We propose a new model of knowledge creation in purposeful, loosely-coordinated, distributed systems, as an alternative to a firm-based one. Specifically, using the case of Linux kernel development project, we build a model of community-based, evolutionary knowledge creation to study how thousands of talented volunteers, dispersed across organizational and geographical boundaries, collaborate via the Internet to produce a knowledge-intensive, innovative product of high quality. By comparing and contrasting the Linux model with the traditional/commercial model of software development and firm-based knowledge creation efforts, we show how the proposed model of knowledge creation expands beyond the boundary of the firm. Our model suggests that the product development process can be effectively organized as an evolutionary process of learning driven by criticism and error correction. We conclude by offering some theoretical implications of our community-based model of knowledge creation for the literature of organizational learning, community life, and the uses of knowledge in society.

Managerial summary: The ability to redeploy resources inside the firm reduces the cost of entry "mistakes." If a new business turns out to have poor profitability, the ability to redeploy more of its resources back into the firm's other businesses allows recycling of investment and can

This paper focuses on the role of network resources and examines the associated mechanisms that affect the timing of entry into an emerging product market. Linking network theory to market entry research, I analyze the pattern in the structure, relation, and composition of 517 firms' strategic alliances as the firms face the decision of whether and when to enter the networking switches market over a 13‐year period from 1989 to 2001. The context for empirical testing is the voice/data convergence between telephony communications and computer networking technologies during which the industry boundary blurs. Firms that have access to information of high quality, large quantity, and compositional heterogeneity are likely to enter the newly developed market more quickly. However, network configuration lock‐in and network costs may counterbalance the benefits derived from network resources. I discuss the implications of these findings for research on social networks and the timing of market entry. Copyright © 2007 John Wiley & Sons, Ltd.

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The resource-based view of the firm suggests that the timing of market entry by a firm depends on its resources and capabilities, but several important questions remain. First, in a high-velocity market where capabilities change quickly, how does entry timing depend on the capabilities at varying points in time? Second, how much flexibility does a firm have in altering its capabilities to achieve desirable entry timing? To answer these questions, this study sets out to develop a dynamic, refined version of the resource-based view that parameterizes a firm by its time-varying capability relevance with respect to a focal market, and makes predictions on entry timing and future growth of capability relevance. The study develops a novel approach that uses the entrants' product portfolios to infer a potential entrant's capability relevance. The results based on a panel of potential entrants show that the initial and current capability relevance each affect entry timing alone, revealing the persistent effect of the initial condition. However, given the knowledge of the current capability relevance, the initial relevance has no effect on entry timing, suggesting that the initial relevance affects entry timing through its influence on the current relevance. Firms that are in an initially unfavorable position can still achieve early entry, provided that they improve their capability relevance over time. ). The theory suggests that the resources and capabilities of a firm can be a source of sustainable competitive advantage, as opposed to the attributes of an industry or the position occupied by the firm in the industry, as Porter (1980) argues. Many scholars who study the determinants and effects of entry timing (or order of entry) have applied the resource-based view either implicitly or explicitly (

This article highlights a perspective that has been underexplored in resource allocation research. By viewing resource allocation through a resource and capability lens, three connections are developed between resource-based theories of strategy and strategy research on resource allocation. First, the lens is applied to frame capital investments as investing in capabilities. This framing provides a theoretical path connecting the strategic purpose of investments, through value creation from resource commitments, to the creation of competitive advantage. Second, resource allocation for the purpose of capability development is related to a resource-based model of asset accumulation. Placing resource allocation decisions in the context of capability development suggests that key features of the asset accumulation process can usefully inform research on the resource allocation process. Last, corporate capital allocation is connected to resource redeployment in multibusiness firms. This connection explicates ways in which corporate headquarters can add to firm value. These connections illustrate the potential that resource-based theories have to contribute insights to resource allocation research.