Towards a knowledge-based view of OEM relationship building: sharing of industrial experiences in Taiwan

Abstract

This paper addresses issues of knowledge transfer through OEM (original equipment manufacture) subcontracting in high-tech industries in Taiwan. Major issues explored in this paper include how a firm in Taiwan establishes an OEM relationship with its world-class competitors, how the relationship was maintained, and how knowledge transfer was facilitated under such a relationship. Findings of our study suggest that the Taiwanese firms deliberately chose to collaborate with their world-class competitors in order to learn from them. Under OEM subcontracting , knowledge transfer took place in a systematic fashion. The types of knowledge transferred were diverse, and the transferred knowledge influenced profoundly the firms' operations or even their ways of thinking. Such knowledge transfer enhanced the firms' absorptive capacity, and could be divided into several phases. Benign contexts in which mutual trust developed between the firms and their OEM buyers facilitated the transfer of knowledge. Propositions for further research are proposed.

Knowledge acquisition in supply chain partnerships: The role of power

“…As expected, and in line with findings of previous studies (e.g. Wu and Hsu, 2001;Kotabe et al, 2003;Modi and Mabert, 2007;Lawson et al, 2009), knowledge acquisition activities had a positive impact on the performance of supply chain firms. Our study shows that supply chain partners do benefit from interfirm knowledge transfer activities.…”

“…The suggestion that acquisition of external knowledge enhances the performance of firms operating within a supply chain enjoys broad support (Wu and Hsu, 2001;Kotabe et al, 2003;Modi and Mabert, 2007;Rauniar et al, 2008;Yeung et al, 2008;Lawson et al, 2009). …”

“…They noted that the process generates 'dynamic learning capabilities' and 'client-specific capabilities' respectively. Similarly, the quantity and variety of knowledge acquired by a firm has been found to enhance its innovativeness, eventually improving its performance (Wu and Hsu, 2001). Kotabe et al's (2003) study showed that sharing of technical know-how improved suppliers' performance.…”

Network agility as a trigger for enhancing firm performance: A case study of a high-tech firm implementing the mixed channel strategy

“…Yu (2005) argued that rather than moving into the OBM business, which involves high business risk and brand development costs, some imitative firms have chosen to become manufacturing specialists serving product developers. Besides, CMs have begun to shoulder functions, such as coordinating cross-border supply chains, as part of their role as integrated service providers, thus becoming an essential node in the global value chain (Chen, 2002;Wu & Hsu, 2001). Cheng, Blankson, Wu, and Chen (2005) proposed a stage model of international brand development, where CMs sell products with OEM brands to expand international markets.…”

How to manage strategic alliances in OEM-based industrial clusters: Network embeddedness and formal governance mechanisms

“…According to Burt's (1982Burt's ( : 209, 1992) definition of structural equivalence, "an actor will quickly adopt an innovation after actors he perceives to be structurally equivalent to him have adopted it." Positional embeddedness strongly influences firm behavior, as witnessed in the supplying-buying behaviors of the Taiwanese SC industry (Wu & Hsu, 2001). Not only do most of these firms imitate each other in the acquisition of core technology resources through international transfers or licenses, but the development of industrial clusters is also dominated by the imitation of interfirm technology linkages.…”