Resources, Technology and Strategy Over recent years, the Resource-Based Perspective (RBP) has become a dominant force in strategic thinking Under the influence of RBP, managers have become more aware of their ability to control their destinies through the accumulation, and efficient use, of resources including production capabilities, marketing prowess, finance and organisational culture Technology is undoubtedly one of the most important factors in the strategic management of resources As the rate of change has accelerated in recent decades, firms have been challenged to use technological capabilities as weapons in their battles for market share This book brings together experts from Europe, North America and Asia to consider the strategic relationship between technology and other resources Much of Resources, Technology and Strategy is devoted to a theoretical examination of RBP, assessing its strengths and weaknesses Case studies reveal the importance both of having and not having strong technological capabilities in settings as diverse as the US semiconductor industry, small family manufacturing firms in Hong Kong and state owned enterprises in China Overall, this book demonstrates the usefulness of RBP for the analysis of strategic problems It shows the value of economic theory in providing a rigorous framework for considering the consequences of technological change in a dynamic framework Aimed at graduate specialists in the fields of strategic management and technology management, this book will also be a valuable resource for practitioners in the field Nicolai J.Foss is Professor of Economic Organisation at the Copenhagen Business School, Denmark He has edited a number of books and readers on management and economic organisation with Routledge such as Towards a Competence Theory of the Firm, and Economic Organisation, Capabilities and Coordination Paul L.Robertson is Professor of Management at the University of Wollongong in Australia He is the co-author of Firms, Markets and Economic Change: A Dynamic Theory of Business Institutions, and Authority and Control in Modern Industry, both published by Routledge Routledge Advances in Management and Business Studies Middle Managers in Europe Yves Frédéric Livian and John G.Burgoyne Marketing Apocalypse Eschatology, escapology and the illusion of the end Edited by Stephen Brown, Jim Bell and David Carson Relationship Marketing in Professional Services A study of agency-client dynamics in the advertising sector Aino Halinen Job Design and Technology Taylorism vs Anti-Taylorism Hans D.Prujt Regulation and Organisations: International Perspectives Edited by Glenn Morgan and Lars Engwall Information Technology, Organisations and People Transformations in the UK retail financial services sector Jeff Watkins HRM, Technical Workers and the Multinational Corporation Patrick McGovern The Internationalization of Small to Medium Enterprises The Interstratos Project Edited by Rik Donckels, Antti Haahti and Graham Hall Neo-Industrial Organising Renewal by action and knowledge formation in a project- intensive economy Rolf A.Lundin, Hans Wirdenius, Eskil Ekstedt and Anders Soderholm 10 Perspectives on Public Relations Research Edited by Danny Moss, Dejan Vercic and Gary Warnaby 11 Resources, Technology and Strategy Explorations in the resource-based perspective Edited by Nicolai J.Foss and Paul L.Robertson Resources, Technology and Strategy Explorations in the resource-based perspective Edited by Nicolai J.Foss and Paul L.Robertson London and New York First published 2000 by Routledge 11 New Fetter Lane, London EC4P 4EE Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2005 “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” © 2000 Nicolai J.Foss and Paul L.Robertson for selection and editorial matter All rights reserved No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Resources, technology, and strategy/[edited by] Nicolai J.Foss and Paul L.Robertson (Routledge advances in management and business studies) Includes bibliographical references and index Industrial management Strategic planning Technological innovations—Management Human capital I Foss, Nicolai J., 1964– II Robertson, Paul L III Series HD31.R464 2000 658–dc21 99–32605 CIP ISBN 0-203-98225-8 Master e-book ISBN ISBN 0-415-21585-4 (Print Edition) Contents List of tables and figures vii The contributors ix Introduction: resources, technology and strategy NICOLAI J.FOSSPAUL L.ROBERTSON Equilibrium vs evolution in the resource-based perspective: the conflicting legacies of Demsetz and Penrose NICOLAI J.FOSS 11 Knowledge and capabilities: a new view of the firm J.STANLEY METCALFEANDREW JAMES 31 Synthesising