sun, thank you for accommodating the demands of my education without complaint. To Jonathan Propp, thank you for providing support and advice. Especially, I would like to thank Jeff Elsmore, my manager, for taking a gamble on me and letting me try. Thanks for taking the risk. I won't let you down! To my parents for teaching me the value of education Finally, and most importantly, I thank my family, Lynne, Steffi and Paul. Thank you for being patient. I promise to make up for lost time! -4- An Analysis of the Strategic Management of Technology in the Context of the Organizational Life-Cycle by Steven W. Klosterman Submitted to the System Design and Management Program on May 4, 2000 in partial fulfillment of the requirements for the degree of Master of Science in Engineering and Management Abstract High-technology, new-economy firms seem to operate under different rules than their old-economy counterparts. The fast pace of disruptive invention, rapid product development cycles, short product market life and intense, frequently unanticipated competition drive technology strategies. Organizational growth and tight labor markets for talented employees influence technology capacity and capabilities. Valuation and profitability measurements seem to violate long-standing financial trends. All these reinforce a perception that these firms represent a radical departure from the stoic, traditional organization. This thesis explores the product development and organizational history of a leading high technology firm, Sun Microsystems. Using a model based upon the organizational life cycle and principles of systems architecture, we capture the common and unique characteristics of how the firm is dealing with changing markets, technology, complexity and growth. The study tests the hypothesis that, while Sun competes in a fast-paced arena, many problems experienced during periods of rapid growth are, in fact, endemic to any organization under similar circumstances. As this hypothesis holds, we look at current technology and process initiatives in the company to assess whether they are appropriately addressing the right issues. Thesis Supervisor: Thomas Kochan, George M. Bunker Professor of Management -3- Acknowledgements I would like to thank the individuals and organizations that have helped me pursue this thesis and my MIT education: To the System Design and Management (SDM) program for providing the vision of flexible, distance learning as an enabler for mid-career engineers to study at one of the world's foremost centers of learning. To Tom Magnanti, Tom Kochan, Ed Crawley, John Williams, Margee Best, Anna Barkley, Leen Int'Veld, Dan Frey, Jon Griffith and Dennis Mahoney, I cannot sufficiently express my gratitude for being given the privilege of becoming a member of the MIT community. To my fellow students in the SDM program for providing the support, encouragement and help, I am honored to be associated with you. To Rick Maybury for being my impartial sounding board during the development of this thesis. Thanks for keeping me on the path! To my colleagues at Sun Microsystems who endured undue pain, hardship and suffering to enable me to attend MIT. To Steve Doherty, Wayne Bolivar, Alex Pappas, Jon Simon, Ken Weiss, Nicholas Laplaca and Heidi Peabody, I will be forever in your debt. To Marco Riera, Willis Hendley and Ed Debarros, thank you for the encouragement. To the other members of the Workgroup Server Division at Sun, thank you for accommodating the demands of my education without complaint. To Jonathan Propp, thank you for providing support and advice. Especially, I would like to thank Jeff Elsmore, my manager, for taking a gamble on me and letting me try. Thanks for taking the risk. I won't let you down! To my parents for teaching me the value of education Finally, and most importantly, I thank my family, Lynne, Steffi and Paul. Thank you for being patient. I promise to make up for lost time! -4- Table of Contents ABSTRA CT............................................................................................................................................ 3 ACK NOW LED G EM ENTS.................................................................................................................... 4 TABL E O F CO NTENTS ....................................................................................................................... 5 O BJECTIVE ............................................................................................................................--.. ....10 APPROACH................................................................................................................ ...... ------------.... 12 OVERVIEW OF A COMPUTER SYSTEM ................................................................................................... 12 ORGANIZATIONAL STUDIES ............................................................................................................... 12 CASE STUDY OF THE HISTORY OF TECHNOLOGY DEVELOPMENT AT SUN ............................................... 13 OVERVIEW OF CURRENT COMPANY INITIATIVES ................................................................................... 13 TESTS OF OUR HYPOTHESIS .............................................................................................................. 14 DATA USED IN TH IS TH ESIS........................................................................................................... 15 BACK GRO UND .................................................................................................................................. 16 BRIEF HISTORY OF SUN ................................................................................................................... 16 INFLUENCE OF TECHNOLOGY MIGRATION........................................................................................... 18 INFLUENCE OF COMPANY CULTURE ................................................................................................... 19 W ARNING SIGNS.............................................................................................................................---. 19 M OTIVATION FOR CHANGE.......................................................................................................... 20 CONSTRAINING THE STUDY ...................................................................................................... ...... 22 SY STEM S VIEW O F A COM PUTER ................................................................................................ 23 OVERVIEW OF A SYSTEM ..................................................................................................................... 24 W hat is a system ?.......................................................................................................................... 24 Requirements ................................................................................................................................ 25 Complexity.................................................................................................................................... 25 Decomposition accordingto goal, behavioraland structuralattributes ........................................ 26 -5- OVERVIEW OF A COMPUTER SYSTEM..................................................................................................
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