Strategic factor markets: Bargaining, scarcity, and resource complementarity

Strategic factor market theory suggests that without luck or asymmetric expectations, firms can't appropriate gains from acquired resources. Adopting the bargaining perspective on resource advantage, we hold that this is only true in the absence of resource complementarity. We extend factor market theory to account for resource complementarity, and we show that firms can profit when they exhibit superior complementarity to target resources, even in the absence of asymmetric expectations. Thus we provide an alternative interpretation of managers' recent emphasis on externally acquired resources.Complementarity; bargain perspective; value appropriation; resource acquisition; asymmetric expectation;

What do we really know about when technological innovation improves performance (and when it does not)?

Most approaches to innovation bear the implicit assumption that increased innovativeness leads to improved organizational performance. Thus, more attention has been focused on innovativeness than on innovation performance; on novelty than on value. However, recent empirical evidence calls into question the unqualified optimism surrounding innovation, and leads us to ask what we really know about when technological innovation improves performance. In this paper, we seek to make a contribution by presenting the results of an exhaustive review of extant knowledge on the outcomes of technological innovation. Our synthesis of the literature allows us to relate in one parsimonious model the drivers and moderators of the antecedents, technical outcomes, and performance outcomes of technological innovation and technological change. We also make sense of the proliferation of terms, and consequent terminological ambiguity, which characterizes a lot of work on technological innovation. Finally, in the light of the model presented and recent developments in work on firm capabilities, we indicate possible avenues for further development of this critical area of research.Technological innovation; organizational performance; innovation and innovativeness;

Appropriating value from external technology: Absorptive capacity dimensions and innovation strategy

Innovation from external sources has continued to grow in importance in recent years, in defiance of conventional wisdom advocating internal sourcing of core technologies. One important reason for the previous emphasis on internal sourcing of core technologies relates to concerns of horizontal and vertical appropriability. Thus, the question arises of whether and how firms can reconcile horizontal and vertical appropriability with the rise of the external sourcing of new technologies. Must firms sacrifice value appropriation on the altar of value creation? To answer these questions, we delve beneath individual technological innovations to examine the technical and market capabilities underlying them. Specifically, we show how the amount of value a firm stands to appropriate relative to competitors and relative to technology suppliers depends on the fit between its innovation strategy and its previous investments in distinct dimensions of absorptive capacity. At the same time, we also show how first-order capabilities and dynamic capabilities interact to determine firm performance. Thus, we shed light on how and when the move to 'open' innovation will affect the amount of value innovating firms stand to appropriate.Innovation strategy; external sourcing; technology innovation; value appropriation;

Intra-alliance performance, control rights, and today's split of tomorrow's value

Although the differential benefits reaped by individual partners are a major determinant of the performance impact of strategic alliances, previous analysis has faced methodological challenges. In response we propose a measure for relative value appropriation and an explicit theoretical framework for predicting its variation in terms of relative bargaining position. With a sample of 180 biotechnology R&D alliances, we are thus able to explain variation in value appropriation across partner types as well as individual partners of each type.Alliance performance; strategic alliances; value appropriation; bargaining position; factor markets;