Knowledge integration using product R&D outsourcing in biotechnology
We build on systems integration literature to explain how and why knowledge integration of non-modular products is based on a strategic choice between internalizing and outsourcing core R&D. The under-researched choice of outsourcing core R&D on an on-going basis appears to face risks of higher transactions costs and loss of control. We illuminate these choices in a comparative analysis of two longitudinal cases that compare an internally focused R&D intensive firm and an externally focused R&D intensive firm; and we show how the externally focused approach can avoid risks by framing non-modular outsourcing as modular even though it is not so and by engaging in a social process of communication to achieve a common agreement between partners concerning the direction of efforts and thus effectively reduce highly iterative knowledge exchange between modules. Our findings add to our understanding of the systems integration literature; the nature of firm product system strategies, as well as firm boundaries in a knowledge economy.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jason Owen-Smith & Massimo Riccaboni & Fabio Pammolli & Walter W. Powell, 2002.
"A Comparison of U.S. and European University-Industry Relations in the Life Sciences,"
INFORMS, vol. 48(1), pages 24-43, January.
- Jason Owen-Smith & Massimo Riccaboni & Fabio Pammolli & Walter W. Powell, 2001. "A Comparison of U.S. And European University-Industry Relations in the Life Sciences," LEM Papers Series 2001/03, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Owen-Smith, Jason & Riccaboni, Massimo & Pammolli, Fabio & Powell, Walter W., 2002. "A Comparison of U.S. and European University-Industry Relations in the Life Sciences," MPRA Paper 15963, University Library of Munich, Germany.
- Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
- Oliver Hart & Sanford Grossman, 1985. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Working papers 372, Massachusetts Institute of Technology (MIT), Department of Economics.
- Grossman, Sanford J. & Hart, Oliver D., 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Scholarly Articles 3450060, Harvard University Department of Economics.
- Grossman, Sanford J & Hart, Oliver, 1985. "The Cost and Benefits of Ownership: A Theory of Vertical and Lateral Integration," CEPR Discussion Papers 70, C.E.P.R. Discussion Papers.
- Pavitt, Keith, 1998. "Technologies, Products and Organization in the Innovating Firm: What Adam Smith Tells Us and Joseph Schumpeter Doesn't," Industrial and Corporate Change, Oxford University Press, vol. 7(3), pages 433-452, September.
- Prencipe, Andrea, 1997. "Technological competencies and product's evolutionary dynamics a case study from the aero-engine industry," Research Policy, Elsevier, vol. 25(8), pages 1261-1276, January.
- Jansen, J.J.P. & van den Bosch, F.A.J. & Volberda, H.W., 2005. "Managing Potential and Realized Absorptive Capacity: How do Organizational Antecedents matter?," ERIM Report Series Research in Management ERS-2005-025-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
- Robert M. Grant & Charles Baden-Fuller, 2004. "A Knowledge Accessing Theory of Strategic Alliances," Journal of Management Studies, Wiley Blackwell, vol. 41(1), pages 61-84, January.
- Christoph Grimpe & Ulrich Kaiser, 2010. "Balancing Internal and External Knowledge Acquisition: The Gains and Pains from R&D Outsourcing," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1483-1509, December.
- Valérie Sabatier & Vincent Mangematin & Tristan Rouselle, 2010. "From Business model to Business model portfolio in the european biopharmaceutical industry," Grenoble Ecole de Management (Post-Print) hal-00430782, HAL.
- Rothaermel, Frank T. & Deeds, David L., 2006. "Alliance type, alliance experience and alliance management capability in high-technology ventures," Journal of Business Venturing, Elsevier, vol. 21(4), pages 429-460, July.
- Tether, Bruce S. & Tajar, Abdelouahid, 2008. "Beyond industry-university links: Sourcing knowledge for innovation from consultants, private research organisations and the public science-base," Research Policy, Elsevier, vol. 37(6-7), pages 1079-1095, July.
- Michael Hobday & Andrew Davies & Andrea Prencipe, 2005. "Systems integration: a core capability of the modern corporation," Industrial and Corporate Change, Oxford University Press, vol. 14(6), pages 1109-1143, December. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:45:y:2016:i:5:p:1031-1045. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If references are entirely missing, you can add them using this form.