Some concepts of technology transfer: adoption of
innovations in organizational context
A. K. Chakrabarti, The East-West Technology & Deve/opmenf Institute, University of Hawaii, U.S,A.
Abstract. This paper is based on the review of literature on
technology transfer and diffusion of innovations. Models
and propositions developed by scholars in various dis-
ciplines were analyzed. The definitions and concepts
frequently encountered in the literature were discussed to
understand the process of technology transfer at various
levels. Problems of inter-organizational technology trans-
fer were discussed at length.
INTRODUCTION
The objective of this paper is to review some of the con-
cepts pertinent to the process of technology transfer with
special reference to the adoption of innovations in
organizational context. Researchers and scholars in
various fields, like anthropology, sociology, education,
industrial economics, industrial history and industrial
engineering, have been active in studies on utilization of
new ideas by societies, communities, individuals such as
farmers and doctors, and organizations. Since the litera-
ture is widely scattered and appears in very diverse forms,
such as technical reports, trade journals, newspaper items
and conference papers, it has been very difficult to synthe-
size the information. Moreover, there appears to be some
amount of insularity among the various traditions of
research with the consequent lack of cross-referencing to
one another. It is hoped that this paper will highlight
some of the key concepts useful in understanding the
process of technology transfer.
Technology has been viewed as the key to the develop-
ment of the Western world. Developing countries are
becoming increasingly aware of the importance of tech-
nology in the process of economic growth. As Gruber &
Marquis (1969) pointed out, the recent recognition of the
need for a better understanding of the process of transfer
of technology is based on the transition from private to
government sponsorship of research and the increase in
the proportion of national income devoted to R & D
activities. Both the developed and the developing nations
have become increasingly oriented to the formulation and
execution of pragmatic science policy directly related to
the economic goals. Corporate management personnel
have become increasingly concerned with the relevance of
R & D activities and the transfer of technology to the
functional subunits.
TRENDS I N THE STUDIES I N TECHNOLOGY
TRANSFER
Danhof (1949) is one of the pioneers who made a sys-
tematic effort in studying the adoption of new innovations
by industrial firms and identified four types of firms:
(a) Innovators: the first firm to adopt a new idea.
R & D Management 3,3, 1973
(b) Initiators: the firms who adopted the ideas soon after
the innovators.
(c) Fabians : the firms who adopted the idea only after its
utility was widely acknowledged in the industry.
(d) Drones: the last firms to adopt new ideas.
In their study of 130 British firms, Carter & Williams
(1 957) used innovativenessas the basis of classification.The
contrasting characteristics of the firms at the two ends of
a dichotomous scale of parochialness c - + progres-
siveness, were further developed in their later study
(Carter & Williams, 1959) of fifty British firms. Suther-
land (1959) used a similar approach in his study of
diffusion of spinning innovation in sixteen British firms.
Enos (1959) examined the relationship of profitability to
innovativeness in the petroleum refining industry.
Mansfield (1968) took a rigorous quantitative approach
towards the systematic study of industrial innovations
in American industry.
During the later part of the 1960s, there has been a
great increase in the study of technology transfer under
the auspices of several government agencies, such as the
National Aeronautics and Space Agency (NASA), the
U.S. Army Research Office, the National Science Founda-
tion, the National Planning Association, the Department
of Defense, etc. These studies can be divided into the
following categories.
1. Policy-oriented study. Doctors (1969), for example,
devoted his major attention to the analysis of government
documents, patent laws, etc., to recommend courses of
action to government agencies. This type of study uses
short cases as anecdotal instances of technology transfer
without much in-depth analysis.
2. Survey on adoption of industrial innovations. Myers
& Marquis (1969) reported the survey on adoption of 439
innovations in 121 selected firms in five industries. The
Denver Research Institute has a large project on follow-
ing up the utilization of NASA technology. The Science
Policy Research Unit at the University of Sussex has
completed a research project, called SAPPHO, focusing
on the process of innovation in industry.
3. Studies on information and idea transfer. Information
transfer and idea flow within the R & D organizations,
and between R & D and other potential users of technical
information, has gained popularity in the studies of the
past decade. Thomas Allen of M.I.T., Richard Rosen-
bloom of Harvard, and A. H. Rubenstein of North-
western, have directed series of studies in this field, with
primary focus on the effectiveness of communication
channels and the characteristics of the process of informa-
tion transfer.
