Integrative capabilities, vertical integration, and innovation over successive technology lifecycles

Organization Science

Volumn 27, Issue 2, 2016, Pages 249-264

  Helfat, Constance E ^a   Campo Rembado, Miguel A ^b  

^a DARTMOUTH COLLEGE   (United States)

^b Ernst and Young LLP   (United States)

Author keywords

Competitive strategy; Evolutionary approaches; Innovation; Organizational capabilities; Organizational economics; Organizational evolution and change; Organizational form; Organizational routines; Strategy and firm performance; Technological change

Indexed keywords

EID: 84963553687     PISSN: 10477039     EISSN: 15265455     Source Type: Journal    
DOI: 10.1287/orsc.2015.1045     Document Type: Article

References (89)

1. Abernathy W, Clark KB (1985) Innovation: Mapping the winds of creative destruction. Res. Policy 14(1):3-22.
2. Afuah A (2001) Dynamic boundaries of the firm: Are firms better off being vertically integrated in the face of a technological change? Acad. Management J. 44(6):1211-1228.
3. Agarwal R, Gort M (2002) Firm and product life cycles and firm survival. Amer. Econom. Rev. 92(2):184-190.
4. Aggarwal VA, Hsu DH (2009) Modes of cooperative R&D commercialization by start-ups. Strategic Management J. 30(8):835-864.
5. Amit R, Schoemaker PJH (1993) Strategic assets and organizational rent. Strategic Management J. 14(1):33-46.
6. Anderson P, Tushman ML (1990) Technological discontinuities and dominant designs: A cyclical model of technological change. Admin. Sci. Quart. 35(4):604-633.
7. Argote L (1999) Organizational Learning: Creating, Retaining, and Transferring Knowledge (Kluwer Academic Publishers, Norwell, MA).
8. Argyres NS (1999) The impact of information technology on coordination: Evidence from the B-2 "Stealth" Bomber. Organ. Sci. 10(2):162-180.
9. Argyres NS, Bigelow L (2010) Innovation, modularity and vertical de-integration: Evidence from the early U.S. auto industry. Organ. Sci. 21(4):842-853.
10. Argyres NS, Liebeskind JP (1999) Contractual commitments, bargaining power, and governance inseparability: Incorporating history into transaction cost theory. Acad. Management Rev. 24(1):49-63.
11. Armour HO, Teece DJ (1980) Vertical integration and technological innovation. Rev. Econom. Statist. 62(3):470-474.
12. Arora A, Bokhari FAS (2007) Open versus closed firms and the dynamics of industry evolution. J. Indust. Econom. 55(3):499-527.
13. Baldwin CY, Clark KB (2000) Design Rules, Vol. 1: The Power of Modularity (MIT Press, Cambridge, MA).
14. Bechky BA (2003) Sharing meaning across occupational communities: The transformation of understanding on a production floor. Organ. Sci. 14(3):312-331.
15. 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? Admin. Sci. Quart. 46(4):597-621.
16. Business Week (2004) At P&G, it's "360-degree innovation." (October 11), http://www.bloomberg.com/news/articles/2004-09-30/at-p-and-g-its-360-degree-innovation.
17. Castanias RP, Helfat CE (1991) Managerial resources and rents. J. Management 17(1):155-171.
18. Chen P, Williams C, Agarwal R (2012) Growing pains: Pre-entry experience and the challenge of transition to incumbency. Strategic Management J. 33(3):252-276.
19. Chesbrough HW, Kusunoki K (2001) The modularity trap: Innovation, technology phase shifts and the resulting limits of virtual organizations. Nonaka I, Teece DJ, eds. Managing Industrial Knowledge: Creation, Transfer and Utilization (SAGE, London, Thousand Oaks, CA), 202-230.
20. Christensen CM, Verlinden M, Westerman G (2002) Disruption, disintegration, and the dissipation of differentiability. Indust. Corporate Change. 11(5):955-993.
21. Clark HH (1996) Using Language (Cambridge University Press, Cambridge, UK).
22. Colfer L, Baldwin C (2010) The mirroring hypothesis: Theory, evidence and exceptions. Working paper, Harvard Business School, Boston.
23. Corts KS (1997) The ready-to-eat breakfast cereal industry in 1994(A). Case Number 9-795-191, Harvard Business School, Boston.
24. Dosi G, Nelson RR, Winter SG (2000) The Nature and Dynamics of Organizational Capabilities (Oxford University Press, New York).
25. Dyer JH, Singh H (1998) The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Acad. Management Rev. 23(4):660-679.
26. Dyer JH, Kale P, Singh H (2001) How to make strategic alliances work: The role of the alliance function. MIT Sloan Management Rev. 42(4):37-43.
27. Fixson SK, Park JK (2008) The power of integrality: Linkages between product architecture, innovation, and industry structure. Res. Policy 37(8):1296-1316.
