1. Information Technology (IT) as a capability: A Technological Capability (TC) Approach
Author´s name Carlos Arturo Torres Gastelú
Telephone number 52-(229)-9241185
Mailing Address Calle Josefina del Río de Melo Núm. 830 Fracc. Villa Rica
C.P. 91810 Veracruz, Ver. México
e-mail Address carlos_tr66@yahoo.com ctorres@uv.mx
Affiliated institutions UNAM
Department Facultad de Contaduría y Administración
Topic Technology and Productivity
Key words: IT, Technological Capabilities, Information Technology
Abstract
This paper explores preliminary research results realized in a large Mexican firm in order to
identify and examine technological capabilities (TC) of information technology and their
implications in the following dimensions: individual and organization. It is proposed to make a
research of the possible relation between capability accumulation for a specific type of
information technology (IT): employees´ portal (EP) with the technological capability that can be
achieved in a specific firm. In order to do that closed related factors have been identified
(organizational behaviour, technology integration, individuals skills, social interaction and
technological infrastructure). These factors are involved in the knowledge1 codification-
transmission processes for employees´ portal capabilities generation, with the purpose to
identify how influence in the different administrative ways for processes and taking decisions that
affects in a direct or indirect way for the technological incorporation of IT, such as personnel
training policies, personnel recruiting, technological investment rate, modernization strategies,
corporative philosophy, communication policies, and so on.
1
For this study the knowledge typology proposed by Lundvall (1996) will be used, due the research focus
for this study will analyze technological knowledge based in experience, skills and others variables. The
knowledge typology is integrated by four elements: know what, know why, know how and know who.
Know-what refers to knowledge about "facts". How many people live in Mexico city is an example of this
kind of knowledge. Know-why refers to knowledge about principles and laws of motion in nature, in the
human mind and in society. Know-how refers to skills - i.e. the capability to do something. Know-who
involves information about who knows what and who knows to do what. But especially it involves the
social capability to establish relationships to specialised groups in order to draw upon their expertise
(Lundvall, 1996).
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2. Introduction
Several authors (Terceiro & Matías, 2001; Seely Brown & Duguid, 2001) have discussed
the importance of technology as a factor of the change in the social relations, production
ways and economical structures; also about the impact that have been affecting the
society due to the afectations in these matters; specially IT has been an interest subject
attending their difussion and explotation (Moelbjerg, 1998) and also some theories have
been developed trying to explain this phenomeno, however few has been studied about
in which way successful technology incorporation (in specific IT in developing countries)
could be spread in one or more industries in order to increase region development or
national development. In the case of Mexico, as a developing country it has at least two
realities for firms, in one side it can be found few strong large mexican firms (LMF) that
are getting stronger with the time and have reached international markets fighting with
major world firms leagues, and in the other side most of the small and medium mexican
firms face day by day the tremendous challenge of survival, and some of them compete
in local, regional or even national markets.
It is convenient to analyze what is happening in each one of this firms sectors for
technological capabilities (TC) development, in order to have a better understanding
about reality, and in that way try to answer to the main question of this research: How IT
is been positionated in TC conformation in LMF?; in order to answer that it is proposed
the following specific questions: Which factors affect IT capabilities accumulation? Are
IT capabilities related with TC conformation in LMF? How those factors have been
affecting individual´s and organizational´s dimensions IT capabilities accumulation in
LMF? How IT (employees´s portal) capabilities are being codified and transmitted?
The purpose of this investigation is to try to explain the possible positioning of IT and its
implications in the following dimensions: Individual and organization. It is intended to
establish possible relation that exist in the accumulation of capabilities of IT regarding
the total accumulation of technological capabilities that they may develop at a given firm.
