Organising new product development Knowledge hollowing-out and knowledge integration

The paper analyses the organization of the new product development process at FIAT from a resource-based perspective. The focus is on organizational resources for integrating dispersed specialist knowledge required in the development of complex products. The analysis shows how the application of a resource-based perspective is able to uncover negative long-term effects of outsourcing on the knowledge base (hollowing out), despite beneficial short-term effects on cost.New product development, FIAT Auto, knowledge integration systems integration, modularity, knowledge hollowing-out, resource-based view

Beyond product architecture: Division of labour and competence accumulation in complex product development

This paper considers the trade-off between leveraging external sources of innovation by outsourcing design and engineering activities and the ability to develop internal product development competences. The trade-off arises because the division of labor within and across firms' boundaries has a crucial role in shaping competence development processes, especially because the division of labor also influences opportunities for learning by doing. In new product development projects, learning by doing appears to be both a key determinant of competence development and a difficult-to-substitute form of learning. While the division of development tasks is often considered as guided by product architecture, we show that by decoupling the decisions concerning the product architecture and the allocation of development tasks, firms can realize the benefits of outsourcing such tasks while developing new internal competences. Drawing on a longitudinal case study in the automotive industry, we also identify a new organizational lever for shaping competence development paths and for designing firm boundaries. This lever consists in alternating different task allocation schemes over time for different types of development projects. We show why this is a novel solution, what its underlying logic is, and how it enables alleviating the trade-off between the benefits of leveraging external sources of innovation and the opportunities for competence development provided by in-house design and engineering. We discuss implications for theories of organizational boundary design and innovation management.innovation management; organizational boundaries; outsourcing; product architecture; modularity; new product development; template process; automotive industry; Fiat

Intra and Inter-Organizational Knowledge Transfer Processes Identifying the Missing Links

Inspired by the resource- and knowledge-based views, much attention has been focused on knowledge transfer as a process of strategic importance. Still, many open questions regarding knowledge transfer processes need to be addressed to complete our understanding. For instance, what are the barriers to knowledge transfer, and what are the facilitators? A review of the literature reveals that it is divided into two streams: articles on intra-firm knowledge flows and articles on inter-firm knowledge flows. Part of the incompleteness of our understanding of knowledge transfer processes, we argue, derives from the fact that it is unclear in which way intra- and inter-firm knowledge flows are different. The paper investigates three questions: first, how knowledge transfer is defined differently in intra- and inter-firm knowledge flows; second: how barriers to knowledge transfer processes differ; and thirdly: what we need to know to be able to formulate a management view of organizational knowledge flows, whether intra- or inter-organizational. The concluding section argues five research questions whose answers may enable research to formulate a management view of knowledge flows.Review; internal knowledge flows; external knowledge flows; definition; barriers to knowledge flows

The concept of routines twenty years after Nelson and Winter (1982) A review of the literature

Twenty years have passed since Nelson and Winter (1982) proposed routines as the unit of analysis of an evolutionary theory of economic change. Since then, the concept of routines has been taken up widely in the economics and business literature. Many ambiguities and open questions still persist, however. The article presents a review of the literature on routines (mainly) since 1982, focussing on the questions 'What progress has been made in understanding what routines are', and 'what are their roles in organisations and in the economy?'Routines, organizational routines, evolutionary economics

Applying organizational routines in analyzing the behavior of organizations

The concept of organizational routine can foster our understanding of the behavior of organizations and of organizational change [Nelson, R.R., Winter, S.G., 1982. An Evolutionary Theory of Economic Change. Belknap Press/Harvard University Press, Cambridge; March, J.G., Simon, H.A., 1958. Organizations. Blackwell, Oxford (1993); Cyert, R.M., March, J.G., 1963. A Behavioral Theory of the Firm. Blackwell, Oxford (1992)], but since empirical studies employing organizational routines as analytical perspective are still relatively rare, how to conduct such an analysis and what are its benefits is not yet fully evident. We wish to shed light on how employing routines contributes to understanding the behavior of organizations and to demonstrate the potential of such analysis. The empirical analysis of the product development process at an engineering centre shows that using organizational routines presents advantages over alternative analytical approaches. The paper also contributes to shed light on how to fruitfully employ an organizational routines perspective in analyzing the behavior of organizations, providing the foundation for further empirical work

A review of the literature

Twenty years have passed since Nelson and Winter (1982) proposed routines as the unit of analysis of an evolutionary theory of economic change. Since then, the concept of routines has been taken up widely in the economics and business literature. Many ambiguities and open questions still persist, however. The article presents a review of the literature on routines (mainly) since 1982, focussing on the questions 'What progress has been made in understanding what routines are', and 'what are their roles in organisations and in the economy?

Communities of practice, intergration, and recurrent interaction patterns

The objective of this paper is to contribute to understanding knowledge integration. The guiding question is 'What are the mechanisms underlying knowledge integration?' By knowledge integration we mean solving the problem raised by specialization: Specialization leads to a dispersion of specialized bodies of knowledge that are held by different specialists. Knowledge integration refers to how this drawing on different bodies of specialized knowledge is organized. The paper is organized in three main parts. First, we analyze what the problem of knowledge integration consists in, how it can be approached, and what mechanisms are underlying the approaches. Subsequently, we supply an empirical and a conceptual anchoring to our understanding. Finally, we propose to answer the question how to use such an understanding in analysing knowledge integration by focussing the analysis on communities of practice as the most adapted level of analysis for analysing knowledge integration, and on 'recurrent interaction patterns' within and between such communities. Such a focus would centure on one of the most important mechanisms for providing knowledge integration, it would be on a solid conceptual grounding, and it also is a practical approach that can be implemented. Keywords: knowledge flows, knowledge integration, communities of practice, recurrent interaction patterns, routine

The Role of Routines in Reducing Pervasive Uncertainty

Under conditions of pervasive uncertainty, increasing the "amount" of information will not necessarily decrease uncertainty. Perhaps more information will even increase uncertainty. Since information may be valuable, even under conditions of pervasive uncertainty, this amounts to a puzzle. Its solution seems to hold the promise of understanding how decisionmakers actually go about reducing uncertainty in its more pervasive forms and is therefore at the center of attention in the present article. It is hypothesized that the role of routines in decision-making provides the key to solve the "information puzzle." Drawing on data from 56 companies, the argument is supported by empirical tests employing path analysis by linear structural equations modeling

How to Avoid Innovation Competence Loss in R&D Outsourcing

Companies developing complex products face a crucial dilemma: the benefits of research and development (R&D) outsourcing such as lower costs, access to specialist knowledge, or shorter development lead times often have negative consequences for competence development due to the loss of opportunities for learning by doing. Having experienced the problems of outsourcing R&D, Fiat developed a novel organizational solution that offers new insights as to how firms can organize R&D to protect against innovation competence loss in R&D outsourcing