Organizational Capabilities and Technology Acquisition: Why Firms Know Less than They Buy

Abstract

This article examines some of the main challenges faced by firms as they seek to acquire the high-technology capital goods, systems and services that form the core of their operational infrastructure. Although the acquisition of the parts or components required to build manufactured products has been widely explored in the innovation literature, the acquisition of the technological infrastructure required by firms to undertake such activities is poorly understood. The process of infrastructure acquisition is a key part of the firm's innovation process, yet many firms lack the in-house capabilities required to effectively undertake this activity as it is an infrequent and highly complex task: firms know less than they buy. The article introduces a buyer typology that relates the acquisition of high-technology capital goods and services to the purpose and frequency with which they are acquired and examines the challenges faced by firms in the buying process. The part played by external specialist suppliers and consultants in the acquisition process is also explored, and the wider impact on the firm's absorptive capacity and innovation processes are considered.