Speaker(s): Andrea Prencipe (Sussex)
Title:
Abstract
Empirical studies on coordination of economic activities focused on the two
polar cases of governance mode, namely vertical integration and market
exchanges. The vertically
integrated firm was suggested as the appropriate mode of coordination when
change occurred, while market exchanges were more appropriate for dealing with
stable contexts (Teece, 1996). Based
on two case studies on the aircraft engine industry, this paper introduces the
concept of systems integration as the primary coordination mechanism in
between markets and hierarchies that firms employ to cope with change in
multitechnology settings. Multitechnology
multicomponent products have important managerial implications since they
intensify the coordination efforts for firms developing them and therefore
provide a vantage point to study coordination modes, particularly in the face of
technological change.
The paper argues that systems integration, as coordination mechanism comprises a set of different technological and organizational skills, ranging from component assembly through the understanding and integration of the technological disciplines underlying a product, to project management. It shows that from a competitive point of view, systems integration is most appropriately understood as knowledge integration. Systems integrating firms are understood as the organizations that set up the network of actors involved in the industry and lead it from an organizational and technological viewpoint.