A technology-based explanation of industrial output processes: the automotive, machine-tool and “other transport material” industries

Abstract

Purpose

This paper aims to analyse the viability of production processes in the framework of three industries, referred to here as “automotive”, “machine-tool” and “other transport material”. This idea is of interest as a result of the cognitive convergence that has arisen from the widespread of information and communication technologies in the technical solutions used by most of the product fields that make up the manufacturing industry.

Design/methodology/approach

Under the framework of evolutionary theory and based on the cognitive composition of the technical solutions used by the industries studied, this paper has drawn up technology profiles for those industries from the viewpoint of formal logic. These profiles will help us to analyse their potential and difficulties so as to bridge the cognitive gap and enabling them to access new paths and set up processes to diversify their output. Interviews with company management staff and high-ranking experts have provided us with highly useful information to help us complete the theoretical reflection and check it against expected behaviour patterns.

Findings

The results confirm that firms in the industries studies find it difficult to drive forward diversification processes. The analysis provides a theoretical explanation for the empirical results that can be found in the literature on the extent to which path dependency processes explain technology dynamics.

Research limitations/implications

The limitations of this study lie on the one hand in the small number of firms interviewed (it would be useful to extend the sample to include other medium- and high-technology industries to see whether the results are confirmed) and on the other hand, in the possibility that the Covid-19 crisis may affect results, investment decisions and access to financial resources, and thus, upset plans for diversification.

Practical implications

There is a consensus that decision-making in general, and in management in particular, is plagued by unpredictability, risk and uncertainty (Baldwin et al., 2005; Bergh et al., 2011). Managers making deliberate strategic choices – which usually require long time horizons and involve high risk (Perello-Marin et al., 2013) – need to know whether the competitive future of their firms lies mainly in product innovation (diversification), in process and organisational innovation, in the internationalisation of production, in mergers or in other, alternative paths (Sydow et al., 2009). This study presents empirical evidence of the possibilities and difficulties faced by firms based on their technology profiles. This is a complex approach that calls for more research effort if it is to become an option for enhancing resilience and flexibility at firms and strengthening their ability to react to changes. According to Raynor (2002) diversification, understood dynamically, provides a way for companies competing in especially turbulent industries to hedge against uncertain future reconfigurations of industry boundaries. Palich et al. (2000) state that compared with single-business firms, firms engaging in related diversification are able to exploit synergies across product units by consolidating business activities in manufacturing, marketing, raw material purchases and R&D, and thus, achieve both scale and scope economies.

Originality/value

The manuscript is absolutely original in terms of its approach and design and sets out to analyse industrial diversification processes on the basis of the cognitive characteristics of the technical solutions used by the various industries.

Citation

Bilbao-Ubillos, J., Camino-Beldarrain, V. and Intxaurburu, G. (2021), "A technology-based explanation of industrial output processes: the automotive, machine-tool and “other transport material” industries", Journal of Knowledge Management, Vol. 25 No. 6, pp. 1640-1661. https://doi.org/10.1108/JKM-07-2020-0582