(Related to the Apply the Concept on page 374) Segment.com reorganized its office as part of its "antidistraction campaign." According to an article in the Wall Street Journal, the company cut back on its internal text messaging service and moved "some of its communication back to email to reduce the number of notifications employees were receiving." a. Is it possible that this movement from a new technology-text messaging-to an older technologye-mail-represented positive technological change at Segment? Briefly explain. b. Suppose that competition for software engineers results in Segment.com having to pay them higher salaries. Would the fact that the firm will now face an increased cost of providing its services be an example of negative technological change? Briefly explain.

Step by step solution

01

Understanding Positive Technological Change

Technological change is positive when it increases the overall level of productivity within the company. This occurs when the company is able to deliver more output using the same amount of input. The question here is whether shifting communication back to email from text messaging is improving productivity.

02

Analysing the Shift from Text Messaging to Email

While email is an older technology compared to text messaging, if the change was made because it reduces interruptions and increases overall productivity, it can be considered a positive technological change. It would be a positive change if, for instance, employees were wasting time with unnecessary notifications from text messaging and this change streamlined their communication and made them more efficient.

03

Understanding Negative Technological Change

Negative technological change is when productivity decreases within a company. This can happen when more resources or input is needed to achieve the same amount of output.

04

Analysing the Impact of Higher Salaries for Software Engineers

Suppose Segment.com has to pay higher salaries because of competition, it would increase the company's costs of operation. This increased input (i.e. salaries) is not directly related to technology’s impact on production or productivity. So, it is not an example of negative technological change, it is just a rise in costs.

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