Technology transfer as technological learning: a source of competitive advantage for rms with limited R&D resources

Bou-Wen Lin
Institute of Technology Management, National Tsing Hua University, 101, Sec. 2, Kuan-Fu Rd., Hsinchu, 30013, Taiwan. bwlin@mx.nthu.edu.tw

The objective of this article is to answer why and how rms in developing countries with limited R&D resources can gain sustainable competitive advantage through technology transfer (TT). Successful rms are those that can accumulate competence through internal technological learning after transferring technologies from external technology sources. Organizational intelligence, rm specicity of technology, and causal ambiguity are identied as three mediators between technological learning performance and several antecedents previously discussed in the literature. A survey of Taiwanese manufacturers is conducted to explore the technological learning phenomenon as an integral part of TT, which is important but often neglected. This article also provides an interesting research setting for the evaluation of technological learning theories.

1. Introduction

he resource-based view of the rm postulates that valuable resources are difcult to imitate or transfer and thus transferable resources or technologies themselves cannot be a source of a rms competitive advantage (Barney, 1991). Yet we observed that many manufacturing rms in newly industrialized countries with limited R&D resources could still compete successfully internationally. Those manufacturers usually depend on technologies transferred from partners in developed countries. The bad news is that the transferred technologies are also accessible to other competing rms worldwide. To gain sustainable competitive advantage, those rms must facilitate technological learning and accumulate rm-specic competence based upon the transferred technologies so that their competitors

cannot be easily imitated. It is certainly intriguing that the transferee could greatly enhance its technological capability within a short time period through an effective communication process with the technology provider. The TT literature is thus dominated by research on the interaction and communication processes between transferor and transferee (e.g., Gibson and Smilor, 1991; Lin, 1998). Little attention has been paid to how the transferred technology is assimilated and adapted by the transferee and how the technology evolves to be the core competence of the transferee and eventually becomes a competitive weapon. This article addresses how a transferee can assimilate external technology through a technological learning process. Successful transferees are those that can integrate transferred technologies into their existing knowledge bases and innovate in the 327

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Bou-Wen Lin subsequent technological learning stage. Performance of subsequent technological learning is the key and the ultimate judge of the performance of technology sourcing efforts. This article also provides a research opportunity of measuring organizational learning performance, which had hindered the empirical efforts in organizational learning research (Gallagher and Fellenz, 1999). On the other hand, a knowledge-based view (e.g., Kessler et al., 2000) suggests that tacit knowledge is not easily replicable and transferable (Mowery and Rosenberg, 1989). The inherent immobility or stickiness of the valuable resource demands insurmountable time and costs to transfer. The two schools of thought represent two extreme ends of a continuum of technology transferability. A technology consists of both parts. One portion of a technology can be readily transferred and the other portion of it cannot. Valuable technological knowledge is never easily transferred from one rm to another. A time-consuming technological learning process is needed to assimilate and internalized the transferred technology. Technological learning performance depends on both the rms capabilities to learn new knowledge and the nature of the technological knowledge. The former is associated with the intelligence of a rm that is characterized by organizational variables. The latter is associated with the extent to which the technological knowledge can be learned by the rm. Firm specicity (e.g., Williamson, 1985) and causal ambiguity (e.g., Simonin, 1999) are the two widely recognized concepts in the literature to characterize the transferability of a technology. The resource-base view of the rm stresses the importance of internal resources for sustainable competitive advantage. This view posits that rms compete on the basis of unique resources that are valuable, rare, difcult to imitate, and nonsubstitutable by other resources (e.g., Barney, 1991). Resource-based theorists (e.g., Prahalad and Hamel, 1990) broadly dene resources to include physical assets, knowledge, technology, organizational capabilities, and operations procedures. Inimitability is central to understanding the sustainability of competitive advantage (Spender and Grant, 1996). There are two types of barriers to imitation that sustain rms competitive advantage. First is rm specic assets or resources that were developed due to history-dependent factors (Barney, 1991), such as a rst mover in a market with time compression diseconomies (Dierickx and Cool, 1989) or socially complex resources, such as trust and organizational cultural and routines (Barney, 1991). Second is causal ambiguity, which is one of the key concepts that construct the resource base theory of the rm (Barney, 1991). Lippman and Rumelt (1982: 420) suggest that causal ambiguity (i.e., the ambiguity regarding the nature of causal relations between actions and outcomes) acts as a powerful on both imitation and factor mobility. The resource-based
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2. Technology transferability
Some scholars (e.g., Mowery and Rosenberg, 1998) suggest that technology/knowledge is the dominant feature of the world today. Burgelman et al. (1996) dene technology as the theoretical and practical knowledge, skills, and artifacts that can be used to develop products and services as well as their production and delivery systems. (p. 2) Technology is embodied in people, materials, cognitive and physical processes, facilities, machines, and tools. Unfortunately, the capability of developing technologies is not homogeneously distributed among rms around the world. TT therefore lies at the heart of the process of economic growth, and that the progress of both developed and developing countries depends on the extent and efciency of TT (Manseld et al., 1982). Baranson (1970) also claims that multinational production and interchange intensies the need for TT as a contributor to efciencies in resources utilization. High-tech manufacturers in newly industrialized countries such as China, Taiwan, and Korea have limited R&D capabilities and depend on TT as an important route to gain access to advanced technologies. Kogut and Zander (1993) even claim that TT is at the center of issues about growth of rms, domestically and internationally.

