Moments of Governance in is Outsourcing: Conceptualizing Effects of Contracts on Value Capture and Creation

2005 ◽  
Vol 20 (3) ◽  
pp. 152-169 ◽  
Author(s):  
Shaila M Miranda ◽  
C Bruce Kavan
Keyword(s):  
Value Creation ◽  
Psychological Contract ◽  
Interorganizational Relationships ◽  
Empirical Work ◽  
Network Governance ◽  
Or Efficiency ◽  
Value Capture ◽  
Contractual Relationship ◽  
Governance Choices ◽  
Is Outsourcing

Research on the governance of IS outsourcing has recognized two moments of governance: the formal outsourcing contract (promissory contract) and post-contractual relationship management (psychological contract). While this research has been prescriptive of contract terms that lead to successful outsourcing, there is need for clarity on what specific governance options are available at each moment of governance and how governance choices at one moment affect those at another, and consequently affect outsourcing outcomes. This paper draws on theoretical and empirical work in the areas of governance and contracts to develop a model of IS outsourcing governance, delineating specific moments of governance (MoG). It describes how the IS outsourcing context circumscribes market, hierarchy, and network governance options that are available at the promissory contract and psychological contract moments. Processes and structures that constitute governance choices at each moment of governance are identified. This analysis of outcomes recognizes an inherent tension in interorganizational relationships: firms’ desire for value capture or efficiency vs their desire for value creation or innovation. We explore how choices in formulating the promissory contract affect the psychological contract, and how psychological contract choices impact value capture and creation. The paper concludes by exploring the implications of the MoG model for practitioners and suggesting areas in which further conceptualization and empirical work may be beneficial.

scholarly journals Competitive Heterogeneity

Management ◽  
2019 ◽  
Author(s):  
Tammy L. Madsen
Keyword(s):  
Competitive Advantage ◽  
Value Creation ◽  
Empirical Work ◽  
Superior Performance ◽  
Bargaining Model ◽  
Contributing Factors ◽  
Research Topics ◽  
Value Capture ◽  
Performance Heterogeneity ◽  
Analytical Approaches

It is widely accepted that positioning for competitive advantage is related to how value is created and captured. Yet, despite substantial theoretical work on competitive advantage, empirical work has been less cohesive and accretive. Contributing factors include, but are not limited to, differences in conceptual definitions, misalignment between theory and operational designs, and variation in analytical approaches. In response, the theory of competitive heterogeneity emerged with the intent of providing a more comprehensive explanation of persistent differences in intra-industry performance, the core focus of the strategy field. Formally, competitive heterogeneity refers to enduring and systematic (superior) differences in strategic positioning—and, in turn, performance—among relatively close rivals, where a firm that produces the largest gap between the value (V) of a good or service to a buyer and the cost (C) of producing that value holds an advantage, or superior position, relative to that of rivals. The theory adopts a bargaining model (Value-Price-Cost) to define superior performance differences independently of resources and capabilities. If resources or capabilities associated with performance heterogeneity are not protectable, then the persistence of an advantage must be associated with something other than costly imitation. It follows, then, that important sources of value and cost differences among firms may lie outside the Resource-Based View’s (RBV’s) boundaries. As such, work on competitive heterogeneity has broader theoretical roots than the RBV. Additionally, research on the factors and conditions promoting persistent and systematic (superior) differences in performance among firms benefits from the integration of multiple theoretical lenses, research methods, and techniques. This diversity informs a wide array of research topics (e.g., the Value-Price-Cost model; value-based strategies; value creation and value capture dynamics; value appropriation; performance heterogeneity; persistent performance heterogeneity; temporary advantage; isolating mechanisms and barriers to imitation; micro and macro influences) and employs a host of analytical techniques (empirical, descriptive, formal theory, mathematical modeling). This bibliography discusses the contributions from these complementary areas but the bibliography’s scope (and page limits) precludes a detailed treatment of all areas that intersect with competitive heterogeneity and its origins. As a result, and guided by the definition of competitive heterogeneity, this annotated bibliography provides an overview of the primary research streams, with specific attention to influential writings and those that detail the scope of contributions in an area. The research topics are presented in a particular order, beginning with the theory’s core, the Value-Price-Cost bargaining model, conceptual definitions, and theoretical insights, and then shifting to empirical studies on performance heterogeneity, persistent advantage, and value creation and capture.

Living It Up at the Hotel California: Employee Mobility Barriers and Collaborativeness in Firms’ Innovation

2021 ◽  
Author(s):  
Eunkwang Seo ◽  
Deepak Somaya
Keyword(s):  
Human Capital ◽  
Value Creation ◽  
Knowledge Spillovers ◽  
Value Capture ◽  
Employee Mobility ◽  
Mobility Barriers ◽  
Collaborative Innovation ◽  
Complex Knowledge

