Technical knowledge as value added in business markets: Implications for procurement and marketing

NORTH-

T e c h n i c a l K n o w l e d g e as Value A d d e d in B u s i n e s s Markets Implications for Procurement and Marketing

Morry Ghingold Bruce Johnson For many businesses, competitiveness is highly dependent on the technical knowledge of its operating personnel. This article presents the view that vendors able to offer cutting-edge technological expertise relevant to customers' operations as part of their overall "bundled" offering add more value for customers than competitors emphasizing product supply alone. Concurrently, it is suggested that purchasing and materials management should view technical knowledge as a strategic resource and adopt procurement strategies that encourage knowledge acquisition. An exploratory study was undertaken to determine the degree to which technical knowledge is linked to more desirable decision-making styles and outcomes using a sample of

Address correspondence to Morry Ghingold, School of Business, University of Southern Indiana, 8600 University Boulevard, Evansville, IN 47712.

key buying center members (operating~manufacturing managers). The results of a mail survey indicate that higher levels of technical knowledge are linked to more desirable decision styles and decision outcomes, suggesting that managers' technical knowledge is an important asset for firms with manufacturing or process operations. Implications for procurement and marketing are discussed. © Elsevier Science Inc., 1997

INTRODUCTION All active business organizations require goods and services to function. As competition has increased in virtually all business sectors, tangible differences for even highly sophisticated or complex offerings have narrowed. Customers are placing increasing emphasis on in-

Industrial Marketing Management 26, 271-280 (1997) © Elsevier Science Inc., 1997 655 Avenue of the Americas, New York, NY 10010

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Buyers generally prefer to deal with vendors that are technical leaders in their industry. tangibles, the services that vendors provide in addition to their "core" products. Although the term service is somewhat vague and tends to vary from industry to industry, even between firms in the same industry, for the purposes of this article, service can be thought of as anything the vendor does that adds value for one or more customers [ 1]. Differentiating oneself on the basis of service is not a new concept; marketers of commodity products and services have long faced this competitive situation. When one considers the substitutability of truck transportation services between carriers or purchases of commodity chemicals from competing chemical manufacturers and distributors, it is easy to see that customers looked beyond the "core" product in making supplier choices [e.g., 2, 3]. Instead, customers estimate the total value of (possible) relationships with alternative suppliers, with the intent of gaining the maximum added value relevant to the buying organization. This value-added buying approach is applicable to almost all organizational purchases because functional and quality differences between vendors' offerings have narrowed substantially in many industries. There are many ways for firms to add value through services provided to customers. For example, for some buying organizations service may simply represent a vendor's consistency in supply performance or fulfilling promises (e.g., delivery, problem resolution, etc.). For other customers, service may relate to spare parts or repair availability. In this context, the customer perceives value added in the vendor's ability to minimize downtime in the buyer's operating domain, be it telecommunications services, office machines, heavy equipment, or anything else. Yet another perspective on service would MORRY GHINGOLD is Associate Professor of Marketing at the University of Southern Indiana in Evansville, Indiana. BRUCE JOHNSON is Associate Professor of Information and Decision Sciences at Xavier University in Cincinnati, Ohio.

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encompass specialized assistance or activities that a vendor might provide. This could include the value added by an expert salesforce that provides prepurchase technical consulting advice, access to product testing labs, customized solutions to a customer's unique needs, or other similar services offered by knowledgeable vendors. In this context, the vendor organization has specialized knowledge or technical skills that are valued by customers. Organizational buyers in this latter situation generally prefer to deal with vendors that are technical leaders or experts in their industry. These firms are likely to be at the forefront of technological advances in their respective fields, poised to provide added value through their technological expertise, not only for the moment but for the long-term as well. To the extent that marketing can leverage this differential strength, the technical knowledge possessed by technically expert vendors gives them an advantage over less knowledgeable competitors [4]. This article focuses its attention on this "knowledge-based service added value" technologically advanced and/or technically expert vendors are able to offer.

