Narrow Results

This paper draws from the findings of a large-scale empirical research program on the global application service provider (ASP) industry funded by research grants from the European Commission (EC) and the Engineering and Physical Sciences Research Council (EPSRC). A conceptual framework consisting of a taxonomy of ASPs is used to demonstrate the different market segmentation strategies adopted by ASPs for competing in this fledgling and turbulent industry. Drawing from empirical research carried out in the US and Europe, the paper evaluates ASP strategies for deploying, hosting, managing and enabling software applications on behalf of their customers. The ASP business model is advocated as an attractive value proposition for SMEs, dot.com companies and other start-up firms seeking hyper-growth. Yet the evidence so far suggests a slow start to the ASP market as few reference sites demonstrating best practice exist. ASPs will therefore need to re-evaluate their strategies if they are to convince potential customers of the benefits of application outsourcing. Against this background, the paper evaluates the benefits and risks of the ASP model.

In the constant drive for higher quality, lower cost, and faster-to-market products, many firms have begun to learn "how not to make things" — how to give some tasks to other firms who could make more efficiently. Examples from industries highlight the trend. Case studies were conducted in six firms and many insightful comments from prominent managers are incorporated.

The case studies reveal a trend toward outsourcing some tasks in new product development. We use the transaction cost theory and the resource-based theory to explain the trend of outsourcing. This kind of outsourcing allows the firm to focus on core tasks and access resources and capabilities not available or not easily developed internally. NPD program performance can be greatly enhanced, and the R&D department can move away from routine administration toward a more strategic role. Many implications for managers are offered, and theoretical contributions are discussed.

Government support for partnering between BioPharma companies and universities is growing in the UK and some European countries but few studies have explored these partnerships.

Through interviews and a survey of key institutions we explored perceptions of key informants on industry and university partnerships. Study participants identified that partnering helped them to increase innovation in R&D and led them to adopt more open approaches to innovation.

Organisational structures to coordinate and support partnerships; flexibility in operational management to solve problems in establishing and running these partnerships; leadership, especially by investigators to champion and lead collaborations; developing organisational capabilities of universities; and creation of an enabling environment by governments were identified as the critical success factors for partnering. The challenges faced were identified as lack of funding for university research teams; pressure on pricing from industry partners; disagreements on IP ownership; asymmetry of industry and university capabilities in partnering; and lack of administrative support with excessive bureaucracy from universities.

During the 1990s mature industries, such as car manufacturing, restructured their production and innovation processes, changing from vertical integration to high outsourcing. Open innovation is antithetic to vertical integration. Analyzing whether this restructuring influenced the emergence of open innovation is an important step towards improving our understanding of open innovation (Chesbrough and Crowther, 2006).

During the 1990s, Fiat, one the largest European car producers, increased the extent to which it involved external firms in new product development (NPD). Unlike its competitors, Fiat outsourced the NPD of core products, resembling the opening of innovation that "radical innovators" implement in high technology industry (Laursen and Salter, 2006, 137). However, it failed to transition towards open innovation because its "opening" to external firms also entailed downsizing in-house NPD divisions, which caused a "hollowing out" of its knowledge (Becker and Zirpoli, 2003). The products developed through this system did not perform well. After a dramatic decline in market shares, Fiat changed its NPD system: it reduced outsourcing of NPD, whilst opening it to customers for the first time. This contributed to the development of highly successful models, which fuelled Fiat's recovery after 2004.

The paper explains the Fiat case by looking at the drivers of its organizational changes from a historical perspective. It argues that Fiat's cost-cutting routines, developed because of its intangible specialization in small vehicles, explain why it opened NPD to suppliers but failed to adopt open innovation. The case study is relevant for the study of open innovation because it provides evidence of the relationships between outsourcing and open of innovation in a mature industry that went through a profound process of restructuring during the 1990s.

This paper explores the relationship between innovation outcomes, absorptive capacity and human resource management practices in information technology outsourcing relationships. Previous research has highlighted the need for absorptive capacity to achieve innovation in organizations. Since this absorptive capacity is likely to be embodied within the relationship management teams of both the supplier and client in outsourcing dyads, the human resource practices of the participating firms should have a direct bearing on levels of absorptive capacity and innovation outcomes for the relationships. This research examined four large IT relationships as case studies and presents a model of inter-organizational innovation that shows the necessity of developing the appropriate absorptive capacity to achieve innovation in outsourcing environments. From this model, the research presents three HRM practices that can help develop absorptive capacity to support innovation activities: retention of client employees with firm-specific business process knowledge rather than technical knowledge; minimization of legacy hiring practices for suppliers; and maintaining and optimal work group size for relationship management teams on both the client and supplier sides of the relationship.

Make-or-buy decisions on technology-intensive components represent a key task in the management of technologies. Against this background, this paper presents an analysis of a technology company which gave key insights into their make-or-buy decisions on the strategic and operative level. The results show two kinds of make-or-buy decisions, called type 1 and type 2. In contrast to type 1 make-or-buy decisions whose scope is mostly limited to the production and quality function, type 2 decisions are strongly linked to engineering and R&D activities. Moreover, two new decision matrices are introduced: a ‘product/subsystem aggregation’ scheme and a ‘make-or-buy controlling’ matrix. In an environment in which companies move towards greater use of outsourcing, the framework ensures that company strategy and core competencies are followed in the long run despite short-range deviations of make-or-buy analysis results. These findings might be helpful and suitable to other manufacturing companies that deal with technology-intensive components on a strategic and operative level.

Several studies in the literature have addressed the issue of outsourcing in relation to New Product Development (NPD) or R&D processes. However, the issue of how the outsourcing decisions in the NPD process are best undertaken by the firms has not been fully addressed. Understanding factors influencing the decision of innovation outsourcing more likely remains a need within the current research stream. As it stands, the existing literature takes account of neither a complete set of decision making dimensions, nor the specificity of the NPD process, especially when a disruptive technology fosters product innovation. Although these studies have analysed the antecedents of the innovation outsourcing, the decision-making dimensions are not considered in an integrated multidimensional decision-making model, that considers the inter-related effects of their contemporaneous consideration. There are, therefore, significant gaps in the literature, which this article intends to fill. Our study aims to understand how organisations approach outsourcing decisions relating to NPD activities in technology intensive industries, and the performance implications of these decisions. The context of the study is that of aircraft industry. Therefore, this article discusses the findings of an empirical research that explores an embedded and in-depth longitudinal case study, namely, the Boeing 787-8 programme (the first model of the B787 Dreamliner programme). This new aircraft is a disruptive technology product innovation within the industry because it adopts new material technologies that make it possible to meet future customer needs. The programme has radically changed the partnership model adopted in the industry’s supply chain. The aim of the empirical research is to verify how the proposed model works to investigate outsourcing strategies related to the Boeing 787 Dreamliner programme. The research question that we aim to answer is: which strategic dimensions in a decision-making model are able to extensively and thoroughly address the outsourcing decisions relating to NPD activities given the hypothesis that a disruptive technology fosters product innovation?

This paper argues that as firms compete in an increasingly knowledge-intensive environment in the 21st century, they will need to structure their HR processes and practices to support their internal knowledge assets. Using a resource-based view of the firm, this paper categorises HR policies into a framework that is based on the knowledge requirements and dimensions of the core capabilities of the firm. This framework explains how outsourcing, training and development, teambuilding, and research and development initiatives are mapped for different firms that have different knowledge, skills and ability, as well as tacit and explicit knowledge requirements.