David J. Teece

Bio: David J. Teece is an academic researcher from University of California, Berkeley. The author has contributed to research in topics: Dynamic capabilities & Multinational corporation. The author has an hindex of 89, co-authored 312 publications receiving 93195 citations. Previous affiliations of David J. Teece include Yale University & University of Michigan.

Dynamic Capabilities, the Multinational Corporation, and Capture oF Co-created Value from Innovation

Abstract: We build on international business (IB) developments over the past 55 years or so, to inform our understanding of the nature, objectives and essence of the MNE. We suggest that in contrast to the conventional economics-based approaches that have been dominant in the field of IB for many decades, the aforementioned can fruitfully be seen as interrelated, co-determined and co-evolving. Moreover, MNEs exist because of entrepreneurial management's actions to create and capture value through the establishment and design of organizations that help develop cross-border markets, shape business ecosystems, and leverage capabilities. We submit that the concepts of co-specialization, market and business ecosystem creation and co-creation, and dynamic capabilities (DCs) are essential to explicating the nature and essence of the MNE. We develop an entrepreneurial, DCs-based theory of the MNE. In our integrated framework, DCs coupled with good strategy are seen as necessary to sustain superior enterprise performance, especially in fast-moving global environments characterized by deep uncertainty. Entrepreneurial management and transformational leadership are incorporated into a capabilities theory of the MNE. The framework is then used to explain how strategy and DCs together determine firm-level sustained competitive advantage (SCA) in global environments. We argue, further, that MNE entrepreneurs, motivated by appropriability, act in path dependent ways to shape demand and supply-side conditions, markets, and supporting business ecosystems that foster the co-creation of appropriable value. Embracing critical developments in organization, international strategic management and entrepreneurship scholarship can help the theory of the MNE move toward a multidisciplinary perspective that is both richer in descriptive content and stronger in predictive power.

A General Framework for Competitive Analysis in Wireless Telecommunications

Abstract: The Telecommunications Act of 1996 sets forth extensive provisions to unbundle the local telecommunications network to encourage the development of a competitive market for local telephone. It would seem to have been an unstated premise of those statutory provisions and the Federal Communications Commission (FCC) rules interpreting them that the task of unbundling is one that should take place in a technological vacuum. Although the Telecommunications Act of 1996 ostensibly removed artificial regulatory distinctions based on the particular technology employed to produce a communications service, the administrative rulemakings and federal court litigation that have dominated the first three years of experience under the new statute have focused on the traditional wireline access network and have seemingly ignored the fact that, over the same period, wireless telecommunications has rapidly matured as a substitute for wireline access. If regulators were to acknowledge that development, the entire exercise of wireline unbundling could become irrelevant. Wireless local telephony already provides a substitute for wireline access. It is therefore highly pertinent for a symposium on interconnection, such as this one, to consider the FCC's policies that artificially constrain the market structure for wireless telecommunications services. The Supreme Court's 1999 decision in AT&T Corp. v. Iowa Utilities Board, reversed the FCC's unbundling rules for incumbent local exchange carriers to the extent that the agency failed to establish a reasonable standard for determining whether it is necessary to unbundle a particular element and whether the failure to unbundle that element would impair and entrant's ability to compete in the provision of local telecommunications services. In this Article, we propose a general framework for evaluating competition in wireless telecommunications. Although our analysis has immediate ramifications for wireless telecommunications policies-such as spectrum caps and mergers of wireless carriers-the same analysis can shed light on the question of whether, or for how long, it is necessary to mandate the unbundling of even the copper loop, which constitutes the element of the wireline network that is considered the least susceptible to duplication by competitors. If wireless is indeed an access substitute for wireline copper loops, and if wireless thus permits the competitive supply of bundled services that are satisfactory substitutes in consumers' minds for the typical bundle of services that consumers have until now demanded in conjunction with standard wireline access, then Congress, the FCC, the state public utilities commission, and the courts must ask: Is the great experiment of mandatory unbundling of telecommunications networks worth the candle? That consequential question emerges from the analysis that we employ to study a seemingly narrower issue of wireless telecommunications policy. By regulation, the FCC has limited to 45MHz the amount of commercial mobile radio services (CMRS) spectrum that may be licensed to a single entity within a particular geographic area. As the Commission stated in its 1998 notice of proposed rulemaking (NPRM) concerning possible relaxation of the spectrum cap, a single entity may acquire attributable interests in the licenses of broadband Personal Communications Service (PCS), cellular, and Specialized Mobile Radio (SMR) services that cumulatively do not exceed 45 MHz of spectrum within the same geographic area. We formulate, in this Article, a decision rule that would assist the Commission in deciding whether or not to retain the spectrum cap and, thereafter, in evaluating competition in wireless telecommunications generally. We employ decision-theoretic analysis to determine whether the expected costs of retaining the 45 MHz spectrum cap exceed the expected costs of removing it. The expected costs of removing the spectrum cap are negligible. The probability of either monopolization by a single firm or collusive pricing by a group of nationwide pricing plans and because capacity is a function of both spectrum and equipment. In contrast, the expected costs of retaining the spectrum cap are substantial as wireless services evolve from mobile voice to fixed voice and data applications. The probability that a single carrier would use more than 45MHz is nontrivial, because the growth in demand due to consumers' desire for bundled service offerings and the invasion of wireless carriers into fixed communications markets will together severely burden existing networks. In short, a cost-benefit analysis demonstrates that the spectrum cap should be abolished because the expected costs of retaining the spectrum cap vastly exceed the expected costs of removing it. The application of decision-theoretic analysis to the issue of spectrum cap policy can easily be generalized to deal with a broad range of competitive policy issues in the wireless industry. We restate the decision rule in terms that can be applied to numerous wireless policy issues. For example, regulators may have to decide whether newly merged firms should be forced to divest themselves of wireless properties in overlap territories. The issue of divestiture is treated in similar fashion to the spectrum cap analysis. Not surprisingly, many of the same factors that influence the spectrum cap analysis resurface in the merger analysis. In Part I of this Article, we explain our decision-theoretic rule for determining whether the spectrum cap should be retained. In Part II, we estimate the expected costs of removing the cap and describe the magnitude of those costs in qualitative terms. In Part III, we present the same analysis with respect to the expected costs of retaining the cap. In Part IV, we compare the expected costs of retaining and removing the spectrum cap. In Part V, we demonstrated the general applicability of our decision-theoretic approach to competitive policy in the wireless communications industry. We conclude by noting how the increasing substitutability of wireless and wireline services is blurring the definitions of relevant market in the telecommunications industry-a development that has direct implications for whether, and how much, to mandate unbundling of the incumbent wireline network.

