Production Competence and Knowledge Generation for Technology Transfer: A Comparison between UK and South African Case Studies

Setting The Stage

It has long been suggested that equipment performance is dependent on production competence (Ferdows and De Meyer, 1990; Leonard-Barton, 1995). Employees who understand how something is made are better able to manage manufacturing practices than those who deal only with the underlying symptoms of a process (Gourley, 2006). An environment where knowledge assimilation and sharing generate continuous learning capability lends itself to absorptive capacity (Tu et al, 2006). Early proponents such as Cohen and Levinthal (1990) see absorptive capacity (AC) as the ability of a firm to recognise and utilise the value of new information that comes from continuous learning. Mowery and Oxley (1995) construe AC as a comprehensive set of skills that engages with the tacit component of transferred and imported knowledge. Jones and Craven (2001) emphasise the need for communication networks that diffuse knowledge and technology.

Production competence and knowledge generation may be seen as a function of AC, which Zahra and George (2002) define as: “AC is a set of organizational routines and processes by which firms acquire, assimilate, transform and exploit knowledge to produce a dynamic organizational capability” (p.185). Like many commentators these authors view AC as an essentially organizational phenomenon.

In order to understand a knowledge-based process Rouse and Daellenbach (2002) suggest that we should follow the value generation trail back to its source. This requires “unpacking the process, beginning with performance, then looking for sources of advantage in the form of capabilities and competencies. Unless the sources of firm-specific superiority can be understood, the nature of the competitive advantage is doomed to remain largely a mystery. We will merely have substituted a black box of competencies for the black box of organizations.” (p.966) Rouse and Daellenbach (2002) also suggest a theoretical and empirical understanding of what occurs in TT as well as how this takes place:

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  Resources, technology and knowledge (tangible and intangible) are bundled, linked and incorporated as management processes.

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  Management processes and structural relationships are converted and organised into routines and systems.

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  Routines and systems formalise capabilities that lead to production competencies.

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  Competencies become the means whereby products and services are generated to provide value and competitive advantage.