Managing Innovation During Technological Shift: Design Hierarchy and Firm Boundaries

35 Pages Posted: 3 Mar 2009

See all articles by Jaegul Lee

Jaegul Lee

Wayne State University - School of Business Administration

Date Written: March 2, 2009

Abstract

I extended "systems integration capability" perspective. I argue that the systems integration capability can be either externally or internally oriented, and system integrators' propensity to exercise externally or internally oriented capability depends on the level of technological shift. Using carefully screened patent data and hierarchical view of product structuring, I show that systems integrators (automakers) were major players responsible for the emergence of a subsequent subsystem-level technological shift after the emergence of the product level dominant design. I also found that systems integrators had higher propensity for externally oriented systems integration capability of coordinating component suppliers when the dominant design emerged at the product level but changed their focus to internally oriented systems integration capability of strengthening internal capabilities in component when a major technological shift occurred at the subsystem level.

Keywords: Design hierarchy, firm boundaries, systems integration, modularity, technology evolution

JEL Classification: O32

Suggested Citation

Lee, Jaegul, Managing Innovation During Technological Shift: Design Hierarchy and Firm Boundaries (March 2, 2009). Atlanta Competitive Advantage Conference 2009 Paper. Available at SSRN: https://ssrn.com/abstract=1351825 or http://dx.doi.org/10.2139/ssrn.1351825

Jaegul Lee (Contact Author)

Wayne State University - School of Business Administration ( email )

United States

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