Contracting for Innovation: Vertical Disintegration and Interfirm Collaboration

Gilson, Ronald J.; Sabel, Charles F.; Scott, Robert E.

doi:10.2139/ssrn.1289428

Cited by 102 publications

(126 citation statements)

References 16 publications

(5 reference statements)

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“…Often, they were bounded by medium-term contracts for innovation services, which transaction costs economists have previously studied (e.g. Gilson et al 2009). …”

Section: Conceptual Contributionsmentioning

confidence: 99%

“…The exchange of incremental innovation services requires buyers and sellers to agree on the service's qualities, value, and the terms and conditions of its exchange in the context of present and future unknowns (Araujo and Spring 2006). Debates around how to 'contract for innovation' may serve as an indication of just how complex and contentious this formatting in the face of continuous uncertainty at the buyer/seller interface can be (Gilson, Sabel and Scott 2009).…”

Section: Introductionmentioning

confidence: 99%

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Making incremental innovation tradable in industrial service settings

Geiger

Finch

2016

Journal of Business Research

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How do organizations develop, buy and sell incremental innovation as a service? In many knowledge-intensive business-to-business settings the locus of interaction has shifted from stable, discrete, and articulated products and services to the exchange of somewhat nebulous capacities of problem-solving, innovation and R&D services. In these exchanges, tensions and conflicts between actors can arise in seeking clarity as to what is being exchanged and how it is valuable, while at the same time attempting to keep the interaction open for future adjustments to the scope and content of the exchange. We combine a longitudinal case study of a chemical services firm with Galison's (1999) concept of a trading zone and contributions in industrial services marketing to assess how actors offer, value and exchange incremental innovation. Focusing on the contentious nature of innovation processes, our contributions to the understanding of intra-and interfirm behavior in marketing and purchasing are threefold:(1) We examine how incremental innovation is formatted as a tradable service; (2) We explain how buyers, sellers and developers exchange the service of incremental innovation even when this service remains contentious in its specification; (3) We argue that trading zones complement relational processes and contractual arrangements by allowing actors to preserve their own logics and expertise pertaining to innovation.

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“…Often, they were bounded by medium-term contracts for innovation services, which transaction costs economists have previously studied (e.g. Gilson et al 2009). …”

Section: Conceptual Contributionsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Making incremental innovation tradable in industrial service settings

Geiger

Finch

2016

Journal of Business Research

View full text Add to dashboard Cite

show abstract

“…Contrary to the common view that these dimensions are mutually exclusive, we stress their complementary aspects: new knowledge grows as a result of coordination across individual experiences and the development of shared understanding. At the same time, variety and heterogeneity are not sufficient to replenish the knowledge base, and individual specialization is most effective when coordinated through formal and informal mechanisms (Gilson et al, 2009). The collective character of knowledge, in turn, elucidates the importance of establishing sound governance mechanisms (Antonelli, 2006).…”

Section: Coordinated Varietymentioning

confidence: 99%

The Evolution of Knowledge Organization and the Emergence of a Platform for Innovation in the Car Industry

Patrucco

2014

Industry and Innovation

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The paper aims at explaining the changes in how economic actors and their organizations acquire and coordinate innovative and productive capabilities. Using the illustrative evidence from organizational change in the automobile industry in Piedmont over the last 50 years, the paper describes how transformations in the structure of interactions between firms are steered by changes in the pattern of specialization and differentiation in the capabilities and technological skills of economic actors. The system is characterized by the emergence of a platform for the coordination of productive and technological activities, which can be seen as a major change in the organization of innovation in the system.

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“…Indeed recent observations suggest that vertical integration -the badge of large-scale industrialisation -appears to have lost much of its attraction and the previously dominant integrated, centralised-type of larger economic organisation is increasingly shunned and replaced by various constellations of independent yet closely inter-connected specialised firms that prefer to restrain from direct involvement in non-core operations and choose instead to re-focus on their original competencies (Carter and Hodgson 2006;David and Han 2004;Gereffi 2005;Gilson et. al.…”

Section: General Implicationsmentioning

confidence: 99%

Trade-offs in choice of inter-firm transaction structure: A qualitative study of perceived comparative advantages of business relation over vertical integration

Azarian

2012

Journal of Sociology

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This article investigates how a plastic manufacturing firm handles the challenging task of comparing and choosing among the feasible alternative modes of structuring the flow of repeated transaction with one of its key suppliers. Qualitative interviews are used to explore the perceptions of the management of the firm concerning the advantages and disadvantages associated with each alternative, and the main findings suggest that the selection of the transaction structure intended to reduce boundary uncertainty is itself an uncertain choice. Since many of the gains and drawbacks of the alternatives are unknown and even unknowable in advance, the firm is unable to set up a conclusive comparative assessment to underpin its choice. Instead it is inclined to select the alternative that is perceived as the one allowing most flexibility.

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Contracting for Innovation: Vertical Disintegration and Interfirm Collaboration

Abstract: provided helpful comments on an earlier draft. We also appreciate the support of the Kauffman Foundation.

Cited by 102 publications

References 16 publications

Making incremental innovation tradable in industrial service settings

Making incremental innovation tradable in industrial service settings

The Evolution of Knowledge Organization and the Emergence of a Platform for Innovation in the Car Industry

Trade-offs in choice of inter-firm transaction structure: A qualitative study of perceived comparative advantages of business relation over vertical integration

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