Technology Acquisition Permitting The Insertion In

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1 Technology acquisition permitting the insertion in the international market 1 30 Technology Acquisition Permitting The Insertion In The International Market: A Case Study Thompson Copperfield von Agner CEFET-PR Ponta Grossa, PR, Brazil Carlos Cezar Stadler Prof. Dr. CEFET-PR Arquimedes da Silva Szezerbicki CEFET-PR Luiz Alberto Pilatti Prof. Dr. CEFET-PR ABSTRACT The globalization processes is permitting that small and medium Brazilian organizations start to export their products to all the consuming markets on the globe. Exports started to create a demand that these organizations fulfill standards of quality that the national markets did not demand. To attend the quality requirements the organizations observed the need of technological upgrading. Such upgrading forced a restructuring in the workforce staff in order for these workers to operate the new equipments with technological advantages. In this way, the organization can start having the necessary requirements demanded by the international market. This article is a field study accomplished in a wood mill, which works with reforested pine. Initially it only produced to for the national Brazilian market. Observing the possibilities offered by the global market this organization now only exports its production. To reach the demanded requirements of the international market there was the need of technological changes and also a change in workforce. Key words: Globalization, Technology Acquisition, Wood supply. INTRODUCTION The intention of this article is to demonstrate the importance of technology acquisition for the growth of the organization in the face of international market and its maintenance in this market using technology that aggregates value to products and services.

2 2 IAMOT 2005 With regional and national success, organizations have seen the need for geographical expansions of their services and products. This expansion leads towards conquering international markets via exports. Exporting, once only possible for large is now possible for the medium and small organizations too. This is due to various factors and one is the technological advancements that aggregate value and quality to products and services. Developing the possibility for organizations to penetrate in to international markets that demand quality and competitive prices. This new scene generates the opportunity for the involved actors, in developing countries, to be suppliers of finished goods, instead of being the traditional exporters of raw materials. To active, satisfactory production capacity of finished goods, Brazilian organizations have to import knowledge and technology. This is because research and development (R&D) is not a part of business strategies for the small and medium Brazilian organization especially in the lumber millwork sector. The quota of small and medium Brazilian organizations that have entered the international market are producing for niche consumers in the lumber millwork sector. These niche consumers demand standards of quality that are not demanded by the national market. In order to achieve the demanded standards and maintain the needed price level, to be competitive, technology and knowledge has to be imported. INNOVATION AND COMPETENCE According to Zarifian (1999), competence is the practical intelligence of situations that are supported on acquired knowledge and transforms it self with more strength, the more increases the complexity of situations. It is seen that, the notion on competence, as well as the administration of innovation, appear associated to words such as; to know, to act, to mobilize resources, to integrate multiply and complex knowledge, to know, to learn, to know to engage, to assume responsibilities, to have strategic vision. Durand (1998) affirms that; in medieval times, alchemists tried to transform metals in gold; today, the managers and companies try to transform resources and assets in profit. A new form of alchemy is necessary for organizations. It still should be emphasized that, innovation is the most effective form alchemy, since it characterizes companies that try to offer to their customer s innovative, revolutionaries and facilitating products. Innovation is what the studied organization is aiming to archive with the acquisition of new technologies. With innovation, the organization attempts to maintain itself in the international market.

3 Technology acquisition permitting the insertion in the international market 3 THE ORGANIZATION AND ITS LOCALIZATION The studied organization is a lumber mill that started producing reforested wood boards to supply the local civil construction sector in the early eighties. This very lowtech operation demanded little productive sophistication. After ten years new opportunities appeared and the organization saw the opportunity to produce for the international market. In order to insert it self in the international market new products would have to be developed, new equipment and a more technically educated workforce would have to be hired and or trained. The area of the municipal district of Ponta Grossa in the state of Parana is in the south of Brazil and possesses a tradition in the lumber sector that dates from the end of the XIX century. The municipal district occupies the fourth place among the most populous cities of the state, with a population of inhabitants and an annual growth rate of 1.94%. The economic activity this divided in 5% in the agricultural sector, 56% in the industrial sector and 39% in the service sector (IBGE, 2000). The municipality is distant 118 Km from the capital city of the State, Curitiba, 278 Km of the port of Paranagua PR and 330 Km of the port of Itajai - SC and possessing rail conjunction that makes possible a fast drainage of the production. The area also possesses a considerable infrastructure of technical and superior education and the energy demand is supplied with ease. With these characteristics, the municipal district presents favorable conditions for the industrial activity. These favorable conditions turned the municipal district in an attractive area for the industrial sector in the state of Paraná. The wood industry accompanied the development of the city and suffered a decline during some decades. Recently this sector has recovered and is prospering due to the globalization processes. GLOBALIZATION Globalization is altering production manners, productive structures, location patterns and establishing new ways of competitiveness in the economical level, clusters and networks of companies are strengthening local production with this (Cunha, 2002). With these alterations, new paradigms are appearing and market characteristics are modified. National borders are broken and start to be inexistent for the small and medium size companies. The capacity of adaptation to changes drove small and medium organizations to a level where they can be rearranged to maintain competitive. The globalization process provoked changes in the economical processes of the world by creating the need to search for customers and suppliers out of the national borders. Due to these needs, organizations were motivated to alter their commercialization models and started to look for the foreign market to maintain their competitive advantages. Even with the regional and national commercial success of organizations,