For that, an analysis of knowledge-codification and knowledge-transmission will be
intended to take for the generation of capabilities for the incorporation of Internet
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3. technology specifically to employees' portals, with the purpose of identifying how IT
influences the different administrative aspects such as processes and taking decisions
(the personnel's qualification, the personnel's recruitment, etc.). Under this perspective it
is intended to establish IT influence examining TC accumulation taking in consideration
two dimensions: the individual and the organization contrasting them with the group of
TC that could be detected in the interviews with the firm's executives
A case of study in a Mexican corporation that has been characterized for a great
sustained growth and also for an increasing technological incorporation has been
selected: that firm is CEMEX, which is been constituted as a mature enterprise so much
for the productive sector that it takes care of, as for the grade of technology
compenetration, which it has been the result of a learning technological process joined
to a continued innovative process disseminated in the various levels of the firm (Costa &
Robles, 2002).
This Mexican corporation is the third productive worldwide- cement plant, the fifth most
important firm of the country and occupies the nineteenth place at all the Latin American
continent, so CEMEX has developed its own corporate philosophy (the “CEMEX Way”)
that implicates the adoption of new technology and the strict imposition of standards of
worldwide control, as much as its technology as well as management techniques done
“at home”.
It's probable that the adoption, adaptation and development processes utilized by
CEMEX may do assets brought in for a best understanding of the forms as it has been
adopted successfully and “in the Mexican way” the use and exploitation of IT. It is
important to mention that of the broad range that conforms the IT, it is only intended to
examine the participation of employees' portals in the conformation of the TC in the
LMF, however the present document coverage includes preliminary results due that
investigation has not been concluded.
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4. Technological capabilities conceptualization
One of the researchers that has deeply penetrated in the technological capabilities
conceptualization is Lall; this author has assumed that the TC are circumscribed as the
skills, knowledge and experience demanded in order that a firm attain the technological
change in different levels (Lall, 2000a). He has highlighted the fact that the TC are
acquired and accumulated by long periods of time through technological efforts, which
are carried through by the firm. Such technological accumulation is named learning
process, which as it is simultaneous to the technological change.
Accumulated capability type, as well as the technological change reached depend on
how explicit and decided the efforts are. While more explicit and decided the
technological efforts are, the deepest and the most complexes will be the accumulated
capabilities and the technological change reached (Lall, 2000a). A little bit different
perspective of Lall (2001) in posterior publications emphasizes that technological
capabilities are defined as “ the skills - techniques, administrative or organizational - that
are necessary to permit the firms to efficiently utilize the hardware (team) and software
(information) of the technology”. Such capabilities are necessarily specific of the firm,
institutional knowledge composed of individual skills and all the accumulated experience
in the course of time” (Lall, 2001). Where he develops an important argument regarding
the “synergetic element” that appears as a product of the individuals's interaction, which
is different to the very literal sum of the individuals's capabilities.
In the same way Ernst & Kim (2001) have supported that the organizational learning is
not the simple sum of individual learnings. Only the effective institutions can translate
the individual learning and the capabilities in organizational learning and capabilities.
Lall (2001) and Hedberg (1981) affirm that the construction of capabilities requires
individual and organizational learning. The individuals are the main actors in the learning
and in the creation of knowledge. They constitute local capabilities that can be combined
in the level of organization. Therefore technology simply cannot be transferred to a
developing country like a physical product, due that effective implantation has to include
important capabilities building elements: Simply providing equipment and directions of
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5. operation, patents, designs or the drawing of execution does not secure that technology
will be used efectively.
Regarding technological capabilities development in the processes of industrialization,
Cimoli (2000), argued that it is related with the capability to acquire technology and with
the capability to absorb and to adapt the local environment. In the same direction,
Figueiredo (2002b), define the technological capability as the necessary resources to
generate and manage improvements in processes and production organization,
products, equipment and engineering projects. Agreeing with Bell and Pavitt (1995)
whereon technological capabilities are accumulated and developed by the individuals
(skills, knowledge and experience) and in the organizational systems. Also Gonsen
(1998), has ratified it when he has addressed that the fundamental components of
technological capabilities are the individuals (which possess skills and technical
knowledge), the organization (institution that assemble different accomplishments and
the “know how”), and a common objective (combination of efforts of technical skills in a
common direction) (Gonsen,1998).
Empiric case studies have analyzed the technological capabilities in three levels: Level
of the firm or microlevel, in the level of industrial sector and in a national level. Given
that the large Mexican companies are the nature of sign of study, it is considered
adequate level of the firm or microlevel.
