EXTERNAL TECHNOLOGY ACQUISITION IN LARGE MULTITECHNOLOGY CORPORATIONS

Based on different contractual forms and their associated degrees of o rganizational integration, a typology of strategies for technology acq uisition (sourcing) is constructed. Based on a sample of corporations in Europe, Japan and US, it is shown that external acquisition of tech nology through various strategies increases in importance in general. Product case studies further show that external acquisition of technol ogy is associated with technology diversification into increasingly co stly new technologies. As a result corporations become multi-technolog ical ('multech'). At the same time quasi-integrated corporate systems of innovation arise in which in-house R&D is managed together with a m ix of strategies for external acquisition of technology, using various contractual forms. This presents new challenges to traditional in-hou se R&D management. Technology diversification is moreover shown to be associated with growth of sales as well as with growth of R&D expendit ures. A high level of external technology acquisition presents risks t hat ought to lead companies to consider technology based product diver sification.