Technological Know-How, Organizational Capabilities, And Strategic Management: Business Strategy And Enterprise Development In Competitive Environments

Abstract: Foundations: Dynamic Capabilities and Strategic Management Dynamic Capabilities, Competence, and the Behavioral Theory of the Firm Intellectual Capital, Technology Transfer, and Organizational Learning: An Economics Perspective on Intellectual Capital Collaborative Arrangements and Global Technology Strategy A Review and Assessment of Organizational Learning in Economic Theories Market Entry and Licensing Strategies for Innovative Firms: Managing Intellectual Capital: Licensing and Cross-Licensing in Electronics Patents, Licensing, and Entrepreneurship: Effectuating Innovation in Multi-Invention Contexts and other papers.

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 difftcult-to- trade knowledge assets and complementary assets), and the evolution path(s) it has aflopted or inherited. The importance of path dependencies is amplified where conditions of increasing retums exist. Whether and how a firm's competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding intemally) 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 intemal 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. © 1997 by John Wiley & Sons, Ltd.

Dynamic capabilities, what are they?

Abstract: This paper focuses on dynamic capabilities and, more generally, the resource-based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing. They are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed ‘best practice’). This suggests that they are more homogeneous, fungible, equifinal, and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic, stable processes with predictable outcomes. In contrast, in high-velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well-known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high-velocity markets, it is on selection. At the level of RBV, we conclude that traditional RBV misidentifies the locus of long-term competitive advantage in dynamic markets, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high-velocity markets. Copyright © 2000 John Wiley & Sons, Ltd.

Evolving to a New Dominant Logic for Marketing

Abstract: Marketing inherited a model of exchange from economics, which had a dominant logic based on the exchange of “goods,” which usually are manufactured output The dominant logic focused on tangible resources, embedded value, and transactions Over the past several decades, new perspectives have emerged that have a revised logic focused on intangible resources, the cocreation of value, and relationships The authors believe that the new perspectives are converging to form a new dominant logic for marketing, one in which service provision rather than goods is fundamental to economic exchange The authors explore this evolving logic and the corresponding shift in perspective for marketing scholars, marketing practitioners, and marketing educators

Toward a Knowledge-Based Theory of the Firm

Abstract: Given assumptions about the characteristics of knowledge and the knowledge requirements of production, the firm is conceptualized as an institution for integrating knowledge. The primary contribution of the paper is in exploring the coordination mechanisms through which firms integrate the specialist knowledge of their members. In contrast to earlier literature, knowledge is viewed as residing within the individual, and the primary role of the organization is knowledge application rather than knowledge creation. The resulting theory has implications for the basis of organizational capability, the principles of organization design (in particular, the analysis of hierarchy and the distribution of decision-making authority), and the determinants of the horizontal and vertical boundaries of the firm. More generally, the knowledge-based approach sheds new light upon current organizational innovations and trends and has far-reaching implications for management practice.

The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage

Abstract: In this article we offer a view that suggests that a firm's critical resources may span firm boundaries and may be embedded in interfirm resources and routines. We argue that an increasingly important unit of analysis for understanding competitive advantage is the relationship between firms and identify four potential sources of interorganizational competitive advantage: (1) relation-specific assets, (2) knowledge-sharing routines, (3) complementary resources/capabilities, and (4) effective governance. We examine each of these potential sources of rent in detail, identifying key subprocesses, and also discuss the isolating mechanisms that serve to preserve relational rents. Finally, we discuss how the relational view may offer normative prescriptions for firm-level strategies that contradict the prescriptions offered by those with a resource-based view or industry structure view.