Showing papers by "David J. Teece published in 1980"

Economies of scope and the scope of the enterprise

Abstract: This paper examines elements of an efficiency-based theory of the multiproduct firm. The theoretical framework developed by Williamson to explain vertical integration is extended to explain diversification. The proposition is advanced that a cost function displaying economies of scope has no direct implications for the scope of the business enterprise. However, if economies of scope are based upon the common and recurrent use of proprietary knowhow or the common and recurrent use of a specialized and indivisible physical asset, then multiproduct enterprise (diversification) is an efficient way of organizing economic activity. These propositions are first developed in a general context and then examined in the context of diversification in the U.S. Petroleum industry.

The Diffusion of an Administrative Innovation

Abstract: This paper examines the diffusion of a particular kind of multidivisional administrative structure—the “M-Form”—in two classes of large industrial firms. The M-Form organization is a multidivisional structure with quasi-independent divisions which are assigned profit center standing and which are monitored and guided by a headquarters organization. A simple deterministic model commonly employed to represent the diffusion of technological innovations is utilized to explain the diffusion of the M-Form structure. The commendable performance of the model suggests that additional insights from the study of technological innovation can be applied with advantage to the study of administrative innovation.

Overseas research and development by us‐based firms

Abstract: In recent years, the overseas research and development activities of US-based firms have become the focus of controversy. Some observers view such activities with suspicion, since they regard them as a device to "export" R and D jobs, or as a channel through which American technology may be transmitted to actual or potential foreign competitors.' Others, particularly the governments of many developing (and some developed) countries, view them as highly desirable activities that will help to stimulate indigenous R and D in these countries. Indeed, the United Nations Group of Eminent Persons recommended that host countries require multinational corporations to contribute towards innovation of appropriate kinds, and to encourage them to do such R and D in their overseas affiliates.2 Although the amount of controversy in this area might lead one to believe that the nature of existing overseas R and D activities of US-based firms has been studied quite thoroughly, this is far from the case. The unfortunate truth is that economists have devoted little or no attention to even the most basic questions concerning these activities.3 In this paper, we try to fill part of this gap.