resource-based, evolutionary and neoclassical thought: resource-advantage theory as a general theory of competition SHELBY D.HUNT 53 A processual account of innovative capabilities PETER W.ROBERTS 79 Product and process architectures in the management of knowledge resources RON SANCHEZ 99 Building innovative assets and dynamic coherence in multi-technology companies JENS FRØSLEV CHRISTENSEN 121 Dynamic complementarities and technology acquisition TOMI LAAMANENERKKO AUTIO 149 Economic organisation and the accumulation of rent-yielding assets KIRSTEN FOSS 171 Capabilities and vertical disintegration in process technology: the case of semiconductor fabrication equipment RICHARD N.LANGLOIS 193 10 vi 11 Technological capabilities and the strategies of small manufacturing firms: the case of Hong Kong TONY F.YUPAUL L.ROBERTSON 219 12 Technological capabilities and foreign direct investment in China YIZHENG SHI 243 Index 261 Tables and figures Tables 4.1 Foundational propositions of Perfect Competition and Resource-Advantage theory 6.1 Comparison of product definition, design and development in creating conventional versus modular product architecture 6.2 Know-how, know-why and know-what forms of knowledge 7.1 Combinations of categories of innovative assets and their contributions to competitive advantage 7.2 The relationship between categories of innovative asset dynamics, and the dominant features of innovative assets 8.1 Life cycle stages of the acquired companies cross-tabulated with industry sectors 8.2 Regression equations of three regression analyses: with all variables that correlated with the compound measure of success; with same variables as in but with a backward elimination procedure with a significance level of 0.10; with same variables as in but with a forward elimination procedure with a significance level of 0.05 10.1 Top ten semiconductor equipment suppliers, 1979 and 1989 10.2 Top ten semiconductor equipment suppliers, 1996 12.1 Foreign direct investment in China (US$ million) 12.2 Foreign direct investment in China by country of origin 12.3 Hong Kong imports from China (US$ million) 12.4 Technological assets and FDI strategies of firms 60 105 114 126 133 158 161 196 197 249 250 251 257 Figures 4.1 4.2 5.1 5.2 5.3 5.4 A schematic of the Resource-Advantage theory of competition Competitive position matrix Hierarchy of firm capabilities Series of positional advantages Non-deterministic representations of innovation Innovative capabilities: a reconciliation 58 59 80 83 90 91 viii 6.1 Modular product architecture as coordinating mechanism for modular process architectures 6.2 Loosely coupled learning processes for developing know-how, know-why and know-what knowledge 8.1 A process model on the evolution of technology-based company networks and dynamic complementarities with the assumption that a fundamental discontinuity starts the evolution 8.2 Distribution of the studied acquisitions according to the industry; N=111 8.3 Size distribution of the companies in the sample 8.4 Results of the regression analysis with the component and compound measures of success 8.5 An illustration of the influence of complementarities on the sales revenue of the acquired company 10.1 A parallel-processing configuration 10.2 A hypothetical modular integrated-processing system (after Burggraaf 1989) 111 114 154 157 157 161 166 200 201 The contributors Erkko Autio is Professor of Industrial Management, Department of Strategy and International Business, Helsinki University of Technology Jens Frøslev Christensen is Professor of Technology Strategy, Department of Industrial Economics and Strategy, Copenhagen Business School Kirsten Foss is Associate Professor (technology strategy, economic organisation), Department of Industrial Economics and Strategy, Copenhagen Business School Nicolai J.Foss is Professor (economic organisation), Department of Industrial Economics and Strategy, Copenhagen Business School, and director of the RESPECT research group Shelby D.Hunt is the J.B.Hoskins and P.W.Horn Professor of Marketing, Texas Tech University, College of Business Administration, Area of Marketing Andrew James is Research Fellow, PREST (Policy Research in Engineering, Science and Technology), University of Manchester Tomi Laamanen is Professor of Industrial Management, Department of Strategy and International Business, Helsinki University of Technology Richard N.Langlois is Professor of Economics and Management, Department of Economics and Department of Management, University of Connecticut J.Stanley Metcalfe is Professor and Director of CRIC (Centre for Research on Innovation and Competition), University of Manchester Peter W.Roberts is Assistant