The effects of innovation on vertical structure: Perspectives on transaction costs and competences

Academy of Management Review

Volumn 33, Issue 3, 2008, Pages 586-605

  Wolter, Claudio ^a   Veloso, Francisco M ^a,b  

^a CARNEGIE MELLON UNIVERSITY   (United States)

^b CATHOLIC UNIVERSITY OF PORTUGAL   (Portugal)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 47249161570     PISSN: 03637425     EISSN: None     Source Type: Journal    
DOI: 10.5465/AMR.2008.32465693     Document Type: Article

References (82)

1. Afuah, A. 2001. Dynamic boundaries of the firm: Are firms better off being vertically integrated in the face of a technological change? Academy of Management Journal 44: 1211-1228.
2. Alchian, A., & Demsetz, H. 1972. Production, information costs, and economic organization. American Economic Review, 62: 777-795.
3. Argyres, N. 1996. Evidence of the role of firm capabilities in vertical integration decisions. Strategic Management Journal 17: 129-150.
4. Argyres, N., & Silverman, B. 1999. R&D, organization structure, and the development of corporate technological knowledge. Strategic Management Journal 25: 929-958.
5. Armour, H., & Teece, D. 1980. Vertical integration and technological innovation. Review of Economics and Statistics, 62: 470-474.
6. Arora, A., & Gambardella, A. 1994. The changing technology of technological change: General and abstract knowledge and the division of innovative labour, Research Policy, 23: 523-532.
7. Balakrishnan, S., & Wernerfelt, B. 1986. Technical change, competition and vertical integration. Strategic Management Journal 7: 347-359.
8. Barney, J. 1986. Strategic factor markets: Expectations, luck, and business strategy. Management Science, 32: 1231-1241.
9. Brusoni, S., Prencipe, A., & Pavitt, K. 2001. Knowledge specialization, organizational coupling, and the boundaries of the firm: Why do firms know more than they make? Administrative Science Quarterly, 46: 597-621.
10. Cacciatori, E., & Jacobides, M. 2005. The dynamic limits of specialization: Vertical integration reconsidered. Organization Studies, 26: 1851-1883.
11. Christensen, C., Verlinden, M., & Westerman, G. 2002. Disruption, disintegration and the dissipation of differentiability. Industrial and Corporate Change, 11: 955-993.
12. Coase, R. 1937. The nature of the firm. Economica, 4: 386-405.
13. Cohen, W., & Levinthal, D. 1990. Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35: 128-152.
14. Conner, K., & Prahalad, C. 1996. A resource-based theory of the firm: Knowledge versus opportunism. Organization Science, 7: 477-501.
15. Davies, A. 1997. The life cycle of a complex product system. international Journal of innovation Management. 1: 229-256.
16. de Figueiredo, J., & Teece, D. 1996. Mitigating procurement hazards in the context of innovation. Industrial and Corporate Change, 5: 537-559.
17. Dyer, J. 1996. Does governance matter? Keiretsu alliances and asset specificity as sources of Japanese competitive advantage. Organization Science, 7: 649-666.
18. Fine, C., & Whitney, D. 1999. Is the make-buy decision process a core competence? In M. Muffatto & K. Pawar (Eds.), Logistics in the information age: 31-63. Padova, Italy: Servizi Grafici Editoriali.
19. Fixson, S., Ro, Y., & Liker, J. 2005. Modularisation and outsourcing: Who drives whom? A study of generational sequences in the US automotive cockpit industry. International Journal of Automotive Technology and Management, 5: 166-183.
20. Foss, N. 1993. Theories of the firm: Contractual and competence perspectives. Journal of Evolutionary Economics, 3: 127-144.
21. Globerman, S. 1980. Markets, hierarchies, and innovation. Journal of Economic Issues, 14: 977-998.
22. Helper, S., MacDuffie, J., & Sabel, C. 2000. Pragmatic collaborations: Advancing knowledge while controlling opportunism. Industrial and Corporate Change, 9: 443-488.
23. Helper, S., & Sako, M. 1995. Supplier relations in Japan and the United States: Are they converging? Sloan Management Review. 36(3): 77-84.
24. Henderson, R., & Clark, K. 1990. Architectural innovation: The reconfiguration of existing product technologies and the failure of established firms. Administrative Science Quarterly, 35: 9-30.
25. Hobday, M. 1998. Product complexity, innovation and industrial organisation, Research Policy. 26: 689-710.