28. Franco A, Sarkar MB, Agarwal R, Echambadi R (2009) Swift and smart: The moderating effects of technological capabilities on the market pioneering-firm survival relationship. Management Sci. 55(11):1842-1860.
29. Gort M, Klepper S (1982) Time paths in the diffusion of product innovations. Econom. J. 92(367):630-653.
30. Grant RM (1996) Toward a knowledge-based theory of the firm. Strategic Management J. 17(Winter):109-122.
31. Helfat CE, Lieberman MB (2002) The birth of capabilities: Market entry and the importance of pre-history. Indust. Corporate Change 11(4):725-760.
32. Helfat CE, Peteraf MA (2003) The dynamic resource-based view: Capability lifecycles. Strategic Management J. 24(10):997-1010.
33. Helfat CE, Peteraf MA (2015) Managerial cognitive capabilities and the microfoundations of dynamic capabilities. Strategic Management J. 36(6):831-850.
34. Helfat CE, Raubitschek RS (2000) Product sequencing: Co-evolution of knowledge, capabilities and products. Strategic Management J. 21(10-11):961-979.
35. Helfat CE, Teece DJ (1987) Vertical integration and risk reduction. J. Law, Econom. Organ. 3(1):47-67.
36. Helfat CE, Winter SG (2011) Untangling dynamic and operational capabilities: Strategy for the (n)ever-changing world. Strategic Management J. 32(11):1243-1250.
37. Helfat CE, Finkelstein S, Mitchell W, Peteraf MA, Singh H, Teece DJ, Winter SW (2007) Dynamic Capabilities: Understanding Strategic Change in Organizations (Blackwell Publishing, Malden, MA).
38. Henderson R (1994) The evolution of integrative capability: Innovation in cardiovascular drug discovery. Indust. Corporate Change 3(3):607-630.
39. Henderson RM, Clark KB (1990) Architectural innovation: The reconfiguration of existing product technologies and the failure of established firms. Admin. Sci. Quart. 35(1):9-30.
40. Henderson RM, Cockburn I (1994) Measuring competence: Exploring firm effects in pharmaceutical research. Strategic Management J. 15(S1):63-84.
41. Hill CWL, Hitt MA, Hoskisson RE (1992) Cooperative versus competitive structures in related and unrelated diversified firms. Organ. Sci. 3(4):501-521.
42. Hoetker G (2005) How much you know versus how well I know you: Selecting a supplier for a technically innovative component. Strategic Management J. 26(1):75-96.
43. Iansiti M, Clark KB (1994) Integration and dynamic capability: Evidence from product development in automobiles and mainframe computers. Indust. Corporate Change 3(3):557-605.
44. IBM Archives (2015) Mainframes product profiles. Accessed July 2, 2015, http://www-03.ibm.com/ibm/history/exhibits/mainframe/mainframe_profiles.html.
45. Jacobides MG (2005) Industry change through vertical disintegration: How and why markets emerged in mortgage banking. Acad. Management J. 48(3):465-498.
46. Jacobides MG, Winter SG (2005) The co-evolution of capabilities and transaction costs: Explaining the institutional structure of production. Strategic Management J. 26(5):395-413.
47. Jacobides MG, MacDuffie JP, Tae CJ (2015) Agency, structure, and the dominance of OEMs: Change and stability in the automotive sector. Strategic Management J. ePub ahead of print October 1, http://dx.doi.org/10.1002/smj.2426.
48. Kogut B, Zander U (1992) Knowledge of the firm, combinative capabilities, and the replication of technology. Organ. Sci. 3(3): 383-397.
49. Kapoor R (2013) Persistence of integration in the face of specialization: How firms navigated the winds of disintegration and shaped the architecture of the semiconductor industry. Organ. Sci. 24(4):1195-2013.
50. Kapoor R, Adner R (2012) What firms make vs. what they know: How firms' production and knowledge boundaries affect competitive advantage in the face of technological change. Organ. Sci. 23(5):1227-1248.
51. King AA, Tucci CL (2002) Incumbent entry into new market niches: The role of experience and managerial choice in the creation of dynamic capabilities. Management Sci. 48(2):171-186.
52. Klepper S (1997) Industry life cycles. Indust. Corporate Change 6(1):119-143.
53. Langlois RN (1992) Transaction-cost economics in real time. Indust. Corporate Change 1(1):99-128.
54. Lawrence PR, Lorsch JW (1967) Organization and Environment: Managing Differentiation and Integration (Harvard Business Press, Boston).
55. Leiblein MJ, Miller DJ (2003) An empirical examination of transaction- and firm-level influences on the vertical boundaries of the firm. Strategic Management J. 24(9):839-859.
