Technological and organizational designs for realizing economies of substitution

Article Abstract:

The present industrial environment is characterized by accelerated change and systemic technologies. Rapid change fosters shorter product life cycles that require firms to regularly innovate. Systemic technologies, on the other hand, undermines the ability of firms to produce all components of a technological system. To address these two challenges, the solution is the development of technological systems that can potentially generate economies of substitution, instead of economies of scale and scope. The concept of substitution involves the replacement of particular components of a technological system while reusing others to attain technological progress. Such economies can be achieved by applying the network mode of governance and using technological systems that are modularly upgradable. This approach guarantees shorter product-development time, improved ability to leverage past investments and offer continuity to customers.

Methods, Technological innovations, Product life cycle

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Changing competitive dynamics in network industries: an exploration of Sun Microsystems' open systems strategy

Article Abstract:

Sun Microsystems Inc allows competitors to learn from its technical knowledge and motivates them to enter its workstation market, despite conventional wisdom against such practice. Such an open systems strategy provides insights on the changes transpiring in industries characterized by technological systems and network externalities. In these industries, the relevant network boundaries of users are demarcated by the compatibility of the different technological systems offered by competing companies. The initiative of Sun Micros to create systems around industry benchmarks and to stimulate rivals to follow its lead is actually aimed at capitalizing on these industrial changes by increasing multisystem compatibility in the workstation market. By appropriating a technology sponsor role, Sun Micros thus enjoys a transient monopoly position in the workstation market.

Electronic computers, Computer terminals, Analysis, Computer industry, Competition (Economics), Sun Microsystems Inc., Workstations (Computers)

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An empirical evaluation of the internal corporate venturing process

Article Abstract:

A model of the internal corporate venturing process is developed to facilitate a greater understanding of the conditions under which business people will pursue a course of action even when faced with disappointing results. It is proposed that there is a greater possibility for entrepreneurs to persist in a given course of action despite its negative outcomes when the venture is highly ambiguous and when these entrepreneurs have access to slack resources. This persistent behavior contrasts sharply with the trial-and-error learning behavior. The internal corporate venturing process is examined using longitudinal data on cochlear implant development within a major company. The results of the analysis are discussed.

Psychological aspects, Research, Businesswomen, Businessmen, Persistence, Persistence (Psychology)

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