Professor, GSIA, Carnegie-Mellon University Paul L.Robertson is Professor, Department of Management, University of Wollongong Ron Sanchez is Professor, Institute for Management Development, Switzerland Yizheng Shi is Assistant Professor, Department of Marketing, Hong Kong Baptist University Tony F.Yu is Research Fellow, School of Economics and Management, University College, University of New South Wales YIZHENG SHI 259 References Allouche, Jose and Gerard Pogorel (1995) Technology Management and Corporate Strategies: A Tricontinental Perspective, Amsterdam, New York and Oxford: Elsevier Science, North Holland Caves, R.E (1982) Multinational Enterprise and Economic Analysis, Cambridge: Cambridge University Press Chen, Chien-hsun (1996) ‘Regional Determinants of Foreign Direct Investment in Mainland China’, Journal of Economic Studies 23(2):18–30 Chen, E.K.Y (1983) ‘Multinational 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(1993) The Theory of Transnational Corporations, London: Routledge Eng, I (1996) ‘Flexible Production in Late Industrialization: The Case of Hong Kong’, Economic Geography 72:26–43 Eng, I and Y.Lin (1996) ‘Seeking Competitive Advantage in an Emergent Open Economy: Foreign Direct Investment in Chinese Industry’, Environment and Planning A 28:1113–38 Graham, Edward M (1995) Foreign Direct Investment in the World Economy, International Monetary Fund Working Paper 95/59:22 Guisinger, Stephen (1986) ‘Host Country Policies to Attract and Control Foreign Investment’, in John Dunning (ed.) 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(1995) Zhongguo Duiwai Jingji Maoyi Zhengce Zhinan (Guidebook of China Foreign Economic and Trade Policies), Beijing: China Economic Management Press Narula, Rajneesh (1996) ‘Multinational Investment and Economic Structure: Globalisation and Competitiveness’, Studies in International Business and the World Economy, vol 4, London and New York: Routledge Panagariya, Arvind (1995) ‘What Can We Learn from China’s Export Strategy?’, Finance and Development 32(2):32–4 Pavitt, K (1985) ‘Technology Transfer among the Industrially Advanced Countries: An Overview’, in N.Rosenberg and C.Frischtak (eds), International Technology Transfer, New York: Praeger 260 TECHNOLOGICAL CAPABILITIES AND FOREIGN DIRECT INVESTMENT IN CHINA Saggi, Kamal (1996) ‘Entry into a Foreign Market: Foreign Direct Investment versus Licensing’, Review of International Economics 4(1):99–104 Shi, Yizheng (forthcoming) Chinese Firms and Technology in the Reform Era, London: Routledge SSB (State Statistics Bureau) (1996) China Statistics Yearbook 1995, Beijing: China Statistics Publishing House Sun, Nansheng (1996) ‘Sanzi Qiye Jishu de Fenxi yu Duice (The Analysis and Solution to the Problems in Technology Transfer of Foreign Invested Firms)’, Guoji Maoyi Wenti (International Trade Issues) 6:31–5 Thoburn, J., H.M.Leung, E.Chau and S.H.Tang (1990) Foreign Investment in China under the Open Policy, Aldershot: Avebury Wang, Yonggui (1996) ‘Liyong Waizi zhong yi Shichang huan Jishu Boxi (The Analysis of the Marketfor-Technology Policy in Attracting Foreign Investment)’, Guoji Maoyi Wenti (International Trade Issues) 9:50–3 Wang, Zhile (1996) Zhuming Kuaguo Gongsi zai Zongguo de Touzi (The Investment of Famous Transnational Corporations in China), Beijing: China Economic Press Wu, Nengquan (1995) Guangdong ‘Sanzi’ Qiye Xiaoji Fengxi (Performance Analysis of FDI Firms in Guangdong), Guangzhou: Zhongshan University Press Zhang, Jingsheng (1996) ‘Yingjin Waizi Zhanlue (The Strategy to Attract Foreign Investment)’, Guoji Maoyi Wenti (International Trade Issues) 10:11–16 Zhao, Hongxin (1995) ‘Technology Import and Its Impacts on the Enhancement of China’s Indigenous Technological Capability’, Journal of Development Studies April, 31(4):583–603 Index 3M 121, 135–9, 139–5 Abernathy, W 153 abstraction: in RBP 23 accumulation 46, 100, 170–9, 182, 186 acquisition: 29, 34, 44–9; company 148–73; competence 148–8; technology 6, 148–73, 242 Acta-Scanner 126 activities: firm 80 adaptability 227, 229 adaptive imaginary representations 36, 42 administrative skills: slack advertising 18–19 after-sales service 122, 125, 127 agency: problem 69 Alchian, A.A 22, 174, 179 alertness: entrepreneurial 81, 93–6 alliances 34, 64 Alston, L.J altruism 68 ambiguity: causal 82 Amit, R 7, 9, 41, 56 amortisation 127–1, 132–6, 136–42 Amsden, A.H 220, 234 Anderson, P 153 Andrews, K 11 Anelva 212 antitrust: analysis 18–19 Applied Materials 195–3, 206–19 architecture 97–19; knowledge 99–2, 102, 108–18; process 99–4, 106–19; product 99–19; technological 193 Arrow, K 42, 224 Arthur, B 37 Asia 191, 196, 218, 234; East 223, 232, 235, 242, 245; Southeast 