This paper examines the nature of the core capabilities of a firm, focusing in particular on their interaction with new product and process development projects. Two new concepts about core capabilities are explored here. First, while core capabilities are traditionally treated as clusters of distinct technical systems, skills, and managerial systems, these dimensions of capabilities are deeply rooted in values, which constitute an often overlooked but critical fourth dimension. Second, traditional core capabilities have a down side that inhibits innovation, here called core rigidities. Managers of new product and process development projects thus face a paradox: how to take advantage of core capabilities without being hampered by their dysfunctional flip side. Such projects play an important role in emerging strategies by highlighting the need for change and leading the way. Twenty case studies of new product and process development projects in five firms provide illustrative data.

https://www.jstor.org/stable/pdfplus/2486355.pdf

Core capabilities and core rigidities: a paradox in managing new product development

This paper introduces a social network perspective to the study of strategic alliances. It extends prior research, which has primarily considered alliances as dyadic exchanges and paid less attention to the fact that key precursors, processes, and outcomes associated with alliances can be defined and shaped in important ways by the social networks within which most firms are embedded. It identifies five key issues for the study of alliances: (1) the formation of alliances, (2) the choice of governance structure, (3) the dynamic evolution of alliances, (4) the performance of alliances, and (5) the performance consequences for firms entering alliances. For each of these issues, this paper outlines some of the current research and debates at the firm and dyad level and then discusses some of the new and important insights that result from introducing a network perspective. It highlights current network research on alliances and suggests an agenda for future research. © 1998 John Wiley & Sons, Ltd.

/pdf/alliances-and-networks-sirimysid3.pdf

Alliances and networks

We develop a contingency view of process management's influence on both technological innovation and organizational adaptation. We argue that while process management activities are beneficial for organizations in stable contexts, they are fundamentally inconsistent with all but incremental innovation and change. But dynamic capabilities are rooted in both exploitative and exploratory activities. We argue that process management activities must be buffered from exploratory activities and that ambidextrous organizational forms provide the complex contexts for these inconsistent activities to coexist.

Exploitation, Exploration, and Process Management: The Productivity Dilemma Revisited

Previous research suggests that knowledge diffusion occurs more quickly within Toyota’s production network than in competing automaker networks. In this paper we examine the ‘black box’ of knowledge sharing within Toyota’s network and demonstrate that Toyota’s ability to effectively create and manage network-level knowledge-sharing processes at least partially explains the relative productivity advantages enjoyed by Toyota and its suppliers. We provide evidence that suppliers do learn more quickly after participating in Toyota’s knowledge-sharing network. Toyota’s network has solved three fundamental dilemmas with regard to knowledge sharing by devising methods to (1) motivate members to participate and openly share valuable knowledge (while preventing undesirable spillovers to competitors), (2) prevent free riders, and (3) reduce the costs associated with finding and accessing different types of valuable knowledge. Toyota has done this by creating a strong network identity with rules for participation and entry into the network. Most importantly, production knowledge is viewed as the property of the network. Toyota’s highly interconnected, strong tie network has established a variety of institutionalized routines that facilitate multidirectional knowledge flows among suppliers. Our study suggests that the notion of a dynamic learning capability that creates competitive advantage needs to be extended beyond firm boundaries. Indeed, if the network can create a strong identity and coordinating rules, then it will be superior to a firm as an organizational form at creating and recombining knowledge due to the diversity of knowledge that resides within a network. Copyright © 2000 John Wiley & Sons, Ltd.

/pdf/creating-and-managing-a-high-performance-knowledge-sharing-3g622ymk14.pdf

Creating and managing a high‐performance knowledge‐sharing network: the Toyota case

While the recent focus on knowledge has undoubtedly benefited organizational studies, the literature still presents a sharply contrasting and even contradictory view of knowledge, which at times is described as "sticky" and at other times "leaky." This paper is written on the premise that there is more than a problem with metaphors at issue here, and more than accounts of different types of knowledge (such as "tacit" and "explicit") can readily explain. Rather, these contrary descriptions of knowledge reflect different, partial, and sometimes "balkanized" perspectives from which knowledge and organization are viewed. Taking the community of practice as a unifying unit of analysis for understanding knowledge in the firm, the paper suggests that often too much attention is paid to the idea of community, too little to the implications of practice. Practice, we suggest, creates epistemic differences among the communities within a firm, and the firm's advantage over the market lies in dynamically coordinating the knowledge produced by these communities despite such differences. In making this argument, we argue that analyses of systemic innovation should be extended to embrace all firms in a knowledge economy, not just the classically innovative. This extension will call for a transformation of conventional ideas coordination and of the trade-off between exploration and exploitation.