4. Zn-depth studies on the adoption process in industrial
organization. At Northwestern a few projects were under-
111
I I2
taken under the direction of Professor A. H. Rubenstein
to study the effects of various techno-economic and
organizational factors upon the adoption of innovations
in industrial organizations. Martin (1967) gathered data
from eighty-six co-operating managers and engineers in
thirty-four firms, engaged in electronics manufacturing,
on evaluation and acceptance/rejection of ideas related to
production processes. Lapp (1966) did an empirical study
of eight railroads on technological innovations. Maher
(1970) reported on some factors relevant to the adoption
of a computer-based project selection technique, in an
R & D organization. Ettlie (1971) concentrated on the
success of technology transfer in the machine tool
industry and studied the factors affecting adoption and
implementation of numerically controlled machine tools.
5. Studies on entrepreneural behavior. There have been a
few studies on the entrepreneural behavior of people
involved in technological innovation. Rubenstein (1958)
conducted a study on the problems of financing and
managing new research-based enterprises in the New
England area. An exhaustive study of the different aspects
and problems of new research-based enterprises (NRBE)
was made in terms of (a) the role of NRBE in the national
economy; (b) financing of NRBE; (c) objectives of
NRBE; (d) growth, mergers and measures of success of
NRBE; (e) management skills; (f) marketing and sales
problems of NRBE; and (g) transition from laboratory to
production. Professor Edward Roberts of M.I.T.
directed a series of studies on the psychological charac-
teristics of the scientists who established their own enter-
prises in the Boston area. Roberts & Wainer (1966) listed
those studies. Cooper (1971) reported similar research
results of R & D-based enterprises in the San Francisco
Bay area. McClelland (1969) developed the theory of
achievement orientation as a motive force behind the
entrepreneural and, consequently, innovative behavior in
industrial organizations.
6. Wisdom literature. Quite a few conference papers and
journal articles have appeared, based on the respective
authors experience in his own organizational setting.
Jack Morton of Bell Telephone Laboratories deserves a
special mention as a regular contributer to this field. The
Materials Advisory Board utilized in-house researchers
to write detailed case histories on ten innovations in ten
organizations high-lighting the research-engineering in-
teraction process.
7. Evaluative studies on technology transfer. Project
Hindsight (Isenson, 1966), under the sponsorship of the
Department of Defense, was directed towards gaining a
more objective understanding of defense utilization of
science and technology. This study was intended to
determine which, if any, policy controllable factors could
markedly influence the efficiency of the Department of
Defenses R & D programs. The investigation carried in
Project TRACES (IITRI, 1968) was based on the histori-
cal tracing of key scientific events which led to five major
technological innovations : (1) magnetic ferrites, (2) the
video tape recorder, (3) the oral contraceptive pill, (4) the
electron microscope, and (5) matrix isolation in chemical
reaction. This study emphasized the communication
between science and technology.
A. K. CHAKRABARTI
DEFINITIONS OF SOME BASIC CONCEPTS
Before proceeding further to the discussions of various
models, we will examine the definition of some key terms
and concepts frequently used in the studies of technology
transfer.
A. Innovation
The word innovation, often used in the literature, has
been defined both as an item and as a process. Barnett
(1953, p. 4) defined innovation as any thought, behavior
or thing, that is new because it is qualitatively different
from the existing forms. Thus novelty or newness is the
key to define the word innovation. Rogers (1962) incor-
porated this characteristic in the following definition :
An innovation is an idea perceived as new by the
individual. It really matters little, as far as human
behavior is concerned, whether or not an idea is objec-
tively new as measured by the amount of time elapsed
since its first discovery. It is the newness of the idea to
the individual that determines his reaction to it.
Other authors, however, emphasized the reaction of
individuals to the ideas in their definition of innovation.
Thompson (1965) remarked: By innovation is meant the
generation, acceptance and implementation of new ideas,
processes, products, or services. Innovation, therefore,
implies the capacity to change or adapt. Adaptive
organization may not be innovative, but innovative
organization will be adaptive, because it is able to
implement new ideas. Thompson implied two aspects in
his definition of innovation: (a) creation of the idea and
(b) acceptance of the idea. Schon (1967) differentiated
between these two in his definition. According to Schon
(1967), invention is the process of bringing new tech-
nology into being, or new technology created in pro-
cesses; but innovation means the process of bringing
invention to use. Doctors (1969) went along with Schon
(1967) in his definition of innovation. According to
Doctors (1969), innovation is the application of new
technique (hardware or software) which increases per-
formance at existing or lower cost.