A. Two schools of thought

There are two schools of thought about the transferability of technology. On the one hand, economic theories often take technology as given that is embodied in products or processes. Such technology resembles blueprints, machines, or materials, which is easily available. For example, Solows growth model (1957) sees technology as information and techniques that are easily replicated and transferred. Contractor (1991) argues that in recent decades, the transferability of technology has increased, as recipients of technology become more sophisticated, requiring less training and start-up assistance than before. 328
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Technology transfer as technological learning view also poses a question: how can some technology recipients outperform other technology adopters even the original technology donors? If the technology is critical resources for competitive advantage, how can it be transferred? One possible answer is that the recipients can enhance their technological capabilities through technological learning after TT, a topic not yet explicitly addressed in the literature. It is interesting to investigate how technology transferees can learn and assimilate external technological knowledge into an integral part of their competitive advantages (Olayan, 1999). nizations. A conceptual model for technological learning performance is proposed as shown in Figure 1. Variables in the model are classied into three categories: the independent variables, mediating variables, and dependent variables (e.g., Lee and Kim, 1999). Organizational intelligence, rm specicity, and causal ambiguity and are treated as three mediators between technological learning performance (the dependent variable) and several antecedent variables. This model differs from previous studies in the literature in that it distinguishes the antecedents and the mediators. Antecedents impact on technological learning performance indirectly through those three moderators. Causal ambiguity (e.g., Reed and DeFillippi, 1990) is a well-established construct, which is independent of the rm to characterize the technological knowledge. The model neglects the antecedents to causal ambiguity since the antecedents of causal ambiguity have been extensively studied (e.g., Simonin, 1999). Technological learning performance is determined by the capability of an organization to learn, that is, organizational intelligence (Glynn, 1996) and the characteristics of technological knowledge (i.e., causal ambiguity and rm specicity). Organizational intelligence is a construct developed to measure the capacity of an organization to create and apply knowledge. The construct, rm specicity, is drawn from transaction cost theory (i.e., Williamson, 1985). Technological knowledge can be rm specic in that it can be very specialized to the rms organizational settings. Firm specic technological knowledge can be valuable to the rms competitive advantages, difcult to transfer, and timeconsuming to develop. Causal ambiguity (e.g., Lippman and Rumelt, 1982) refers to the extent to which a technology is difcult to be explicitly articulated because the relations between actions and results are ambiguous. Technologies that are difcult to be articulated and codied cannot be efciently communicated, accumulated or assimilated within an organization.

B. Technological capability and organizational learning

Kessler et al. (2000) distinguish two types of organization learning process in the context of technology management: internal learning and external learning. As Simon (1991) suggests, the internal learning process starts with the creation and utilization of technology by individuals. The external learning process, on the other hand, starts with the identication of knowledge created outside the organization. Although tradeoffs are involved in the internal and external learning process (Bierly and Chakrabarti, 1996), both internal and external learning constitutes an integrated whole of an organizational learning process. TT is a technological learning process involving internal and external learning. The locus of technological learning in TT research has shifted from external learning to internal learning. Evidence suggests that rms learn from their previous experience when gradually expanding into culture space, and that centrifugal expansion patterns are more successful than a random strategy (Barkema et al., 1996). Cusumano and Elenkov (1994) report that technology capability, including through international TT, comes from establishing appropriate organizational routines, accumulating specialized industrial skills, and acquiring the ability to learn selectively. Steensma (1996) further argues that in contemplating a collaborative technology acquisition, a rm needs to both access the characteristics of the incoming technology and establish goals in regard to the desired competency development.