TECHNICAL KNOWLEDGE AS ADDED VALUE It is useful to examine the value adding impact of technical knowledge or technological leadership experienced by customers. To maintain consistency, we will focus on technical knowledge and leadership and its value adding properties as they are related to manufacturing and operations, an activity and procurement domain common to many business organizations and one that has experienced major upheavals in technology. (It should be noted that the relevance of technical knowledge and leadership are not limited to this functional activity in a firm. Firms may develop superior knowledge and expertise in applying and managing technology that directly impacts order processing, logistics, customer needs assessment, etc. The opportunities to develop and leverage technical knowledge in ways that add value to customers are bounded only by the firm's creativity and imagination.)

Technical knowledge within the firm is at the foundation of competitive advantage. Clearly, dramatic and rapid changes in the application and enhancement of manufacturing technologies have taken place in recent years. Moreover, this turnover and leapfrogging in equipment and process technology is likely to continue for some time. The importance of these changes to firms with manufacturing and process operations cannot be understated. In this context, it is clear that up-to-date technical knowledge is crucial for operating personnel. Operations, manufacturing, and production managers and executives constantly make decisions regarding the utilization of manufacturing technology, upgrades in technology, and major reinvestments in all new technologies [5]. For these managers, technical knowledge becomes a valuable asset and a necessary resource for the firm. As a resource, technical knowledge enters the domain of purchasing and materials management [4]. Thus, organizational buyers should be expected to include the added value of technical knowledge in their comparisons of suppliers. And, when only slight variations in product- or supply-related attributes exist between competing suppliers, an increasingly common scenario, it would stand to reason that a significant marketing advantage could accrue to vendors able and willing to augment their offerings by bundling in a valued intangible resource (i.e., access to technical knowledge or technological expertise). Thus, technical knowledge appears to be important as an input and as a potential marketing strength. The following section builds on this viewpoint, positioning technical knowledge as an important strategic asset of the firm that is essential for achieving and sustaining competitive advantage.

TECHNICAL KNOWLEDGE AND COMPETITIVE ADVANTAGE The notion that technical knowledge is important to the firm is evidenced in current work in both strategic management and strategic marketing. Following formative work on the pathways to competitive advantage, e.g., lowest delivered cost, value leadership, or niche special-

ization [6-8], attention has recently shifted to the prerequisite supporting conditions which enable a firm to realize and sustain competitive advantage [e.g., 9-13]. By adding detail and specificity, these recent explorations of competitive advantage have increased the applicability and usefulness of the construct for managers. Day [12] has presented a synthesis of current research which interweaves competitive advantage with the concept of the market driven organization. Day presents a conceptual framework which links internal conditions, marketplace capabilities, and process factors as drivers of competitive advantage and superior firm performance. Day contends that positions of advantage result from market-wide distinctive capabilities [see 14, 9]. These broadly defined distinctive capabilities can be internally oriented (yielding advantages in the firm's internal activities and/or operations) or externally-oriented (i.e., based on the firm's ability to manage extra-organizational affairs via its capacity to assess customers' or channel members' needs, anticipate competitors' actions, etc.). Day argues that successful market driven organizations have strong capabilities on both dimensions. These observable capabilities are based, in part, on more narrow and specific competencies imbedded within the business itself [12]. Business-level competencies can be understood as complex bundles of skills and knowledge that lead to superior asset utilization and/or customer service [15]. In this framework, the knowledge component is a major factor driving business-level capabilities. Knowledge is dispersed throughout the organization and includes a dimension related to employee knowledge and skills resulting from technical knowledge, training, and experience [16]. Thus, technical knowledge within the firm is at the foundation of competitive advantage. It represents an asset that successful firms acquire, disseminate internally, and leverage for marketing advantage. Viewed in this way, technical knowledge becomes an important value adding intangible which can be acquired as part of relationships with suppliers or shared as part of relationships with customers.