Barnett (1953) made a sharp objection to equating
acceptance with innovation. His argument is that,
although the process of acceptance may have some ele-
ments in common with the process of innovation, motiva-
tionally, they are different. Moreover, acceptance is
preceded by the communication of ideas, which is not a
necessary step in the case of innovation.
In the context of his study of the adoption of NASA
innovations by commercial firms, Chakrabarti (1972)
found the definition of Rogers as the acceptable one.
The main thrust of his research was on the reaction of
different firms towards some specific techno-economic
opportunities, pieces of information regarding products
or processes generated at NASA research centers or at
NASA-Contractor organizations.
B. Technology Transfer
Technology transfer can be viewed as the generalized pro-
cess of information transfer between science, technology,
R & D Management 3, 3, 1973
Some concepts of technology transfer
and actual utilization of scientific ideas. Brooks (1966)
remarked :
Technology transfer is the process by which science and
technology are diffused throughout human activity.
Wherever systematic rational knowledge developed by
one group or institution is embodied in a way of doing
ihings by other institutions or groups, we have tech-
nology transfer. This can be either transfer from more
basic scientific knowledge into technology or adaption
of an existing technology to a new use. Technology
transfer differs from ordinary scientific information
transfer in the fact that to be really transferred, it must
be embodied in an actual operation of some kind.
On the basis of the above generalized concept of
technology transfer, Brooks (1966) made a distinction
between two types of technology transfer: vertical and
horizontal. Vertical transfer refers to the transfer of
technology along the line from the more general to the
more specific. In particular, it is the process by which new
scientific knowledge is incorporated into technology, and
by which a state-of-the-art becomes embodied in a sys-
tem, and by which the confluence of several different, and
apparently unrelated, technologies lead to a new tech-
nology. Horizontal transfer occurs through adaptation of
a technology from one application to another, possibly
wholly unrelated to the first.
Analysis of these two types of technology transfer
would show that horizontal transfer is generally an inter-
organizational process, whereas vertical transfer generally
involves an intra-organizational ptocess. The aspects of
horizontal transfer proposed by Doctors (1969) and Bar-
Zakey (1970) as the process by which information gener-
ated in one institutional setting (e.g. aerospace industry)
is adapted and used in another institutional setting (e.g.
health care). These definitions of technology transfer
implicitly assume technology as a transmissible, seminal
idea. As Burns (1969) pointed out, the basic assumption
of technology, as an assemblage of pieces of information
which can be extracted or expelled from one sector of
organized creativity and transposed to another to pro-
duce different outputs, is implied in the space age jargons
like spin-off, fall-out, etc.
C . Spin-ofl
Spin-off is the term popularly used as equivalent to
technology transfer in the aerospace industry. Welles &
Waterman (1964) differentiated between two types of
spin-offs: tangible and intangible. Tangible spin-off is the
transfer to commercial use of well-defined products, pro-
cesses, or materials originally developed for space-related
purposes. Intangible spin-off is the transfer of scientific
and technological information.
D. Diffusion of Innovation
The term diffusion of innovation has been used exten-
sively in rural sociology and lately in the medical socio-
logy. It is the process by which a new idea is spread from
its source of invention or creation to its ultimate users or
adopters. Katz, Levin & Hamilton (1963) remarked that
seven elements are essential in any diffusion study: (1) the
R & D Management 3, 3, 1973
113
acceptance, (2) over time, (3) of some specific item-an
idea or practice, (4) by individuals, groups or other
adopting units linked to (5) specific channels of com-
munications, (6) to a social structure and (7) to a given
system of values or culture,
The problem of making a distinction between tech-
nology transfer and diffusion of innovation is nQt easy,
because the stages involved in both are quite similar in
nature. The main point of difference between them is in
the elements of purposiveness involved in the behavioral
pattern of the user. Spencer & Woroniak (1967) empha-
sied that the word diffusion itself refers to a spontaneous
process. They argued that the tradition of research in
diffusion of innovations overlooks the purposiveness
manifested by conscious, predetermined effort and com-
mitment of resources to transplant technology from one
setting to another.