In the level of the firm, the empiric evidence reveals that some firms, that initially were
dependent or else were importing technology, they developed (through the effort and
time) technological capabilities that they permitted catching up with international level
high standards of efficiency and competitiveness, by means of the development of
strategies for the acquisition of knowledge, adaptation and development (Gonsen,
1998).
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6. For the purpose of this investigation it is considered that technological capabilities are
related to a technological learning processes that imply the acquisition of additional
knowledge and technical skills by individuals and organizations, this learning process
implies acquisition processes and knowledge-codification processes, that is how they
acquire and transmit the knowledge in the firms by the accumulation of experience
acquired by the qualification or specialized training, by the transmission of tacit
knowledge or else for the practice of daily realization.
In the recent literature (Figueiredo, 2002a, 2002b) TC have been studied in the firm's
level (microlevel) aspects related with the organization, process and production or else
centered in the product, investment or equipment, it is proposed to take IT to
accomplish a contribution that imply the explanation of the conformation of technological
capabilities turning to a production's element of investment as IT, in order to identify its
possible relation with the firm's total capabilities. In other words, I propose the assets
brought in of this study in the theoretic frame of TC to group them on the basis of the
types of selected dimensions. As to individual's dimension, I consider that the type of
knowledge is different for the incorporation of information technology that for the rest of
the technological capabilities, for example for the production processes regarding the
design and maintenance of a web portal; It means it´s not the same type of knowledge
and therefore their knowledge-codification processes and transmission processes will be
different. Regarding to the dimension of the organization, I propose a relation of
recognition by the executive staff and also most of the employees of the LMF expressed
in the affectations in the culture, behavior and ways to do things, which as they consider
the accumulation of technological capabilities of information technology belonging to the
total TC of the firm in study.
Methodology
Although final reach of this study will permit explaining the participation of IT in the
conformation of TC of the firm, preliminary results materialized in this document permit
validating in a preliminary manner some factors proposed in IT incorporation. The
research instruments occupied in the two first months that extends throughout this report
have been the documentary work, the interviews and the observation. In posterior
phases questionnaires will be also included.
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7. Documental work performed was divides in two phases, in the first one TC bibliography
revision and analysis and the second one review of available documentation at the
public portal of the firm. What I got from bibliography analysis was proposed factors for
this research, while the available documentation checked at public portal of the firm
relating to the origin, development and evolution of the firm, articles and publications
that implicate the use of IT with the aim of knowing the story and evolution of the firm, as
well as the manner to regulate the realization of processes at the firm, for the objective
of detecting and build manner whereon is implicated the participation of IT. The valuable
resource of interviews as much to the executive, management and operating staff has
provided relevant information for the understanding on the forms about how to do things,
the organizational behavior and the culture adopted for the firm for the IT incorporation
in its processes.
Observation work in the working spaces joined to the formal and informal interviews with
the IT personnel of the firm has permitted compiling information to understand how the
conformation of technological transference of processes and products, the assimilation
and development of specialized skills, the schemes of diffusion and appropriation are
accomplished.
Research work intends to be ended up in an additional time limit of 6 to 8 months in the
missing period in addition to the instruments mentioned, it is intended to make use of
questionnaires, which will be designed in order to procure the skills and knowledge of
personnel sign to employees' portal, permitting to know the group of techniques
acquired, the knowledge acquired of processes, labor experience; as well as the
networks that they conform for the dissemination and acquisition of intervening
knowledge the get-together with associates and bosses, the formation of supportive
internal networks as well as his forms of interaction. Besides it will enable the
compilation of valuable information relating to the mechanisms, grade and forms of
qualification and training, as well as the forms applied for the personnel's recruitment.
7

8. Finally to conform TC of the firm, I will make use of the information compiled by another
researchers joined with the information compiled at work field (documentary revision,
interviews, questionnaires and observation), once shaped will proceed to compare the
TC of the firm with the executives staff using a partial results presentation, however the
presentation of general final results will have to wait until end of the investigation.