235 ASIC (application-specific integrated circuits) 205–13 ASM Japan 212 assets 120, 170–9, 174–3, 178–7, 182–90, 185, 186–5, 221, 228; accumulation 100, 170; amortisation 127–1, 132–6, 136–42; building 127, 129, 132, 137, 138; complementary 121–5, 126, 128–2, 131– 5, 136–40; creation 127–3, 132–6, 137; definition 121; domain-specific 121–7, 131–6; dynamics 127–7; firm-specific 121–8, 131–6; fission 128–6, 138–2, 143; generic 121–8, 131–6; improvement 127–3, 132–6, 137; innovative 120–48; integrative 121–8, 131–6; knowledge-based 88; rent-yielding 170, 172, 176, 172; tangible 62; transaction-specific 51 261 262 INDEX Baldwin, C 193 Barbeschi, M 166 Barney, J ix, 5–6, 9, 12, 20–4, 40, 55, 82, 149, 167, 186–4 barriers to entry 18, 70, 187, 246, 251 Barzel, Y 173, 179 batch processing 197–6, 202, 205 behaviour 68–68; innovative 89; organisational 83 Benjamin, R 108 Berger, S 220, 223–3, 234 Berry, C.A 150 Black, J.A 56 Boal, K.B 56 Bolton, M.K 231 Bower, J.L 111 brand: loyalty 19 Brumagim, A.L 56, 80, 83 business: theory of 43, 46–9 Canon 210 capabilities 29, 42–4, 53–5, 77, 81–7, 93, 112– 15, 115, 120, 122–6, 133–7, 138, 144, 153, 177–5, 184, 191–212, 219, 221–1 225, 228, 234; causal ambiguity of 44–7, 47; collective 43–6; core 80; corporate renewal 23; creative 79–2; definition of 7, 121; distinctive 46; dynamic 54, 64, 79, 89; economic 191; exploitation of 33; firm specific 97–1; industry 97, 228; innovative 77–94, 123, 125–9, 129; internal 191, 203, 206; learning 102; personal 92; positional 77–5, 86–92; process 112, 113; productive 34; rare 77, 81–4, 86; self-diagnostic 106; technological 218–45, 242–68; theory of the firm 29–5, 40–9; valuable 77, 86 capital 154, 223, 246–8, 251, 253, 258; equipment 5; human 62, 176, 183; information 64 Carlsson, B 51 Casson, M 237 Caves, R.E 243 Chandler, A.D 11, 191, 226–6 change: endogenous 23 Chau, L.C 218 Cheah, H.B 218 Chen, E 244 Cheung, F.K 218 Cheung, S.N.S 179 Chicago: price theory 18; University of 18, 53 Chiesa, V 166 China: People’s Republic of 7, 220, 233–5, 242– 68; see also special economic zones; state owned enterprises Chinese firms 218–9, 227–45 Chiu, S.W.K 235 Christensen, C 111, 121, 133, 166 citizens 68 Clark, K 193 cluster tools 196, 203, 205, 206, 208; flexible 196; integrated 200; modular 196, 200–20; proprietary 201, 204 Coase, R 31, 171, 177–90, 185–3, 187, 221 Cockburn, I 83, 88, 94, 149 codes: moral 57, 67, 68–1 coherence: contextual 134, 136–42; corporate 121, 133, 139, 152; dynamic 6, 133–43, 141, 143–8; INDEX 263 explorative 137–2; local 134–8, 138, 141; technology base 121–5, 133–48 collaboration 31, 44, 150–6, 153, 164–70, 166 collective 42 Collis, D.J 56, 79–2, 92 Coloplast 129–4 Comanor, W 83–6, 88 communication 42, 229 competence 2, 51–5, 55, 64, 70–3, 120, 123, 133, 138, 149, 184, 221–1; acquisition 148–8; architectural 83; building 11, 15; component 83; core 2, 6, 139; definition 121; destruction 5; differences 61; enhancement 5; entrepreneurial 58; innovative 128–2; internal 148; organisational 97, 125, 149; perspective 51–6, 62–7, 71, 100, 134, 144; pool 42; technological 148 competencies: see competence competition 29, 33–5, 47, 56–8, 59, 65, 68, 70–4, 80–4, 85, 92, 191, 203, 210–19, 219, 225, 229, 243, 251–2, 255–6; competence based 54, 97, 100; hyper- 2, 5, 23, 82; limits to 13, 20, 82; perfect 19, 55, 58, 64–8, 68–4, 224; see also dynamic routines competitive advantage 5–6, 12–15, 21–3, 23, 29, 33–5, 40–2, 43, 47, 54–6, 58, 59, 64, 71, 79–5, 86–9, 124, 128, 132, 137, 170, 185, 186–5, 244–6, 256; Big Bang Theories of 23; differential 20; equilibrium 14; process 17, 33; sustainable 77, 89, 92, 94, 125, 132, 138; theory 56 competitor 63, 68; actions of 61; alliances with 64; imitation 77, 80–3, 92 complementarity: dynamic 6, 150, 152–63, 164–72 complexity 35, 37, 41, 45, 47, 106, 108, 111, 115 components 102–14, 116 conceptual framework 97 Conner, K 56 construction: social consumer 55, 57–9; behaviour 61; taste 66, 70 context 42, 43, 100, 108, 111, 134, 136 contractual: perspective 31, 33, 51; theories 171–86, 183–2 Cool, K 9, 56, 186–4 coordination 101, 108, 171, 178–8, 183, 185– 5, 221–1; of resources 14, 100 core competence approach corporate: coherence 121, 133, 152; control 44; entrepreneurship 83; imagination 115; renewal 2, 23 costs 106; information 16, 18–20, 22, 171, 173, 180, 183; sunk 132; transaction 14, 32, 68, 125, 171–90, 187, 193, 206, 224, 243 Crawford, R.G 174 creative destruction 79 creativity 33, 42, 79, 128, 176 credit rationing 19 culture: organisational customer 5, 41, 222; base 64; relationships with 33–5; support 111 customs 57 264 INDEX Cyert, R.M 232 D’Aveni, R.A 5, 82 decision: making 35; theory 14 decomposition 