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Technical k n o w l e d g e is an important a s s e t for o r g a n i z a t i o n s . . , a strategic resource that a d d s real v a l u e w h e n offered by vendors. VALUE OF TECHNICAL KNOWLEDGE TO BUYING ORGANIZATIONS

4. higher quality decisions made in a more timely manner.

Purchasing and materials management must ensure the procurement of goods and services necessary for all aspects of an organization's functioning. The presumed intent of manufacturing/production-related purchases by firms with investments in manufacturing and process equipment is to maximize productivity, at least in the near-term. However, from a strategic perspective, the dynamic nature of manufacturing technologies mandates a more activist and strategic purchasing management role. Current, state-of-the-art technical knowledge is clearly a necessary input to better strategic manufacturing management decisions, particularly regarding the application and utilization of technology [ 17]. The firm' s capacity to strategically plan and manage technology relates precisely to the concept of "business capabilities" noted above, a central building block of competitive advantage [ 12]. At a more basic level, technical knowledge is also an important prerequisite of improved technical decision making [5]. This link between managers' knowledge and decision making is intuitive but it has not received much empirical attention in the manufacturing, marketing, or purchasing literatures. Normative approaches for improving manufacturing decision making have received a great deal of attention in the operations and management literatures (see [5] for a detailed review). This body of research suggests that to be more effective, operations decision making would require:

If technical knowledge increases the likelihood that better management decisions will be made, then we should expect to observe specific linkages between technical knowledge and operations decision making. These relationships can be framed as the following propositions:

1. Increased information use (in terms of how much is considered and how rigorously it is analyzed); 2. a proactive approach to managing risk (i.e., minimizing inertia or the avoidance of decision making under uncertainty or when there is incomplete information); 3. the use of longer time horizons when making technology-related decisions and, intuitively;

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Pl: The greater the technical knowledge of an operating

P2:

P3:

P4:

P5:

P6:

manager, the more detailed his/her information acquisition style will be; The greater the technical knowledge of an operating manager, the more systematic (versus intuitive) his/her information evaluation style will be; The greater the technical knowledge of an operating manager, the less averse to making manufacturing decisions under risk or uncertainty he/she will be; The greater the technical knowledge of an operating manager, the longer his/her time horizon will be in making manufacturing related decisions; The greater the technical knowledge of an operating manager, the higher the quality of his/her manufacturing related decisions; The greater the technical knowledge of an operating manager, the more timely (neither too early nor too late) his/her manufacturing related decisions.

Confirmation of these propositions will support the view that technical knowledge is an important asset for organizations and is, therefore, a strategic "resource" that adds real value when offered by vendors to buying organizations. Organizations with manufacturing (or process) operations will need and want this resource, suggesting important implications for buying. Concurrently, if it appears that technical knowledge and leadership are attributes highly valued by customers, marketing considerations come into play, particularly for those marketing organizations underutilizing this potential pathway to

competitive advantage or undervaluing its significance and failing to take adequate steps to preserve or strengthen it. A study was undertaken to explore the research propositions and to assess the value of technical knowledge as a resource for operating personnel involved in manufacturing decision making. If technical knowledge is found to be important for business/industrial customers and it has the potential to be bundled as a value enhancing benefit, it will contribute to marketing advantage for business marketers able to leverage this competence. The immediate challenge would then be to consider what businesses can and should do about managing and marketing technical knowledge. Given the unprecedented degree of technological change and global competitiveness affecting all firms today, it may well be that the value-adding potential of technical knowledge will have important implications for both purchasing and marketing management. The research methods, findings and implications of the study examining the role of technical knowledge are presented below.

