Knowledge integration using product R&D outsourcing in biotechnology
Dzidziso Samuel Kamuriwo, Charles Baden-Fuller
Research Policy · 2016 · Volume 45 · Issue 5
DOI: 10.1016/j.respol.2016.02.009
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
Biotechnology, Inter-firm coordination mechanisms, Knowledge integration, R&D outsourcing, Product systems capability, Product systems
Enable JavaScript for citation tools and additional paper interactions.