103, 106 DeFillippi, R.J 56, 82 DeltaScan 126 demand 66 Demsetz, H 9–12, 15, 18–24, 51, 174, 187 deontology 57, 67–9 design: configuration 38–39, 43; costs 106; product 103, 106–9, 154, 231; protocol 109–12, 112; rules 193; technological 38 destruction: creative 79 determinism 81, 84–8; non- 81, 86–9, 89, 92–5 development: internal 16, 148, 150, 152 Dierickx, I 9, 13, 56, 186–4 differences: systematic, between firms 12–13 diffusion of technologies 4, discovery 85, 88, 89; entrepreneurial 80, 84, 86–9, 91–4 distribution 110, 122, 149, 154, 156, 163–9, 167; costs 106 diversification 14, 120, 127, 144 Dodwell, D 220 Dosi, G 37–9, 55, 64, 99 Doz, Y 121, 166 DRAM (dynamic random-access memory) 195, 197–5, 202, 205, 210–19, 213 Du Pont 138 Dunning, J 243 dynamic: basis of competition 33; capabilities 54, 64, 79, 89–3; coherence 6, 133–43, 141, 143; complementarities 6, 150, 152–63, 164– 72; efficiency 101; explorative 132–6, 137, 138–3; factors in RBP 15, 22–4, 77–1; of innovative assets 127–6; of knowledge 47; optimisation problem 15; reproductive 132–6, 137–2, 143; routines 81, 87, 89–6 economic organisation 170–8 economics 15, 23–6, 34, 65, 71; Austrian 7, 12, 23–6, 56, 79–3, 84–88, 92– 6, 171, 173–1, 176, 186; equilibrium 11, 23–6; evolutionary 6–7, 12, 24, 54, 56, 58, 71; heterodox 16; industrial organisation 18; institutional 56; mainstream 16, 24, 79, 87; neoclassical 2, 4, 15–16, 23, 61–3, 64–7, 69, 171, 173, 191, 224; non-neoclassical 15, 22; Schumpeterian 17; standard 2, 15; subjectivist 84, 173, 176–4, 179, 186; transaction cost 68–68; Veblenian 17 economies: of scale 191, 203, 243, 246; of scope 194, 203–12 effects: firm 62, 65, 70; industry 62, 65, 70; learning 20; system 1; team 20 efficiency 14, 54, 229; differential 20 egoism 67–9 Eliasson, G 51 EMI: CT-scanner 126–30, 136, 138–2 employment contract 173, 180–8, 183 enabling capacity 63 encapsulation 157, 164–3 INDEX 265 endogenous: change 23; creation of resources 3, 6, 23–5; growth 29, 34, 71; innovation 55, 71; organisational learning 55; production of services 16; technological progress 70–4 ends 77, 80, 91; see also outcomes Enright, M.J.E 220 entrepreneur 51, 59, 85, 87, 94, 148, 154–60, 183, 228 entrepreneurship 11, 17–18, 22–4, 53, 56, 59, 63, 80–3, 83–7, 87, 92, 171, 176, 191, 219, 222, 225, 230; Arbitraging 225; corporate 83, 85, 87, 89–3, 93 entry: barriers to 18, 70, 187, 246, 251 environment 24; problem 1, epistemology 64, 86; evolutionary 36 equilibrium 2, 15–16, 23–6, 69–3, 84–7, 87, 184; approach in RBP 5–6, 9–26, 54, 64, 79; competitive 14; economic 11–12, 22; Nash 22; organisational 16; Pareto-optimal 55; price theory 13; Walrasian 70–3 Eriksen, B 97, 100, 230 Espy, J.L 218 essentialism: methodological 33 ethics 67–9, 69; deontological 57, 67–9; teleological 67 Etzioni, A 68 evolution 2, 5, 85, 93; economic 29; industrial 191; market 92; technological 54, 154, 163 evolutionary: approach in RBP 6, 9–26, 29, 51–72, 80, 94; discovery process 18; dynamics 47; economics 6–7, 12, 24, 54, 56, 58, 71; epistemology 36; factors in RBP 15; theories of competitive process 33 exogenous: technological progress 70 expectations 85–8, 88, 91–5, 223 experience 35, 46, 86, 88 experimentation 133, 138, 170–8, 178–6, 182– 99, 185, 186; business 44 exploitation 133, 137; of capabilities 33 exploration 33, 133, 137–1 external: resources 4, 97–1, 148; technological environment factor: imperfections 22; market 14, 55, 63, 121; services 32 Fairchild 195 family 222–3, 226, 228–8; firms 219–45 Federal Trade Commission 62 Ferguson, C.H 193–1 fictional worlds 36 financial success 159, 160, 163 firm, the 29–47, 51–4, 55, 58, 64, 71, 173, 221–1, 232; activities 80; diversity 54, 61; effects 62, 65, 70; entrepreneurial 81; information 68; nature of 29–4, 178–8; objective 68; reputation 82; small 218–45; theories of 29, 51, 54, 173, 184 fixed wage contract 173 266 INDEX flexibility 17, 22, 89, 104, 116, 191, 205–13, 220, 225–9, 233 foreign direct investment 242–68 formalism: in RBP 23–6 Foss, N.J 7, 45, 51–5, 55, 61, 64, 71, 94, 97, 100, 121, 133, 166, 172, 174 fragmentation 121, 139, 141–8, 196 Fry, A 135 Fukuyama, F 227, 235 functionality 102–7 Government Industry department 227, 231–1; small manufacturers in 6, 218–45 Hughes, T.P human: motivation 67–68 humanware 150 hustle strategies 220, 222, 226, 230, 231, 234 hyper-competition 2, 5, 23, 82 hypothesis: testing 38 Gates, B 3, GE (General Electric) 126–30 General Motors 20, 138 General Signal Thinfilm Company 208 German companies 226, 253–4 Grant, R.M 56, 81–4 growth: economic 47; policy 34 Grundfos 125–9 Gulati, R 152 GW Systems 204 Iansiti, M 124 IBM 20, 138, 202, 204, 207, 210 ICI (Imperial Chemical Industries) 121, 