26. Hoetker, G. 2005. How much you know versus how well I know you: Selecting a supplier for a technically innovative component. Strategic Management Journal. 26: 75-96.
27. Hoetker, G. 2006. Do modular products lead to modular organizations? Strategic Management Journal, 27: 501-518.
28. Jacobides, M. 2008. A model of how transaction costs, capabilities and limits to growth drive vertical scope. Organization Science, 19: 1-21.
29. Jacobides, M., & Billinger, S. 2006. Designing the boundaries of the firm: From "make, buy or ally" to the dynamic benefits of vertical architecture. Organization Science, 17: 249-261.
30. Jacobides, M., & Hitt, L. 2005. Losing sight of the forest for the trees? Productive capabilities and gains from trade as drivers of vertical scope. Strategic Management Journal, 26: 1209-1227.
31. Jacobides, M., & Winter, S. 2005. The co-evolution of capabilities and transaction costs: Explaining the institutional structure of production. Strategic Management Journal, 26: 302-326.
32. Kogut, B., & Zander, U. 1992. Knowledge of the firm, combinative capabilities, and the replication of technology. Organization Science, 3: 383-397.
33. Lamoreaux, N., Raff, D., & Temin, P. 2003. Beyond markets and hierarchies: Toward a new synthesis of American business history. American Historical Review, 108: 404-433.
34. Langlois, R. 1988. Economic change and the boundaries of the firm. Journal of Institutional and Theoretical Economics. 144: 635-657.
35. Langlois, R. 1992. Transaction-cost economics in real time. Industrial and Corporate Change, 1: 99-127.
36. Langlois, R., & Robertson, P. 1989. Explaining vertical integration: Lessons from the American automobile industry. Journal of Economic History, 49: 361-375.
37. Lee, J., & Veloso, F. In press. Interfirm innovation under uncertainty: Empirical evidence for strategic knowledge-partitioning. Journal of Product Innovation Management.
38. Leiblein, M., & Miller, D. 2003. An empirical examination of transaction- and firm-level influences on the vertical boundaries of the firm. Strategic Management Journal, 24: 839-859.
39. Leiblein, M., & Ziedonis, A. 2007. Deferral and growth options under sequential innovations. Advances in Strategic Management, 24: 225-245.
40. Leonard-Barton, D. 1992. Core capabilities and core rigidities: A paradox in managing new product development. Strategic Management Journal, 13: 111-125.
41. Macher, J. 2006. Technological development and the boundaries of the firm: A knowledge-based examination in semiconductor manufacturing. Management Science, 52: 826-843.
42. Macher, J. & Mowery, D. 2004. Vertical specialization and industry structure in high technology industries. In J. Baum & A. McGahan (Eds.), Advances in Strategic Management, 21: 317-356.
43. Madhok, A. 2002. Reassessing the fundamentals and beyond: Ronald Coase, the transaction cost and resource-based theories of the firm and the institutional structure of production. Strategic Management Journal, 23: 553-550.
44. Masten, S. 1984. The organization of production: Evidence from the aerospace industry. Journal of Law & Economics, 27: 403-417.
45. Masten, S., Meehan, J., & Snyder, E. 1989. Vertical integration in the United States auto industry: A note on the influence of transaction specific assets. Journal of Economic Behavior & Organization, 12: 265-273.
46. Mayer, K., & Argyres, N. 2004. Learning to contract: Evidence from the personal computer industry. Organization Science, 15: 394-410.
47. Mayer, K., & Nickerson, J. 2005. Antecedents and performance implications of contracting for knowledge workers: Evidence from information technology services. Organization Science, 16: 225-242.
48. Miller, R., Hobday, M., Leroux-Demers, T., & Olleros, X. 1995. Innovation in complex systems industries: The case of flight simulation. Industrial and Corporate Change, 4: 363-400.
49. Monte verde, K. 1995. Technical dialog as an incentive for vertical integration in the semiconductor industry. Management Science, 41: 1624-1638.
50. Nelson, R., & Winter, S. 1982. An evolutionary theory of economic change. Cambridge, MA & London: Belknap Press of Harvard University Press.
51. Nickerson, J., & Zenger, T. 2004. A knowledge-based theory of the firm-The problem-solving approach. Organization Science, 15: 617-632.
