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CA Foundation Exam June 2023 » CA Foundation Study Material » Business and Commercial Knowledge » Technological Environment
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Technological Environment

This article is about the latest emerging technology changing how we work, live, and learn. This article further highlights the technological environment and its importance in business.

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With advancements in technology comes the capacity to shape our technological environment. The technologies themselves must be understood to effectively direct them towards meeting a particular end while also disregarding unwanted effects which may accompany these ends. The role of information technology in the environment and human health has been widely studied. Still, there is relatively little written about the role of the societal environment in information technology’s effects on the human body. Further, the impact of technology on the environment and human health is not fully understood and requires further research.

What do you mean by Technological Environment?

The term “technological environment” refers to the particular physical and social conditions shaping technology development. It includes any society’s material, political, legal, and cultural aspects. Technological environments are also shaped by social factors into production. Such factors as social class, gender, age, culture, race, and ethnicity are taken into account when defining technological environments because they impact different groups’ access to technology in different ways that may not be apparent at first glance.

What is the impact of the technological environment on companies?

The technological environment is essential for developing a company’s products because the technological environment affects the type and speed of change that occurs in society. Generally, technological environments affect the progress of technology and its applications to society in two ways:

(1) by shaping social norms regarding acceptable use of technologies; and

(2) by changing what is technologically possible. While understanding how technology affects society is essential to understanding how companies operate, one must also consider how technology impacts a person’s daily life. It is not sufficient to understand how a piece of technology operates and whether or not one has the right to use it.

The technological environment in business:

The technological environment of a business influences the methods used to research and develop new products and the design and implementation of those products. The technological environment is essential in high-tech industries, where the technology may be created rapidly, but there is little or no standardisation. It is also essential to understand the significance of changes to a business’ technological environment when they occur. Changes in a technological environment may affect a company’s ability to generate revenues or may cause it to lose market share by making it difficult for some competitors to obtain critical components or services needed for their continued growth. Some of the technological environment examples are:

(1) Standardisation of technology or the lack thereof. Standardisation affects how quickly and efficiently a company can design and implement new components. For example, if a company uses proprietary software to run their manufacturing processes but there is no standard for that particular software, their ability to find alternatives may be limited.

(2) Changes in infrastructure, standards, and protocols. A company must consider the effects of changes made in a technological environment when they affect its business. A change such as the closure of a facility can have different effects on a company’s technological environment. For example, consider the case of an airline that operates from several airports. Suppose one airport closes and can no longer service aircraft. In that case, the company will either have to decide which airport to move its operations to or find another alternative. In either case, without a technological environment change, this business would continue with its original operational plan.

(3) Changes in regulations and standards related to information technology. Information technology standards can provide important clues regarding how technology will change over time.

Why is the Technological Environment Important?

Understanding the technological environment and how it influences your company is essential to its survival. The business’s technological environment provides cues regarding the potential for profits and the possibility of failure if you do not consider changes in society, infrastructure, and technological developments. A business must also consider changes that may affect its operational procedures or strategies. For example, consider a software company that designs software on personal computers. If a company with a large installed base of users develops new software that requires advanced graphics capabilities, this software will not run on every computer available.

Conclusion:

Information Technology is created in the technological environment applying to all aspects of society, including politics, law, economy, and culture. Understanding the societal environment is essential to managing information technology, such as planning network enhancements or selecting components and applications. The societal environment also impacts individuals differently depending on their social class, gender, age, and culture. Businesses are affected by changes in the technological environment in terms of regulation, infrastructure development, and so forth. Companies must be aware of changes to their technological environments because they can affect revenues and market share. Changes to a business’ technological environment provide cues regarding its ability to generate sales or cause it to lose out to competitors that can take advantage of these changes for their gain.

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