Preliminary Results
The factors (see table 1) that affect the participation of IT in the conformation of TC are:
Organizational behavior, technology integration, individual skills, social interaction and
technological infrastructure.
Table 1. Definition of the factors involved in IT incorporation
Factor Definition
This factor is related with culture and ways to do things in the
Organizacional organization. Regarding to culture is important to know which are
Behavior corporative values related with IT incorporation and also IT role
and what IT represents to employees. Ways to do things are
defined in terms of operating practices, politics and procedures, so
it means how IT is related with management routines.
Conformation of this factor involves several elements: mechanisms
Technology to integrate knowledge, firm strategies for skills development into
Integration the organization, employees and organizational systems flexibility
to change adaptation and finally standards adoption such as
technological as organizational that allow spread acquired
technological knowledge.
This factor is integrated by organizational and technical skills that
an individual can develop in a organization, as basic and
Individual Skills specialized knowledge acquired by several ways and finally
accumulated experience by performance in daily routine activities
expressed in terms of acquired values and behavior tacit norms
developed for daily problems management.
8

9. Social Interaction constitute a medium for individual TC
transformation into organizational TC. It is integrated by utilized
Social electronics communication forms, by IT recognition and positioning
Interaction in daily activities, by different ways of electronic socialization that
works as an informal knowledge transmission mechanism and
finally by the team spirit generated in team daily activities caused
by information interchange.
This factor constitute a basic requirement for information
Technological technology TC conformation. It is related with firm technological
Infrastructure resources, human resources that can be able to understand,
manipulate, use, modify and even create with acquired technology
and also R&D intensity realized in IT.
Source: Own elaboration based on research.
It is important to mention that all factors are strongly related, so I suggest total factors
participation to TC conformation in a firm working as a system.
The preliminary results obtained in CEMEX turn up developed according to these
proposed factors.
Organizational behavior.
Technological adoption has been reflected in the philosophy of the ´CEMEX Way´,
which has been backed up and fomented for the firm's directive levels, standards were
able to generate a model that includes processes and operating practices backed up to
a large extent for the IT, permitting to generate capabilities of replication in the different
plants and countries that conform to this mexican group. This is perhaps the best
example of the form whereon CEMEX has been able to get constituted as an innovative,
mature firm in the incorporation of IT in its processes and best operating practices, but
above all in the capability of adaptation to the change, in the proliferation of incentives
mechanisms of creativity, as well as the international level standardization of common
forms to get the things done.
9

10. The ´CEMEX Way´ represent a technological capability that cannot be transferred with a
low cost neither in a fast way with the equipments, drawings of execution and user´s
manuals. It has to be built with ´technological efforts´ with a purpose: Investments in
time and resources for the assimilation, adaptation and improvement of known
technologies, and the creation of new technologies ´made at home´ (Romijn &
Albaladejo,2002) (Lall,2001). This technology ´made at home´ proposal for CEMEX is
the result of a group of capabilities developed and properly integrated to get the
established goal: Standardization and replication of processes and best operating
practices by means of information technology.
CEMEX created a selected group joining high IT executives level with high business
areas executives and with a solid and stable IT platform generating a technological
capability through the creation, improvement and maintenance of a model to do the
things (CEMEX Way). Besides of a solid technological infrastructure and a corporative
governance, it was backed for a high tools and applications adoption grade, generating
a modification in the organizational culture where several mechanisms emerged to
propitiate the gestation, depuration, development and implementation of the creative
ideas that happen within the pale of the entrepreneurial space without distinction of
levels or else through the interaction with the technological partners. These modification
processes accomplish themselves by means of learning internal processes, generating
its own individual patterns of technological and organizational capabilities and its
technological trajectories (Bachmann and Astrid, 1998)
Technology Integration.
A distinctive characteristic of CEMEX with regard to the generation of capabilities has
been the grade of existing fusion among the IT personnel and the business areas
personnel, expressed in the permanent human resource allocation for the tracking,
monitoring and business processes understanding analysis.