Some researchers (in private communication to the
author) expressed the opinion that diffusion of innova-
tion is an intra-sectoral phenomenon whereas transfer of
technology is an inter-sectoral one. This type of definition
is not of much help, because many times a company may
be operating in different sectors. It is sufficient to note
that these two traditions differ in terms of the research
objectives. The diffusion research involves the analysis
of the rate at which an idea spreads in a given social
system, whereas technology transfer is considered as a
point-to-point phenomenon. The important point to be
made here is that the two are not mutually exclusive: a
researcher working on one tradition must draw on the
knowledge available in the other.
MODELS FOR TECHNOLOGY T R A N S F E R A T T H E
INDIVIDUAL LEVEL
Different models of adoption of innovation and tech-
nology transfer have been developed by focusing on
different levels of units of analysis : (1) an individual, (2) a
group of individuals, (3) a community, (4)an organiza-
tion, (5) an industry as a whole, and (6) a nation. For our
purpose, we will examine the models at the first four levels
of analysis.
At the individual level, Barnett (1953) developed a
model for the process of innovation. According to him,
the process of innovation consists of six sequential stages:
(1) configuration of idea, (2) recombination of idea,
(3) identification of relevant new ideas, (4)substitution of
old ideas, (5) discrimination between different ideas, and
Desire f o r ego
structural i z a t I on f o r ego-domination
- Innovat I ve
behavior
I wants 1 A
Credit wants
different f r o m
others
Figure 1. Barnetts model for innovative behavior.
114
(6) final evaluation of losses and gains associated with the
different ideas. Barnetts analysis of innovative behavior
has been summarid in the box-and-arrow diagram
shown in Figure 1. The main point of interest in Barnetts
model is the importance of the emotional and, hence,
irrational, elements of an individuals psychological pro-
cess in the innovative behavior. The important step in the
process of innovation is the reconfiguration, either
consciouslyor unconsciously, of the conventionalassocia-
tions of ideas that are otherwise known to people. Re-
garding the distinctive features of the innovative process,
Barnett (1953) hypothesized as follows:
I . An innovators analytical potential depends upon his
freedom to make some non-customary analysis, be-
cause any reaction to a stimulus field involves some
kind of organization of it.
2. The resources of an individual are intimately linked
with his analytical ability in the overall measurement
of his innovative potential.
3. Individual differences in availability of materials may
be due to a cultivated mental habit.
The basic ideas which emerge out of it are that:
(a) An element of creativity is involved in the process of
innovation.
(b) This element of creativity is intrinsic to the individual.
(c) Environmental factors may be effective to some de-
gree in enhancing the innovativeness.
This notion on individual differences in innovative
potentials can be extended to larger units of analysis.
Secondly, the idea that environmental factors play an
important role in promoting the innovativeness of indi-
viduals may be utilized in our problem of innovation at
corporate level. Gellman (1966) coined the term innova-
tion quotient to denote the propensity to innovate at the
firm (or industry) level. Myers (1966) reported the opera-
tionalization of this concept at the industry level and
observed that firms in the computer industry are more
innovative than those in the railroad and the housing
industries. Barnett (1953) made a qualitative distinction
between the process of innovation and the process of
acceptance of a novel idea. Acceptance of an idea is based
on its superiority to other available ideas in fulfillment
of the actors needs. The desire for change, based upon
the novelty of the idea, is dependent on a hierarchy of
wants, ;is shown in Figure 2. Barnetts model does not
elaborate on the process by which these wants are created.
His model is based more on cultural rather than on
economic factors. Foster (1962), in his study of techno-
logical change in developing countries, noted the impor-
tance of economic factors. Although Foster did not
differentiate the level at which he was investigating, i.e.
whether his unit of analysis was at the individual or the
national level, his observation is important for our con-
sideration here. He observed :
Cultural, social and psychological barriers and stimu-
lants to change exist in an economic setting. In a more
comprehensive analysis, economic factors should re-
ceive extensive treatment, for they seem to set the
A . K. CHAKRABARTI
quantitative aspects Concept o f
Desire for auanti tat i ve
Volun tory
avoidance
of wants
wants
I Desire for
change
I
Figure 2. Barnetts model for change.
absolute limits to change. People often are unwilling to
change their ways, because of cultural and social and
psychological factors. But equally as often, they are
quite aware of the value of change and anxious to alter
their traditional ways, but the economic sacrifice is too
great. If an economic potential does not exist or cannot
be built into a program of directed change, the most
careful attention to culture and society will be meaning-
less.
