مدیریت ریسک انتقال فن آوری بین المللی: تجزیه و تحلیل موردی شرکت های ایالات متحده با فن اوری پیشرفته در آسیا

Using a comparative case analysis of nine U.S. high-tech manufacturers transferring technology to Asian operations through direct investments (wholly owned operations or joint ventures), we examined how they are protected against competitive loss of these technologies. We found some support for internalization theory in that companies preferred wholly owned operations as a means of protection. However, wholly owned operations were not always possible nor were they always sufficient to protect technologies. We found that companies additionally minimized transfer risks by viewing their technologies as a system, thus transferring only peripheral or dependent technologies. Further, they used prioritizing and segmenting technology levers to guard technology either in conjunction with or in lieu of entry mode.

The capacity to translate knowledge into high-value products and services has emerged as an important competitive asset (Porter & van Opstal, 2001). Viewing technology as firm level knowledge, we define it as any process that transforms inputs into outputs. As technology has become increasingly important to global competitiveness (Zahar & Covin, 1993), governments, company managers, and researchers have paid more attention to alternatives involving its international transfer. For example, host governments have enacted policies that attempt to gain greater domestic access to foreign technology at a reasonable cost (Peng, 2000). These policies largely target multinational enterprises (MNEs) that account for a huge share of global R&D. Concomitantly, MNE managers must decide whether to transfer technology, which technology among a portfolio of technologies to transfer, and how to transfer technology abroad. We focus on the managers' decisions of which and how in this paper, taking whether as a given. On the one hand, managers want their companies' technologies to gain them cost and sales advantages abroad (Isobe, Makino, & Montgomery, 2000). On the other hand, they do not want to lose competitive leadership by enabling other companies to gain quicker access to their technologies Anderson & Gatignon, 1986 and Buckley & Casson, 1976. In other words, companies do not worry about international technology transfers per se; rather, they worry about technology appropriation by potential competitors, whether domestic or foreign (Liebeskind, 1996). Nevertheless, a company may have less protection against appropriation of its technology some places abroad than at home. This is because many countries offer little protection of industrial property rights and allow more freedom for ex-employees to take proprietary information with them to other companies Czub, 2001 and Weeks, 2000. So how do/can firms simultaneously exploit and protect their technology? Much of the literature on international technology transfer is based upon internalization theory and focuses on entry mode (Buckley & Casson, 1976). Internalization theory contends that MNEs exist in order to exploit firm-specific knowledge internally by extending their organizational boundaries into foreign markets through wholly owned subsidiaries. Firms have an incentive to keep their knowledge/technology within their own subsidiaries as knowledge is a public good and its value, if compromised, diminishes rapidly. This view is reiterated by Rugman (1981) who contends that the lack of a proper market for the sale of information created by the firm leads the firm to create an internal market of its own. However, there is evidence that companies transfer technology both internally and externally (Meyer, 2001). Internalization theory builds on the early market imperfections work by Coase (1937). It contends that firms are encouraged to exploit their technology on their own because they otherwise incur the costs to monitor partners' (licensees or joint ventures) use of their knowledge and incur risks that partners will violate the terms of technology agreements. Transaction cost theory also addresses the cost of opportunism by technology partners during foreign expansion Anderson & Gatignon, 1986, Hennart, 1988 and Williamson, 1975. Further, it considers the costs of teaching a tacit technology to an outside organization. For example, Teece (1977), studying 26 cases of international technology transfer, found transfer costs to be significant. Further, Kogut and Zander (1993) suggest that when technology is less codifiable and teachable or more complex, companies are more prone to use a wholly owned subsidiary than a joint venture to transfer the technology. But companies have multiple technologies of which some are more valuable to them than others (Prahalad & Hamel, 1990). When considering whether and which technology to transfer, managers are much more concerned about the transfer of core than peripheral technologies. We define core technologies as those technologies that are critical to the long-term competitiveness of a firm. Firms, in fact, expend significant resources to protect core technologies in international expansion, often through the creation of wholly owned facilities Buckley & Casson, 1976, Hill et al., 1990 and Rugman, 1981. To further minimize the possible expropriation of core technologies, companies often prefer to export to foreign markets rather than produce in foreign countries where they sell. However, managers' technology transfer decisions are much more complex than what we have discussed thus far. For example, a firm's strategy may impact its choice of entry mode, and thus its technology transfer Hill et al., 1990 and Kim & Hwang, 1992. Companies' efforts to integrate their operations transnationally may also impact their plan of production and technology application abroad (Bartlett & Ghoshal, 1992), or they may simply subordinate their technology transfer policy to their strategic objectives (Chen, Cannice, & Daniels, 2001). Further, companies may opt to share technology with partners abroad because collaborations gain them sufficient advantages to compensate for the higher appropriability risk. A company may also perceive that a partnership decreases competitive risk from poorly performing operations more than it increases competitive risk from technology loss. This perception might occur because a partner has better country-specific knowledge, access to distribution and production factors, and complementary resources. At an extreme, a company may be able to gain foreign cost and sales advantages only by producing abroad in some type of partnership because a host government restricts imports and wholly foreign-owned operations, or a company may fear economic and political risk more than technology appropriation risk and seek out a local partner that will share financial exposure (Tsang, 1997). Both Chandler (1992) and Madhok (1997) argue that a company's capabilities, rather than transaction cost minimization, should be the focus of mode choice. In other words, a company's technology is often embedded within its organization; thus, it is difficult for another company to appropriate it even in a shared operation. At the same time, the company may need to combine this organizational capability with capabilities held by other companies in order to be successful in foreign markets Burgel & Murray, 2000, Hagedoorn & Narula, 1996 and Tsang, 2000. Finally, partnering may reduce costs by using a local company's excess capacity or prevent higher costs by not creating excess capacity. Although a company may have compelling reasons to enter a foreign market through a partnership, it may not find a suitable partner if local companies lack an interest in partnering or lack sufficient knowledge to absorb the transferred technology efficiently. Regardless of whether the company is partnership or not, it may still need alternative mechanisms (the how) to manage international technology transfer risk in addition to the entry mode choice. This is not only because partners may appropriate technology, but also because employees may leak information to potential competitors. This is the least researched area concerning the relationship between international technology transfer and technology protection; however, researchers have reported that companies use such mechanisms as transferring their own personnel to direct those functions (such as manufacturing) where proprietary knowledge is housed, establishing back-to-back joint ventures or cross-licensing agreements in both companies' home markets to create more interdependency, licensing to their own subsidiaries, and maintaining home-country control of key technological elements (Daniels & Magill, 1991). Of course, companies must weigh the costs of utilizing these mechanisms against the risks from technological loss. Overall, most studies have examined the means of protecting technology, such as through internalization, in isolation from other mechanisms. Thus, our study has two primary purposes: (1) to synthesize the various influences on how companies simultaneously exploit technologies abroad and seek to protect them, and (2) to systematically discuss technology management mechanisms companies employ. We shall look specifically at which technologies companies transfer and how they seek to protect them.