RESEARCH METHODS

Sample Frame and Data Collection Method A mail survey was undertaken to obtain "real world" data for the proposition tests. The target population for the study comprised managers with day-to-day responsibility in manufacturing/process operations. These managers are of great interest to business marketers because they are likely to play multiple buying roles in manufacturing/process equipment and services-related purchases (see [ 1[ for a presentation of the buying center construct and a description of buying center roles). Operating/manufacturing managers are primary users of manufacturing/process technologies, are likely to be major influencers in buying decisions for such (and related) purchases, and may in many cases be deciders, personally making final vendor selections. Some operating/ manufacturing managers may also play gatekeeping roles if they have direct control over information used within the buying center. These managers are often key targets for marketing communications and clearly represent an important constituency for many business marketers. Moreover, few marketing studies have focused on them as a group, adding to the desirability of sampling this population. Two mailing lists were used to access the targeted population. The first list contained names of high level

manufacturing executives from the midwestern United States. Membership lists from four APICS (American Production and Inventory Control Society) chapters, from the Midwest, were also used. Two lists were used to ensure representation from both senior and operating management. A total of 1,248 managers were mailed questionnaires (with a single follow-up, as necessary). A total of 169 usable questionnaires were returned, yielding a response rate of 13.5%, not uncommon for mail surveys of managers offering no direct compensation [18, 19]. Both operating and top management were represented in the respondent set, with roughly 60 and 40% representation, respectively. No differences were found between the two samples on all key variables.

Measurement Technical knowledge has received a great deal of attention in the manufacturing literature as a concept, but it has yet to be operationalized for measurement. A thorough review of the literature suggests that three components or aspects of technical knowledge can be identified (see [5] for a detailed presentation of this material). These knowledge components are: 1. Knowledge related to the application(s) of equipment and process technologies by the manufacturing firm [20, 21]; 2. Knowledge related to the effects of equipment and process technology on management of the manufacturing firm [17]; 3. Knowledge of state-of-the-art techniques of technologies gaining acceptance in advanced manufacturing finns [22-24]. Items representing each of these knowledge components were drawn from the manufacturing literature to measure knowledge (using 5-point interval scales). The knowledge component measurement scales demonstrated a high degree of inter-item reliability with coefficient alpha scores ranging from 0.76 to 0.94, all very high. A respondent's technical knowledge was evaluated on the basis of his/her knowledge score for each of the three knowledge components. This was done so that it would be possible to determine if certain types of technical knowledge are more consequential than others. (Sample items used to measure technical knowledge appear in Appendix I.) The decision making variables in the research propositions were also measured using five point interval scales.

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Managers with higher levels of technical k n o w l e d g e . . , have more favorable decision outcomes. Multiple items were used for each decision making variable. Inter-item reliability was acceptable, although not as strong as for the knowledge component scales (alphas ranging from 0.53 to 0.66). Sample items appear in Appendix I.

Data Analysis, Research Findings, and Study Limitations To test the relationships between the three components of technical knowledge and the five decision making variables--information acquisition, information evaluation, risk avoidance, time horizon, quality of decisions, and timeliness of decisions--a series of multiple regression analyses were performed to determine how well knowledge components could predict the decision making variables of interest in the study. The results of the regression analyses appear in Table 1 and are summarized below. In general, technical knowledge is a strong predictor of decision making variables. All of the research hypotheses were supported at very high levels of statistical significance (P < .001). The data show that high levels of technical knowledge are related to: • • • • • •

more detailed information acquisition styles more systematic information evaluation styles less aversion to decision making under "risk" longer time horizons in decision making higher quality decisions more timely decisions

These findings are consistent with the propositions and offer empirical evidence establishing the value of technical knowledge as an important resource for organizations with manufacturing or process operations. Of notable interest here is that the three components of technical knowledge were not equal predictors of decision making, (see Table 1). In particular, knowledge related to the application of technology was the strongest

