The impact of technological capability on manufacturing companies: A review

• Published date: 01 February 2022
• Author: Yaser H. S. Al‐Mamary,Mohammed Abdulrab,Mohammed A. Alwaheeb,Alina Shamsuddin,Fawaz Jazim
• Date: 01 February 2022
• DOI: http://doi.org/10.1002/pa.2310

ACADEMIC PAPER

The impact of technological capability on manufacturing

companies: A review

Yaser H. S. Al-Mamary

1

| Mohammed Abdulrab

1

| Mohammed A. Alwaheeb

1

|

Alina Shamsuddin

2

| Fawaz Jazim

3

1

Department of Management and Information

Systems, College of Business Administration,

University of Ha'il, Hail, Saudi Arabia

2

Department of Technology Management,

Faculty of Technology Management and

Business, Universiti Tun Hussein Onn

Malaysia, Parit Raja, Malaysia

3

Department of English, College of Arts,

University of Ha'il, Hail, Saudi Arabia

Correspondence

Yaser H. S. Al-Mamary, Department of

Management and Information Systems,

College of Business Administration, University

of Ha'il, Hail, Saudi Arabia.

Email: yaser_almamary@yahoo.com

Funding information

University of Ha'il

Building technological capability (TC) is a long-term process that must be planned

carefully to achieve the desired results. Therefore, companies should increase their

effort to maintain technological interactions with other companies and gain competi-

tive advantages. This study aims to review the literature in the field of TC and pro-

vide a conceptual framework that highlights the relationship among TC, competitive

advantage and manufacturing performance. After reviewing the literature, the

researcher found that TC plays an important role in achieving competitive advantage

for any company and improving the performance of companies. In addition, most pre-

vious studies have focused on TC in manufacturing companies probably due to the

fact that manufacturing is currently an extremely important industry in the economy

of most countries. TC strongly participates in the production and operation sectors,

which are the cornerstones of every manufacturing company. Focusing on TC will

play a role in developing the performance of manufacturing companies while gaining

competitive advantages and maintaining commercial success in domestic and interna-

tional markets.

1|INTRODUCTION

Technological capability (TC) is a core resource and a distinctive com-

petency that enables firms to create firm value. Firms can acquire

unique resources and skills and engage in strategic activities with high

TC, and thus, gain competitive advantages and increase their profit-

ability while enhancing their organizational performance (Lin &

Lai, 2020).

TC plays an important role in achieving competitive advantages. It

also improves the performance of firms, industries and even countries.

The potential of TC as a competitive tool has been recognized in vari-

ous industries. Manufacturers strive to outperform competitors. They

are not only competing in terms of profits earned but also in terms of

achieving a high level of operational performance. The performance

of manufacturers is traditionally measured on the basis of an account-

ing management system. However, focus has shifted from solely

emphasizing financial measures to specific multidimensional opera-

tional priorities (Ahmad et al., 2019).

Sobanke, Adegbite, Ilori, and Egbetokun (2014) asserted that TC

facilitates innovation, which, in turn, drives productivity growth. Con-

sequently, a nation should payattention to the accumulation of TC by

firms to improve its competitiveness or achieve improved productivity

and economic growth. TC is one of the factors that enables a country

and its enterprises to performcertain functions (particularly innovation)

that are critical to economic development and international competi-

tiveness. Accumulating this capability, particularly in developing coun-

tries, is considered a learningprocess that requires absorptive capacity.

Ahmad, Othman, and Lazim (2014) reported that many previous

TC studies have covered the manufacturing industry of the electric,

biotechnology, automotive, high technology and telecommunications

sectors. At present, manufacturing plays a crucial role in the economy

of most countries. Manufacturing firms are facing tremendous chal-

lenges because of the dynamic character of manufacturing itself, its

market and the environmental conditions. Developing countries are

striving to compete in the intense global market, and thus, this key

industry should maintain and boost local capabilities to achieve

Received: 10 July 2020 Revised: 17 July 2020 Accepted: 19 July 2020

DOI: 10.1002/pa.2310

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https://doi.org/10.1002/pa.2310