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Technological Capabilities as the Base of Diversification Strategy: A Theoretical Framework and its application in TAAM Irankhodro

Malekifar, Siavash | 2010

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 41068 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Arasti, Mohammad Reza
  7. Abstract:
  8. Corporations play a significant role in countries economy. These companies are usually active in multi and diverse businesses. Their business diversification could be based on technological capabilities. Therefore it's important to consider the relation between technology strategy (eventually leads to technological capabilities) and the strategy of diversification (as an overall strategy) at acorporate level. Unfortunately, there's no a proper theoretical framework to underpin this relation or offer a method for practical decision-makings. The aim of this research is to fill partially this gap and purpose a new framework for linking technology to business diversification at a corporate level. Through a vast literature survey, the framework presented by Hemel and Prahalad (1990), was selected as the reference base for our research. This framework links the core competencies of corporations to their diverse businesses using the concept of main (core) products. Then, based on a chronological survey from 1990 to 2010, we reviewed all documents which support, enhance or criticize Hamel and Prahalad’s framework. Through literature survey and content analysis, the main themes and concepts have been extracted, categorized and added step by step to the reference framework to be modified and completed. Then, the new framework has been applied to a real case, TAAM IranKhodro. TAAM is a subsidiary of IranKhodro corporation, the largest automotive company in middle-east. TAAM is active in different sectors such as automotive, mining, rail transportation and Oil & Gas. It seems that the company’s technological capabilities in automation and robotics and its expertise in design and engineering have been resulted in business diversification. The Investigation of company is made by interviewing seven top executive managers, based on the proposed framework. Using ATLAS.ti (the qualitative data analysis software), the transcript of interviews have been analyzed in order to pointed out the main concepts and themes. In this case study many practical evidences have been found which support the proposed framework. As a result, a framework with fourteen parameters, which explain how technological capabilities could be the origin of business diversification, is developed and illustrated. These are the factors affecting the linkage of technology strategy and diversification strategy at a corporate level and can be divided into internal and external environmental factors. Among the parameters, thirteen are the factors extracted from the literature survey and only one resulted from the case study. Finally effective parameters on the relation between technological capabilities and business diversification are listed as below: Instutitional Environment, Environmental and Technological Trends, Technology Integration Capabilities, Synergy, Platform Characteristic, Transaction Cost, Firm Technological Diversity, Leadership Style, Human Resources Expertises, Firm Effort to Diversify, Organizational Culture, Technology Observation, Firm Size, Organizational Structure. The proposed framework can be used as a basis for further studies
  9. Keywords:
  10. Case Study ; Technology Strategy ; Corporation ; Diversification Strategy ; Qualitative Research ; Theoretical Framework ; TAMM Irankhodro Company ; Technological Capabilities

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