A. Organizational intelligence
A learning organization refers to an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reect new knowledge, and insights (Hall, 1995). The technology transfer literature suggests that tacit knowledge is not easy for an organization to
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3. Theoretical model and hypotheses

This study focuses on the technological learning after transferring technology from external orgar Blackwell Publishing Ltd 2003

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Bou-Wen Lin assimilate in a short period of time. Glynn (1996: 1088) denes organizational intelligence as an organizations capability to process, interpret, encode, manipulate, and access information in a purposeful, goal-directed manner, so it can increase its adaptive potential in the environment in which it operates. Therefore, an organization with a high level of organizational intelligence is a learning organization that can learn correctly, accurately, and appropriately from its experience. A rms distinctive competence is a set of differentiated technological skills, complementary assets, and organizational routines and capacities used to create sustainable competitive advantage (Burgelman et al., 1996: p. 34). Grant (1991) characterizes a hierarchy of organizational capabilities that specialized capabilities are integrated into functional capabilities such as marketing, manufacturing, R&D, and IT capabilities. Technological learning capability is in line with the term competence, which has been described differently by a number of scholars. Prahalad and Hamel (1990) downplay physical assets and dene core competence as the collective learning in the organization which creates the ability to consolidate corporate-wide technologies and production skills into competencies that empower individual businesses to adapt quickly to changing opportunities. Organizational intelligence can thus be seen as a source of a rms competitive advantage. The resource-based view thus suggests that technology is part of rms intangible or rm-specic assets. In an empirical study on US rms international strategic partnerships, Lynskey (1999) reports that it is useful to understand rms technology capacity as its ability to learn new external technologies. Technology adopters can gain competitive advantages only through a technological learning process to build their own core technological compences that can be quite different from those of the original technology developers. Grant (1991) classies a rms critical resources as tangible, intangible, and personnelbased resources. While resources serve as a basic unit of analysis, a rms competitive advantages come from assembling resources that work together to create capabilities that can be dened as the ability to assemble, integrate, and deploy valued resources, in combination or co-presence. In the context of technology sourcing, Lynskey (1999) suggests that a distinction can be made between those technology agreements involving the exchange of resources and those involving the exchange of competencies. The former type 330
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is traditional TT agreements that technical knowhow is exchanged in return for licensing fees or royalties. The latter involves information-based invisible assets, representing tacit knowledge that cannot be appropriated readily. We can expect that a rm with higher organizational intelligence will have a higher level of technological learning performance both during and after TT. Therefore, the following hypothesis is proposed: H1: A rms organizational intelligence is positively associated with its technological learning performance after technology transfer.