Foster identified economic gains and competitive
pressures as the main motivating devices for innovation in
any situation. This approach will be more applicable in
industrial behavior, since the industrial organizations are
economic organizations in all social psychological theory.
Assumptions of rationality (or bounded rationality,
according to Simon, 1957a) would be applicable for
buisiness organizations.
Fosters model for technological change is based on a
systems approach, but his main focus is on the individuals
as the decision-making units. In the sociologicaltradition
or research, particularly in the rural sociological tradi-
tion, the focus is on the individuals as the decision-making
unit, with predominant importance on the social inter-
action influencing the decision making. Rogers (1962)
described the adoption process as a type of decision-
making process. A decision-making process is a sequence
of events: (1) observation of the problem, (2) analysis of
the problem, (3) decision on the alternative courses of
action, (4) implementation of an alternative, (5) accept-
ance of the consequence. This is the rational view of the
decision-making process which Fulcher (1965) termed as
thoughtful decision making. According to him there are
five elements involved in a thoughtful decision process :
(a) the existence of a problem situation, (b) the purpose
of the decision maker, (c) the availability of alternates,
(d) the probable consequences, and (e) the values of the
decision maker.
Economists and psychologists have developed a large
literature on the decision-making process utilizing the
concept of economic man. The classic concept of econo-
mic man, according to Taylor (1965), is essentially a
theory of decision-making under certainty. An economic
k & D Management 3,3, 1973
Some concepts of technology transfer
man is assumed to be (1) completely informed about the
courses of actions and the outcomes of the different
actions, (2) infinitely sensitive to the alternatives, and
(3) rational. The assumption regarding rationality of an
economic man demands that (a) he can weakly order the
states in which he can get something and (b) he makes his
choice in order to maximize something. In the literature
of decision-makingunder certainty, it is assumed that the
rule is to maximize the utility of the decision maker. In
decision under risk, as in decision under certainty, the
individual knows with certainty all of the alternatives; but
at least one of the alternatives leads to a set of conse-
quences with more than one member, the consequences
being mutually exclusive, with the probabilities of the
occurrence of each of these consequences being known to
the decision maker. Under such circumstances, the objec-
tive is to maximize the expected utility of the decision
maker. According to behavioral decision theory, as
Edwards (1961) proposed, people maximize the product
of utility and subjective probability of the occurrence of
the outcomes. A subjective probability is a number that
represents the extent to which an individual thinks a given
event is likely.
Simon (1957a) challenged the notion of the absolute
rationality of the decision-making process in real life,
particularly in the context of organizational behavior. He
wrote :
A theory of administration or of organization cannot
exist without a theory of rational choice. Human be-
havior in organizations is best described as intendedly
rational; and it merits that description more than does
any other sector of human behavior. (Simon, 1957b,
p. 196)
Actual behavior falls short of the objective rationality
assumed in the concept of economic man in the following
three ways:
Rationality requires a complete knowledge and antici-
pation of the consequences that will follow on each
choice. In fact, a knowledge of consequences is always
fragmentary.
Since these consequences lie in the future, imagination
must supplement the lack of experiences. But conse-
quences of a decision can only be imperfectly antici-
pated.
3. Rationality requires a choice among all possible
alternative behaviors. In actual behavior, only a very
few of these alternatives ever comes to mind.
Based on these arguments, he proposed the principle of
bounded rationality as follows :
The capacity of human mind for formulating and
solving complex problems is very small compared with
the size of the problems whose solution is required for
objectively rational behavior in the real world-or even
for a reasonable approximation to such objective
rationality. (Simon, 1957b, p. 198)
The principle of bounded rationality leads to the theory
of satisficing, in place of the theory of maximizing, in the
decision-making process. The key to the simplification of
the choice process, according to Simon, is the replace-
ment of the goal of maximizing with the goal of satisficing,
of finding a course of action that is good enough.
