Showing papers by "David J. Teece published in 2003"

Dynamic Capabilities and Strategic Management

Abstract: The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm's (specific) asset positions (such as the firm's portfolio of difficult-to-trade knowledge assets and complementary assets), and the evolution path(s) it has adopted or inherited. The importance of path dependencies is amplified where conditions of increasing returns exist. Whether and how a firm's competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding internally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing internal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival's costs, and excludes new entrants.

Technology Transfer by Multinational Firms: The Resource Cost of Transferring Technological Know-How

Abstract: The following sections are included:IntroductionTechnology Transfer and the Production of KnowledgeThe SampleDefinition of Technology Transfer CostsTransfer Costs: Data and HypothesesThe Level of Transfer CostsTechnology/Transferor CharacteristicsTransferee and Host Country CharacteristicsDeterminants of the Cost of International Technology Transfer: Tests and ResultsThe ModelStatistical Tests: Phase IStatistical Tests: Phase IIDefferences between International and Domestic Technology TransferConclusionReferences

The Dynamic Capabilities of Firms

Abstract: An expanded paradigm is needed to explain how competitive advantage is gained and held. Firms resorting to ‘resource-based strategy’ attempt to accumulate valuable technology assets and employ an aggressive intellectual property stance. However, winners in the global marketplace have been frms demonstrating timely responsiveness and rapid and flexible product innovation, along with the management capability to effectively coordinate and redeploy internal and external competences. This source of competitive advantage, ‘dynamic capabilities’, emphasizes two aspects. First, it refers to the shifting character of the environment; second, it emphasizes the key role of strategic management in appropriately adapting, integrating, and re-configuring internal and external organizational skills, resources, and functional competences toward a changing environment. Only recently have researchers begun to focus on the specifics of developing firm-specific capabilities and the manner in which competences are renewed to respond to shifts in the business environment. The dynamic capabilities approach provides a coherent framework to integrate existing conceptual and empirical knowledge, and facilitate prescription. This chapter argues that the competitive advantage of firms stems from dynamic capabilities rooted in high performance routines operating inside the frm, embedded in the firm’s processes, and conditioned by its history. It offers dynamic capabilities as an emerging paradigm of the modern business firm that draws on multiple disciplines and advances, with the help of industry studies in the USA and elsewhere.

Expert talent and the design of (professional services) firms

Abstract: This paper discusses key issues with regard to an expert services firm (a professional firm whose primary product is the delivery of expert services). The increasing importance of expert talent in today's economy has significant theoretical implications for the nature of the employment relation within such a firm; and the nature (and theory) of professional service firms as a distinct organizational form. Copyright 2003, Oxford University Press.

Dynamic Capabilities and Strategic Management

Abstract: The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm's (specific) asset positions (such as the firm's portfolio of difficult-to-trade knowledge assets and complementary assets), and the evolution path(s) it has adopted or inherited. The importance of path dependencies is amplified where conditions of increasing returns exist. Whether and how a firm's competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding internally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing internal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival's costs, and excludes new entrants.

Standards Setting and Antitrust

Abstract: The following sections are included:TYPES OF STANDARDS AND REGULATIONS DIFFERENTIATEDDIFFERENT TYPES OF STANDARDSFormal Standards Versus De Facto StandardsStandards Versus RegulationsA CASE STUDY: REFORMULATED GASOLINEII. ANTITRUST ISSUES IN STANDARDS SETTINGSTANDARDS, INTELLECTUAL PROPERTY, AND MARKETSSTANDARDS SETTING AND DIVERGENT ROLESPATENTED STANDARDS AND SOCIAL EFFICIENCYPOLICY IMPLICATIONSCHOOSING STANDARDSTHE CHOICE OF STANDARDS: DIVERGENT ROLES AND DIVERGENT BELIEFSTHE CHOICE OF STANDARDS: Ex ANTE VERSUS Ex POST ASSESSMENTSTANDARDIZATION, LOCK-IN, AND OPPORTUNISMLIMITATIONS OF THE “HOLD-UP” CONCERN“MANIPULATION” OF STANDARDS: ACTIVE AND PASSIVE CONDUCTSSO IP RULES: MAKING THE CASE FOR CLARITYSSOS AND IP RULES: EFFECT ON PARTICIPATION AND ORGANIZATIONAL CONSTRAINTSRules Constraining the SSO ItselfRules Affecting ParticipantsParticipation ConstraintsSEARCH AND DISCLOSURE RULES: REPRESENTATION AND BURDENSearchDisclosureLICENSING POLICIESThe “One Patent, One Standard” Problem“Royalty-Free” and “Reasonable Terms““Reasonable Terms“: When Announced?“Reasonable” Terms: How Determined?Antitrust Remedies“Non-Discriminatory” TermsPENDING PATENT APPLICATIONSNon-Disclosure Does Not Equal Lack of KnowledgePublic Policy Regarding Disclosure of Pending Patent ApplicationsTHE NEED FOR CLARITYSANCTIONS FOR NON-COMPLIANCECAPTURING THE BENEFITS OF STANDARDIZATION THROUGH SSO-RULE CLARITYTHE BENEFITS OF STANDARDIZATION AND THE NEED FOR SPEEDThe Social Costs of DelayConsortia, Organizational Structure, and EfficiencyEFFORTS To BLOCK OR DELAY THE ADOPTION OF A STANDARDRESTRICTIONS ON PARTICIPATIONADOPTION OF IMPLICATED STANDARDSANTITRUST INTERVENTION AND CLARITYPROBLEMS WITH “ONE SIZE FITS ALL” POLICIESCONCLUSIONAPPENDIXON THE PRIVATE AND SOCIAL EFFICIENCY OF STANDARDS INVOLVING PATENTS