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predictor. Applications knowledge was a significant predictor (P < .024 or less) for all of the decision making variables (except information evaluation, which was P = • l l). Conversely, knowledge related to the managerial effects of technology was the weakest predictor, not significant as a predictor for any of the decision making measures. Knowledge of state-of-the-art techniques and technologies was a significant predictor for all of the decision making variable (P < .05 or less) except risk aversion and timeliness• Although these findings are certainly exciting and encouraging, limitations of the study should be noted. For example, although the mail survey response rate was consistent with a priori expectations, the usable sample of 169 respondents is narrow and too small to produce absolute truths and sweeping generalizations that apply equally to all industries and buying organizations. More-

TABLE 1 Regression Analysis of Decision Making Variables Technical Knowledge Components Decision Making Variable Information acquisition information evaluation Risk handling Time horizon Quality Timeliness

Application Effects State-of-the-Art Beta Weight Beta Weight Beta Weight (t) (t) (t) 0.355 (3.10) 3 O. 154 (I.61) 0.337 (3.84) 2 0.533 (5.30) j 0.312 (3.50) 2 0.393 (3.47) 2

~Test statistic significant at 2Test statistic significant at 3Test statistic significant at 4Test statistic significant at

- 0.028 (0.32) 0.081 (1.15) 0.031 (0.49) 0.028 (0.38) 0.009 (0.14) 0.104 (1.26) < < < <

= = = =

0.0001 0.001 0.01 0.05

0.181 (1.95) 7 0.151 (1.98) 4 0.80 (1.14) 0.211 (2.63) 3 0.158 (2.25) 7 -0.026 (0,29)

R2

F

0.13

6.922

0.10

5.482

0.16

9.40 I

0.30 20.49 I 0.17

10.10 I

0.13

7.46 t

Purchasing professionals should strategically manage knowledge procurement. over, the sample was limited to buying center members of a single job category type (operations/manufacturing managers), again precluding generalizations to other job categories. Although the sample was appropriate and adequate given the study's research objectives and data requirements, it was limited in size and scope and caution should be taken to not overplay study findings and conclusions. Similarly, the limitations inherent in the exploratory efforts to develop scales and measure linkages between complex constructs via regression analysis have no doubt led to the usual problems of scale noise, bias, covariation of predictors and error terms, outlier effects, etc. These factors also detract from absolute confidence in the reported findings and conclusions. Still, the consistency of study findings with the theory-based propositions and the strength of the statistical relationships observed do lend, at a minimum, promising support for the tenet that technical knowledge is a valuable asset for the finn which contributes to competitive advantage both as an input and a marketing strength. Thus, in spite of the research limitations noted, the data still provide strong support for the study's conceptual position and research propositions. Study findings support the view that knowledge related to the application of technology and knowledge of the latest, state-ofthe-art techniques and technologies are strong predictors of operating managers' decision making styles and outcomes. (Knowledge related to the managerial effects of technology was a less strong predictor of these dependent variables, however.) In summary, it was observed that managers with higher levels of technical knowledge employ more advantageous decision making styles and have more favorable decision making outcomes than managers lacking technical knowledge. Study findings point to managers' technical knowledge as an important factor in manufacturing decision making. As such, it represents a key re-

source or asset for manufacturing firms. This view of technical knowledge as an asset or resource points toward a number of practical implications for purchasing and marketing. The implications for purchasing will be discussed first.

MANAGERIAL IMPLICATIONS FOR PURCHASING Valuing knowledge as a necessary resource is an uncommon view for most purchasing professionals. But, that does not diminish its importance. Burt [25] has called for purchasing management to move away from its "myopic" tendencies and to accept its more important role as a key contributor to strategic management of the finn. Given today's turbulent business environment with rapid technological change and increasing competition at the global level, Burt's call for "strategic purchasing" is ever more appropriate. Recognizing the value of knowledge accessible from vendors in the competitive marketplace and taking specific steps to locate and acquire it are integral parts of strategic purchasing. Once the value of technical knowledge is acknowledged, purchasing professionals should take two separate approaches to strategically managing knowledge procurement for their organizations. The first approach involves "no dollar cost" sources of technical knowledge. This proactive gatekeeping would include specific activities, such as: 1. Qualifying strategic vendors and developing strategic relationships or alliances with technological leaders that have the capacity to contribute to the buying finn's knowledge base for years to come. 2. Encouraging, not avoiding, sales calls and presentations, particularly those of a technical nature which have bearing on operations and production. 3. Increasing/maximizing technical inputs from current and potential suppliers, regardless of the product or

