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The Role of Knowledge Bases in Complex Product Systems: Some Empirical Evidence from the Aero Engine Industry

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  • Massimo Paoli
  • Andrea Prencipe

Abstract

In this paper we argue that the virtual corporation as understood in current management literature does not hold as a universal model throughout various industrial sectors. Complex product systems industries show peculiar features in terms of product characteristics, innovation dynamics and strategic and management options that may render the virtual corporation model inapplicable. The paper begins with a contrast between the simplistic neoclassical approach to the interpretation of the concept of knowledge and the more in-depth evolutionary view. The former understands knowledge as information and its production process and outcomes as easily decomposable. Based on this, advocates of virtual corporation claim the viability of outsourcing strategies based on simple economic factors. The evolutionary approach, on the other hand, considers knowledge as a system of processes deeply rooted in their contexts of production. Tacitness and non-decomposability of the knowledge production processes are highly emphasised in this view. In the light of this contrast and relying on a study of the aero engine industry we reinterpret the notion of virtual corporation showing its limits. Copyright Kluwer Academic Publishers 1999

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  • Massimo Paoli & Andrea Prencipe, 1999. "The Role of Knowledge Bases in Complex Product Systems: Some Empirical Evidence from the Aero Engine Industry," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 3(2), pages 137-160, June.
    • Handle: RePEc:kap:jmgtgv:v:3:y:1999:i:2:p:137-160
    DOI: 10.1023/A:1009999823012
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    References listed on IDEAS

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    1. Hobday, Mike, 1998. "Product complexity, innovation and industrial organisation," Research Policy, Elsevier, vol. 26(6), pages 689-710, February.
    2. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    3. Langlois, Richard N. & Robertson, Paul L., 1992. "Networks and innovation in a modular system: Lessons from the microcomputer and stereo component industries," Research Policy, Elsevier, vol. 21(4), pages 297-313, August.
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    Cited by:

    1. Prencipe, Andrea & Tell, Fredrik, 2001. "Inter-project learning: processes and outcomes of knowledge codification in project-based firms," Research Policy, Elsevier, vol. 30(9), pages 1373-1394, December.
    2. Roberta Apa & Valentina De Marchi & Roberto Grandinetti & Silvia Rita Sedita, 2021. "University-SME collaboration and innovation performance: the role of informal relationships and absorptive capacity," The Journal of Technology Transfer, Springer, vol. 46(4), pages 961-988, August.
    3. Massimo Paoli & Andrea Prencipe, 2003. "Memory of the Organisation and Memories within the Organisation," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 7(2), pages 145-162, June.
    4. García-Vega, María & Vicente-Chirivella, Óscar, 2024. "The role of public external knowledge for firm innovativeness," International Journal of Industrial Organization, Elsevier, vol. 93(C).
    5. Ilaria Brocanello & Marina Gigliotti & Andrea Prencipe, 2013. "Internazionalizzazione, trasformazione delle core competence e post crisi economica: il caso della Bimal Srl," MERCATI & COMPETITIVIT?, FrancoAngeli Editore, vol. 2013(3), pages 83-105.
    6. Biggiero, Lucio & Angelini, Pier Paolo, 2015. "Hunting scale-free properties in R&D collaboration networks: Self-organization, power-law and policy issues in the European aerospace research area," Technological Forecasting and Social Change, Elsevier, vol. 94(C), pages 21-43.
    7. Guffarth, Daniel & Barber, Michael J., 2013. "The European aerospace R&D collaboration network," FZID Discussion Papers 84-2013, University of Hohenheim, Center for Research on Innovation and Services (FZID).
    8. Nanik Kustiningsih & Bambang Tjahjadi & Noorlailie Soewarno, 2022. "Projecting Experience of Technology-Based MSMEs in Indonesia: Role of Absorptive Capacity Matter in Strategic Alliances and Organizational Performance Relationship," Sustainability, MDPI, vol. 14(19), pages 1-19, September.

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