Stefano Brusoni

Knowledge Specialization, Organizational Coupling, and the Boundaries of the Firm: Why Do Firms Know More than They Make?

This paper uses an analysis of developments in aircraft engine control systems to explore the implications of specialization in knowledge production for the organization and the boundaries of the firm. We argue that the definition of boundaries of the firm in terms of the activities performed in house does not take into account that decisions to outsource production and other functions are different from decisions to outsource technological knowledge. We show that multitechnology firms need to have knowledge in excess of what they need for what they make, to cope with imbalances caused by uneven rates of development in the technologies on which they rely and with unpredictable product-level interdependences. By knowing more, multitechnology firms can coordinate loosely coupled networks of suppliers of equipment, components, and specialized knowledge and maintain a capability for systems integration. Networks enable them to benefit from the advantages of both integration and specialization. Examples from other industries extend to other contexts the model we develop.

Making Design Rules: A Multidomain Perspective

Design rules allocate functions to modules, identify operating principles, and set interfaces among modules that determine how organizations evolve. A case study of radical innovation in tire manufacturing illustrates the transition from old to new design rules through the joint adaptation of the manufacturing organization and the product to reflect changes in the underlying engineering knowledge. The case shows how knowledge evolution mediates organizational and technological change and makes any organization design openended and evolving.

Managing Knowledge in Loosely Coupled Networks: Exploring the Links between Product and Knowledge Dynamics

The contemporary literature concentrates on ‘make or buy’ decisions in design and production activities, assuming that decisions about the underlying fields of technological knowledge will automatically be the same. Building on previous research on multitechnology firms and products, this paper argues that firms know more about technology than they apply in their own production. We propose two major dimensions according to which firms should adjust their knowledge and production boundaries, namely systemic interdependencies across components and uneven rate of change across components’ underlying knowledge bases. We analyse the implications of this less‐than‐perfect overlap between knowledge and production boundaries for the management of firms’ external relationships.

Perspectives on Innovation

Innovation has become a major field of study in economics, management, sociology, science and technology, and history. Case studies, empirical models, appreciative analyses and formal theories abound. However, after several decades of study on innovation, and so many different types of contribution, there are still many phenomena we know very little about. The debate on innovation still has much to deliver; important questions remain unanswered and many problems require solution. Bringing together many leading figures in the field, this collection aims to address these concerns by offering detailed analyses of topics that are crucial for understanding innovation. In addition, it offers discussions of topics that researchers are just beginning to explore and of topics that continue to defy our efforts to understand and systematise. This important and wide-ranging collection will be essential reading for academic researchers and graduate students who wish to gain a broad overview of frontier-research in innovation.

The Value and Costs of Modularity: A Problem‐Solving Perspective

This paper discusses the issue of modularity from a problem-solving perspective. Modularity is in fact a decomposition heuristic, through which a complex problem is decomposed into independent or quasi-independent sub-problems. By means of a model of problem decomposition, this paper studies the trade-offs of modularity: on the one hand finer modules increase the speed of search, but on the other hand they usually determine lock-in into sub-optimal solutions. How to balance effectively this trade-off depends upon the problem environment and in particular on its complexity and volatility: we show that in stationary and complex environments there exists an evolutionary advantage to over-modularization, while in highly volatile environments, contrary to usual wisdom, modular search is inefficient in the long run. The empirical relevance of our findings is discussed especially with reference to the literature on systems integration.

The knowledge bases of the world’s largest pharmaceutical groups: what do patent citations to non-patent literature reveal?

This article examines the knowledge bases of the world’s largest pharmaceutical groups by sales. It builds upon the concepts of knowledge specialisation and knowledge integration as the relevant dimensions along which knowledge bases can be mapped. The former is studied developing indicators of breadth. Breadth is measured by analysing the evolution of specialisation by scientific field over time. It hints at the widening range of bodies of scientific and technological knowledge relevant to firms’ innovative activities. Knowledge integration is studied developing indicators of depth. Depth is measured by analysing the evolution of integration across different typologies of research. It hints at the complex, non-linear interdependencies that link the scientific and technological domains. We develop the analysis on the strength of an original database of 33,127 European Patent Office patents and 41,931 citations to ‘non-patent document’ (of which 19,494 were identified as scientific articles included in the ISI databases) of the 30 largest pharmaceuticals groups during the period 1990–1997. The groups studied seem to have incrementally increased the breadth of their knowledge bases, moving towards the fields proper to the new biopharmaceutical research trajectory. At the same time, some of the groups studied exhibit remarkable depth in knowledge integration in particular fields such as biotechnology, biochemical research and neurosciences.

Exploring The Miracle: Strategy And Management Of The Knowledge Base In The Aeronautics Industry

We consider here the governance of learning and the diffusion of technological knowledge in the civil aircraft industry. We describe a systemic process by which specialization in knowledge encourages depth whilst breadth is captured through the integration of contributions by the lead manufacturer, which acts as systems integrator. We explore the boundaries of the knowledge bases related to airframe structure and systems and aircraft instrumentation by using patents as tracers, considering the range of scientific and technological disciplines related to the industry as well as the sources of that knowledge. We conclude that knowledge base supporting the aeronautics industry is complex and multidisciplinary, and that firms acting as system integrators have to hold the broadest knowledge bases to co-ordinate design and production.

The Impact of Virtual Technologies on Organizational Knowledge Creation: An Empirical Study

This study examines the processes of organizational knowledge creation in two highly virtualized teams, one involved in the design of a small city car and the second in the re-design of a small industrial vehicle. Using Nonakas model of organizational knowledge creation, we explore how the visualization of knowledge based processes, i.e. the intensive exploitation of ICTs in support of knowledge-based activities, has shaped new forms of knowledge creation both at individual and organizational level. In contrast with previous studies [1] that identified knowledge codification as the main contribution of ICTs, this study provides detailed micro-level evidence on the ability of virtual technologies to support the transfer and the creation of new knowledge both at explicit and tacit levels. Several implications for scholars and practitioners are presented.

THE CHANGING GOVERNANCE OF KNOWLEDGE IN AVIONICS

Abstract Taking in hand the two sides (i.e. cognitive and risk-bearing) of authority in design and production in complex tasks, this paper aims to give a first look at shifts in the locus of authority in the aviation electronics—or avionics—industry. Relying on patent and joint ventures data, we attempt to trace the evolution of problem-solving ‘authority’ over the evolution of the industry, using an empirical approach which can then be used to explore similar trends in other industries. We find that while it is still too early to say whether we are observing a wholesale shift of ‘authority’ from aircraft makers to avionics producers, it is clear that the leading avionics producers are challenging their clients in taking the role of systems integrators. We can speculate that we may be observing the beginning of a ‘market for technology’. At the very least, we are observing an increasing distribution of both problem-solving authority and risk in this industry.

New combinations in old industries: the introduction of radical innovations in tire manufacturing

The literature on long waves gives great emphasis to the process of the diffusion of new pervasive technologies that raise productivity and growth, first in the sectors that generate them, then in those sectors that progressively adopt them. This paper explores this process of diffusion, relying on an ongoing analysis of the diffusion of robotized, modular production process in the international tire industry. The analysis captures three key features of the diffusion process of the long wave. First, we look at the emergence of radical innovations in mature sectors through the adoption of pervasive technologies, i.e. robotics. Second, we see that the adoption of the new process goes hand in hand with the adoption of new organizational routines at the level of both design and manufacturing processes, modularity. Third, this study highlights the role played by key individuals—entrepreneurs—who develop new ways of doing business.