4 4 IAMOT 2005 they observe the need of geographical dispersion of their products for markets beyond their national territorial borders. This dispersion does not only happen with large organizations, organizations of small and medium sizes are finding space also in the international markets. This is due to advanced technology that joins value and quality to their products making it possible for the opportunity of penetration in these demanding price and quality markets. Globalization made it possible for organizations to distribute their products in all of the consumer markets of the world. In order to reach these markets there is the need to produce for certain niches that demand a differentiation in the goods. To reach this differentiation exporting organizations need, in many moments, to import up-to-date technologies in order to adapt to the quality needs imposed by the importers and also to be competitive in price. Exports should not be characterized as an isolated event in business development. For Garcia (2001) exports should be treated as an activity that has been developed parallel to other representative commitments of the economical life in the organization, meaning the perfect integration of this new activity with the regular operations developed in the organization. Garcia (2001) explains that to relegate export to a secondary level, in the list of events, means to attest that the organization did not adapt exports to its business atmosphere. It is observed that, to export only the surpluses is equal to the absence of an organizational pledge, generating a retrograde behavior due to the lack of necessary entrepreneurship for the existence of the organization in the globalize world. Tookey (1997) comments that exporting involves four components that are: Products, Services, Investments and Knowledge. In this study, a fifth component can be added. This component is Technology. For this organization, technology played an important roll in its export process. For some companies the export process is not possible due to the installed production capacity or the technological level of development that they possess. In order to integrate itself in the global market, technology and knowledge has to be bought and implemented. THE CASE STUDY The researched organization has passed in three distinctive phases in its technological evolution since the period it started producing for the international market. A forth phase was attempted but, rendered in a failure. In the first phase, the organization bought low-level technology to produce what is called Clear Blocks. These blocks are produced from reforested pine and do not go in

5 Technology acquisition permitting the insertion in the international market 5 dimensions beyond 30 to 60 cm in length and 10 to 30 cm in width and do not have any defects. A very simple product and does not demand a technical work force. The training of the workforce was done in approximately one workweek. The aggregated value comparing to the pine boards leaped in the amount of 300%. The technological investment was paid off in 11 months from the date of the first containers exported. Ten containers per month were exported in the first six months and the amount of exported containers pre month grew every month. In the period before the start of phase two, a total of 150 containers per month were being exported. In phase two, the organization advanced to the second level in technical necessity. The new product had more aggregated value and quality demand. In this phase, the wood blocks were jointed forming a product called Blanks. The Blanks varied form 200 cm to 400 cm in length and 10 to 30 cm in width. In order to aggregate value to the Clear Blocks new equipments were acquired. With the acquisition of the Finger Jointer equipment, a greater change was noticed in the plants layout and in the workforce, due to the technological requirements. The blockproducing workers were maintained and new employees were contracted. This phase demonstrated the need for prolonged training of the new employees. With this new equipment, training took several weeks to accomplish. This product demanded that the workers had knowledge in the English language and a higher level of education; this was in order to correctly operate the equipment. The pay off for the investment in this phase took thirteen months and the aggregated value over the Clear Blocks was in the amount of 85%. The third phase was the transformation of the Blanks in to architectural moldings. These moldings vary in style and sizes. A set of standard moldings are shipped to North American markets, the European market only buys a reduced amount of standard moldings. The European market has a better acceptance for original design moldings. To obtain these original designs a designer was contracted. The designer produced a set of forty original moldings styles that are exclusive for the organization. This phase demanded the acquisition of high technology equipment that was imported for the United States, Germany and Italy. There was also the demand to contract supervisors that had the knowledge in this product and the could instruct the employees. The effort to locate and contract these supervisors was high. They had to be contracted from other organizations and this produced friction between the organizations involved. The organization elevated its profit over the Blanks in the order of 244%. The technological investment was paid off in a period of 24 months. With this phase, the organization penetrated even further into the international market, obtaining sales in the Asian market. The forth phase was the production of refined and highly detailed picture moldings. This product has a high aggregated value and demands high levels of quality and training. Due to the nature of this product, it demands zero defects. The production of