139, 141–7 ideas: generation of 36 IG Farben 141 ignorance 36, 85, 88, 171, 174 imagination 35–8; corporate 115; see also adaptive imaginary representations imitation 1, 55, 71, 77–6, 88, 91–5, 124–8, 148, 185, 218, 231–2; barriers 21, 185–3; imperfect 41; perfect 89; resource 59 imperfect mobility 13 indeterminacy 93–6 individuals 42, 64, 85–8, 88 Indonesia 233 inductive reasoning 37 industrial organisation: theory of 18 industry: effects 62, 65, 70 information 43, 66, 68, 109, 152, 175–3, 178, 181; capital 64; costs 16, 18–20, 22, 171, 173, 180, 183; impactedness 82; imperfect 55, 58; processing perspective 108; sticky 108–11; structures 100 Hamel, G 2, 12, 22, 23, 43, 51, 56, 166, 184 Hansen, M.H 56 Hanson 143 Harrigan, K.R 150 Harrison, T 143 Hart, O 174, 176 Harvard Business School 126 Hatch, W 233, 235 Henderson, R 83, 88, 94, 149 heterogeneity 13, 20; of firms 23; resource 40, 59, 185 heterogenous demand 61; theory 56, 58 High Vacuum Apparatus 204 history 36, 44, 46, 61, 81, 89, 184, 186; corporate 46 Hitachi 210, 212, 230 Hobday, M 232 Hodgson, G.M 54, 64, 72 Hong Kong 6, 242–4, 248–63, 258; INDEX 267 infoware 149 innovation 11, 23, 24, 35–8, 39–2, 58, 79, 94, 120–48, 154, 156, 166, 182, 222, 225; autonomous 193; endogenous 55, 71; networks 153; policy 34, 47; proactive 59; race models of 83, 88; reactive 59; routines 80; systemic 191–193; systems 34; technological 12, 24, 121–30, 132; unanticipated 15; see also innovative innovative: assets 120–48; capabilities 77–94, 123 institutional: economics 56; systems approach 29 institutions: economic 56; societal 57, 59–2 integration 150–6, 157, 160–8, 164–2 vertical 71, 141, 191, 196, 210, 224, 243 intellectual property 64, 123 intention: strategic 43, 44, 46, 97 interfaces 103–6, 109–12, 193 internal: capabilities 191, 203, 206; development 16, 148, 150, 152; properties of the firm 29; resources 148; technological environment international: trade theory 59 intra-firm learning processess 16 introspective: RBP as irreversibility 15 isolated resource problem 1, 3, 5–6 isolating mechanisms 79, 82 Jacobson, R 87 James, A 23 Japan 107, 230, 248, 253–4; multinationals in 219, 233, 235; semiconductor industry in 196, 203, 206, 210–20 joint ventures 34, 44 judgment 35, 38 Kay, J keiretsu 210 Ketteringham, J.M 135 Kirzner, I 84–8, 88, 222 Klein, B 22, 51, 174 know-how 101–4, 113–17, 229, 243 knowledge 29–47, 55, 80, 85, 88, 89–5, 101– 4, 106, 149, 160–8, 180, 221–5, 235; accumulation of 32, 171–9, 179, 187; architectures 99–2, 102, 108–15; based view of the firm 40; codified 38; -creating company 2, 23; differential 43; discovery process 56; firm’s 37–40, 43; fragility of 45; generation 34, 37, 45; management 183, 185–4; market 39, 43; new 86; organisational 101–4, 113; paradigm view of 41; resources 14, 97–2, 109, 113; tacit 43–7, 51, 64, 71, 124, 229; technological 29, 34, 37, 45, 100, 222, 226–6 know-what 101–4, 113–18 know-why 101–4, 113–18 Knudsen, C 54 Kokusai 212 Korea 218; semiconductor industry in 196, 206, 211 Kuhn, T 37, 39 Kwok, P 218 Laamanen, T 155 labour 5, 178, 244, 246, 257; costs 220, 234, 233, 251, 253; 268 INDEX division of 31, 41–3 Lado, A.A 56 Lam Research 206–15, 209 Landes, D.S 226 Lang, J.W 116 Langlois, R.N 35, 51–5, 69, 171–9, 176–4, 187, 194 learning 11, 15, 22–4, 86–9, 100, 102, 138, 151, 183–1, 187; by doing 133, 182, 198, 203; by using 133; costs 179, 183; effects 20; in firms 6; genuine 85, 93; 116; intra-firm 16; organisational 2, 15, 18, 23, 24, 42, 55, 58, 80, 83, 99, 101, 108, 112–19, 167; paths 170–8; resource 17; technological 116 Lengnick-Hall, C 83, 150 Leonard-Barton, D 80 Lester, R.K 220, 234 Levy, G.B 55, 65 Lippman, S 11, 21–4, 56 Littlechild, S.C 171–9, 174–2, 179 Luhmann, N 223 Luks Electronics Ltd 230 Macao 248 Madhok, A 56 Mahony, J.T 106 Malone, T.W 108 management: role 63 managerial: authority 107; processes 32, 64 manufacturers: small manufacturing 122; industry March, J.G 138, 232 Mark I RBP 11–12, 15, 21–4, 24 Mark II RBP 11–12, 15, 22–4 market 31, 47, 85, 178, 193, 221, 233, 243, 246, 258; -based economies 57; future 92; offerings 63–5; performance 40; power 54; position 34, 57; preferences 115; process 23, 32, 47, 79–3, 84–9, 93, 172; segments 58, 59–2, 63, 68, 71, 103; share ix, 254; structure 1, 4; success 159, 160, 163; trends 113–17 marketing 3, 41, 122–6, 125, 127, 154, 156, 232, 246, 252, 256; heterogeneous demand theory 56, 58; research 103 Markides, C.C 121, 127, 129 Marshall, A 34 materials: raw 3, Matsushita 231, 255–6 maximisation 23 Mayo, J 143 McKelvey, M 42 McNulty, P 31 MDC Vacuum Products 204 means 80, 91; -ends framework 77, 80–3, 84, 87–89, 92–5 mechanisms: isolating 79, 82 memory 43; organisational 167 