B. Firm specicity
A portion of technological knowledge could be codied as documentation, hardware, software packages, standard operation procedures, and drawings. This portion of technology can be transferred through a well-planned project. However, a large portion of the technological knowledge is embedded in context and idiosyncrasy (Kogut and Zander, 1993) that the recipient could not imitate directly. On the one hand, this portion of technological knowledge hinders the recipients desire to keep up with the technology provider in a short run. A rm-specic technology, which is embedded in a rm, is difcult to transfer from one to another. We can expect a wide performance gap between the technology recipient and the technology provider right after the TT project. On the other hand, the gap also leaves much room for the recipient to further develop its own rm-specic knowledge with technological learning. Lado and Wilson (1994: 699) therefore suggest that rms can build sustained competitive advantage through facilitating the development of competencies that are rm specic, produce complex social relationships, are embedded in a rms history and culture, and generate tacit organizational knowledge. Bharadwaj et al. (1993: 89) further assert that competitive cost and differentiation advantages associated with synergy are less likely to be imitated, because these are often achieved under a unique set of circumstances as well as on the basis of unique rm specic resources and skill base. Firms investments on competence directed toward developing what Nordhaug (1994) terms standard technical competences and unique competences. Their high task specicity, but low rm and industry specicity characterize standard technical competences. Unique competences
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Technology transfer as technological learning are both highly rm specic and task specic but industry nonspecic. In other words, a major proportion of employer-nanced training is directed at the creation of static t between employees and current work tasks (p. 70). Firms can gain sustained competitive advantage through facilitating the development of competencies that are rm specic, produce complex social relationships, are embedded in a rms history and culture, and generate tacit organizational knowledge (Barney, 1991; Reed and DeFillippi, 1990). Firms in the resource-based perspective are characterized as distinct sets of rm-specic skills and routines so that the more an activity accesses these valuable routines; the lower should be its costs. As Conner (1991: 140) points out, rmspecic activities are both more efcient and qualitatively more productive because of the opportunity to gain from asset interdependencies within the rm. Kogut and Zander (1992: 395) also formally predict that rms will make those components that require a production knowledge similar to their current organizing principles and information. Therefore, the technological learning to share routines, exploit common language and more broadly exploit task interdependencies suggests a positive relationship between the rmspecicity of technology and its performance within the rm. Firm specic technologies, which are often more deeply embedded, are predicted to be higher performing in technological learning after TT. The following hypothesis is proposed: H2: Firm specicity of the transferred technology is positively associated with a rms technological learning performance after technology transfer. denes the concept, internal stickiness, as the difculty of transferring knowledge within the organization in a study of internal transfer of best practice. Reed and DeFillippi (1990: 89) dene tacitness as the implicit and noncodiable accumulation of skills that result from learning by doing. Nonaka (1994) argues that tacit knowledge cannot be easily communicated and shared and is highly personal that is often deeply rooted in action and in an individuals involvement within a specic context. Causal ambiguity has been addressed in the literature in two different ways (King and Zeithaml, 2001): linkage ambiguity and characteristic ambiguity. Linkage ambiguity is ambiguity about the link between core competence and competitive advantage (e.g., Lippman and Rumelt, 1982). Characteristic ambiguity refers to characteristics of competences y that can be simultaneous sources of advantage and ambiguity (Reed and DeFillippi, 1990). This study focuses on the latter because technological competence is evaluated. Resource-based theorists (e.g., Barney, 1991) suggest that causal ambiguity of technological knowledge is an important source of competitive advantages that keep a rms core competence from imitation. In practice, rms do sometimes bribe or hire away knowledgeable employees to learn about a competitors superior capabilities (e.g., see Besanko et al., 2000). These intelligencegathering strategies will be less productive when employees can explain little about how a rm achieves superior performance (McEvily et al., 2000). McEvily et al. (2000: 294) argue that as a rm extensively acquires explicit knowledge (through a TT project) it reduces the level of causal ambiguity that protects its distinctive competence from imitation. Causal ambiguity impedes not only technology transfer across rms but also the creation of new knowledge within the rm. It would frustrate efforts to diffuse technological knowledge with organizational boundaries to at least the same degree. Szulanski (1996) found causal ambiguity to be one of the primary factors hindering best practice transfer within rms. Teece (1976) also reports that rms incur high costs to transfer poorly understood technologies, which is consistent with the resource-based arguments. Causal ambiguity also prevents a rm from learning from its own experience and from improving its performance over time (e.g., see Huber, 1991). Causal ambiguity, as well as characteristics of technological competencies that give rise to it, has been a particular focus in
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C. Causal ambiguity
Another barrier preventing valuable technology resources from imitation is the causal ambiguity of technology. Lippman and Rumelt (1982: 420) suggest that causal ambiguity acts as a powerful on both imitation and factor mobility. In the literature, causal ambiguity appears as several similar notions such as stickness in Szulanski (1996) and sticky information in von Hippel (1988). Those notions are devised to describe a similar lack of understanding of the logical linkages between actions and outcomes, inputs and outputs, causes and effects that are related to technological or process know-how (Simonin, 1999: 597). For example, Szulanski (1996: 29)
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Bou-Wen Lin studies of knowledge resources (Barney, 1991; Dierickx and Cool, 1989; Reed and DeFillippi, 1990). Causal ambiguity hinders the internal diffusion of technological knowledge and decelerates the rate of knowledge creation within a company. The following hypothesis is proposed: H3: Causal ambiguity of the transferred technology is negatively associated with a rms technological learning performance after technology transfer. specic. A technology is relatively simple if it is embodied in the forms of documentation, materials, and machines. The skill and education levels of TT team members required to transfer a technology are other indicators to measure the complexity of a technology (Robinson, 1991). Chakrabarti and Rubenstein (1976) point out that the maturity of a technology will affect its transferability from one rm to another. Technology is increasingly codied as its life cycle progresses. Industrial standards emerge when a technology becomes mature. Abernathy and Utterback (1978) asserted that after a design standard (or an industrial standard) emerges. A transition form radical to incremental innovations occurs when a dominant product design emerges. Incremental innovation typically results in a increasingly specialized system in which economy of scale in production and the development of mass markets are extremely important (Abernathy and Utterback, 1978). Radical innovation and incremental innovations require very different organizational capabilities, which are difcult to create and costly to adjust (Hannan and Freeman, 1984). Incremental innovation reinforces the capabilities of establish rms, while radical innovation demands them to acquire a new set of technological knowledge and/or reengineer their organizational structure. Incremental innovations involve the adaptation, renement, and, enhancement of products and services, which are usually more rm specic in nature. As a technology becomes mature, the locus of innovation may shift from product innovation to process innovation and it becomes increasingly rm specic. Therefore, the following hypotheses are proposed: H4: Complexity of a rms technology is positively associated with the rm specicity of the technology. H5: Maturity of a rms technology is positively associated with the rm specicity of the technology.

D. Complexity and maturity of technology

Singh (1997: 340) dene a complex technology as an applied system whose components have multiple interactions and constitute a nondecomposable whole. Following the denition, complex technologies are systemic, have multiple interactions, and are nondecomposable. Singh further elaborates on the three characteristics: the systemic characteristic means that a complex good or technology comprises elemental units or components, usually organized in hierarchies of subsystems. This hierarchical structure causes complicated interdependencies among interrelated subsystems and components. This structure leads to multiple interactions. Though interactions between individual components are often simple and direct, multiple interactions and feedback between components within subsystems, between components across subsystems, and between subsystems at various hierarchical levels create a complicated network of nonsimple relationships. A product is nondecomposable if it cannot be separated into its components without seriously degrading its capabilities or performance. After reviewing research on three technologies of nuclear power stations, aircraft carriers, and US Army M1 tanks, Steele (1991) also found the complexity of organizational and social systems to support a technology can be positively associated with the complexity of the technology. Therefore, a complex technology at the rm level often is embedded in the rm and co-evolves with the rms organizational as well as social systems. The unique combination of components and their interactions within a complex technology create outputs that are not easily reproducible with other combinations of inputs or with other congurations of the same inputs. Many or most of the components in a complex technology are highly complementary, or co-specialized (Teece, 1986). Therefore, a complex technology system tends to be rm 332
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E. Organizational intelligence and its antecedents

