The Acquisition Of Physical Facilities By Subsidiaries Of Multinational Corporations: The Case Of The Canadian Petroleum Refining Industry

Date of Award


Degree Type


Degree Name

Doctor of Philosophy


In many industries, process technology plays a decisive role in advancing the firm's competitive position. Process technology is particularly important to such process intensive industries as Petroleum Refining. Executives in these industries consider process acquisition to be a critical phase in implementing the firm's competitive strategy.;The acquisition of a process technology or physical facility requires the firm to perform a series of technical activities of Process Research, Process Development and Process Manufacture. The existing management literature views the firm as having the option of performing any number of these activities internally or via a supplier market. The particular combination can be viewed as the facility or process acquisition mode used by the firm and expresses relative dependence of the firm on the supplier market as opposed to its own internal resources to acquire process technology.;This research accepts the basic notions expressed in the literature and tries to expand on them by asking and answering some fundamental questions: (1) Does the range of acquisition activities recognized by the literature fit the practice framework of managers? (2) How do firms depend on their own resources, the supplier market and their parent companies to acquire process technology? (3) What factors can be used to explain the pattern of dependence demonstrated by firms?;The research generated some specific propositions that were tested using data generated on the Canadian Petroleum Refining Industry. The research methodology involved in depth, semi-structured interviews with seventeen executives in the industry. Data were collected in six firms and on fifteen different acquisition cases.;The results of the research show that managers recognize a larger range of technical activities in practice than exists in theory and that the range varies as between new technology generation and acquisition of existing technology. The results further showed that firms use a limited number of acquisition modes and that they tend to delegate activities, whose outcome is more certain, to the supplier industry. There was limited dependence on parent companies. Futhermore, the results show that the pattern of dependence on the three technology sources--Internal, Suppliers, Parents--can be explained by three factors: (1) how far downstream from research the activity is located, (2) how innovative is the facility or process technology and (3) how strong the firm (subsidiary) is technologically.

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