A case study on inter-organisational technology transfer in the defence industry

Abstract

As part of the offsets, the defence industrial partnerships typically involve technology transfer (TT) between a local recipient and a foreign supplier. This acquisition of technology does not however automatically lead to increased capabilities, often resulting the governments and the local recipients left unhappy with the level of received TT and the demonstrated technological and process capabilities.

The purpose of this study is (i) to establish a systematically constructed defence offset TT process description, and (ii) to identify the critical success factors enabling an efficient technology transfer project with a knowledge absorption and organisational learning ability that results in a long term sustainable competitive advantage for the local recipient, (iii) to investigate how the interaction of these success factors change the behaviour of a TT system, and (iv) how alternative industrial participation policies would result in a better performance.

The study is an exploratory sequential multi method study conducted in three phases. In Phase 1 a systematic literature review is conducted and as a result a conceptual theoretical framework is constructed based on the key concepts regard the factors enabling a successful TT and their relations emerging from the literature. In Phase 2, a level 2 SCOR model is constructed and the technology transfer success factors are identified by applying a novel integrated case study and Straussian grounded theory approach under the interpretative assumptions and purposive sampling in a global defence industry organisation. As a result, the theoretical position of local recipient’s management, financial planning, supply chain management, and local production planning were advanced as the main factors that the local recipient organisation can best influence to enhance the project's efficiency and success. In Phase 3, a system dynamics TT model was constructed to test and compare the interaction of the critical success factors and how they change the behaviour of the TT system through different hypotheses. The combined findings of the system dynamics modelling and the process analysis in study’s Phase 1 and Phase 2 respectively suggest changes to a typical industrial participation management policy in terms of the local recipient selection, TT process management and control, and the management of the local supplier network. As a result, the defence industry organisations and economies involved in the defence contracting can better plan and manage their related industrial participation TT activities.

To date, the body of technology transfer research has focused on the factors influencing the technology absorption and the identification of meta mechanisms between the supplier and recipient organisations in a context of a multinational corporation and as an intra-firm activity, providing little insight to the actual practical operational level technology transfer process. This study seeks to fill this gap by advancing a more profound understanding of the process activities and the main factors through which the local recipient organisation can best influence the project's success and manage the interorganisational technology transfer operations more effectively in a highly technologically complex operational environment. Furthermore, this study demonstrates the application of a novel methodology of integrated case study and Straussian grounded theory approach, as well as the application of qualitative system dynamics modelling approach. The theoretical contribution of this study is in the perspective of the receiver of a TT and the prerequisites on both country, management and operational levels in order to achieve a sustainable TT.

This is a single case study, only reflecting the supplier view. Future research could explore the other dimensions of the process to confirm the identified factors playing a role over time, expanding the approach from conceptual to empirical domain.