Complementarity, capabilities, and the boundaries of the firm: the impact of within‐firm and interfirm expertise on concurrent sourcing of complementary components

Anne Parmigiani and Will Mitchell

Strategic Management Journal, 2009, vol. 30, issue 10, 1065-1091

Abstract: Theories of the firm raise conflicting arguments about how complementarities between two or more components affect firms' knowledge and production boundaries. Traditional arguments in the boundaries of the firm literature suggest that firms will tend to produce sets of complementary components internally, while more recent modularity studies argue that firms can outsource to gain flexibility. We resolve these views by examining concurrent sourcing, which arises when firms both make and buy the same components. We argue that concurrent sourcing of complementary components becomes more common in two cases: when firms have relevant knowledge about the components in conjunction with suppliers (interfirm expertise) and, perhaps more surprisingly, within the firm (within‐firm shared expertise). The results suggest that firms often need to make in order to know, but can partially outsource if they possess sufficient expertise. Copyright © 2009 John Wiley & Sons, Ltd.

Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (55)

Downloads: (external link)
https://doi.org/10.1002/smj.769

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:stratm:v:30:y:2009:i:10:p:1065-1091

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0143-2095

Access Statistics for this article

More articles in Strategic Management Journal from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().