Integrative Capability and Technology Adoption : Evidence from Oil Firms

For most companies, adopting new technology is a necessity of survival. But why do some firms fare better than others in adopting new technology? Why do some firms possess a greater ability to integrate it into their operations than others? These questions are addressed via a comparative case study of oil firms that all adopted the same technology: horizontal drilling. Two efficacious and two less efficacious adopters were contrasted. They differed in the processes of adoption: the efficacious adopters developed strong strategic commitment to the technology early, facilitating their more extensive external and internal integration activities. The more efficacious firms differed from the less efficacious ones also in their knowledge systems: employee skills, technical and managerial systems, and values and norms. The firms` integrative capability developed through a dynamic interplay of adoption processes and their knowledge systems, and affected efficacy of adoption. We contribute to the literature on firm capabilities by providing an empirically based model of the development of integrative capability in the context of high-uncertainty technology adoption