Organizational intelligence itself is a complex construct demands further exploration. A comprehensive investigation into the construct is beyond the scope of this study. This study considers only two antecedents to organizational intelligence: employee qualication and innovative
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Technology transfer as technological learning orientation. The two variables are widely discussed in the literature as determinants of technological learning and technology transfer. This study intends to demonstrate that organizational intelligence is a useful mediator of technological learning and several of its explanatory variables identied in the literature. Glynn (1996) proposes a two-stage process for innovation: (a) initiation and idea generation, (b) implementation and adoption. Each stage is characterized by a variety of different activities, with contrasting demands at both the individual and rm levels. Corresponding to the four antecedents of organizational intelligence, employees qualication and innovation orientation are the main drivers of organizational intelligence at the rst stage. At the second stage, goal alignment is the innovation driver. The initiation stage of organizational innovation requires fewer controls, greater autonomy, diversity and informality, whereas implementation is facilitated by goal alignment approaches, programmed tasks and central direction. Glynn (1996) proposes three theoretical models of organizational intelligence. The aggregation model assumed that the intelligence of individual members aggregates as organizational intelligence. She further suggested that it would be possible to measure organizational intelligence as the aggregated total, maximum or mean of individual intelligences. Sadler-Smith and Badger (1998) report that the thinking processes of individual members of a rm may affect the global approach to learning and some members of the organization have greater inuence. They suggest that one mechanism for organizational learning is to surface and share of individual mental models to form shared mental models. Kessler and Chakrabarti (1996) reviewed research into new product innovation and found at the work-team and individual level, decentralizing decision-making can facilitate innovations. It motivates employees to go against the status quo, increases employees involvement in and awareness about technological learning, and subsequently strengthens employees commitment to it. Kessler and Chakrabarti (1996) also found that greater experience of employees is associated with relatively faster product innovation. Osborn (1988) revealed that 3Ms use of autonomy and personal innovation time facilitated idea generation. Damanpour (1991) found that a positive attitude toward change was signicantly related to rms innovativeness. Dougherty (1992) also
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found that innovation was furthered when different functional groups programs and routines were synthesized by a common direction and belief system (i.e., a shared culture). What seems to set the initiator apart from other individuals is the drive to make a difference, combined with a feeling of responsibility to the organization. This balance between individual and organizational success was expressed during the research in several ways. Frohman (1999) studied several innovations and found that all initiators knew the goal of their companies and aligned their innovation efforts to it. Froman reports that many initiators knew their company suffered from critical problems, such as being a high-cost producer, and that management was searching for ways to drastically cut costs. An organization can be seen as two or more individuals working in concert to achieve a common goal. Goal alignment and coordination are central to the very existence of organizations. Organizational control may be viewed as everything that can help to assure that individuals work together toward common goals. Therefore, the following hypothesis are proposed: H6: Overall employee qualication of a rm is positively associated with the rms organizational Intelligence. H7: Innovative orientation of a rm is positively associated with the rms organizational Intelligence.

4. Research method
The unit of analysis was the technological learning process within a rm after transferring a technology from an external technology source. A survey was conducted to collect data for the study. This study adopted ve-point Likert type scale in the survey. Data needed to examine the research model were collected through the selfreported survey questionnaires. The population of interest was engineering and technology units of rms in Taiwan that transfer technologies from foreign technology sources. This study limited the sampling frame to larger manufacturers with more than 250 employees. This study followed a systematic approach in constructing the mailing list for the survey. First, the larger manufacturing rms were identied through a search of the factory database provided Industrial Development Bureau, Ministry of Economic Affairs,
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Complexity

H4 (+) H5 (+)
Firm Specificity

Causal Ambiguity

Maturity

H2 (+)

H3 (-)
Technological

Employee Qualification

Learning Performance

H6 (+)
Organizational Intelligence Innovation Orientation

H1 (+)

H7 (+)

Figure 1. A conceptual framework for technological learning performance.

Taiwan (http://icmfac.moeaidb.gov.tw/dbweb/ rst.jsp). Manufacturers that are not likely to adopt technologies from foreign sources were excluded from the list. This yielded a set of 850 manufacturers. The mailing addresses for these manufacturers were obtained from the factory database. Senior managers were chosen as the respondents as they are likely to be most informed about quality initiatives in engineering and technology units. A total of 750 questionnaires were mailed. A total of 84 usable responses were received, resulting in a response rate of 11.2%. The response rate is below the minimum recommended level of 20% but is similar to those obtained in many surveys of Taiwanese rms. The low response rate is probably because many of the manufacturing rms do not have TT projects in the last few years.

