Technology Transfer Disadvantages

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DISADVANTAGES OF INTRA-FIRM TECHNOLOGY TRANSFER However, there are disadvantages that could be partly ignored by MNCs. Disadvantages such as over dependency on technology, workforce became less self-reliant and pose an issue as far as performing tasks typically handled by technological products or services. Another drawback is that performing technology transfer activities had proven to be difficult and costly for certain organizations, due to geographical constraints, unsuitable organization structure and size. Attempting to expedite research into production and fully tested may also lead to a high likelihood of a costly and time-consuming outcome. One other issue underlying issue of intra-firm technology transfer highlighted by Shamsavari et al., (2002) is the degree of control which the MNC may have over the transfer channel. In a case study carried out by Courtney et al., (2014) on General Electric (GE)’s entry into China’s aviation market. It shows the strict restrictions imposed on foreign companies’ access, requiring them to enter joint ventures and transfer technology to the indigenous firm. This leads to a joint venture between GE and Aviation Industry Corporation of China (AVIC) which is a state-owned enterprise managed by the Chinese government. Although the technology transfer is not “one-way” as AVIC is contributing…show more content…
One of the main concerns in technology transfer is the absorptive capacity of receiving units and the ability to utilize it into their own operation structure or flexibility in implementing new processes. As overseas strategy business units are established in foreign environments, there are dissimilarities in the social, cultural and legal context that may affect the retentive capacity of the receiving unit as
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