Local firms' response to changing foreign partnership characteristics : dynamic technology management strategies of firms in Sri Lanka

This paper examines how local firms in foreign partnerships adopt dynamic technology management strategies during the partnership. It analyses the technological capability development process of six firms from the two industries of rubber products and garment accessories manufacturing in Sri Lanka. It then proposes a model of dynamic technology management strategies used by firms in foreign joint venture partnerships and takes the perspective of local partner firms operating in a developing economy. It argues that successful local firms in foreign partnerships operating in a technologically constrained systemic context adopt dynamic technology sourcing strategies based on the characteristics of the evolving partnership. It first identifies the level of skills and competencies within the local partner firm, the potential for technological contribution by the foreign partner firm and the level of autonomy of the partner firms. These are important determinants in the choice of technology management strategies of the local partner firm. A model is then developed to demonstrate the behaviour of local firms as they develop their own local technological capabilities. The findings of this research and the model developed have significant implications for the technology management practices of local host firms in developing economies. It is applicable for both to firms that are currently in joint venture partnerships with foreign firms in order to develop technological capabilities for competitiveness, and to those that seek such a partnership