56. Lieberman MB (1987) The learning curve, diffusion, and competitive strategy. Strategic Management J. 8(5):441-452.
57. Macher JT (2004) Vertical disintegration and process innovation in semiconductor manufacturing: Foundries vs. integrated producers. Working paper, Georgetown University, Washington, DC.
58. Martin X, Salomon R (2003) Knowledge transfer capacity and its implications for the theory of the multinational corporation. J. Internat. Bus. 34(4):356-373.
59. Mayer KJ, Salomon RM (2006) Capabilities, contractual hazards, and governance: Integrating resource-based and transaction cost perspectives. Acad. Management J. 49(5):942-959.
60. Monteverde K (1995) Technical dialog as an incentive for vertical integration in the semiconductor industry. Management Sci. 41(10):1624-1638.
61. Moore G (1965) Cramming more components onto integrated circuits. Electronics 38(8):114-117.
62. Moore G (1975) Progress in digital integrated electronics. Reprinted, IEEE, IEDM Tech Digest, 11-13.
63. Nelson RR, Winter SG (1982) An Evolutionary Theory of Economic Change (Belknap Press, Cambridge, MA).
64. Nicholson W, Snyder C (2011) Microeconomic Theory: Basic Principles and Extensions, 11th ed. (Cengage Learning, Boston).
65. Nickerson JA, Silverman BS (2003) Why firms want to organize efficiently and what keeps them from doing so: Inappropriate governance, performance, and adaptation in a deregulated industry. Admin. Sci. Quart. 48(3):433-465.
66. Pisano GP (1990) The R&D boundaries of the firm: An empirical analysis. Admin. Sci. Quart. 35(1):153-176.
67. 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 J. 19(9):853-877.
68. Puranam P, Singh H, Chaudhuri S (2009) Integrating acquired capabilities: When structural integration is (un)necessary. Organ. Sci. 20(2):313-328.
69. Qian L, Agarwal R, Hoetker G (2012) Configuration of value chain activities. Organ. Sci. 23(5):1330-1349.
70. Rosenbloom RS (2000) Leadership, capabilities, and technological change: The transformation of NCR in the electronic era. Strategic Management J. 21(10-11):1083-1103.
71. Sanchez R, Mahoney JT (1996) Modularity, flexibility, and knowledge management in product and organization design. Strategic Management J. 17(Winter):63-76.
72. Schilling MA, Steensma HK (2002) Disentangling the theories of firm boundaries: A path model and empirical test. Organ. Sci. 13(4):387-401.
73. Shea C (2007) General Mills. Presentation, Tuck School of Business, Dartmouth, Hanover, NH.
74. Srikanth K, Puranam P (2014) The firm as a coordination system: Evidence from software services offshoring. Organ. Sci. 25(4):1253-1271.
75. Stadler C, Helfat CE, Verona G (2013) The impact of dynamic capabilities on resource access and development. Organ. Sci. 24(6):1782-1804
76. Stigler GJ (1951) The division of labor is limited by the extent of the market. J. Political Econom. 59(3):185-193.
77. Strojwas M (2005) An empirical study of vertical integration in the semiconductor industry. Unpublished Ph.D. dissertation, Harvard University, Boston.
78. Takeishi A (2002) Knowledge partitioning in the interfirm division of labor: The case of automotive product development. Organ. Sci. 13(3):321-338.
79. Taylor A, Helfat CE (2009) Organizational linkages for surviving technological change: Complementary assets, middle management, and ambidexterity. Organ. Sci. 20(4):718-739.
80. Teece DJ (1988) Technological change and the nature of the firm. Dosi G, et al., eds. Technical Change and Economic Theory (Pinter, London), 256-281.
81. Teece DJ (1996) Firm organization, industrial structure, and technological innovation. J. Econom. Behav. Organ. 31(2):193-224.
82. Thompson JD (1967) Organizations in Action (McGraw Hill, New York).
83. Tushman ML, Anderson P (1986) Technological discontinuities and organizational environments. Admin. Sci. Quart. 31(3):439-465.
84. Tushman ML, Nadler DA (1978) Information processing as an integrating concept in organizational design. Acad. Management Rev. 3(3):613-624.
85. Wheelwright S, Clark K (1992) Revolutionizing Product Development (Free Press, New York).
86. Williamson OE (1975) Markets and Hierarchies: Analysis and Antitrust Implications (Free Press, New York).
87. Williamson OE (1985) The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting (Free Press, New York).
88. Winter SG (2003) Understanding dynamic capabilities. Strategic Management J. 24(10):991-996.
89. Wolter C, Veloso FM (2008) The effects of innovation on vertical structure: Perspectives on transaction costs and competences. Acad. Management Rev. 33(3):586-605.