Selection of technology acquisition mode using the analytic network process

Abstract

Selecting the appropriate acquisition mode for a required technology, is one of the critical strategic decisions in formulating a technology strategy. Although a number of factors were found to be influential in the choice of technology acquisition mode, it still remains a void in the literature how to make a strategic decision, based on a huge set of those factors with the help of a systematic approach. This study deals with the selection of technology acquisition mode as a multiple criteria decision making (MCDM) problem. The proposed solution to the problem in this study, is the analytic network process (ANP) approach. Since the ANP is a MCDM method that can accommodate interdependency among decision attributes, it is capable of providing priorities of alternatives with consideration of interrelationships among strategic factors. The 21 influential factors identified from the empirical studies are included as sub-criteria in the ANP model, and they are grouped into five criteria: capability, strategy, technology, market, and environment. The final decision can be made based on the resulting priorities of the alternative acquisition modes. The proposed approach is expected to effectively aid decision making on which mode is adopted for acquisition of required technologies. A case of a software company is presented for the illustration of the proposed approach. (C) 2008 Elsevier Ltd. All rights reserved.