The chapter is concerned with two sets of capabilities developed and implemented by a cellular phone network company. One of these capabilities is for the installation of new stations, the other is for maintenance and problem‐solving. These complex examples of capabilities are used in the paper to study the usefulness, limits, and meaning of the treatment of capabilities as bundles of routines. The chapter concludes that effective capabilities certainly do involve the mastery and use of certain routines, and also the ability to do particular and often idiosyncratic things that are appropriate to a particular context. The company studied in this chapter has different operations in different regions, and, therefore, the paper also explores the question of the extent to which capabilities, and practices, are company wide, as contrasted with developing regional‐ or group‐specific idiosyncratic elements, and conclude that the latter are important.
Software design and development in Free/Open Source projects are analyzed through the lens of the theory of modularity applied to complex systems. We show that both the architecture of the artifacts (software) and the organization of the projects benefited from the paradigm of modularity in an original and effective manner. In particular, our analysis on empirical evidence suggests that three main shortcuts to modular design have been introduced and effectively applied. First, some successful projects inherited previously existing modular architecture, rather than designing new modular systems from scratch. Second, popular modular systems, like GNU/Linux kernel, evolved from an initial integrated structure through a process of evolutionary adaptation. Third, the development of modular software took advantage of the violation of one fundamental rule of modularity, that is, information hiding. Through these three routines, the projects can exploit the benefits of modularity, such as concurrent engineering, division of labor, decentralized and parallel development; at the same time, these routines lessen some of the problems posed by the design of modular architectures, namely imperfect decompositions of interdependent components. Implications and extensions of Free/Open Source projects experience are discussed in the conclusions.
Advances in stochastic system analysis have opened the way to a reconsideration of the processes through which behaviors spread in a population of individuals or organizations. One peculiar phenomenon affecting diffusion is information contagion (Arthur and Lane 1994). When agents have to choose on the basis of other people's experience, rather than relying on their own direct observations, information externalities arise that drive towards the emergence of the arbitrary, stable dominance of one product over the competing one. We reproduced in controlled laboratory conditions the process of information contagion. The experiments show that when agents can only resort to the observation of other people's experience in choosing between competing alternatives, the choice process generates some peculiar features: -information contagion among subjects generates self-reinforcing dynamics, amplifying initial asymmetries of products' market shares; -this in turn produces path-dependent trajectories, highly dependent on early events in the choice sequence; -arbitrary asymmetric market shares tend to be stable in the long run, exhibiting lock-in phenomena; -agents choice criteria are heterogenous, giving rise to a mix of positive and negative feedback in the choice process, with the mix and the timing of such criteria affecting the final outcome.
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