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service they provide, to gain maximum benefit from the specialized technical knowledge and advantages they may have. 4. Encouraging technical personnel to interact with technical vendors and/or technical experts from vendor firms, even if the short-run likelihood of purchases from that vendor is low. These proactive approaches to procuring and disseminating knowledge involve non-monetary costs. They do, however, require a new approach to managing knowledge as a resource, significant incremental effort and specific strategies to succeed. Procurement efforts regarding technical knowledge can also encompass disbursement of new monies. These funds would be used for the proactive procurement of technical knowledge. Some sources of this knowledge could include: purchased workshops and/or seminars; consulting contracts with individuals or organizations possessing valuable, expert knowledge that can benefit the firm and its operating personnel; subscriptions to relevant technical and professional journals and periodicals for reading by operating managers; tradeshow attendance (including multiple tradeshows, not just the firm's industry show); and finally, sponsored continuing education for operating personnel. Many firms currently "buy" one or more of these sources of knowledge. The concern, however, is that they often do not have a long-term knowledge strategy in place. Implementing strategic purchasing embraces this long-term approach to managing knowledge procurement.

MANAGERIAL IMPLICATIONS FOR MARKETING Customers' perceptions of the value added by a vendor's technical knowledge and capabilities have a number of important implications for marketing management. The first is literal, that is, technical knowledge and technological leadership are important competitive considerations and should not be neglected. Too often, marketing is disconnected from engineering and R&D [26]. To the extent that strengths in technical capabilities, expertise and leadership foster marketing and competitive advantage, they become marketing concerns. Marketing has a vested interest in ensuring that the organization is able to offer this "service" to customers. Rather than dealing with technical personnel as support staff, these personnel should be viewed as major players in developing and

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maintaining profitable long-term relationships with customers. Suppliers' skill in utilizing and adapting technology is not simply the means of producing better or cheaper end products, it is an important competitive tool that contributes to value leadership and competitive advantage. Relatedly, marketing must determine how to best leverage and communicate this skill [27]. Situationspecific tactics such as message strategies in marketing communications, team selling approaches, and a general shift from a product focus to a more robust value added focus all come into play. A second concern for business marketing management thus becomes proper use of this value-adding marketing strength. Clearly it is not universally applicable. Customers buying nails, pencils, and lawn mowing services may not perceive substantial added value in the technical knowledge of suppliers of these goods and services. It is incumbent upon marketing to determine the appropriate industries and, more importantly, the appropriate customer targets for a marketing approach utilizing technical leadership or knowledge as a competitive tool. For example, Jackson [28] has distinguished between customers valuing relationships and customers who are more price driven and tend toward transactional marketing based on discrete interactions in which competitors are played off against one another. When the firm's strategy builds on the added value of its technical capabilities, the former types of customers, those desiring relationships, are clearly better prospects than the latter transactionoriented group. Hence there is an important target selection imperative inherent in leveraging technical knowledge and strengths for market advantage. A third implication is that any competitive advantage resulting from technical knowledge advantages over competitors can be fleeting. Porter [7] specifies that factors contributing to competitive advantage are meaningful only if they are sustainable. Thus, marketing has a significant interest in the organizations's investments in maintaining technical leadership. When customers seek to establish long-term relationships with vendors, they are valuing not only the vendor's current technical knowledge and expertise, but also the vendor's anticipated leadership in future technical applications and expertise. In this way, strategic marketing forces the organization to prioritize long-term investments in technology and technical knowledge so that its value adding advantages can be sustained over the long-term. In sum, marketing implications can be summarized as the need to:

Marketing has a significant interest in the investments in maintaining technical leadership. 1. Encourage technical leadership within the firm and properly intermesh it with other marketing activities. 2. Correctly target this type of "knowledge as value added" marketing at both the industry and firm level. 3. Ensure that technical skills and leadership receive long-term investments to sustain derived competitive advantages.

