Acquisition and assimilation of technology in the tractor industry in India: the strategic perspective
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Researchers in international transfer of technology have predominantly assumed the perspective of top management of multinational corporations or public policy makers in developing countries. The influence of the external as well as the internal environments on the technology acquisition and assimilation process has been studied by previous researchers. However, the processes through which top managers of firms manage the two environments while acquiring and assimilating technology has received less attention. This research was focused on the managerial processes involved in managing the interaction of the external and internal environments in relation to technology acquisition and assimilation in the specific context of the typical developing country like India. This study used the framework of corporate strategy, which links the external environment with the organization by utilizing the concept of matching of environmental opportunities and threats with organizational resources and capabilities. The research sites chosen were six major firms in the Indian tractor industry. The perspective assumed was that of the top management of those firms. The major findings are: 1. The government exercised a pervasive influence on the process of technology acquisition and assimilation in the tractor industry because of its importance to the economy. In spite of the constraints imposed by government, the firms were able to develop different product-market and technological strategies. When these strategies were uniquely related to the environment and the organizational resources and compecences, there was all round improvement in performance. The better the match between technological decisions, the firm’s environment and organizational resources and capabilities, easier and faster was the process of technology assimilation. A general conclusion arrived at was that several firms operating in the same environment could achieve overall success by developing strategies uniquely related to their environment, and resources and capabilities. Two dominant mode of the strategy development process were identified. They were both characterized by an adaptive response to environmental changes were termed. i)Formulatory-Adaptive, and ii) Evolutionary-Adaptive depending on the nature of the process. 2. The process of acquisition and assimilation of technology was viewed as the process by which firms attempt to relate technological decisions to their environment and resources and distinctive competences. This process was conceptualized as consisting of four interrelated sub-processes. i) Technology Acquisition, ii) Technology Adaptation, iii) Technology utilization, and iv)Technology development. These sub-processes were distinguished from each other by the differences in organizational characteristics, key managerial tasks and critical skills required to manage them. Some implications were examined for three likely audiences: i) researchers in management and international transfer of technology, ii) managers, and iii) public policy makers in developing countries. Data was collected in 1978 from six major tractor manufacturing firms, which comprised more than 80 per cent of the total sales turnover. Technological issues studies were: i) choice of product, ii) choice of foreign collaborator and mode of collaboration, iii) choice of plant size, iv) choice of plant location, v) choice of manufacturing technology, vi) choice of R&D activities, etc. Environmental factors like competition, Government regulations, technological capabilities of farmers, automotive ancillary, role of national laboratories, etc. were considered. Organizational characteristics like formal organizational structure, system of control and coordination, training mythology, philosophy of top management of the firms, and their resources and capabilities were studied in conjunction with the environmental factors. The clinical methodology used consisted of three phases: i)a pilot study of two major firms for a period of one and a half months approximately, ii) study of secondary data sources, and iii) a re-examination of the previous two organizations and study of four additional ones. Major data sources were in depth interviews of some 60 senior company executives for a total period of about 300 hours. In addition, detailed study of various company documents like detailed project reports, feasibility reports, organizational announcements, etc. was also done.
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