Measures
The constructs that need to be operationalized are complexity, maturity, employee qualication, innovation orientation, organizational intelligence, rm specicity, causal ambiguity, and technological learning performance. The scales were rened based on a pilot study conducted with two managers of technology unit, two senior executive managers, and two researchers working in the area of technology management. Technological learning performance after TT is operationalized with seven question items including: overall learning results, competitiveness enhancement, market performance, technological performance, technology independence, and technology modication. Organizational intelligence is operationalized with four question items: problem334
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solving capability, responsiveness to environmental changes, information processing, and learning by experiences. Causal ambiguity is operationalized as three question items: ambiguity in inputoutput relationships, uncodiable, and tacitness. Firm specicity is measured with two question items: required investments on both specialized physical assets and human resources. Complexity is measured with a single question item and maturity with two items. Employee qualication is measured with four question items: education, problem-solving capability, training programs, and creativity. Finally, innovation orientation is operationalized with two question items: openness and risk-taking. Appendix summarizes the results of scale reliability. The results indicate that all of the scales meet acceptable levels of reliability. Based on the constitutive denition of the constructs presented earlier, factor scores were computed by averaging the item scores for each factor used as indicators of the constructs in the research model.

5. Results
To examine potential non-response bias, we compared respondents and the population on three variables (number of employees, sales, and age of the rm). None of these three t-tests for differences between the sample and the population means was statistically signicant at the signicance level of 0.05. To check for nonresponse bias, I divided the returned surveys into two groups according to the dates they were returned. The two groups demographic proles are similar. We also found no signicant difference between earlier respondents and later
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Technology transfer as technological learning

Table 1. Construct 1. 2. 3. 4. 5. 6. 7. 8. Technological Learning Performance Causal Ambiguity Firm Specicity Organizational Intelligence Complexity Maturity Employee Qualication Innovative Orientation Correlations between variables 1 1 0.46 0.49 0.68 0.44 0.28 0.55 0.48 2 1 0.24 0.42 0.22 0.41 0.42 0.37 3 4 5 6 7 7

1 0.46 0.57 0.47 0.44 0.34

1 0.54 0.12 0.69 0.58

1 0.29 0.46 0.39

1 0.21 0.13

1 0.65

Table 2.

Regression model one technological learning performance Variable Parameter 0.154* 0.146* 0.379** Adjusted R-square 0.518 T for H0: 2.364 2.345 5.389 Prob.4|T| 0.0216 0.0206 0.0001

H1 H2 H3

Causal Ambiguity Firm Specicity Organizational Intelligence

N 84, *po0.05, **po0.01

respondents on the scores of all question items. The absence of differences would be consistent with the claim that response bias seems not to be a major problem (Armstrong and Overton, 1977). Table 1 reports the construct intercorrelations. The proposed hypotheses were tested with multiple linear regression analysis. Three regression models are used to separately test hypotheses derived from the research model.

logical learning performance. Firm specicity positively inuences technological learning performance, which is signicant at 5% level. Organizational intelligence is the most inuential factor among the three explanatory variables that positively inuences technological learning performance at 0.01% signicance level. This result is in line with our hypothesis H1, H2, and H3.

A. Technological learning performance

Table 2 presents the effects of causal ambiguity, rm specicity, and organizational intelligence on technological learning performance after TT. The correlation coefcients among regressors, on average, are not high. Further tests of the value of the variance ination factor (VIF) yielded a value less than 1.5 for all the cases, indicating no existence of severe multi-colinearity. The rst general regression is conducted with technological learning performance as dependent variable. The result is presented in Table 2. The overall model specication is robust. The F statistic (F 30.049) is signicant at the 0.01% level (p-value o0.0001) indicating at least a 99.99% probability that at least one coefcient of the explanatory variables is not zero. The adjusted R-square also indicates the high explanatory power of the model, accounting for 51.8% of the variance. Causal ambiguity turned out to be a signicant factor, negatively inuencing technor Blackwell Publishing Ltd 2003

B. Firm specicity
The second regression is conducted with rm specicity as dependent variable. The result is presented in Table 3. The correlation coefcient between two regressors complexity and maturity is 0.29, which is not high. Further tests of the value of the variance ination factor (VIF) yielded a value less than 1.5 for both cases, indicating no existence of severe multi-colinearity. The F statistic (F 28.052) is signicant at the 0.01% level. The adjusted R-square also indicates the high explanatory power of the model, accounting for 40.05% of the variance. Table 3 reports the effects of two antecedents technology complexity and maturity on rm specicity. The regression results show a positive relationship between technology complexity and rm specicity (0.424, po0.0006). Maturity is positive associate with rm specicity (0.362, po0.0001). This result is consistent with the hypothesis H4 and H5.
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Table 3. Regression model two rm specicity Variable H4 H5 Complexity Maturity Parameter 0.424** 0.362** Adjusted R-square 0.4005 T for H0: 5.287 3.592 Prob.4|T| 0.0006 0.0001

N 84, *po0.05, **po0.01

Table 4.

