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Organizational tension between static and dynamic efficiency, The

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Author Info

  • Ghemawat, Pankaj

    (IESE Business School)

  • Ricart, Joan E.

    ()
    (IESE Business School)

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    Abstract

    Efficiency has been defined in at least two different ways: in terms of the refinement of existing products, processes or capabilities (static efficiency) or the development of new ones (dynamic efficiency). This paper analyzes the organizational trade-off between these two forms of efficiency. It shows that there is a tendency towards extremes, and that the irreversibility of efficiency orientations tends to tip the balance to be struck between static and dynamic efficiency toward the latter. The paper also advances hypotheses about the industry, business and corporate factors that mediate between the choice of a particular efficiency orientation and organizational performance.

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    File URL: http://www.iese.edu/research/pdfs/DI-0255-E.pdf
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    Bibliographic Info

    Paper provided by IESE Business School in its series IESE Research Papers with number D/255.

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    Length: 25 pages
    Date of creation: 19 Oct 1993
    Date of revision:
    Handle: RePEc:ebg:iesewp:d-0255

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    Postal: IESE Business School, Av Pearson 21, 08034 Barcelona, SPAIN
    Web page: http://www.iese.edu/
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    Related research

    Keywords: organizational trade-off; efficiency;

    References

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    1. Carlsson, Bo, 1989. "Flexibility and the theory of the firm," International Journal of Industrial Organization, Elsevier, vol. 7(2), pages 179-203, June.
    2. Robert A. Jones & Joseph M. Ostroy, 1979. "Flexibilty and Uncertainty," UCLA Economics Working Papers 163, UCLA Department of Economics.
    3. Michael C. Jensen & William H. Heckling, 1995. "Specific And General Knowledge, And Organizational Structure," Journal of Applied Corporate Finance, Morgan Stanley, vol. 8(2), pages 4-18.
    4. George Stigler, 1939. "Production and Distribution in the Short Run," Journal of Political Economy, University of Chicago Press, vol. 47, pages 305.
    5. Williams, J.R., 1992. "How Sustainable is your Competitive Advantage?," GSIA Working Papers 1992-03, Carnegie Mellon University, Tepper School of Business.
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    Cited by:
    1. Caldart, Adrian A. & Ricart, Joan E., 2006. "Corporate strategy in turbulent environments: Key roles of the corporate level," IESE Research Papers D/623, IESE Business School.
    2. Basu, Sandip & Phelps, Corey & Kotha, Suresh, 2011. "Towards understanding who makes corporate venture capital investments and why," Journal of Business Venturing, Elsevier, vol. 26(2), pages 153-171, March.
    3. Thorsten Grohsjean & Tobias Kretschmer & Nils Stieglitz, 2011. "Performance Feedback, Firm Resources, and Strategic Change," DRUID Working Papers 11-02, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    4. Lunnan, Randi & Barth, Theodor, 2003. "Managing the exploration vs. exploitation dilemma in transnational "bridging teams"," Journal of World Business, Elsevier, vol. 38(2), pages 110-126, May.
    5. Ricart, Joan E. & Sieber, Sandra & Svejenova, Silviya, 1999. "Forms of organizing: What is new and why?," IESE Research Papers D/381, IESE Business School.
    6. Tan, Justin & Wang, Liang, 2010. "Flexibility-efficiency tradeoff and performance implications among Chinese SOEs," Journal of Business Research, Elsevier, vol. 63(4), pages 356-362, April.
    7. Wang, Long & Keith Murnighan, J., 2013. "The generalist bias," Organizational Behavior and Human Decision Processes, Elsevier, vol. 120(1), pages 47-61.
    8. O'Reilly, Charles A., III & Tushman, Michael, 2007. "Ambidexterity as a Dynamic Capability: Resolving the Innovator's Dilemma," Research Papers 1963, Stanford University, Graduate School of Business.
    9. Paul Hallwood, 2009. "Learning and Profitability in a Theory of the Firm," Working papers 2009-21, University of Connecticut, Department of Economics.
    10. Dirk Clercq & Narongsak Thongpapanl & Dimo Dimov, 2014. "Contextual ambidexterity in SMEs: the roles of internal and external rivalry," Small Business Economics, Springer, vol. 42(1), pages 191-205, January.
    11. Wong, Christina W.Y. & Wong, Chee Yew & Boon-itt, Sakun, 2013. "The combined effects of internal and external supply chain integration on product innovation," International Journal of Production Economics, Elsevier, vol. 146(2), pages 566-574.
    12. Justin Tan & Yong Zeng, 2009. "A stage-dependent model of resource utilization, strategic flexibility, and implications for performance over time: Empirical evidence from a transitional environment," Asia Pacific Journal of Management, Springer, vol. 26(3), pages 563-588, September.
    13. Chittoor, Raveendra & Ray, Sougata, 2007. "Internationalization paths of Indian pharmaceutical firms -- A strategic group analysis," Journal of International Management, Elsevier, vol. 13(3), pages 338-355, September.
    14. Hsu, Chia-Wen & Lien, Yung-Chih & Chen, Homin, 2013. "International ambidexterity and firm performance in small emerging economies," Journal of World Business, Elsevier, vol. 48(1), pages 58-67.
    15. Wu Zhan & Roger (Rongxin) Chen, 2013. "Dynamic capability and IJV performance: The effect of exploitation and exploration capabilities," Asia Pacific Journal of Management, Springer, vol. 30(2), pages 601-632, June.
    16. Tomoatsu Shibata, 2011. "Unveiling the Successful Process of Technological Transition : A Case Study of Matsushita Electric," TMARG Discussion Papers 104, Graduate School of Economics and Management, Tohoku University.
    17. Blazevic,Vera & Lievens,Annouk, 2003. "Learning during the New Financial Service Innovation Process: Antecedents and Performance Effects," Research Memorandum 040, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    18. Elena Revilla, 2008. "Dynamism and complexity as antecedents of the knowledge strategy in product development," Working Papers Economia wp08-15, Instituto de Empresa, Area of Economic Environment.
    19. Henri, Jean-Francois, 2006. "Management control systems and strategy: A resource-based perspective," Accounting, Organizations and Society, Elsevier, vol. 31(6), pages 529-558, August.
    20. Blazevic, Vera & Lievens, Annouk, 2004. "Learning during the new financial service innovation process: Antecedents and performance effects," Journal of Business Research, Elsevier, vol. 57(4), pages 374-391, April.

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