Capturing Value from Knowledge Assets: The New Economy, Markets for Know-How, and Intangible Assets

Abstract: The following sections are included:Knowledge and Competitive AdvantageLiberalization of MarketsExpansion of What's TradableStrengthening of Intellectual Property RegimesThe Growing Importance of Increasing ReturnsDecoupling of Information Flows from the Flow of Goods and ServicesRamifications of New Information and Communications TechnologiesProduct Architecture and Technology "Fusion"ImplicationsCapturing Value from Knowledge and CompetenceThe Nature of KnowledgeCodified/TacitObservable/Non-observable in usePositive/Negative knowledgeAutonomous/Systematic knowledgeIntellectual property regimeReplicability, Imitability, and AppropriabilityAppropriability and Markets for Know-How and CompetenceSome Sectoral Differences in the Market for Know-HowComplementary AssetsDynamic CapabilitiesExternal sensingOrganizational actionImplications for the Theory of the FirmConclusionNotes

Information Sharing, Innovation, and Antitrust

Abstract: The following sections are included:IntroductionPrices as "Sufficient" StatisticsInformation Exchange and Systems of InnovationNational Systems of InnovationIndustrial ClustersSome Additional Circumstances in which Information Sharing Can Support Innovation and/or CompetitionEstablishing Dominant Standards through Information Sharing and CoordinationBenchmarkingInformation Exchanges on "Common Values"Industry VisionsConclusion

Information Sharing, Innovation, and Antitrust

Abstract: The following sections are included:IntroductionPrices as "Sufficient" StatisticsInformation Exchange and Systems of InnovationNational Systems of InnovationIndustrial ClustersSome Additional Circumstances in which Information Sharing Can Support Innovation and/or CompetitionEstablishing Dominant Standards through Information Sharing and CoordinationBenchmarkingInformation Exchanges on "Common Values"Industry VisionsConclusion

Essays in technology management and policy

Abstract: Capturing Value from Technological Innovation Sustaining Value Creation and Capture Licensing, Technology Transfer, and the Market for Know-How Technological Change and Competition Policy Technological Innovation and the Theory of the Firm.

Essays in Technology Management and Policy: Selected Papers of David J Teece

Abstract: This book examines the manner in which successful firms develop, transfer, protect, and capture value from technological innovation. In essence, it is about “knowledge management”, which lies at the foundation of firm level competitive advantage in today's global economy. The essays contain some of the fundamental contributions to the field of knowledge management by one of its best-known thinkers; they also constitute an immensely practical guide for those managers who wish to look below the surface of what is going on in Silicon Valley and elsewhere.

Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing and Public Policy

Abstract: This paper attempts to explain why innovating firms often fail to obtain significant economic returns from an innovation, while customers, imitators and other industry participants benefit. Business strategy — particularly as it relates to the firm's decision to integrate and collaborate — is shown to be an important factor. The paper demonstrates that when imitation is easy, markets don't work well, and the profits from innovation may accrue to the owners of certain complementary assets, rather than to the developers of the intellectual property. This speaks to the need, in certain cases, for the innovating firm to establish a prior position in these complementary assets. The paper also indicates that innovators with new products and processes which provide value to consumers may sometimes be so ill positioned in the market that they necessarily will fail. The analysis provides a theoretical foundation for the proposition that manufacturing often matters, particularly to innovating nations. Innovating firms without the requisite manufacturing and related capacities may die, even though they are the best at innovation. Implications for trade policy and domestic economic policy are examined.

Competition, Cooperation, and Innovation Organizational Arrangements for Regimes of Rapid Technological Progress

Abstract: Discussions of the link between firm size and innovation are outmoded because the boundaries of the firm have become fuzzy in recent decades. Strategic alliances — constellations of bilateral agreements among firms — are increasingly necessary to support innovative activities. Such alliances can facilitate complex coordination beyond what the price system can accomplish, while avoiding the dysfunctional properties sometimes associated with hierarchy. Antitrust law and competition policy need to recognize that these new organizational forms are often the functional antithesis of cartels, though they may have certain structural similarities. A more complete understanding of bilateral contracts and agreements ought to reveal when and how cooperation can support rather than impede innovation and competition.

