Academic journal article Asian Social Science

The Role of Strategic Technology Alliances (STA) towards Organizational Performance in Manufacturing Industry: The Perspective of Developing Countries

Academic journal article Asian Social Science

The Role of Strategic Technology Alliances (STA) towards Organizational Performance in Manufacturing Industry: The Perspective of Developing Countries

Article excerpt

Abstract

Purpose: This research investigates strategic technology alliances (STA) in Malaysian manufacturing firms and the impact on organizational performance. The outcomes of this paper shed light on the underpinning theories under Resource Based View (RBV) and Organizational Learning (OL) as an antecedent for the successful implementation of strategic technology alliances in the manufacturing industry. At the end of the paper provides a model that describing the success factor of strategic technology alliances en route to improve organizational performance and remain competitive.

Design/methodology/Approach: Research conducted through survey design by collecting questionnaires from 335 Malaysian manufacturers. The empirical analysis performed by using structural equation modeling (SEM) to represent the findings as this statistical method is more robust compared to others.

Findings: The empirical analysis show that absorptive capacity, type of alliance and strategic technology alliance has positive relationship towards improving organizational performance in terms of market share, profit, sales level and manufacturing capabilities. However, in the other coin, resource base availability is insignificant towards organizational performance. Furthermore, technology transfer also only partially mediates STA and organizational performance. Despite the onset of successful alliance formation and resultant technology transfer, firms still need to invest in developing their resources, employee skills, production methods and industrial processes in order to sustain their competitiveness in the global economy.

Originality/value: Many organization embrace technology transfer as part of the strategic weapons to maintain business sustainability. However, there is lack of empirical evidence profiling the antecedent on how organization could success in becoming the developers of their own technology. Therefore, this research attempts to provide a model as guidance to managers in developing country as a key to success in forming technology alliances with foreign countries.

Keywords: strategic technology alliances, resource base view and organizational learning

1. Introduction

Technology is recognized as one of the most important factors for remaining competitive in the global business environment. The successful industrialization of many Asian economies (such as Korea and Taiwan) is attributed to their ability to exploit technological competencies. These countries have evolved from initially acquiring foreign technology to subsequently becoming developers of their own technology. The challenges of globalization and rapid technology change are especially faced by manufacturing organizations in developing countries, who are constantly pressured to examine their production strategies and capabilities (Hitt, 1998; Ireland & Hitt, 1999). As such, alliances are being considered increasingly as a measure for such firms in acquiring external technologies with reduced time, costs, and risks involved (Lei, 1993; Das & Teng, 1998).

More recently, the term 'strategic technology alliances' (STAs) (Colombo, Grilli, & Piva, 2006) has received much attention in the literature, where these types of partnerships involve research joint ventures, technology transfer, joint product development, technology sharing, and commercial agreements involving technology. The growing stream of literature on STAs (Hagedoorn & Sedaitis, 1998; Ju et al., 2005) also highlights how organizations can develop technological competencies and acquire external knowledge. Manufacturing organizations rely on STAs to import technologies that can maintain and enhance their performance. These firms usually form alliances to access complementary resources (Chung, Singh, & Lee, 2000; Hitt et al., 2000) and increase their competitiveness (Arya & Lin, 2007). Additionally, organizations from developing countries also exercise STAs to import foreign technologies given the dearth of indigenous capabilities to develop their own technologies (Jegathesan, Gunasekaran, & Muthaly, 1997; Jamali, 2004). …

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