Research has long recognized the importance of collaboration for innovation, but relatively little is known about the strategic drivers of collaborative innovation in firms. We posit that robust collaboration within firms can increase the interfirm mobility of inventors and increase spillovers of innovative knowledge to competitors by mobile inventors. Therefore, by mitigating these value capture hazards associated with collaboration, barriers to employee mobility may induce firms to increase collaborativeness in innovation. Additionally, consistent with the mechanism underlying this proposition, we hypothesize that firms whose innovation entails more complex knowledge, which is known to impede interfirm knowledge spillovers, will increase collaboration less when employee mobility increases. We test these hypotheses by leveraging quasi-exogenous changes in two legal mobility barriers for inventors across U.S. states and find that higher-mobility barriers are associated with greater inventor collaboration (as observed in patented innovation), and this effect is weaker for firms possessing more complex knowledge. These findings deepen our understanding of the strategic tradeoffs between value creation and value capture entailed in collaborative innovation within firms and of human capital strategies that help to manage these tradeoffs.

scholarly journals Bottlenecks, Modules, and Dynamic Architectural Capabilities

2018 ◽  
Author(s):  
Carliss Y. Baldwin
Keyword(s):  
Property Rights ◽  
Value Creation ◽  
Technical System ◽  
Maximum Effect ◽  
Organizational Boundaries ◽  
Value Capture ◽  
Technical Problems ◽  
Technical Architecture ◽  
Complex Technical System ◽  
Technical Systems

How do firms create and capture value in large technical systems? In this paper, I argue that the points of both value creation and value capture are the system’s bottlenecks. Bottlenecks arise first as important technical problems to be solved. Once the problem is solved, Then the solution in combination with organizational boundaries and property rights can be used to capture a stream of rents. The tools a firm can use to manage bottlenecks are, first, an understanding first of the technical architecture of the system; and, second, an understanding of the industry architecture in which the technical system is embedded. Although these tools involve disparate bodies of knowledge, they must be used in tandem to achieve maximum effect. Dynamic architectural capabilities provide managers with the ability to see a complex technical system in an abstract way and change the system’s structure to manage bottlenecks and modules in conjunction with the firm’s organizational boundaries and property rights.

scholarly journals The effect of business model innovation on organization performance

2021 ◽  
pp. 1481-1488 ◽  
Author(s):  
Amineh A. Khaddam ◽  
Hani J. Irtaimeh ◽  
Ahmad Rajaa Salameh Al-Batayneh ◽  
Suliman Raja Salameh Al-Batayneh
Keyword(s):  
Business Model ◽  
Value Creation ◽  
Business Model Innovation ◽  
Arab Countries ◽  
Organization Performance ◽  
Company Performance ◽  
Value Proposition ◽  
Value Capture ◽  
The Impact ◽  
Measures Of Performance

The aim of the study is to investigate the impact of business model innovation (BMI) on firm performance. The sample of the study consisted of 120 managers from Alban Al-youm Company in Jordan, a leading dairy company. Data were collected using a questionnaire administered to managers. Eighty-seven questionnaires were retrieved valid for the purpose of data analysis. BMI was measured using three components: value creation, value proposition and value capture innovations while company performance was assessed via self-rated questions about operational measures of performance. The results accepted the hypotheses that all dimensions of BMI had significant effects on company performance. That being so, the study contributed to the literature on BMI on company performance in the absence of such studies that use samples for Arab countries, particularly, from Jordan in one of the most vital industries, which is a dairy industry.

Value Creation in Volatile Economies

2019 ◽  
pp. 18-31
Author(s):  
Alvaro Lopes Dias ◽  
Georg Dutschke
Keyword(s):  
Tacit Knowledge ◽  
Local Knowledge ◽  
Value Creation ◽  
Local Development ◽  
Cultural Dimensions ◽  
Shared Value ◽  
Value Capture ◽  
Whole Process ◽  
Third Phase ◽  
Local Actors

This chapter presents in a simplified way that communities in volatile economies can create value through the identification, valorization, and operationalization of knowledge, traditions, and other cultural dimensions, many of them in the domain of tacit knowledge, available in the minds of people and community shared value. Through a cycle of identification of local knowledge, it is possible to begin the whole process, which necessarily passes through the cooperation between the various local actors. In a third phase, it is essential to structure the positioning, which represents the conceptual dimension concerning the way the community intends to present itself to the market. Next, it is essential to structure this offer, promoting value creation and capture. As such, the community should value their products or services by enhancing local knowledge and taking value creation initiatives in favor of local development (value capture).

Social Media and Value Creation

2016 ◽  
Vol 28 (2) ◽  
pp. 107-123 ◽  
Author(s):  
Imed Boughzala
Keyword(s):  
Social Networks ◽  
Social Media ◽  
Knowledge Sharing ◽  
Value Creation ◽  
Generation Y ◽  
Empirical Work ◽  
Enterprise 2.0 ◽  
Corporate Environment ◽  
Use Of Social Media ◽  
Corporate Social

Organizations increasingly rely on corporate social networks and online communities, under what is called today Enterprise 2.0, to enhance socialization and favor information/knowledge sharing, collaboration and value creation among coworkers. Researchers and practitioners to date have mostly assumed that people from this generation Y, because of their massive use of social media in the private arena, would be willing to accept and use them more easily and quickly in corporate environment. However, to the best of our knowledge, there is no empirical work which has been reported on this issue confirming this assumption.

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