Our data indicate that high-technology firms prefer wholly owned operations, but they are generally unwilling to forego exploiting lucrative markets if government regulations prevent their taking 100% ownership on otherwise acceptable operating terms. All our participants that transferred core technology did form wholly owned ventures. This supports internalization theory. Nevertheless, all our participants, whether with joint ventures or wholly owned facilities, handle international technology transfer risks partially by considering their portfolio of technologies as a system and then transferring only part of the technology system to a foreign operation. The part they transfer would cause them little loss if appropriated. First, the technology is of low value (peripheral) to them. Second, the technology would be difficult (costly) for the appropriating company to exploit profitably because of its dependence on the transferring company. Such a system perspective is not new in technology literature and applies to both product and manufacturing process technology Abernathy & Utterback, 1978, Barnett, 1990 and Henderson & Clark, 1990. Fig. 1 shows the relationship between core versus peripheral and dependent versus independent technologies. The greatest risk of loss is when a transferred technology is both core and independent, but a company can reduce risk either by lessening the degree of core technology or the degree of independent technology or some combination of the two that it transfers. If the company cannot lessen one or the other to decrease risk, or if a country's market conditions are so attractive and the host government or competitive factors require both a core and independent transfer, it must then rely much more on ownership means to maintain control of its technology. The following propositions summarize our analysis. P1. Although companies prefer to take 100% ownership of their foreign subsidiaries to prevent misappropriation of their transferred technologies, this ownership may be neither a sufficient nor an available protection. P2. Companies rarely transfer core technology abroad except to their wholly owned subsidiaries. P3. Companies may reduce the risk (negative impact) of misappropriation of their transferred technologies by transferring peripheral (noncritical) technologies. P4. Companies may reduce the risk of misappropriation of their transferred technologies by transferring dependent technologies—ones that depend on complementary technologies they control. P5. Companies may reduce the risk of misappropriation of their transferred technologies by simultaneously using multiple technology protection levers (transfer peripheral rather than core technology, transfer dependent rather than independent technology, and use a wholly owned subsidiary). Full-size image (2 K) Fig. 1. Increasing technology transfer risk. Figure options Contractor (1990, p. 32) explained internalization as “MNEs create and possess proprietary assets that they try to exploit internally by extending their own organization and control across national boundaries by means of fully owned subsidiaries.” We find that MNEs internalize, but from a global perspective, rather than from the perspective of an individual subsidiary. Thus, our findings suggest that we can analyze international technology protection at the global production level rather than the customary subsidiary level. The difference likely reflects the on-going shift from foreign production to serve the local market to foreign integrated production that serves global markets. Thus, the organizational boundaries for internalization are more complex and more blurred than what we generally find in literature on internalization. More work is needed to improve our understanding of this theoretical issue. Technology and know-how are largely embedded in a firm's routines and are context specific (Madhok, 1997). Managers may be able to modify the context of technology in ways other than the entry mode choice. Our participants showed that companies can modify the context by treating technology as a system. Our nine cases support the notion that companies continue to internalize the package of components comprising core technologies. However, by parsing out only those segments of a technology system that is peripheral or dependent, they can reduce the technology's value to a potential appropriator, such as a joint venture or licensing partner. This enables them to extract further rents through international expansion. Managing a technology system in this fashion gives managers protection levers that replace, supplement, or complement entry mode as a protective lever. For example, companies may gain the advantages of collaborative arrangements while simultaneously protecting the technology they transfer to the arrangements. In summary, our findings suggest that the internalization mechanism at a subsidiary level is neither a sufficient nor the only means to protect technologies; therefore, MNEs are using other mechanisms to reduce risks in their international technology transfers. Please see Table 3 for a summary of our alternative arguments for technology management as compared to internalization theory. Table 3. Internalization theory and our alternative perspective Internalization theory Alternative perspective Internalization arguments: Alternative arguments: Leverage superior technology internationally by transferring it abroad within organizational boundaries. Favorable entry modes are either unavailable to MNCs or are insufficient to protect technologies. Internalization predictions: Alternative predictions: Transfer valuable technologies to wholly owned subsidiaries to reduce opportunistic costs. MNCs can transfer useful but peripheral technologies abroad to satisfy host government constraints and achieve organizational objectives. MNCs can transfer high value (but dependent) technologies abroad, thereby making them low value to foreign partners. Overall objective: Overall objective: Leverage and protect core technologies in international markets with entry mode selection. Leverage and protect core technologies in international markets with technology prioritizing and segmenting levers along with entry mode selection.