Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of boxes
- Notes on contributors
- Preface: the reconfiguration of the world economy
- Part I Conceptual frameworks and theories
- Part II The offshoring and outsourcing of R&D and innovative activities
- 4 Blurring firm R&D boundaries
- 5 Outsourcing, fragmentation, and integration
- 6 Towards a better understanding of multinational enterprises' R&D location choices
- 7 Does R&D offshoring displace or strengthen knowledge production at home? Evidence from OECD countries
- 8 Innovation across tech-firms' boundaries
- 9 Suitable organization forms for knowledge management at various R&D functions in decentralized and cooperative R&D networks
- Part III Management issues in offshoring and virtual teamwork
- Part IV Empirical analyses and case studies of outsourcing and offshoring
- Index
- References
4 - Blurring firm R&D boundaries
Integrating transaction costs and knowledge-based perspectives
Published online by Cambridge University Press: 10 January 2011
- Frontmatter
- Contents
- List of figures
- List of tables
- List of boxes
- Notes on contributors
- Preface: the reconfiguration of the world economy
- Part I Conceptual frameworks and theories
- Part II The offshoring and outsourcing of R&D and innovative activities
- 4 Blurring firm R&D boundaries
- 5 Outsourcing, fragmentation, and integration
- 6 Towards a better understanding of multinational enterprises' R&D location choices
- 7 Does R&D offshoring displace or strengthen knowledge production at home? Evidence from OECD countries
- 8 Innovation across tech-firms' boundaries
- 9 Suitable organization forms for knowledge management at various R&D functions in decentralized and cooperative R&D networks
- Part III Management issues in offshoring and virtual teamwork
- Part IV Empirical analyses and case studies of outsourcing and offshoring
- Index
- References
Summary
Introduction
Firm boundary decisions have been traditionally studied through the lens of transaction cost theory (TCT) (Masten et al., 1991; Monteverde, 1995; Williamson, 1975, 1985). However, the challenging evidence associated with the worldwide diffusion of new outsourcing practices, such as advanced subcontracting in the automobile industry, has driven researchers to analyze this phenomenon using alternative – although somewhat complementary – paradigms like the knowledge-based view of the firm (KBVF) (Grant, 1997; Kogut and Zander, 1993; Madhok and Tallman, 1998; Malhotra, 2003; Moran and Ghoshal, 1996) or the relational view (RV) (Dyer and Singh, 1998).
Although these paradigms question some of the predictions of TCT, the underlying hypothesis of this paradigm – the minimization of production and transaction costs – remains valid (Barney and Ouchi, 1986). In relation to this, a new trend is drawing the attention of both academics and practitioners: increased outsourcing of high-value and knowledge-based services that have traditionally been conducted internally by the firm, even to emerging countries (Bunyaratavej et al., 2007, 2008; Doh, 2005; Lewin and Peeters, 2006; Kedia and Mukherjee, 2008; Kotabe and Murray, 1990, 2004; Mol et al., 2004, 2005; UNCTAD, 2004, 2005). As far as these services are concerned, this chapter will focus on R&D specifically. Like advanced subcontracting, the outsourcing phenomenon of R&D services is another example of a boundary decision that does not perfectly fit with TCT. Due to the fact that firms are both increasingly fragmenting their product development activities and outsourcing some of these stages to external specialized providers (UNCTAD, 2005), we analyze the governance-mode decision related to R&D services.
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- Information
- Global Outsourcing and OffshoringAn Integrated Approach to Theory and Corporate Strategy, pp. 107 - 136Publisher: Cambridge University PressPrint publication year: 2010