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The Trade-off Between Efficiency and Learning in Interorganizational Relationships for Product Development

  • Maurizio Sobrero

    ()

    (Department of Management, University of Bologna, 40125, Bologna, Italy)

  • Edward B. Roberts

    ()

    (Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142-1347)

This paper analyzes the performance implications of interorganizational relationships in the development of technological innovations, focusing on the characteristics of the tasks partitioned between a manufacturer and its suppliers in the development of new products. We identify two critical dimensions: (1) the design scope and (2) the level of task interdependency. The design scope dimension characterizes the type of problem-solving activities outsourced by the manufacturer. The level of task interdependency dimension characterizes the influence of any given supplier-manufacturer interaction on other activities within an overall innovation process. Data analyses on 50 supplier-manufacturer relationships drawn from three new product development projects show that the type of problem-solving activities being partitioned and their level of interdependency with the rest of the project are important predictors of performance outcomes of the relationship, controlling for contractual differences. Further, the analyses demonstrate a clear trade-off between short-term efficiency-increasing and longer-term learning-enhancing outcomes.

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File URL: http://dx.doi.org/10.1287/mnsc.47.4.493.9828
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Article provided by INFORMS in its journal Management Science.

Volume (Year): 47 (2001)
Issue (Month): 4 (April)
Pages: 493-511

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Handle: RePEc:inm:ormnsc:v:47:y:2001:i:4:p:493-511
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  1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-95, December.
  2. Kirk Monteverde & David J. Teece, 1982. "Supplier Switching Costs and Vertical Integration in the Automobile Industry," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 206-213, Spring.
  3. Erin Anderson & Barton Weitz, 1989. "Determinants of Continuity in Conventional Industrial Channel Dyads," Marketing Science, INFORMS, vol. 8(4), pages 310-323.
  4. Eric von Hippel, 1994. ""Sticky Information" and the Locus of Problem Solving: Implications for Innovation," Management Science, INFORMS, vol. 40(4), pages 429-439, April.
  5. von Hippel, Eric, 1990. "Task partitioning: An innovation process variable," Research Policy, Elsevier, vol. 19(5), pages 407-418, October.
  6. Clark, Kim B., 1985. "The interaction of design hierarchies and market concepts in technological evolution," Research Policy, Elsevier, vol. 14(5), pages 235-251, October.
  7. Kim B. Clark, 1989. "Project Scope and Project Performance: The Effect of Parts Strategy and Supplier Involvement on Product Development," Management Science, INFORMS, vol. 35(10), pages 1247-1263, October.
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