CONCLUSIONS This article promotes an unorthodox proposition for management's consideration. Knowledge, and technical knowledge in particular, is a valuable and strategic resource for virtually any business. A study examining the relationship between technical knowledge and technology-related decision making by manufacturing/operations managers indicated a strong linkage between technical knowledge and managers' utilization of more desirable decision styles and the achievement of better outcomes in their decisions. The findings confirm the proposition that technical knowledge is a valuable resource that yields positive results for firms with manufacturing and process operations. The extent to which this resource (technical knowledge) is acquired, stored, disseminated and used will, in part, determine a firm's long-term competitiveness. Purchasing and marketing management have important responsibilities in this context. Proactive, strategic purchasing adds such new priorities as developing knowledge sources and managing knowledge procurement. The article presents a series of knowledge procurement strategies purchasing managers can consider, both tactical and strategic. Perhaps the most critical issue for purchasing and materials management professionals, however, is not the implementation of tactics and strategies but rather the need to recognize the importance of technical knowledge and its value as one of the more crucial "products" needed for a firm's success.

Similarly, marketing managers must be cognizant of customers' value calculations. In certain industries and for certain customers, technical skills and contributions that vendors are able and willing to share with buyers can swing supplier selection decisions to the supplier perceived to be strongest on this dimension. Technical skills are not simple engineering or production issues. They should be seen as important marketing considerations, dictating marketing strategy and target marketing and influencing long-term strategic investments. It is often asserted that knowledge is power. In the context of business and industrial marketing it may well be that possessing important technical knowledge and knowing how to effectively package and bundle that knowledge can create real market power.

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Multiple lndust~ Investigation of Process, Information Systems-User Relationships, and Project Outcomes. Ph.D. dissertation, University of Cincinnati, 1984. 21. Gregerman, Ira B., Knowledge Worker Productivity, American Management Association, AMA Briefing, 1981. 22. Thurow, Lester C., The Task at Hand: After Decades of Excuses, It's Time for American Managers to Learn Technology. The Wall Street Journal, June 12, 1987, p. 46d. 23. Henderson, Robert P., The high technology industry is taking off. But there may be one hitch: the serious shortage of engineers. How did it happen and what should be done'? Enterprise, March, 1982. 24. Hayes, Robert H., and Wheelwright, Steven C., Restoring Our Competitive Edge: Competing Through Manufacturing, John Wiley & Sons, 1984. 25. Burr, David N.. Proactive Procurement, Prentice-Hall, 1984. 26. Wilson, David T., and Ghingold, Morry, Linking R & D to Market Needs. Industrial Marketing Management 16(3), 207-214 (1987).

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APPENDIX I Sample Items from the Decision Making and Technical Knowledge Measures Decision Making (Measured by 5-point frequency of occurrence scales) Information Acquisition Make a decision based on answers to your questions. Information Evaluation Make a decision that has side effects that you did not anticipate. Risk Not make a decision because you lack confidence in its outcome. Time Horizon Make a decision that emphasized long term concerns. Decision Quality Make a decision that is truly successful. Timing Delay a decision so that its outcome is negatively affected. EPT (Equipment and Process Technology) Knowledge (measured by 5-point high versus Jow knowledge scales) Effects of EPT Direct effects on the product Indirect effects on the operating system Degree of Automation: Application of EPT Your mastery of the technologies of your firm. The frequency with which you are consulted as a technical expert. Your ability to recognize job-related technical opportunities. Current Techniques Computer integrated manufacturing (C1M). Computer aided process planning (CAPP). Bar coding