52. Nooteboom, B. 1999. Innovation, learning and industrial organisation. Cambridge Journal of Economics, 23: 127-150.
53. Peteraf, M. 1993. The cornerstones of competitive advantage: A resource-based view. Strategic Management Journal 14: 179-191.
54. Poppo, L., & Zenger, T. 1998. Testing alternative theories of the firm: Transaction cost, knowledge-based, and measurement explanations for make-or-buy decisions in information services. Strategic Management Journal, 19: 853-877.
55. Prahalad, C., & Hamel, G. 1990. The core competence of the corporation. Harvard Business Review, 68(3): 79-91.
56. Prencipe, A. 2000. Breadth and depth of technological capabilities in CoPS: The case of the aircraft engine control system. Research Policy, 29: 895-911.
57. Richardson, G. 1972. The organisation of industry. Economic Journal, 82: 883-896.
58. Riordan, M., & Williamson, O. 1985. Asset specificity and economic organization. International Journal of Industrial Organization. 3: 365-378.
59. Sampson, R. 2004. Organization choice in R&D alliances: Knowledge-based and transaction cost perspectives. Managerial and Decision Economics, 25: 421-436.
60. Schilling, M., & Steensma, H. 2002. Disentangling the theories of the firm boundaries: A path model and empirical test. Organization Science, 13: 387-401.
61. Shanley, M., & Peteraf, M. 2004. Vertical group formation: A social process perspective. Managerial and Decision Economics, 25: 473-488.
62. Silverman, B. 1999. Technological resources and the direction of corporate diversification: Toward an integration of the resource-based view and transaction cost economics. Management Science, 45: 1109-1124.
63. Simon, H. 1991. Organizations and markets. Journal of Economic Perspectives, 5(2): 25-44.
64. Smith, A. 1776. An inquiry into the nature and causes of the wealth of nations. Dublin: Whitestone.
65. Sorenson, O. 2003. Interdependence and adaptability: Organizational learning and the long-term effect of integration. Management Science, 49: 446-463.
66. Stigler, G. 1951. The division of labor is limited by the extent of the market. Journal of Political Economy, 59: 185-193.
67. Takeishi, A. 2002. Knowledge partitioning in the interfirm division of labor: The case of automotive product development. Organization Science, 13: 321-338.
68. Teece, D. 1980. Economies of scope and the scope of the enterprise. Journal of Economic Behavior & Organization, 1: 223-247.
69. Teece, D. 1982. Towards an economic theory of the multiproduct firm. Journal of Economic Behavior & Organization, 3: 39-63.
70. Teece, D. 1986. Profiting from technological innovation: Implications for integration, collaboration, licensing, and public policy. Research Policy. 15: 285-305.
71. Teece, D. 1996. Firm organization, industrial structure, and technological innovation. Journal of Economic Behavior & Organization, 31: 193-224.
72. Teece, D. 2000. Managing intellectual capital: Organizational strategic, and policy dimensions. New York: Oxford University Press.
73. Teece, D., Pisano, G., & Shuen, A. 1997. Dynamic capabilities and strategic management. Strategic Management Journal 18: 509-533.
74. Tushman, M., & Anderson, P. 1986. Technological discontinuities and organizational environments. Administrative Science Quarterly, 31: 439-465.
75. Utterback, J., & Abernathy, W. 1975. A dynamic model of process and product innovation. Omega, 3: 639-656.
76. Walker, G., & Weber, D. 1987. Supplier competition, uncertainty, and make-or-buy decisions. Academy of Management Journal 30: 589-596.
77. Wernerfelt, B. 1984. A resource-based view of the firm. Strategic Management Journal 5: 171-180.
78. Williamson, O. 1971. The vertical integration of production: Market failure considerations. American Economic Heview, 61: 112-123.
79. Williamson, O. 1975. Markets and hierarchies: Analysis and antitrust implications. New York: Free Press.
80. Williamson, O. 1983. The vertical integration of production: Market failure considerations. American Economic Review, 73: 519-540.
81. Williamson, O. 1985. The economic institutions of capitalism. New York: Free Press.
82. Williamson, O. 1999. Strategy research: Governance and competence perspectives. Strategic Management Journal 20: 1087-1108.