mergers 29, 44, 46–9 MESA (Modular Equipment Standards Architecture) 207–17 MESC (Modular Equipment Standards Committee) 207–18, 212 Metcalfe, J.S 23 Microsoft 3, 116 Mikkelsen, J 230 mobility: imperfect 13, 41 modular: processes 6, 100–91; products 7, 100–19 INDEX 269 modularity 99–19, 193–1, 197, 201–20 monopoly 18–19, 82–5, 245 Montgomery, C.A 7, 9, 54, 56 moral: codes 57, 67, 68 Morris, C.R 193–1 motivation: human 67–68 Motorola 255 multinational companies 164, 219, 233, 235, 244; see also transnational corporations multi-technology companies 120–48 Nayak, P.R 135 Nelson, R 39, 55, 61, 64, 80, 94 New Growth Theorists 2–3 newly industrialised: countries 218–8, 233; economies 242, 244–7, 249, 256 niche market 3, 103, 245 nihilism 91 Nikon 210 Novellus 206–15 novelty 15, 23, 39, 47, 85, 89 O’Driscoll, G 84–9 Ohio Nuclear 126 oligopoly open door policy: in China 242, 247, 249 opportunism 51, 68, 175, 221, 223–3 opportunity 91–5; productive 148; technological 123 organisation 41–3, 43; economic 170–8; memory 43; style organisational: behaviours 83; competences 97, 125, 149; knowledge 101–4; learning 2, 15, 18, 23, 24, 55, 58, 80, 83, 99, 101, 108, 112–19, 167; processes 45, 64; routines 88; structures 41, 83 orgaware 150 original equipment manufacturers 219–9, 231, 233 outcomes 80, 88–4 outputs 79; innovative 84 Owen, G 143 paradigms 38; scientific 39; technological 24, 37–39, 93–6; view of knowledge 41 partnering 208 patents 59, 82, 123, 126, 148, 160, 185 path 91–4: dependence 5, 15, 18, 37, 55, 87, 94, 133; intellectual 9; prescribed 91 pattern recognition 37 Pelikan, P 51 Penrose, E.T ix, 3, 9–12, 14–18, 21–4, 24, 32, 40, 43, 51, 54, 56, 95, 194 perfect competition 19, 55, 58, 64–8, 68–4 performance 38; financial 57, 68–3, 77, 81–6; levels 101, 103, 104; market 40 personal computers 104, 194, 196, 204, 210 Peteraf, M.A 5–6, 56, 82 Pettigrew, A 142 pharmaceutical industry 83–6, 94, 255 Philips 138, 255 Phillips, R.L 62, 65 philosophy: moral 67; of science 65 Pisano, G 64 platform 103; design 104 policy: growth 34; innovation 34, 47; public 57, 61 Porro Technologies Ltd 230 Post, H.A 115 power: 270 INDEX relationships within firms Prahalad, C.K 2, 11–12, 22, 23, 43, 51, 56, 184 praxeology 84 price theory 13, 18 prices 79, 178–9; maximum 103 prisoner’s dilemma 68 problem; agency 69; dynamic optimisation 15; environment 1, 3; isolated resource 1, 3, 5; resource application 1, 6; resource creation 1; resource organisation 1, 5–6 process: analysis 15; architectures 99–4; artefacts 38; issues 23; new 34, 89; technology 2, 191–212 procurement 123 product: architectures 99–8; artefacts 38; market applications 16; new 34, 89; portfolio 130, 144; strategy 97; technologies production 3, 41; costs 106; organisation of 33 productive: capabilities 34; opportunity 16, 41 profit 68 progress 38 property: intellectual 64, 123; rights 6, 18, 180, 235 psychology 14 puzzle: solving 38 Quélin, B 150 race models of innovation 83, 88, 93 Rank Xerox 138 rational reconstruction 21 rationality: 34–8, 171; bounded 35, 40, 51, 152, 175, 179, 221; comprehensive 35; maximising 23; Olympian 35; reasonable 35 reality: models of 36 Realtime Performance 204 reasoning: inductive 37 Redding, S.G 218 Reed, R 56, 82 regime: technological 39, 99–3, 116 regulatory bodies renewal: corporate 2, 23 rent: capability 44; differential 43; earning 170–8, 176, 184–2; in equilibrium 23; quasi-sustainable 43; Ricardian 5, 14, 174, 184 representation: spatial 86 reputation 82, 97, 206 research and development 3, 41, 83, 122, 124, 131–5, 138, 140, 142, 160, 170, 186, 220, 231, 234, 245 resource: accumulation 15; -advantage theory 54–72; application problem 1, 6; base 7, 87; building 3; bundles 20, 41, 43, 54–6, 77, 184; characteristics 66; creation problem 1–2; firm-addressable 97–1, 101; firm-specific 97–1, 101; INDEX 271 heterogeneity 40, 185; learning 17; organisation problem 1, 5–6; see also resources resources 1, 54, 80, 97, 246; administrative 80; advantage producing 59; application of 17; assortments of 61; basic 55, 63, 71; competences as 62; complementary 5–6; coordination of 14; creation of 3, 6, 12, 14–15, 23, 24, 58; definition of 7, 121, 149; excess 14, 16; existing 1, 15; external 4, 97, 148; financial 63, 225, 227; human 1, 14, 40, 63, 149; immobile 59; informational 63; internal 4, 148; isolated 4–5; knowledge 14, 97–2, 109, 113; legal 63; maintenance 80; managerial 14, 16; organisational 40, 63, 80, 83, 149; physical 14, 40, 63, 149, 228; portfolio of ix; production 80; relational 63; societal 57, 61; technological 4–5, 7, 99; see also resource responsiveness 89 reverse salients revolution: permanent rights 174, 176, 179, 182–90, 185; property 6, 18, 