Being Different: How Normative and Cognitive Aspects of Institutional Environments Influence Technology Transfer

Abstract

This article provides a novel perspective on technology transfer by arguing that incorporation of a new technology into an organization may require it to become different in more ways than existing research would have us believe. This is especially true when host and home organizations are based in two widely different institutional environments. Because institutional pressures exert themselves on organizational behavior from both outside and inside the organization, they are critical in determining whether the transfer process is successful. Borrowing from institutional theory, the institutional environment of an organization is divided into regulative, normative and cognitive aspects. It is argued that, although less obvious in their influence, normative and cognitive institutions are no less important than the relatively more visible regulatory institutions. This article discusses how normative and cognitive aspects of the institutional environment affect international technology transfer and offers propositions as well as implications for researchers and managers. Although the insights developed in this article are applicable to any instance of technology transfer, they are more salient in cases where technology is transferred internationally. Also, the propositions developed here are probably more relevant in cases where ‘process-embodied’ technologies are being transferred.