New venture technology sourcing: exploring the effect of absorptive capacity, learning attitude and past performance.

* Commitment to learning: simply stated, if an organization does not believe in learning, learning may not occur;

* Open-mindedness: related to the idea of competency trap or core rigidities, an organization must be able to challenge the existing situations, or unlearn (Nystrom and Starbuck 1984);

* Shared vision: a shared vision influences the direction, or focus of learning.

For the authors, these conditions are necessary for learning to occur. As stated by Ribbens (1997), learning, organizational knowledge base, strategy formulation and implementation are interlinked. We define a learning organization as an organization that is committed to learning. By committed, we mean that the organization is ready to change the way it does things by combining existing knowledge or incorporating new knowledge. It encompasses the acquisition, communication, acceptation and absorption phase. Thus, organizational learning processes are neither necessary nor sufficient conditions for a learning organization. But, the existence of organizational learning processes will help the organization to learn.

Organizational learning encompasses the acceptance and assimilation processes of new knowledge with the existing knowledge, using combinative capabilities (Kogut and Zander 1992) or absorptive capacity (Cohen and Levinthal 1990). This concept was defined as 'a set of organizational routines and processes by which firms acquire, assimilate, transform, and exploit knowledge to produce a dynamic organizational capability' (Zahra and George 2002). It indicates that the new venture has internal knowledge that allows it to import, comprehend and use knowledge from external sources.

3. CONCEPTUAL FRAMEWORK AND HYPOTHESIS

We will argue that both absorptive capacity, learning attitude and past performance may interfere with the technology sourcing strategy chosen by companies. Technology sourcing will be analysed according to the number of technology access modes (TAM) used by one single company. Firms position themselves between two extremes. On one side, they might focus almost exclusively on in-house R&D. On the other hand, they might prefer to rely on an extensive number of TAM.

3.1 Technology sourcing and learning attitude

Learning attitude refers to the firm's disposition to acquire new skills. It has been said above that learning is about acquisition, communication, acceptation and assimilation of knowledge in the company. A learning organization will thus be an organization that developed an orientation or attitude toward learning. Learning allows nurturing the ventures' technology portfolio. Inter-organizational learning is a reason for the creation of joint-ventures (Hamel 1991). Sub-contracting with universities and public research centres allow to establish bridges with public research and staying aware of know-what (information) and know why (the scientific principles) (Garud 1996).

Knowledge acquisition and competitive advantage are facilitated by through relational assets (Yli-Renko et al. 2001). High concentration of human resources usually in a single place is one advantage of high-tech ventures regarding learning. This characteristic increases the fluidity of the circulation of information--much more than in multinational diversified companies. On the other hand, high-tech ventures tend to be less organized. One way to alleviate this handicap is precisely to create a learning attitude.

We would like to suggest that companies that are concentrated on in-house R&D do not pay enough attention to their environment. As such, they are not prepared to accept and acquire knowledge from their outside world. It comes that they are not learning oriented. On the other hand, companies that do not rely solely on in-house R&D are open to solutions coming from outside either through technological alliances or technology acquisition. We will assume that concomitantly to their openness, they have developed responsiveness to external knowledge. Their organizations allow accepting, acquiring and assimilating technology developed outside their in-house labs. As such, they are learning oriented. As a consequence, we will hypothesize the following:

Hypothesis 1: Companies with the largest span of TAM are more learning oriented than companies which use a shorter range of TAM.

3.2 Technology sourcing and absorptive capacity

Absorptive capacity is a key element of the knowledge management process. It is a function of the education level and the permeability of the people in place, of the technological level of development, i.e. of the already existing knowledge bases, the resources available to the firm (capital, infrastructures, equipment, etc.) and of the existing systems of management, supports and incentives. Differential absorption capacities induce different learning rates (Kumar and Nti 1998). In order to capture knowledge from an alliance, firms need an absorptive capacity (Parise and Henderson 2001), which in turn will lead to a better alliance selection (George et al. 2002). The same argument prevails when it comes to technology sourcing through acquisition of a start-up. Nevertheless as stressed by Zhara and George (2002), technology sourcing with alliances or acquisitions demonstrates only a potential absorptive capacity rather than a realized one. These forms of acquisition need afterward transformation and exploitation to demonstrate a realized absorptive capacity.

Companies using a large range of TAM are used to settle technological alliances with diverse partners, to sub-contract part of their R&D, to acquire technology through licence agreements or take-over. They are experienced at dealing with external technology stake-holders. All these agreements are channels for the transfer of new knowledge between the outside world and the company. We will suggest that companies used to these diverse TAM are also used to accept and assimilate new knowledge:

Hypothesis 2: Companies with the largest span of TAM are better absorbing innovations created by other companies than companies which use a shorter range of TAM.

3.3 Technology sourcing and performance

We suggest that diversifying technology sourcing has some benefits. Research has shown that when learning processes exist, companies surpass other companies in terms of performance (Calantone et al. 2002; Therin 2002). According to the knowledge-based view, firm performance and development will come from their ability to integrate and use new knowledge (Spender and Grant 1996) or to learn faster than its competitors (Easterby-Smith et al. 1998). Several writers have argued that companies should expand the range of their modes of access to technology. Rothwell and Dodgson (1991) have argued for the complementary between in-house and external know-how accumulation in small and medium sized manufacturing firms. Regarding in-house R&D, Zhara (1996) have shown that there is a positive relationship between internal R&D sources and independent ventures performance; Finally, Autio et al. (2000) have shown that the combination of new knowledge with the existing one will favour the growth.

On the other hand, Miles et al. (1999) have found that when small technology-based firms use alliances, they put themselves in a dependence position, which reduces their performance. They have shown that small technology-based companies should not focus solely on inter-firm alliances as partnering involves the risk of creating dependency on the partner--this means that high-tech small-sized companies should expand the range of their technology sourcing beyond alliances so to increase their performance.

Hypothesis 3: Companies that have the largest span of technology access modes (TAM) outperform the companies which use a shorter range of TAM.

4. RESEARCH METHODOLOGY

4.1 Sample and respondents

A sample of 1000 companies whose names where gathered from the Hoovers directory of companies in 1999 was chosen to collect data. The questionnaire was mailed out in September 2000 to the CEO or President of the company. The companies were chosen based on their affiliation with the technology sectors and their size (less than 500 employees). Questionnaires were answered mainly by the CEO or the President or Vice-Presidents of the companies. The average job tenure was 7.7 years. The result was 110 questionnaires. 50.9 % of the companies are privately owned, 45.4 % are public, while the remaining 3.7% are subsidiaries of other companies. The average number of full-time employees is 88, with numbers ranging from 4 to 465. The sales for 1999 have an average of 25.8 million USD (SD = 99.8), with an export rate of 24.7%. Companies in the sample cover various activities. The two most represented industries are IT and Pharmaceuticals (including biotech).

4.2 Measures and variables

Our constructs were built using sets of perceptual questions (7-points Likert scales) answered by the CEOs or Presidents of the companies. Based on previous works showing good reliability, performance is also based on perceptual measures (Lefebvre and Lefebvre 1996; Sapienza et al. 1988), with a set of 13 items encompassing financial, market and innovation performance.

The learning attitude is operationalized with 8 items (Cronbach's alpha = .89) (see Table 1). Absorptive capacity encompasses two dimensions: potential and realized (Zahra and George 2002). Potential absorptive capacity (PACAP) means that the firm is receptive to the acquisition and assimilation of knowledge. This dimension is operationalized through 9 items (Cronbach's alpha = .90) (see Table 2).