Special Issue: Knowledge, Knowing, and Organizations: Knowledge Partitioning in the Interfirm Division of Labor: The Case of Automotive Product Development

By Akira Takeishi. Organ. Sci., 2002

298 citations recorded by the source corpus.

Drawing on an empirical study on automakers' management of supplier involvement in product development in Japan, this paper shows that when the design of a component is outsourced to a supplier, how much automakers know about the component matters for them to gain a better outcome. While the actual tasks of designing and manufacturing components could be out-sourced, automakers should retain the relevant knowledge to obtain better component design quality. The paper argues that knowledge partitioning should be distinguished from task partitioning, and provides some implications for the knowledge-based theory of the firm.The results indicate that effective pattern of knowledge partitioning differs by the nature of component development project in terms of technological newness. For regular projects, it is more important for the automaker to have a higher level of architectural knowledge (how to coordinate various components for a vehicle) than of component-specific knowledge, which is supposed to be provided by the supplier. However, when the project involves new technology for the supplier, it is important for the automaker to have a higher level of component-specific knowledge to solve unexplored engineering problems together with the supplier. In innovative projects, effective knowledge partitioning seems to demand some overlap between an automaker and a supplier, rather than efficient and clear-cut boundaries that are optimal for regular projects. Such "fluid" nature of knowledge boundaries contingent on the project types poses a challenge for firms seeking both technological leadership and efficiency in established products.Developing and maintaining knowledge about an outsourced component is by no means easy. When the actual design tasks are outsourced, automakers miss substantial opportunities to gain relevant knowledge through learning by doing. Also, obtained knowledge may be diffused among competitors through shared suppliers. Another problem for automakers is that component-specific knowledge is important for only limited cases (innovative projects). Even worse, component-specific knowledge has a trade off relationship with architectural knowledge.Such an inherent dilemma of managing knowledge, however, may provide some automakers with the opportunity to achieve sustainable competitive advantage. Additional analysis shows that one automaker managed both types of knowledge better than others in a manner that deals effectively with the dilemma. Its organizational mechanisms include career development policies, extensive documentation of technological information, internal training programs, and incentive schemes. The difficulty in implementing those mechanisms in a consistent and complementary manner seems to explain why there was a significant variance among automakers in knowledge level, even when the actual tasks were carried out by a shared supplier.

Subfields: Computer Science Applications, Management of Technology and Innovation, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/8029bd81bfee3fe2811c2427ae58bf31ccd314d1

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In Management of Technology and Innovation

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Citations in the corpus

Offshore outsourcing of professional services: A transaction cost economics perspective (2008, background): “Again, this was a knowledge partitioning approach as used by some successful manufacturing firms, retaining knowledge while allowing the supplier to perform specific tasks (Takeishi, 2002).”
Transition pathways revisited: Established firms as multi-level actors in the heavy vehicle industry (2015, background): “In contrast, integral product architectures imply that the manufacturing firms have to manage both deep componentrelated knowledge as well as broad system-related architectural knowledge (Becker and Zirpoli, 2003;Brusoni et al., 2001; Takeishi, 2002).”
An empirical study of the impact of e-business technologies on organizational collaboration and performance (2007, methodology): “…is being used for collaborative processes such as CPFR (Steerman, 2003); and, in the auto industry, supplier firms are using Internet features such as e-mail and discussion forums to understand details of the automaker’s requirements not completely conveyed in formal documentation (Takeishi, 2002).”
The effects of supplier involvement and knowledge protection on product innovation in customer-supplier relationships: a study of global automotive suppliers in China (2014, background): “In the auto industry, Takeishi (2001, 2002) claims that under uncertainty, supplier extend their R&D into OEM’s knowledge space to reduce relational uncertainty.”
What Firms Make vs. What They Know: How Firms' Production and Knowledge Boundaries Affect Competitive Advantage in the Face of Technological Change (2012, unknown): “In this study, we draw on recent theoretical advances that have extended the comparative logic of transaction cost economics to the knowledge-based view (Nickerson and Zenger 2004), as well as advances that have broadened the traditional view of firm organization as implied by transaction cost econo”