Referring back to the problem of the adoption of new
ideas, we would see that the principle of bounded rational-
ity is applicable in this context. We have already seen that
the adoption process is a stage-wise, decision-making
process. The availability of alternatives, the determina-
tion of consequences of the alternatives, and choosing the
alternatives would be dependent upon the decision-
makers own capability, his information sources, the
channels of communication used, and the influence of his
social system. Rogerss (1962) model for the adoption
process has been depicted in Figure 3. Analysis of this
figure shows that Rogers considered the adoption process
consisting of five stages : awareness, interest, evaluation,
trial, and adoption.* The dominant feature of this model
is the assumption that, if the innovation is a stable ele-
ment which one can easily identify as constant, then the
task of measuring its flow through a social system over
time is made considerably easier. This is the critical point
in the diffusion of innovation studies. Loy (1969) studied
the adoption of the breathing technique, controlled
* For a discussion of the operational implication of these stages
in the study of technology transfer, the reader is referred to Chapter
6 of Chakrabarti (1972).

ANTECEDENTS PROCESS RESULTS

Actors I d e n t i t y - 7 I n f o r m a t i o n Sources

I
I I
I I /-Continued

2 Values
3 Mental a b i l i t y
i I Cosmopolite'---
,l,ri)D i
I 2 Personal-imipersonal

4 Social status
i t t
eness Interest Evalua- T r i a l Adoption
I1 tion IV V
t_ Later
adoption
-
111

-
I
Perceptions of the
S i t uat i on
Social system norms
on InnOvatlveness
ADOPTION PROCESS
II
Perceived Characteristics of the Innovation
-I Discontinuance -
2 Economic constraints I R e l a t i v e advantage
and incentives 2 Compatibility
3 Characteristics of 3 Complexity
the u n i t ( f a r m , 4 DiviSibility Continued __L
schoo I, bust ness) 5 Communicability nonado p t I on

Figure 3. Paradigm of the adoption of an innovation by an individual within a social system (Rogers, 1962).
R & D Management 3, 3, 1973
I 16
interval method, among the channel swimmers and cor-
related this behavior with the following social-psychologi-
cal variables : venturesomeness, professional status,
dominance, sociability, cosmopoliteness (through three
measures), self-sufficiency, perseverance, peer status,
intelligence, occupational status, social status, shrewd-
ness, experimentiveness, surgency and sensitivity. The
major point made by Loy in this study is the following:
The discovery of empirically distinguishable adopter
categories lend support to Rogerss arguments that
innovativeness is a continuous variable and that it may
be both theoretically and empirically fruitful in dif-
fusion research to study multiple rather than dicho-
tomous adopter categories.
The caveat in generalizing Loys observation is that his
study involved (a) an individual as the adopting unit and
(b) the characteristic of the innovation was such that a
simple, unidimensional time scale could be used to
measure the adoption behavior. These two conditions are
seldom met with in studying industrial innovation.
There are five major points which can be derived from
this body of literature.
1. The importance of the social relations network. This
involves an explicit recognition of the importance of the
fact that human beings are embedded in, and inextricably
connected to, a social network made up of other indi-
viduals. A complex and intricate set of human substruc-
tures and processes must be operative if diffusion is to
succeed.
2. The users position in the social network. The social
interaction model identified opinion leadership as the
major factor for acceptance of an idea. It means that the
initial acceptance by a small minority of key, influential
people is a major factor in the process of diffusion of
innovation. The prestige of these individuals, their status
as norm-setters, and the frequency of their interaction
with other members, would affect the rate of acceptance
of an innovation in that social system.
3. Informal personal contact. Face-to-face interpersonal
contact is the principal mechanism used by the opinion
leaders to influence the members of the social system.
4. individuals group identity and group loyalty. People
tend to adopt and maintain attitudes and behaviors which
they perceive as normative for their psychological re-
ference group. Innovators are likely to place themselves in
a greater number and variety of such reference groups and
they are more likely to have what Rogers called cosmo-
polite orientation, which allows them to see personal
relevance and value in ideas and things which their
neighbors would see as foreign. A social group having a
large number of individuals maintaining diverse and over-
lapping references would be more innovative (Havelock,
1969).