In the same direction related to the business personnel areas there is a significant
technological assimilation due to the participation of expert elements as much in the
areas of business as well as in the information-technology application. This fusion of
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11. skills developed so much for the technological personnel, executive, strategic and
operational has permitted to generate knowledge-codification and knowledge-
transmission mechanisms through informal networks for the get-together routinist either
for electronic ways (e-mail, forums, chat, etc) or traditional ( face to face, telephone, fax).
CEMEX's technological race, has permitted a high grade of participation from all the
employees in several ways: suggesting changes, improvements in the diverse
intervening applications by a strong and intimate electronic communication (making use
of mail, forums or chats) or when proposing technological alternatives, which can result
in the creation of new projects financed by the firm. However, the organizational
learning, is not the simple sum of individual learnings. Only the effective institutions like
CEMEX can translate the individual learning and the capabilities in organizational
learning and capabilities (Ernst and Kim, 2001) (Dosi, Nelson and Winter, 2001).
Individual skills.
Evidence has been found of a broad recognition of individuals skills in the participation
as a detonating factor in the cultural change, expressed in the selection, recruitment and
utilization of highly human resources qualified in technical and organizational aspects;
this process of recruitment has been made in an international level permitting culture
shock and the gestation of new culture, producing improvements of the best operating
practices and the enrichment of diverse forms to think and ways of doing things. This
interchange of highly human resources qualified in various levels of organization
(executive, related to management and operating) has propitiated the networks
strengthening, skills development as much as in the individual level as in the
correspondent dissemination and proliferation of skills into the organization, and as a
consequence in TC generation (OECD, 1997) (Lall, 2001).
TC individuals's gestation regarding to the development of skills has been considered in
CEMEX using various mechanisms; one of them is the permanent program of
qualification which permits the development of capabilities and certification for
employees, converting the individuals in the main stars in the learning and in the
creation of knowledge (Hedberg,1981), considering with a lot of on-line available
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12. resources using corporative Intranet. By means of the online resource there are also
manuals, instructions books and operating practice available.
Another mechanism for skills development is receiving qualification through the different
technological suppliers, among the ones is NEORIS as a principal technological supplier
being a part of firm's chain that support CEMEX´s technological growth. One skill
diffusion mechanism has been the internal training when the firm reply processes or
plants using the internal personnel in charge of spreading out knowledge and the way
how to get things done in terms of processes, policies and operating practices where
there is an important IT tools and aplications involved.
Social interaction.
It is considered that technological capability also can be expressed by the diverse
aspects of social interaction among the members of organization (Mehra & Dhawan,
2003). A rooted electronic interaction exists in CEMEX working as an official way and
also as an informal communication mean. It emerged from a strong electronic
interchange by e-mail through Lotus Notus and it has evolved even to generate inserted
forms of collaboration at the portal that the firm named ´CEMEX Plaza´.
CEMEX Plaza's concept includes much more than employees' portal, it is considered to
become everybody´s space of work of the personnel at CEMEX, attending to three
dominions the relation of employee and firm, an inherent relation between all different
jobs and the third dimension taking care of the information necessities of the person.
Through this portal all employees have access from anywhere, counting with a
personalized view according to their information needs, safety environment and access
to the applications and more frequent contents
IT incorporation in CEMEX through the portal is a form to foment the informal knowledge
networks using the collaboration mechanisms in terms of portal´s tools and propitious
generation of ´communities´ (personnel that labors in a same business area conformed
by all of the countries that CEMEX has presence in).
12

13. Social interaction capability is fomented in the context of creation of the communities
because creates informal networks and propitious a way to spread knowledge in the
firm, also when IT people try to find the way to deliver a value to the community. This
capability has created communication bridges among the divisional barriers of countries
supported by a strong and solid communication and information platform, all this is
possible because all firm´s employees have gotten a technological madurity level
expressed in IT communication tools mastery but specially in a capacity to expand their
work area in a world wide context.
The portal represents in CEMEX a midway that propitiates the spaces of collaboration
generating mechanisms for the knowledge-codification and knowledge-transmission in
the projects, in the operational basic routines, and still in the workpeople's same informal
get-together. The portal has propitiated the consolidation and formation of capabilities
when the content of different sources is integrating in just one place, propitiating an
increment of the capabilities to collaborate in a structured manner and optimizing how
talkings are being coordinated, specially in projects management.
