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.
This paper explores the impact on sales growth of different product development strategies, especially an approach that focuses on the coordination of multiple projects that overlap in time and share critical components. The data for our analysis comes from the automobile industry, although the principles we discuss should apply to any industry where firms compete with multiple product lines and where the sharing of components among more than one distinct product is both possible and desirable. Some firms compete by trying to develop ‘hit’ products in isolation, with little or no reuse of components or coordination with other products. Another way to compete is to leverage a firm’s investment in new technologies across as many new products as possible as quickly as possible, while the technologies are still relatively new. This paper proposes a typology that captures this effect by categorizing product development strategies into four types: new design, rapid (or concurrent) design transfer, sequential design transfer, and design modification. An analysis of 210 projects from the automobile industry between 1980 and 1991 indicates that firms utilizing the rapid design transfer strategy—quickly leveraging new platform components across multiple projects–increased sales more than when they or their competitors did not use this strategy. The study’s results suggest that not only the sharing of technology among multiple projects but also the speed of technology leveraging are important to sales growth. © 1997 by John Wiley & Sons, Ltd.
Most studies on Japanese supplier-automaker relationships have focused on the nature of the dyadic inter-firm relationship and the performance of the assembler. We examine the relationship between a Japanese supplier's "customer scope strategy" (i.e. number of customers) and the supplier's performance. By analyzing data on 125 suppliers, we found that a supplier with broad automotive customer scope tends to be more profitable and is better off with less exclusive ties. This relationship held even after controlling for supplier size, product type, and the underlying competitiveness/efficiency of each supplier. We argue that a broad customer scope strategy Ieads to superior pedormance primarily due to learning opportunities. This finding highlights a key liability of vertical integration since integration of inputs often limits the ability of in-house divisions to access new customers. However, there is a limit to the advantages of a broad customer base, since sales to "unrelated customers" (e.g., non-automotive) did not have a significant impact on performance. In short, there appear to be diminishing returns to customer scope as suppliers add "dissimilar" customers with requirements fi.u-ther from their core knowledge domain. Thus, these findings offer empirical support for the knowledge based view of the firm which suggests that the efficient boundaries of firms are driven by knowledge domains/considerations. Our findings also suggest that studies that focus only on the advantages of long-term cooperative relationships may be misleading if interpreted to mean that an exclusive supplier-assembler relationship is the optimal solution for the supplier.
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