An evolutionary stage model of outsourcing and competence destruction : a Triad comparison of the consumer electronics industry

Outsourcing has gained much prominence in managerial practice and academic discussions in the last two decades or so. Yet, we still do not understand the full implications of outsourcing strategy for corporate performance. Traditionally outsourcing across borders is explained as a cost-cutting exercise, but more recently the core competency argument states that outsourcing also leads to an increased focus, thereby improving effectiveness. However, no general explanation has so far been provided for how outsourcing could lead to deterioration in a firm‟s competence base. We longitudinally analyze three cases of major consumer electronics manufacturers, Emerson Radio from the U.S., Japan‟s Sony and Philips from the Netherlands to understand the dynamic process related to their sourcing strategies. We develop an evolutionary stage model that relates outsourcing to competence development inside the firm and shows that a vicious cycle may emerge. Thus it is appropriate to look not only at how outsourcing is influenced by an organization‟s current set of competences, but also how it alters that set over time. The four stages of the model are offshore sourcing, phasing out, increasing dependence on foreign suppliers, and finally industry exit or outsourcing reduction. The evolutionary stage model helps managers understand for which activities and under which conditions outsourcing across borders is not a viable option. Results suggest that each of these firms had faced a loss of manufacturing competitiveness in its home country, to which it responded by offshoring and then outsourcing production. When a loss of competences occurred, some outsourcing decisions were reversed

The Use of Resources in Resource Acquisition

The author considers the processes through which a firm can acquire resources and argues that its current stock of resources create asymmetries in competition for new resources. Two simple models illustrate how this can work through linkages on the demand and/or cost side. The normative implication is that firms should expand their resource portfolios by building on their existing resources; different firms will then acquire different new resources, and small initial heterogeneities will amplify over time

2003 Manifesto on the California Electricity Crisis

The authors, an ad-hocgroup of professionals with experience in regulatory and energy economics, share a common concern with the continuing turmoil facing the electricity industry ("the industry") in California. Most ofthe authorsendorsed the first California Electricity Manifesto issued on January 25, 2001. Almost two years have passed since that first Manifesto. While wholesale electric prices have moderated and California no longer faces the risk of blackouts, in many ways the industry is in worse shape now than it was at the start of 2001. As a result, the group of signatories continues to have a deep concern with the conflicting policy directions being pursued for the industry at both the State and Federal levels of government and the impact the uncertainties associated with these conflicting policies will have, long term, on the economy of California. Theauthorshave once again convened under the auspices of the Institute of Management, Innovation and Organization at the University of California, Berkeley, to put forward ourtheir ideas on a basic set of necessary policies to move the industry forward for the benefit of all Californians and the nation. The authors point out that theydo not pretend to be "representative." They do bring, however, a very diverse range of backgrounds and expertise.Technology and Industry, Regulatory Reform

Makespaces: From Redistributed Manufacturing to a Circular Economy

Redistributed manufacturing is an emerging concept which captures the anticipated reshoring and localisation of production from large scale mass manufacturing plants to smaller-scale localised, customisable production units, largely driven by new digital production technologies. Critically, community-based digital fabrication workshops, or makespaces, are anticipated to be one hothouse for this new era of localised production and as such are key to future sustainable design and manufacturing practices. In parallel, the concept of the circular economy conceptualises the move from a linear economy of take-make-waste to a closed loop system, through repair, remanufacturing, and recycling to ultimately extend the value of products and materials. Despite the clear interplay between redistributed manufacturing and circular economy, there is limited research exploring this relationship. In light of these interconnected developments, the aim of this paper is to explore the role of makespaces in contributing to a circular economy through redistributed manufacturing activities. This is achieved through six semi-structured interviews with thought leaders on these topics. The research findings identify barriers and opportunities to both circular economy and redistributed manufacturing, uncover overlaps between circular economy and redistributed manufacturing, and identify a range of future research directions that can support the coming together of these areas. The research contributes to a wider conversation on embedding circular practices within makespaces and their role in redistributed manufacturing

Mapping Patent Classifications: Portfolio and Statistical Analysis, and the Comparison of Strengths and Weaknesses

The Cooperative Patent Classifications (CPC) jointly developed by the European and US Patent Offices provide a new basis for mapping and portfolio analysis. This update provides an occasion for rethinking the parameter choices. The new maps are significantly different from previous ones, although this may not always be obvious on visual inspection. Since these maps are statistical constructs based on index terms, their quality--as different from utility--can only be controlled discursively. We provide nested maps online and a routine for portfolio overlays and further statistical analysis. We add a new tool for "difference maps" which is illustrated by comparing the portfolios of patents granted to Novartis and MSD in 2016.Comment: Scientometrics 112(3) (2017) 1573-1591; http://link.springer.com/article/10.1007/s11192-017-2449-

Industry 4.0. Transformation Challenge in Light of Dynamic Capabilities

The manufacturing industry is facing drastic changes brought about by the driving forces of the so-called Industry 4.0 Transformation. The firms that want to sustain their competitive advantage have to transform their resource bases and manufacturing capabilities in a cost efficient way. The companies have to reinvent their business logic by combining their strengths in product design and manufacturing together with existing, or to-be-created new capabilities in evolving digital ecosystems. This article scrutinizes the tools that modern strategic management research can offer to overcome the challenges of organizational renewal. After analyzing different approaches developed in modern strategy research we focus on the dynamic capability view and especially on its micro-foundations and usability in the context of digitalized platform-based ecosystems will be studied. Finally, we will offer some managerial implications.Post-print / Final draf

Universal Rights and Wrongs

This paper argues for the important role of customers as a source of competitive advantage and firm growth, an issue which has been largely neglected in the resource-based view of the firm. It conceptualizes Penrose’s (1959) notion of an ‘inside track’ and illustrates how in-depth knowledge about established customers combines with joint problem-solving activities and the rapid assimilation of new and previously unexploited skills and resources. It is suggested that the inside track represents a distinct and perhaps underestimated way of generating rents and securing long-term growth. This also implies that the sources of sustainable competitive advantage in important respects can be sought in idiosyncratic interfirm relationships rather than within the firm itself

The Japanese model in retrospective : industrial strategies, corporate Japan and the 'hollowing out' of Japanese industry

This article provides a retrospective look at the Japanese model of industrial development. This model combined an institutional approach to production based around the Japanese Firm (Aoki's, J-mode) and strategic state intervention in industry by the Japanese Ministry of International Trade and Industry (MITI). For a long period, the alignment of state and corporate interests appeared to match the wider public interest as the Japanese economy prospered. However, since the early 1990s, the global ambitions of the corporate sector have contributed to a significant 'hollowing out' of Japan's industrial base. As the world today looks for a new direction in economic management, we suggest the Japanese model provides policy-makers with a salutary lesson in tying the wider public interest with those of the corporate sector

How to Develop Strategic Management Competency: Reconsidering the Learning Goals and Knowledge Requirements of the Core Strategy Course

The dominance of theory-based approaches to strategy teaching has not displaced the need for core courses in strategic management to cultivate broader management skills. Yet, limited attention has been given to explicating, first, why we need to teach these skills, second, which skills we need to teach, and third how they can to be developed in the classroom. To help answer these three questions we need to understand the linkages between theory-based and skills-based approaches to strategy teaching. We begin with the proposition that the purpose of the core strategic management is to develop the strategic management competency of our students. We then adopt a systematic approach to identifying the why, what, and how components of strategic management competency. We show why analytical tools need to be complemented by judgment, insight, intuition, creativity, and social and communicative skills. We outline what these skills are and where they come from. Finally, we derive implications for how we should design and deliver of the core strategic management course