Competence-building, technology fusion and competitive advantage: the key roles of organizational learning and strategic alliances

This paper examines the critical roles of organizational learning and strategic alliances in facilitating competence-building and technology fusion efforts within organizations. The accumulation of knowledge, skills and technological capabilities is a path-dependent process that depends on a systematic investment in continuous organizational learning. The knowledge base that lays the foundation of the firm's core competence is composed of both explicit and tacit forms of knowledge. Tacit knowledge is embedded in the social fabric of the organization's processes, dynamic routines and internal communication paths, and provides a firm-specific resource to sustain competitive advantage. Core competencies should be regarded as technological strategic options that enable a firm to selectively enter new markets according to its strategy and differentiated growth path. The competence-building process may be seen as having two distinct stages: competence acquisition/transformation and competence extension/application. By working in parallel with the internal development of core competencies, strategic alliances facilitate the learning, absorption and internalization of knowledge and skills from other firms. Technology fusion is the blending of older, current and emerging technologies from different industries to create higher-order products and competencies. Firms that work with an array of partners from related and unrelated industries may be able to learn and apply technological breakthroughs to create new types of products whose underlying 'fused' technologies represent a blend of diverse knowledge streams.