Knowledge integration using product R&D outsourcing in biotechnology

Dzidziso Samuel Kamuriwo and Charles Baden-Fuller

Research Policy, 2016, vol. 45, issue 5, 1031-1045

Abstract: We build on systems integration literature to explain how and why knowledge integration of non-modular products is based on a strategic choice between internalizing and outsourcing core R&D. The under-researched choice of outsourcing core R&D on an on-going basis appears to face risks of higher transactions costs and loss of control. We illuminate these choices in a comparative analysis of two longitudinal cases that compare an internally focused R&D intensive firm and an externally focused R&D intensive firm; and we show how the externally focused approach can avoid risks by framing non-modular outsourcing as modular even though it is not so and by engaging in a social process of communication to achieve a common agreement between partners concerning the direction of efforts and thus effectively reduce highly iterative knowledge exchange between modules. Our findings add to our understanding of the systems integration literature; the nature of firm product system strategies, as well as firm boundaries in a knowledge economy.

Keywords: Product systems; R&D outsourcing; Knowledge integration; Product systems capability; Inter-firm coordination mechanisms; Biotechnology (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:45:y:2016:i:5:p:1031-1045

DOI: 10.1016/j.respol.2016.02.009

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