Question

Case Study Big Data Stewart Clegg Radically changing your business due to disruptive innovation requires a different approach. When dealing with disruptive innovation, the alignment and/or realignment of an organization’s assets might not be enough to sustain competitive advantage. When newcomers use the latest technology to disrupt an entire industry, the incumbents will need to take drastic measures to change their organization. The emergence of strategies driven by Big Data means a transition to a data-driven, information-centric organization consisting of capabilities that involve using and applying such data in every aspect of the organization, thereby changing long-standing ideas on management, value and expertise. Facebook and Google are the epitome of Big Data. One tells you what to know; the other connects you with who you want to know. They have very similar strategies based upon their command of huge sources of data about you and millions of other people. Facebook is investing heavily in artificial intelligence (AI) for ‘machine learning’ software that can do things like identify people in photos and determine which status updates and ads should be shown to each user. Facebook is also using AI-powered digital assistants and chatbot programs to interact with users via short messages. Facebook’s Messenger service can be used to do things such as ordering an Uber taxi. It invested heavily in Voice Recognition (VR) having bought Oculus for $2 billion in 2014 in anticipation of keyboardless computing and the future of virtual reality technologies. Since it was founded in 2004, Facebook has acquired 79 companies. These acquisitions are often not driven by a desire to buy the company’s products or customer base. Rather, they are ‘talent acquisitions’, designed to recruit the company’s employees. Google’s parent company Alphabet has acquired over 200 companies as it has sought to diversify its portfolio of tech products from a search engine to a suite of technology and social media services. Google is already at the forefront of the home voice assistant market, battling its Google Home device against Amazon’s Alexa and Apple’s Siri. Google is also using AI techniques to guide self-driving cars. Facebook and Google can attract the best researchers and most promising start-ups, given the vast resources they can command from their enormous profit stream. As The Economist (2016) says: Facebook lags behind Amazon, Apple, Google and Microsoft when it comes to voice-driven personal assistants; when it comes to chatbots, it faces competition from Microsoft and a host of startups eager to prove that bots are the new apps … Microsoft has jumped straight to AR [augmented reality] with its HoloLens headset, its most impressive product in years, and Google, already active in VR, has invested in Magic Leap, a little-known AR startup. These technologies are transforming how people interact with each other, with data and with their organizations and their environments. AI will create devices and services that anticipate your needs (Google’s Inbox app already suggests replies to your emails). Conversational interfaces will allow for keyless search and enquiry. Wearable devices, smart cars and goggles for virtual and augmented reality (VAR) are already here. The future of computing is likely to be AR interfaces mediated by AI, using gestures and speech for inputs with information easily projected within the organization, making possible new forms of communication, creativity and collaboration. It is not all a techies’ utopia, however. There are certain to be privacy and security concerns. Personalized services based on Big Data are highly panoptical, based on digital surveillance. Apple, for instance, placed the privacy of people’s personal data above the security of the nation state in a recent case of Californian terrorism (see Issa, 2016). Will consumers be happy to have everything about them that is codified used as personal details to sell them stuff or invade their privacy? Do we trust private sector monopolies to accrue even more information about us than the state? Intimately entwined in billions of peoples’ lives and making huge profits from their surveillance, can we trust these new behemoths of the digital age? Read The Economist lead article on ‘Facebook: Imperial ambitions’ (9 April 2016: 9) and answer the following questions.

Questions Why does Facebook or Google decide to develop capabilities internally (make) and/or acquire companies (buy) in artificial intelligence, virtual and augmented reality? Why do you think so many tech giants, such as Facebook and Google, choose to buy start-ups for the latest innovation rather than develop the capacities internally? What are some of the issues of cultural integration that might occur when large corporations such as Facebook or Google buy small start-ups?

Answer 1

Laege companies like Facebook and Google acquire hotcake startups rather than internal capabilities development because this helps them reduce turnaround time for market, inventory optimisation and capacities utilisation is leveraged, cost synergies and time for licensing amd approval is saved largely. These big comlanies develop capability internally but look for acquisition as startups are cheaply valued and have stronger expertise and highly qualified manpower needed for the job.

Certain issues for cultural integration arise due to differneces in leadership styles amd workings conditions, micromanagement and office politics, Bureaucracy and authority based rules, resistance to changes, etc are seen.