5. Essential irrelevance of the size of the adopting unit.
The greatest criticism raised against the social interac-
tion model is that it disregards the size and complexity of
the adopting unit. Rural sociologists and medical
sociologists avoided the issue by concentrating on the
individual farmer or. doctor as the adopting unit. But in
the case of industrial organizations, this no longer be-
A . K. CHAKRABARTI
comes valid. This does not depict the involvement of the
different hierarchical subsystemsin an organization in the
decision-making process. It becomes difficult to opera-
tionalize some of the variables in the social interaction
model when one considers a large organization. As Rad-
nor (1964) pointed out, there is a difference of the per-
ception of problems between top management and
divisional management personnel. In such case whose
values would influence the decision about technological
innovation in the corporation ? Rogers does not offer any
proposition about the conflict of the different subsystems
within the same organization.
MODELS FOR TECHNOLOGY TRANSFER A T THE
O R G A N I Z A T I O N A L LEVEL
The view, that the process of technology transfer consists
of a series of orderly steps between the generation of the
idea (e.g. R & D efforts for creating a new product) and
the actual implementation of the idea (e.g. manufacturing
and marketing the product), led to the assumption that
the sequential steps can be planned and achieved through
division of labor. This view implicitly assumes that there
is a definite audience-a specified, passive consumer-
who would accept the innovation if it were derived on the
right channel in the right way, at the right time.
Gruber & Marquis (1969)developed a model based on
the R & D perspective providing a sequential series of
probabilities that might be considered in order to deter-
mine whether given technical information could be trans-
ferred into a new use that would itself result in eventual
diffusion. According to them, the success of technology
transfer depends upon the success of the following
sequential steps: (1) generation of the idea, (2) research,
(3) development, (4) production, (5) marketing. Schon
(1967) also used similar viewpoints in his depiction of
product design processes in corporate organizations.
One critical problem with this type of model is due to
the implicit assumption that the organization has two
critical links with the outside world: one at the time of
generation of the idea and the other at the point of
marketing the packaged product to the consumers. One
can argue that reality is not as sequential as proposed by
Gruber & Marquis (1969). Knowledge does not flow as a
monotonic linear function from one organizational sub-
unit to another. Secondly, the role of the potential user
has been de-emphasized to a great extent. This model
does not account for the contribution of the potential
users needs in the technology transfer process.
Schon (1967) recognized the shortcomings of the
rational model for innovations and commented that the
rational view of innovation as an orderly, goal-directed,
risk-reducing process must appear as a myth. Advance
planning of the process becomes unfeasible, because there
is a constant interaction between the need and the
technique, which produces unexpected twists and turns.
Secondly, innovation produces uncertainties, i.e. it pro-
duces a situation where the probabilities of different
consequencies cannot be measured. Uncertainties occur
due to three factors: (1) the technical feasibility of the
idea, (2) the novelty of the idea, and (3) the market reac-
tion. Novelty of a technical innovation is uncertain
R & D Management 3,3, 1913
Some concepts of technology transfer
because of lack of information in spite of the best efforts
and because of uncertainties involved in judicial pro-
cesses used to evaluate the idea.
In the real life situation, technology transfer and adop-
tion of innovation may be viewed as problem-solving
activities in organizations. The steps involved in the
process are:
1. Need sensing and articulation of information.
2. Diagnosis and formulation of the need as a problem to
be solved.
3. Identification and search for resources relevant to the
problem.
4. Retrieval of potentially feasible solutions and solution-
pertinent ideas.
5. Translation of this retrieved knowledge into specific
solution or solution prototypes,
6. Behavioral trials, or application of the solution to the
need, with the evaluation of effectiveness in need
reduction being made.
Myers & Marquis (1969) used this problem-solving
approach in developing their model of technology trans-
fer. According to them, the decision process for adoption
of innovation, whether it is systematic and quantitative,
or intuitive and informal, involves consideration of (1)
the estimated probability of technical success, (2) the
estimated cost of development, (3) the estimated time for
development, (4)the estimated probability of commercial
success, and ( 5 ) the estimated return to the firm if it is
commercially successful.
If one views technology transfer as a problem-solving
decision-making process, then one must be aware of the
importance of organizational factors in the process. As
Katz & Kahn (1966) pointed out, the cognitive limita-
tions as well as the basic personality traits of the decision
maker are equally important as the nature of the problem
in the decision-making process. The organizational
decision-making process was characterized by March &
Simon (1958) as follows:
1. The decision-making process consists of an aggregate
of a large number of elementary steps.