6 6 IAMOT 2005 this type of molding rendered in a failure of the organization. The workforce did not obtain training form the international corporations that produced the equipment for production. The workers did not have the proper training and the supervisors did not posses the needed knowledge in operating the equipment. Consequently, the output product was not satisfactory of the international market and was not satisfactory for the national market too. Approximately 85% of the production runs that were exported were rejected. This phase resulted in a lost of investment and the closure of this section of the factory. Two alternatives are being studied in order to solve the training problem. One alternative is to send a team of supervisors to obtain training abroad in North American and European factories. The other alternative is to contract a team of instructors to provide the needed training. The problem that occurred in this second option is that Brazil does not have institutions that can provide this type of training. The alternative would be to contract employees for other factories that produce the same goods incurring in new frictions among the organizations. CONCLUSION It was seen in this study that the acquisition of technology is an important factor for organizations that do not posses, cannot afford or do not see the need for a research and development (R&D) department. Other factors have to be put in place also. It was seen that in the forth phase of evolution the organization failed due to the fact that the involved employees did not posses the needed skills. From the first to the third phase, the technology that was acquired had little demand in understanding. In the forth phase the scenery changed dramatically. The change was so dramatic that it forced the organization to close down that production phase in order to not loose more resources. The need to provide training in order to capacitate the workers is a fundamental step in acquiring new technologies. The organization failed to see this and the result was the lost of resources and the layoff of employees. REFERENCE ALMEIDA, Antonio Francisco de. Análise das Estratégias Competitivas de Quatro Bancos sob Diferentes Enfoques Teóricos. NPGA/UFBA ( 25/03/2003) ANDRADE, J.; Dias, C.; QUINTELLA, R.; 1997; Uma análise do processo de formulação das estratégias sócio-ambientais pelo viés da teoria dos jogos: O caso da Aracuz Celulose S.A.;30º Congresso Anual de Celulose e Papel da ABTCP

7 Technology acquisition permitting the insertion in the international market 7 COLLINS, J. C. & PORRAS, J. I.; 1996; Building Your Company s Vision. Harvard Business Review, set/out. GARCIA, Luiz Martins. Exportar: rotinas e procedimentos, incentivo e formação de preços. 7. ed., São Paulo: Aduaneiras, INSTITUTO DE MANEJO E CERTIFICAÇÃO FLORESTAL E AGRÍCOLA IMAFLORA. São Paulo, Disponível na Internet Em 21/01/2004. MACEDO, Angela Regina Pires et all. Produtos sólidos de madeira. BNDES Setorial, Rio de Janeiro, ed. Esp., p , out MARTINS, V. Indústria de clear blocks no Paraná: análise da competitividade diante da globalização e das mudanças estruturais ocorridas na década de 90. Florianópolis, p. Dissertação (Mestrado) Universidade Federal de Santa Catarina. MORA, Admir Lopes et all. Efeito do espaçamento de plantio em reflorestamentos de pinus taeda em Jaguariaíva PR. Revista Uniandrade, v. 2, n. 2, p , jun PLACAGE. São Paulo, Disponível na Internet Em 12/03/2004. TOOKEY, Douglas. Técnicas de exportação. Trad. De Jordano Bruno Piubel. São Paulo, Melhoramentos, Editora da Universidade de São Paulo, GARCIA, Luiz Martins. Exportar: rotinas e procedimentos, incentivo e formação de preços. 7. ed., São Paulo: Aduaneiras, ZARIFIAN, P. Objectif competénce: mythe, constructions ou realité? Paris: Liaisons, DURAND, T. Forms of incompetence. 4 th International Conference on Competence- Based Management. Oslo, June 1998.