Udo Zander

Did socialism fail to innovate? A natural experiment of the two Zeiss companies

Two Carl Zeiss companies provide a natural experiment for analyzing the effects of socialist versus market systems on innovation. By analyzing patent records from 1950 to 1990, we trace the technological contributions of Zeiss Jena in the German Democratic Republic and Zeiss Oberkochen in the Federal Republic of Germany. We show that Zeiss Jena gradually developed considerable technological competence, but a deficiency of innovative potential within the socialist system led to political pressures on key firms to innovate by plan. These findings on Zeiss Jena imply that technologically viable firms can fail during the initial period of transition from socialism to capitalism. The diagnosis of a lack of innovation and faulty managerial incentives as the disease that is cured by market reforms should be balanced by an understanding of the actual capabilities of socialist firms and the difficulties of radical change mandated by brutal shocks to the macroeconomic system

Managing Knowledge in the Dark: An Empirical Study of the Reliability of Capability Evaluations

If knowledge is to be managed and transferred, it is essential that members of organizations know and agree on where capabilities reside. Few studies, however, have examined the difficulties of evaluating capabilities in large firms. This paper reports an in-depth empirical study of capabilities central to knowledge management efforts in large leading multinational companies. The results show that evaluation of these capabilities is a complex task. The median interrater correlation for capabilities designated as strategic by top management is only 0.28. Analysis of the determinants of reliability show that the difference in evaluations is largest for subsidiaries managers know less about, for younger subsidiaries, and for subsidiaries in less important markets. The results of our empirical study have important implications for creating, retaining, and transferring knowledge in organizations.

International Strategy and Knowledge Creation: The Advantage of Foreignness and Liability of Concentration

International business scholars increasingly emphasize regional strategies based on an optimal location of downstream sales. There has been less scholarly attention, however, to the relationship between international strategy and upstream knowledge creation including R&D. Building on contemporary strategic management theory and the knowledge‐based view we remedy this. The viability of home‐regional or bi‐regional strategies is based on common assumptions that imply negative consequences of distance and foreignness for downstream sales and marketing and benefits from agglomeration for upstream knowledge creation activities including R&D. In contrast, we propose that upstream knowledge creation, radical innovation in particular, rather gains from distance and foreignness and from being dispersed, suggesting the effectiveness of a global strategy. Based on the resource‐based view and recent research on the economics of strategic opportunities and competitive advantage, we provide theoretical explanations for this. We demonstrate how a global multinational corporation is uniquely equipped with knowledge extensity including heterogeneous social‐identity frames in multiple sub‐units. Thanks to arbitrage advantages between the sub‐units’ separate and often locally embedded knowledge, a global multinational corporation can address complex interdependences and interactions between knowledge sets required for knowledge creation. This suggests that maximum exploration capabilities are made possible by a global rather than a home‐regional or bi‐regional strategy.

Chapter 2 – Knowledge of the Firm: Combinative Capabilities, and the Replication of Technology

Knowledge of the firm, combinative capabilities, and the replication of technology - How should we understand why firms exist? A prevailing view has been that they serve to keep in check the transaction costs arising from the self-interested motivations of individuals. We develop in this article the argument that whal firms do better than markets is the sharing and transfer of the knowledge of individtials and groups within an organization. This knowledge consists of information (e.g., who knows what) and of know-how (e.g., how to organize a research team). What is central to our argument is that knowledge is held by individuals, but is also expressed in regularities by which members cooperate in a social community (i.e.. group, organization, or network). If knowledge is only held at Ihe individual level, then firms could change simply by employee turnover. Because we know that hiring new workers is not equivalent to changing the skills of a firm, an analysis of what firms can do must understand knowledge as embedded in the organizing principles by which people cooperate within organizations. Based on this discussion, a paradox is identified: efforts by a firm to grow by the replication of its technology enhances the potential for imitation. By considering how firms can deter imitation by innovation, we develop a more dynamic view of how firms create new knowledge. We build up this dynamic perspective by suggesting that firms learn new skills by recombining their curreni capabilities. Because new ways of cooperating cannot be easily acquired, growth occurs by building on the social relationships that currently exist in a firm. What a firm has done before tends to predict what it can do in the future. In this sense, the cumulative knowledge of the firm provides options to expand in new but uncertain markets in the future. We discuss at length the example of the make/buy decision and propose several testable hypotheses regarding the boundaries of the firm, without appealing to the notion of opportunism.

Building competitive advantage in international acquisitions: grey box conditions, culture, status and meritocracy

Building competitive advantage in international acquisitions: : grey box conditions, culture, status, and meritocracy

‘Untangling Absorptive Capacity’ – The Salient Context of Projects

This paper advances the understanding of absorptive capacity by disentangling its four distinct sub-dimensions. Most of the studies in extant literature have treated absorptive capacity as unidimensional concept and as a firm-level construct without paying due attention to its organizational antecedents. Based on the observation that deliberated inter-unit knowledge transfer processes are mostly executed through projects in practice, we suggest that project specific characteristics (i.e., task, time and team) should be considered as salient and relevant antecedents of absorptive capacity. In that regard, we discuss how scope of task, composition of team and perceptions of time have varying and somewhat conflicting effects on acquisition, assimilation, transformation and exploitation dimensions of absorptive capacity.