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Abstract:
Recent discussions in health reform circles have pinned great hopes on the prospect of innovation as the solution to the high-cost, inadequate-quality U.S. health system. But U.S. health care institutions - insurers, providers, and specialists - have ceded leadership in innovation to Indian hospitals such as Care Hospital in Hyderabad and the Fortis Hospitals around New Delhi, which have U.S.-trained doctors and can perform open heart surgery for $6,000 (compared to $100,000 in the United States). The Indian success is a window into America's stalemate with inflating costs and stagnant innovation.

Abstract:
IT-enabled exchanges in electronic markets have significant implications for buyer-supplier relationships. Building on studies that emphasize the role of intangible assets in inter-organizational relationships, this study argues that buyers are less likely to use reverse auctions for supplier relationships involving a high degree of non-contractibility. The argument complements traditional transaction cost economics arguments that focus on the impact of asset specificity and product specialization. We identify six dimensions of non-contractibility: Quality, supplier technological investments, information exchange, responsiveness, trust, and flexibility, which encompass task-based and interaction-based non-contractibility. The study finds that, together with product specialization, these non-contractible elements of inter-organizational relationships have greater explanatory power for reverse auction use than asset specificity. This result highlights the importance of supplier investments in non-contractible elements of exchange relationships in an increasingly dynamic service- and knowledge-based economy.

Reverse Auctions, Procurement auctions, Electronic Markets, Transaction cost economics, Inter-organizational relationships, Buyer-supplier relationships, Incomplete Contracts Approach, Non-contractibility, Business-to-business auctions.

Abstract:
The dynamic capabilities literature suggests that firms need to use both internal development and external sourcing in order to thrive over time, but we have a limited understanding of the conditions that best suit different sourcing choices. This study examines how constraints that arise from firms' existing stocks of capabilities and from their internal social contexts shape their choices of capability sourcing modes and, in turn, their ability to obtain new capabilities. Thus, the research focuses on an under-emphasized form of dynamic capability: the ability to select appropriate modes of capability sourcing. We test the arguments with a survey and longitudinal survival study of the international telecommunications industry. We find intriguing variations in the way that firms' selection capability influences their ability to renew their capabilities and, ultimately, to survive.

professional service firms, embeddedness, clients, careers

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: first, when firms have relevant knowledge about the components both in conjunction with suppliers (inter-firm expertise) and second, 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.

Complementarity, sourcing, firm capabilities, vertical integration, knowledge

Abstract:
This paper considers how a firm's system of exchange skills including internal technical expertise and supplier governance mechanisms influence supplier performance, both independently and jointly. The core question is whether inter-firm governance mechanisms, including both relational and contractual mechanisms, can substitute for a firm’s internal technical skills in maintaining supplier performance or, alternatively, whether a firm risks hollowing itself out by de-emphasizing internal expertise when it outsources. The arguments build on the capabilities, inter-organizational governance, and supply management literature. We find that internal technical expertise influences multiple dimensions of supplier performance, including cooperation, price, quality, delivery, and communication, while relational governance also affects supplier performance though in a more focused way. In turn, combinations of technical expertise, relational governance, and contractual agreements jointly affect supplier performance. Thus, firms generate superior supplier performance if they retain internal technical skills as well as increase their use of external governance mechanisms to manage buyer-supplier relationships.

supply management, purchasing, buyer-supplier relationship, technology management, resource based view