Manpower Flow and Innovation Strategy

Firms have indefinite boundaries, which are often unlocked by the strategies that firms adopt. Processes internal to a firm and the internal generation of information become dependent on and inseparable from processes that are external to it. Co-ordination theorists believed that such fading away of the boundary occurs because firms, in a milieu, exchange information. Richardson (1997) pointed out that a software firm is an extreme case where co-ordination necessitates not only exchanges of technical and industrial information but also forces it to innovate mutually, in order that software utilities can operate in an environment of interoperability. He argued: ‘A software product is of no use in itself, but only when working in conjunction with other complementary products as part of a system. Thus…an operating system, specifically must work with applications and other elements in a hardware platform. In the case of an extended network … the set of related components will be much larger. If these systems, large or small, are to do what we expect of them, then the component parts must be so designed as to inter-operate’ (Richardson, 1997: 10–11). Such interoperability of a software service or product appears to be only one aspect, and the interoperable system is itself evolving. In other words, each software product introduces a variation and consequently a change in the system. No prior design exists in any mind on the specific architecture of this system, which is again not stationary at any point of time.