The governance of technology buyer/supplier relationships in AMT implementation

The acquisition of advanced manufacturing technology (AMT) by a company does not guarantee that it can yield all the potential benefits being offered. Research in this area has found that many technology acquisitions fail during the implementation process. In a developing country like Malaysia, where local technological capabilities are relatively low, this problem is more apparent, especially when the technology has been acquired and transferred from a foreign country. This paper is based on an ongoing study to investigate the governance
of technology buyers and suppliers in AMT acquisition and implementation in Malaysia as well as how it impacts the performance of a particular AMT innovation. Two central questions underlying this research are: i) under what conditions does the governance mechanism enable closer buyer/supplier relationships? and ii) what is the impact of governance on AMT performance? In looking for factors or conditions that change the pattern of governance
between the technology buyer and supplier, this paper utilises transaction cost economics theory to conceptualize how the level of asset specificity, the level of uncertainty and the level of complexity could affect the differences in pattern of governance in buyer and supplier relationships. Apart from bridging the gap in this area the study also aims to contribute to the literature on AMT buyer and supplier relationships as well as extending prior research on technology performance. The study also seeks to provide a better understanding of how the
transaction attributes of the technology can affect the differences in pattern of governance between the technology buyer and the technology supplier.