Technological infrastructure
CEMEX has been characterized for a great IT technological race owed to a great extent
to the directive vision that has believed in the adoption of the technological tool as a
strength of firm core competences; for that reason CEMEX has now a solid and stable
platform in IT. This firm has maintained an uplifted level of IT integration (Feeny &
Willcocks,1998) including all of the main processes, propitiating high computer density
where almost all employee has one PC. Referring information-technology growth
strategy, CEMEX does not develop, it is supported on the solutions and developments
generated by its technological partners. Main technological partner emanated from
CEMEX when it got constituted as an affiliated enterprise named NEORIS which is in
charge of making offer itself so much to CEMEX as well as to others firms, services of
development and consultancy in integral solutions.
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14. Conclusions
Any technology type, including IT does not show for itself, no value as such for the firm.
The way in which the firm is able to incorporate in its processes, operating practices,
procedures, policies molding an IT organizational culture in the realization of daily
activities is what speaks us of IT presence. The individual skills expressed in terms of
experience and knowledge, the strengthening of capabilities in the social interaction, in
the integrative elements of technology and the form to get things done; they constitute
even more relevant elements in this cultural change process that propitiates the
accumulation of technological capabilities
Proposed factors were obtained through bibliography analysis of TC and shaped with
fieldwork information, it is important to mention that although this paper does not include
how they rise and how they consolidate, there must be clear that TC possible
conformation is present for the relations that become established among these factors
and no for the presence itself or develop of some of them, in other words factors they
operate like a system that propitiates knowledge (Dutrénit,2000) and firm skills
(capabilities). It is pending to analyze individual acquired knowledge processes and
how to spread into the organization, in spite of it a contribution that this document offers
is factors definition as well as the development of the different features applied for
CEMEX's case.
Table 2 shows factors that intervene in IT incorporation under a perspective of TC
approach, some of them have been developed at preliminary results section, in the
understood that investigation continues in process and due space limitations not all the
details were exposed.
Technological capabilities are not able to be described entirely in terms of the hardware,
or technological infrastructure sophistication, the synergy (Lall, 2001) among the factors
proposed, that is the capability to combine all like an organization is what it propitiates
that IT converts to a technological capability, no for the participation of the technological
element by itself, but for these amalgam of factors in where the evolution, performance
14

15. and accumulation of capabilities delivered through the time (Figueiredo,2002b) play an
important role.
Table 2. IT incorporation factors
Factor CEMEX´s features
• IT importance recognition of employees expressed in values.
• Worry for technological update in various levels of organization
• Constant participation of employees in the emission of
Organizational technological proposals
Behaviour • Complex and innovator IT structures
• IT worldwide functional diversification responsibilities
• Mastery in business areas by IT personnel
• Fusion between business areas operating practices and IT
• Technological decisions taken by corporative centralization
• Stressed capability for change adaptation
• Operating practices standarization
Technology • Best operating practices identification capability
integration • Flexibility in the personnel's mobility
• Definition of worldwide standards for hardware and software
platforms
• Close relation and common knowledge sharing between
business areas, IT area and corporative area.
• Technological partners close relation
• High technological project management capability
o International human resources utilization
o High processes knowledge by IT personnel
Individuals o Internal training program with skills development and
skills certification for employees
o Permanent support to evolution and invention spirit
15

16. o Human resource technological profiles definitions for
recruitment
o Specific training through technological suppliers
o Diffusion of documents through corporative Intranet
o Internal training for plants and processes replication
• Electronic communication broad diffusion
• High utilization and dependence of IT in the daily activities
Social • Use of mechanisms incentives of creativity
interaction • Flexible and opened communication channels
• Communication and coordination using informal technological
collaboration networks
• Solid and stable IT platform
• Multiple technological platforms strong integration
Technological • High IT integration level covering all main processes
Infrastructure • High PC density by employee
• Documentary regulation in development, implementation and
operation
• IT development by technological partners
Source: Own elaboration based on research.
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