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Organisational Dimensions of Innovation

Author

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  • Labory, S.

Abstract

This paper examines the theorical rationale for a new form of organisation appearing in the car industry. This form is characterised by horizontal as well as vertical communication, incentives based on ability rather than on productivity, and a cooperation of the divisions of large corporations. I show in a duopoly model that such horizontal information flows are optimal when the production technology is flexible, that is when there are large factor complementarities. This organisational form enabled Japanese producers to maintain a competitive advantage in terms of time-to-market and rate of product renewal. Therefore, innovation is not only technological, but also organisational.

Suggested Citation

  • Labory, S., 1997. "Organisational Dimensions of Innovation," Economics Working Papers eco97/07, European University Institute.
    • Handle: RePEc:eui:euiwps:eco97/07
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    Keywords

    DUOPOLIES ; INDUSTRIAL ORGANIZATION;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L00 - Industrial Organization - - General - - - General

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