Knowledge and Organization: A Social-Practice Perspective

https://cyberleninka.org/article/n/191919.pdf

Industry platforms and ecosystem innovation

As high-tech industries become increasingly modular and interconnected--and the ability to innovate becomes the purview of just about anyone--the most successful companies are those that orchestrate industrywide innovations to support not only their products, but also the systems or platforms in which their products work. To become a platform leader--a company that provides the technological foundation on which other products are built--is the Holy Grail of these high-tech industries. The quest is complex and risky, because the success of platform leaders depends largely on their ability to encourage other firms to develop complementary innovations. High-tech-strategy experts Annabelle Gawer and Michael A. Cusumano explain how the best in class, including Intel, Microsoft, and Cisco, establish and grow their dominant positions. Based on these in-depth case studies and on incisive analysis, the authors present a framework for designing and implementing a successful platform strategy. From how to plan internal product development to how best to encourage external innovation activities, this comprehensive book offers executives, strategists, and entrepreneurs a framework for achieving market leadership in platform environments.

Platform Leadership How Intel, Microsoft, and Cisco Drive Industry Innovation

This book focuses on the strategic problems faced by firms in industries dominated by platform products . Gawer and Cusumano recommend that firms compete by developing modular products, because it allows for increased "... ability to innovate [italics in origin] by more actors in the high-tech world" (p.3). Modularity and platform products are found in industries which produce complex products which are built of interdependent components and subsystems. Examples include cars, radios, refrigerators, and stereo systems. The key attribute of these industries, whose number is rapidly increasing, is a network of interdependent producers of different parts of the product who also have the "license" to rapidly innovate without violating the integrity of the overall joint product .

/pdf/book-review-platform-leadership-how-intel-microsoft-and-1a9e1exi05.pdf

Book Review Platform Leadership: How Intel, Microsoft, and Cisco drive industry innovation

This article deals with the diffusion and standardization rivalry between two similar but incompatible formats for home videocassette recorders (VCRs): the Betamax, introduced in 1975 by the Sony Corporation, and the VHS (Video Home System), introduced in 1976 by the Victor Company of Japan (Japan Victor or JVC). Despite being first to the home market, the Beta format fell behind the VHS in market share during 1978 and declined thereafter. By the end of the 1980s, Sony and its partners had ceased producing Beta models. This study analyzes the history of this rivalry and examines its context—a mass consumer market with a dynamic standardization process subject to “bandwagon” effects that took years to unfold and that were largely shaped by the strategic maneuvering of the VHS producers.

/pdf/strategic-maneuvering-and-mass-market-dynamics-the-triumph-43bo9epmgl.pdf

Strategic maneuvering and mass-market dynamics : the triumph of VHS over Beta

This article presents the results of a questionnaire survey sent to a sample of automobile manufacturers in the United States and Japan (including Japanese-managed plants in the United States) during the spring of 1990. The data support observations that Japanese and U.S. practices tend to differ in key areas and Japanese suppliers perform better in dimensions such as quality (defects) and prices (meeting targets, reducing prices over time); and that Japanese-managed auto plants established in the United States have, in general, adopted Japanese practices and receive extremely high levels of quality from Japanese as well as U.S. suppliers. These findings provide evidence that Japanese practices and performance levels are transferable outside Japan and suggest that considerable improvements are possible for U.S. suppliers supplying U.S. auto plants. In addition, the survey indicates that U.S. firms have adopted at least some practices traditionally associated with Japanese firms, apparently reflecting some convergence toward Japanese practices and higher performance levels in supplier management.

/pdf/supplier-relations-and-management-a-survey-of-japanese-3ireocbweh.pdf

Michael A. Cusumano

Papers

Industry platforms and ecosystem innovation

Platform Leadership How Intel, Microsoft, and Cisco Drive Industry Innovation

Book Review Platform Leadership: How Intel, Microsoft, and Cisco drive industry innovation

Strategic maneuvering and mass-market dynamics : the triumph of VHS over Beta

Supplier relations and management: A survey of Japanese, Japanese‐transplant, and U.S. auto plants