Regression model three organizational intelligence Variable Parameter 0.389** 0.386** Adjusted R-square 0.5598 T for H0: 3.73 3.92 Prob.4|T| 0.004 0.002

H6 H7

Employee Qualication Innovative Orientation

N 84, *po0.05, **po0.01

Table 5. Model

Alternative models for testing mediation effects 1A 1B 0.235** 0.395** 0.244** 0.134 0.209 0.189 10.49 0.145 0.048 0.273 0.245 9.76 0.213* 0.253** 0.367 0.351 22.97 0.058 0.100 0.486 0.467 24.655 2A 2B

Firm specicity Organizational intelligence Complexity Maturity Employee qualication Innovative orientation R2 Adjusted R2 F value
N 84, *po0.05, **po0.01

C. Organizational intelligence
The third regression is conducted with organizational intelligence as dependent variable. The result is presented in Table 4. The correlation coefcient between two regressors employee qualication and innovative orientation is 0.65, which is acceptable. Further tests of the value of the variance ination factor (VIF) yielded a value less than 2.5 for both cases, indicating no existence of severe multi-colinearity. The F statistic (F 52.5) is signicant at the 0.01% level. The adjusted R-square also indicates the high explanatory power of the model, accounting for 55.98% of the variance. Table 4 reports the effects of two antecedents employee qualication and innovative orientation on organizational intelligence. The regression results show a positive relationship between employee qualication and organizational intelligence (0.389, po0.004). Innovational orientation is positive associate with organizational intelligence (0.386, po0.002). This result is consistent with the hypothesis H6 and H7. 336
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D. Tests of mediation
Results suggest that causal ambiguity, rm specicity, and organizational intelligence mediate the effects of antecedent variables on technological learning performance. In this article, causal ambiguity is taken into account but its mediating role is not tested since Simonin (1999) has empirically demonstrated the mediating effect of causal ambiguity between its antecedents and knowledge transfer. A sequential procedure recommended by Baron and Kenny (1986) is adopted to test the mediating effects of rm specicity and organizational intelligence on technological learning performance. In the rst step of the analysis, the dependent variable (i.e., technological learning performance) is regressed on antecedent variables corresponding to rm specicity and organizational intelligence respectively. These results are shown as model 1A and 2A in Table 5. In the second step, each of the two mediators is included in the models to assess whether it reduces the effects of the antecedents
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Technology transfer as technological learning to nonsignicance. Mediation occurs if the effects of the antecedents on IT outsourcing performance are reduced in the presence of the mediator and the overall t is improved. Both of these conditions are acceptable, as is shown in Table 5. technological learning performance after the inter-rm TT communication that a technology with a higher level of rm specicity leaves more room for further improvement through the transferees technological learning. Although a high level of rm specicity restricts the transferee to imitate the transferors technology capabilities in the short term, the transferee can exploit a full potential from the transferred technology through technological learning and adaptation. Results also suggest that the level of organizational intelligence is positively associated with technological learning performance. This result is consistent with the organizational learning literature (e.g., Glynn, 1996) as well as the TT literature (e.g., Enos, 1991; Radosevic, 1999). A rm with a higher level of organizational intelligence has a higher organizational learning capacity that can lead to higher technological learning performance. A noticeable literature was developed in the last few decades to analyze the factors affecting the accumulation of technological capabilities for rms in developing countries (e.g., Enos, 1991). Developing countries grow by effectively exploiting an international pool of existing technologies available from technology leading nations. The exploitation is not done through a simple purchase of ready-made solutions but through an active effort by technology recipients to master various elements of technology (Radosevic, 1999). Results of this study suggest that technological learning capability is at the center stage of technology transfer. Technology transfer should be conceived as a technological learning process and the process has at least two distinct phrases. The rst phase is an inter-organizational communication process that the major goal is to duplicate the technological capability of the transferor. The second phase is an organizational learning process that the goal is to assimilate and integrate the transferred technology into the rms existing knowledge base and to foster innovation. This article provides some evidence that the second phase of technological learning needs a management system different from that of the rst phase.

