Title: Exploring the role of value in the technology sourcing decision

Authors: C. Helen Takacs, Alok K. Chakrabarti

Addresses: International Business and Management Department, Dickinson College, PO Box 17013, Carlisle, PA 17013, USA. ' Tampere University of Technology, Finland

Abstract: New product development often incorporates a multitude of individual technologies. Research and experience show that even very large firms have resource limitations that prevent them from maintaining and developing all of the necessary technologies in-house. We explore how the value of a technology is related to whether a firm develops a technology internally or sources it through some external means. This research is set in the medical devices industry, and our model linking value to technology sourcing is based on both previous literature and on exploratory interviews conducted in Finland and the USA. We test the model with survey data gathered from US firms on 162 individual technologies. The results indicate that the relationship between value and internal sourcing is strongest when value is defined operationally (reduces costs) than when it is defined strategically (increases differentiation). Additionally, the uniqueness of a technology is antecedent to its value.

Keywords: technology sourcing; new product development; NPD; innovation; technology value; tacit resources; competitive strategy; medical devices industry; Finland; USA; United States.

DOI: 10.1504/IJSCM.2009.031410

International Journal of Strategic Change Management, 2009 Vol.1 No.4, pp.332 - 348

Published online: 02 Feb 2010 *

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