2. A large component of problem solving consists of
search processes : physical, perceptual or cognitive.
3. The other component of problem solving consists of
screening processes.
4. The elementary components of the problem-solving
process, the search and screening processes, are
characterized by a great deal of randomness.
5. The programs which govern the problem-solving pro-
cess generally have a hierarchical structure.
March & Simon (1958) hypothesized that the natural
stimulus to generation and acceptance of new ideas is
external. It is based on the failure of the existing pro-
grams to obtain the satisfactory levels of criteria for
organizational performance. The process of innovation in
an organization has a synergetic effect on further innova-
tive behavior within the organization; because the criteria
for satisfaction are generated as an outcome of the im-
plementation of new ideas.
R di D Munugement 3, 3, 1973
B
117
March & Simons model is useful in understanding the
dynamics of the organizational factors in the process of
innovation. For example, the involvement of top-level
management affects the institutionalization of innova-
tion, the co-ordination, and the propensity of organiza-
tional members to innovate.
SUMMARY
This paper deals with some of the key concepts often used
in the studies on technology transfer and adoption of
innovations. Innovation is defined as an item or an idea
which is transferable from one individual to another,
from one organizational setting to the other. While the
researchers from sociology and anthropology have been
involved in the rate of spread of an innovation within a
social or cultural setting, there has been a growing in-
terest in the in-depth analysis of the factors influencing
point-to-point transfer of ideas. A hair-splitting distinc-
tion between the two types of research tradition seems to
serve no purpose and it is advisable that both traditions
should be considered together.
The anthropological view of innovative behavior by
individuals dependent on creative wants seems to signify
elements of emotion and non-rationality in the process.
This approach was compared with the concept of
bounded rationality in the decision-making process in
organizations.
The social interaction model developed by the sociolo-
gists focused on the interaction of environmental factors,
such as opinion leadership, communication process, on
the adoption of innovation by individuals. Although one
can learn a great deal from the sociological model, it has
to be modified to explain the behavior in an organiza-
tional context. The complexity invoIved in defining and
characterizing organizations as adoption units creates a
problem.
The models specifically developed to explain innova-
tive behavior in organizations have been divided in two
types, involving (a) sequential transfer of information
across the functional subunits of an organization and
(b) a problem-solving approach. The first model assumes
technology transfer as a goal-directed, planned process
and appears to be over-realistic and over-idealistic. The
second approach seemed to be more realistic and perti-
nent to the organizational context. A synthesis of the
social interaction model and the problem-solving model
will help one understand the technology transfer process.
The innovation-decision process is multi-staged and can
be characterized on the basis of the sociological model.
The influence of various techno-economic and organiza-
tional factors on various stages has to be analyzed using
the concepts developed in the problem-solving approach.
The following six points seem to be of primary impor-
tance in understanding the adoption process in organiza-
tions :
1. Organizations are viewed as open systems in their
behavior.
2. Innovation in organization involves the environment
as well as the members of various subsystems within it.
3. Decision for innovation (i.e. adoption of a new tech-
II8
nology, either new product or new process) should be
viewed as an investment decision.
4. The characteristic %ofan innovation decision vis-d-vis
an ordinary routine investment decision would be in
the difference in handling the uncertainty associated
with the innovation. (A distinction should be made
between risk and uncertainty. Risk means the case
where one knows the probability distribution of the
outcomes of the action, whereas uncertainty denotes
the condition where one does not have a probability
distribution for the outcomes.)
5. Organizations vary in their capability for handling
uncertainty either by institutional arrangement and/or
by their member characteristics.
6. Economic, social, and psychological factors influence
innovative behavior in organizations.
ACKNOWLEDGEMENTS
This is based on the authors doctoral dissertation at
Northwestern University, Evanston, Illinois. The author
is thankful to Professor Albert H. Rubenstein for his
advice. Work in this area was financially supported by the
National Aeronautical and Space Administration and the
U.S.Army Research Office through their grants to the
Program of Research on the Management of Research
and Development at Northwestern University. Dr R. P.
Suttmeier, Visiting Fellow at the East-West Center
offered some valuable comments on an earlier draft.
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