6. Discussion and conclusion

Transferring technology from developed countries is a major route of sourcing advanced technology for manufacturers with limited R&D capabilities. Previous work on TT has focused on the interaction and communication process between transferee and transferor. McEvily et al. (2000: 294) argue, a rm acquires explicit knowledge, it reduces the level of causal ambiguity that protects its distinctive competence from imitation. An organizational learning perspective (Senge, 1990) can shed some light on the technological learning process. This article proposes a conceptual model with three mediators causal ambiguity, rm specicity, and organization intelligence to explain technological learning performance. The conceptual model accounts for the leaning capability of the subject (organizational intelligence) and the subject to be learned (causal ambiguity and rm specicity). Factors that can inuence technological learning performance can be categorized into three groups and the three mediators in turn mediate their effects on technological learning accordingly. For example, technology complexity does not impact on technological learning directly. It impacts on technological learning indirectly through its impacts on one of the three mediators, rm specicity. The model is supported by data of manufacturing rms in Taiwan. Causal ambiguity of the transferred technology has a negative impact on technological learning performance. This result is consistent with that in the organizational learning literature (e.g., Simonin, 1999). A technology with a high level of causal ambiguity is less likely to diffuse and communicate and thus technological learning and knowledge performance will be low. Firm specicity is positively related to the technological learning performance. This result differs from previous work in the technology transfer literature (e.g., Teece, 1976). Since most previous TT studies focused on the communication process of TT that rm specicity of the transferred technology can be a major barrier of interrm communication. This article investigates the
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A. Managerial implications
Results of this study have several profound managerial implications for managers of rms with limited R&D resources. First, technology transferees can gain competitive advantages and
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Bou-Wen Lin bargaining power through its technological learning capability. Many technology-receiving rms can learn the easily transferable part of a technology through a TT transaction with technology providing rms. The technological learning performance differs after the TT transactions. Since technology markets is increasingly efcient, technology-receiving rms must differentiate themselves through their technological learning capabilities. Second, the selection of technology has a major impact on technological learning performance. A technology with a high level of rm specicity can be a bad choice for technology transfer communications but an excellent choice for technological learning. The transferees should not see rm-specic technologies as a threat for its performance but an opportunity for competitive advantages. Third, organizational intelligence is the key to the success of adopting a technology. A rm with a high level of organizational intelligence can effectively communicate with its counterpart during the TT transaction and have effective technological learning after the transaction. Cultivating organization intelligence is a useful tool for managers to enhance knowledge creating as well as the assimilating of external knowledge. Finally, manufacturers with limited R&D resources should manage their technology acquisition process strategically. Technological learning performance is predetermined by organizational intelligence and the characteristics of technology. Technologies transferred must t with the rms learning capability as well as strategic goals. If the rm is good at assimilating external technologies and its goal is to differentiate from its competitors, it can select technologies with a high level of rm specicity and a low level of causal ambiguity. If the rms goal is to earn prots quickly and to exploit its advantage of low-cost labors, technologies with a low level of rm specicity and causal ambiguity are a better choice. As technological innovation becomes increasingly complex and risky, hardly individual rms own all the technological knowledge required to bring new products to the market before their competitors. An innovative rm needs not only to facilitate internal organizational learning in order to create new knowledge within the rm, but also to assimilate external knowledge through a technological learning process. For rms with limited R&D resources, integrating external technological knowledge into their existing knowledge bases is the key to their competitive advantages. The literature on orga338
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nizational learning and knowledge management can shed some light on how we can manage technology transfer effectively.

B. Future research
There are some limitations of this study. First, the research relies on the self-reported survey from R&D managers. This provides an incomplete view of the technological learning process. For further research, employees who involved in the technological learning should be included. Second, this article examines only a subset of the many antecedents that have been reported in the literature. Further studies can include a complete set of the antecedents of organizational intelligence, causal ambiguity and rm specicity. Third, the proposed conceptual framework is very complex and holistic in nature. Structural equation modeling techniques such as LISREL are appropriate. Due to the small number of useful samples in the study, such techniques are not applicable. We have not test the relationship between rm performance and technological learning performance. Some variables such as causal ambiguity can have a direct effect on rm performance. The simple model proposed in this article provides a step stone to explore the complex phenomenon of technological learning between and within organizations. We need to understand more about the technological learning capability as strategic assets; the antecedents and process variables affecting technological learning performance; and the strategic t between the nature of technology, organizational intelligence, and the rms strategic goals.

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Appendix
Constructs Technological learning performance Cronbach Alpha 0.839 Question items Overall technological learning success Competitive position enhancement Market share increase Technical performance enhancement Technical independence Technical superiority to competitors Technical adaptation to local environment Problem solving capability Responses to environmental challenges Information processing capability Learning from experience Ambiguous association between causes and effects Not easily codiable Tacitness

Organizational intelligence

0.871

Causal ambiguity

0.775

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Firm specicity Complexity Maturity Employee qualication 0.755 Not applicable 0.423 0.828 Investments in specialized equipment and facilities Investments in skilled human resources Composed of many interdependent techniques, routines, individuals, and resources. Mature and standardized No major changes for many years Level of Education Work experience and knowledge Training programs New ideas generation Openness and exibility of corporate climate Risk taking

Innovation orientation

0.858

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