The effects of technological complexity on inter-firm Technology Transfer mechanisms in the Automotive Industry

Abstract

This paper analyses mechanisms for transferring technologies from laboratories to firms which will embed it in their products. Analysis is based on the Fiat Research Center (FRC), an industrial R&D laboratory belonging to a multinational group focused on the automotive industry. At the end of the eighties, changes in the automotive industry strategy required technology management to take into account product complexity, growing research costs, new forms of vertical coordination with suppliers. In order to face these challenges successfully, FRC changed its 'group-oriented' strategy into a 'market-driven' one. It developed a new Technology Transfer (TT) process, that had to deal with the trade-off concerning limitations imposed by the group policy in terms of disclosure of innovative technologies, the growth of technological competencies owned by suppliers, and requests arising from customers. The focus of this work is on relationships among the mechanisms for transferring technological knowledge, changes in organizational structures, and intra- and inter-firm coordination mechanisms. The process of TT, and required organizational structures and mechanisms, are considered as depending on (1) the complexity of transferred technologies and (2) organizational competencies owned by firms where technologies are transferred. 'Tacit' knowledge and 'sticky' information concepts are used to explain the existence of alternative mechanisms of TT. Finally, analysis of the cost of coordinating the transfer of technologies to suppliers and Fiat business units has been used to evaluate FRC investments in new technologies, in order to put emphasis on the effect of active management of knowledge on the value of a technology.