Overcoming the Technology Selection Dilemma - The Case of Fanuc Ltd.

         
Author Name SHIBATA Tomoatsu  (Professor, Graduate School of Management, Kagawa University) /KODAMA Fumio  (Faculty Fellow)
Creation Date/NO. December 2004 04-J-047
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Abstract

The issue of how companies can overcome barriers to switching from existing to new technologies is crucial from both practical and theoretical points of view. Generally, discarding successful existing technology and making the shift to new technology involves some very serious management decisions. Thus, companies often find themselves faced with a dilemma. Over the course of its 40-year-plus history, Fanuc Ltd. has managed to make two major technology shifts relating to numerical control equipment and has achieved continuous growth. This paper analyzes the ways in which the company succeeded in overcoming the technology selection dilemma and making two technology shifts, and extracts some common factors from its experiences. The results of that analysis clearly show the importance of recognizing the limitations of existing technology and the way the two switches were made by introducing parallel schemes for improving the existing technologies and developing new technologies simultaneously. In addition to examining the validity and rationality of such schemes, the paper discusses the possibility of a more fundamental logic to explain why existing companies fail when trying to switch to new technologies.