180, 235 Rizzo, M 84–9 Roberts, E.B 150 Robertson, P.L 5, 53–5, 171–9, 176–4, 187, 194, 219 Romer, P.M 72 Roquebert, J.A 62, 65 Rothwell, R 165 routines 42–8, 53–5; dynamic 81, 87, 89–6; innovation 80; organisational 77; search 91–5; static 80 Rubin, P 15 Rumelt, R ix, 9–12, 21–4, 56, 62, 82–5, 184– Sako, M 222–2 Samsung 211, 255 Sanchez, R 118, 121, 149, 166 Sanderson, S 130 Sanyo 256 saving 68 Saxonian, A 99 Schendel, D 56 Schmalensee, R 62 Schoemaker, P.J H 7, 41, 56 Schumpeter, J.A 37, 57, 77–1, 152, 191, 222 science 36–39; philosophy of 65 Scott, E 220 Sellars, W 55, 65 Selznick, P ix, 11, 21 Sematech 208–17 semiconductor: fabrication equipment 195–20; industry 6, 194–20 service: costs 106; productive 40 Shackle, G.L S 35 shareholders 68 Shi, Y 234 Siemens 256 Silicon Valley 194, 208, 218 Silver, S 135 Simon, H.A 35, 106 Singapore 211, 218, 234–5 single-wafer processing 197–12 Sit, V 229 skills 34, 38, 41, 55, 88, 120, 251, 258 slack administrative skills small firms 218–45, 245, 256 272 INDEX Smith, A 34, 181, 193 social construction 5, 224 socialisation 68–1, 223 societal: institutions 57, 59–2; resources 57, 61 socioeconomics 56 sociology 15 soft: approach in RBP 11, 24 Solow, R.M Sony 106, 129–3 space 61; resources and capabilities 97–3 spatial representation 86 special economic zones 252–3 specialisation 17, 31, 43, 99, 125, 179–90, 186– 5, 191–194, 202–12; technological 100 Spender, J.-C 22 stakeholders 5, 67 standardisation 100–3, 116, 193, 202–12, 206– 20, 244–5 state owned enterprises 242, 253 Stokey, N 72 Stowsky, J.S 196 strategic intention 43, 44, 46 structure-conduct-performance approach 1, 18– 19, 62 subcontracting 229–9, 231, 252 subjectivism 17, 84, 86–9, 91, 93, 171, 173, 176–4, 179, 186 Sung, Y.-W 231 suppliers 34, 41, 68, 222; actions of 61; relations with 64 sustainability regime 82 taboos 57 Taiwan 218–8, 235, 248; semiconductor industry in 211 Talouselämä 154–60 target: of acquisition 45–9 team 41–3; -effects 20; members 32; production 51, 173 Technicare 126, 127 technological: capabilities 218–45; environments 2; evolution 54; paradigms 24, 37–39, 93–6; paths 88–1; progress 70–4, 102; regime 39, 99–3, 116; success 157–4, 160, 163, 164 technologies: common 99; diffusion of 4, 7; process 2, 4; product 2, technology 36–39: acquisition 6; base 120–5, 130, 132–48; development of 29; diversification 120; high- 3–4, 7, 224–5, 234; integration 124; low- 4, 7, 219–9, 224–5, 233–4; medium- 4, 224–5; production 68, 84; research 84; strategy 97, 219–35, 233–4; systems 24; transfer 242–3, 247, 255, 258 technoware 149 Techware Systems 204 Teece, D 64, 121–5, 126, 133, 139, 149, 194 teleology 67 Temin, P 84, 88 Termbray Electronics Co 231 Texas Instruments 195, 201–9, 207, 232 Thesis 204 Thoburn, J 244 Thorn Electric Industries 127 time 61, 84, 88, 89, 132, 180; subjective 93 Tokyo Electron 212 tools: cluster 196–20 tradability 43 trade: international 59 INDEX 273 tradition 43, 57 training 43 transaction 32, 221, 224; costs 14, 32, 68, 125, 171–90, 187, 193, 206, 221, 224, 243; specific assets 51; typical economic 31 transnational corporations 242–7, 253–8; see also multinational companies trust 57, 68, 221–8; competence 222, 224–4, 230; contractual 222–2; goodwill 222–6, 229 Turk, T.A 167 Tushman, M.L 153 Ulvac 212 uncertainty 17, 171–9, 174–4, 179–7, 185–3, 223, 227–7, 231; technological 89, 170, 182, 187 United States 248; family businesses in 223, 226; multinationals in 219; semiconductor industry 7, 196, 203, 206– 20, 232 University of California, Los Angeles 18, 21 utilitarianism 67 utility 68 Utterback, J 153 Uzumeri M 130 VAT 204 vertical integration 71, 141, 191, 196, 210 224, 243 Vincenti, W.G 36, 38 von Hippel, E 108 voting behaviour 68 Vtech 231–2 Walrasian: general equilibrium 70 Wang, Z 253 Wernerfelt, B ix, 9, 184–2, 186, 188 West, J 124 Westfall, P.A 62, 65 Williams, J 82 Williamson, O.E 174–2, 187, 221, 224 Williamson, P.J 121, 127, 129 Wilson, D.S 36 Wilson, M.C 56 Winter, S 39, 80, 94 Wong, S 218, 228–8 Wu, N 254 Yamamura, K 233, 235 Yates, J 108 Young, A 72 Yu, T.F 218–8, 231 Zeneca 143 ... Data Resources, technology, and strategy/ [edited by] Nicolai J.Foss and Paul L.Robertson (Routledge advances in management and business studies) Includes bibliographical references and index Industrial... change in the way that many academics in strategy research conceptualise the strategy process and how they think about strategic content The strategy process is increasingly seen as beginning in. .. Laamanen is Professor of Industrial Management, Department of Strategy and International Business, Helsinki University of Technology Richard N.Langlois is Professor of Economics and Management, Department