The Meaning of Monopoly: Antitrust Analysis in High-Technology Industries

Abstract: The following sections are included:IntroductionCharacteristics of Industries Experiencing Rapid Technological ChangeThe Episodic Nature of Competitive DisruptionThe phenomenaImplication for antitrustIncreasing Returns and Network ExternalitiesThe phenomenon of increasing returnsImplications for antitrustNetwork EffectsThe phenomenonImplications for antitrustDecoupling of Information Flows from the Flow of Goods and ServicesThe phenomenaImplications for antitrustScarcity Rents, Schumpeterian Rents, and Monopoly RentsGeneralRicardian (Scarcity) RentsSchumpeterian (Entrepreneurial) RentsMonopoly (Porterian) RentsThe Hallmarks of Monopoly Power in High TechnologyIntroductionMarket PowerMarket DefinitionGeneralA note on switching costsA Note on Barriers to EntryMarket ShareGeneralIndustrial dynamics and concentration levelsImplications for Conduct AnalysisGeneralThe Importance of InnovationPredatory PricingTying and BundlingIntegration of Function"Vaporware" and the Premature Announcement of New ProductsLuck, Incentives, and IgnoranceConclusionAppendix A Examples of Performance CompetitionDiagnostic ImagingMicroprocessorsAppendix B A Multi-Attribute Small but Significant and Nontransitory Increase in Price (SSNIPP)

Essays in Technology Management and Policy:Selected Papers of David J Teece

Abstract: This book examines the manner in which successful firms develop, transfer, protect, and capture value from technological innovation In essence, it is about “knowledge management”, which lies at the foundation of firm level competitive advantage in today's global economy The essays contain some of the fundamental contributions to the field of knowledge management by one of its best-known thinkers; they also constitute an immensely practical guide for those managers who wish to look below the surface of what is going on in Silicon Valley and elsewhere

When is Virtual Virtuous? Organizing for Innovation

Abstract: The following sections are included:IntroductionWhat's Special about Virtual?Types of InnovationThe Case of Industry StandardsThe IBM PC: Virtual Successor or Failure?The Virtuous VirtualsChoosing the Right Organizational DesignScale and Scope

Организационные формы инноваций: когда виртуальная корпорация эффективна?

Abstract: В статье анализируются стратегические последствия применения виртуальной формы осуществления инноваций и делается вывод, что зачастую это организационное решение приносит больше вреда, чем пользы. Отмечается, что при определенных условиях некоторая степень аутсорсинга может содействовать креативности компании, а виртуальная корпорация - быть эффективной. Однако, как утверждают авторы, любая компания должна выбирать форму своей организации в соответствии с характером ее операций и типом инноваций.

Towards an Economic Theory of the Multiproduct Firm

Abstract: This paper outlines a theory of the multiproduct firm. Important building blocks include excess capacity and its creation, market imperfections, and the peculiarities of organizational knowledge, including its fungible and tacit character. A framework is adopted in which profit seeking firms are seen to diversify in order to avoid the high transactions costs associated with using various markets to trade the services of various specialized assets. Neoclassical explanations of the multiproduct firm are shown to be seriously deficient.

The Market for Know-How and the Efficient International Transfer of Technology

Abstract: This article explores the nature of international technology transfer and the operation of the market for know-how. It begins by examining the relationship between codification and transfer costs and then analyzes various imperfections in the market for know-how. The special properties of know-how are shown to confound various aspects of the exchange process when arms-length contracting is involved. The internalization of the exchange process within multinational firms serves to bypass many of these difficulties, and explains why the multinational firm is of such importance. Several forms of regulation of technology imports and exports are examined. It is discovered that the process is insufficiently well understood to permit the design of effective regulation that, moreover, appears unlikely to eliminate inefficiency. An efficiency focus is maintained throughout since I feel no qualification on pontificate on complex and confused distributional issues.

Antitrust Policy and Innovation: Taking Account of Performance Competition and Competitor Cooperation

Abstract: The following sections are included:OverviewThe Nature and Importance of Competition and the Goals of AntitrustInnovation and Market Power AssessmentInnovation and Cooperative Agreements among CompetitorsThe (Traditional) Serial ModelThe Simultaneous ModelOrganizational Requirements of InnovationGovernance Alternatives for InnovationThe price mechanismInternal organizationStrategic alliancesAntitrust Treatment of Agreements Among CompetitorsProposed Modifications to U.S. Antitrust Law Affecting Cooperative Agreements Among CompetitorsConclusionSummaryZusammenfassungReferences