TY - UNPB
T1 - The Social Embeddedness of Knowledge: Problems of Knowledge Sharing and Organisational Learning in International High-Technology Ventures
AU - Lam, Alice
PY - 1998
Y1 - 1998
N2 - This paper addresses a puzzle related to firm size and competition. Since Stephen Hymer´s
pioneering contribution (Hymer, 1960/1976), theories of the firm implicitly assume that
only large, diversified multinational enterprises can compete in industries that combine high
capital intensity, high knowledge-intensity and a high degree of internationalization. Small
firms, by definition, have limited resources and capabilities and are unlikely to possess
substantial ownership advantages. They also have a limited capacity to influence and shape
the development of markets, market structure and technological change. One would thus
expect that they are ill-equipped to compete in a knowledge-intensive industry that is highly
globalized.
Taiwan’s experience in the computer industry tells a different story: despite the dominance
of small- and medium-sized enterprises (SMEs), Taiwan successfully competes in the
international market for PC-related products, key components and knowledge-intensive
services. The paper inquires into how this was possible. It is argued that organizational
innovations related to the creation of knowledge are of critical importance. Taiwanese
computer firms were able to develop their own distinctive approach: due to their initially
very narrow knowledge base, access to external sources of knowledge has been an essential
prerequisite for their knowledge creation. Such “inter-organizational knowledge creation”
(Nonaka and Takeuchi, 1995) was facilitated by two factors: active, yet selective and
continuously adjusted industrial development policies; and a variety of linkages with large
Taiwanese business groups, foreign sales and manufacturing affiliates and an early
participation in international production networks established by foreign electronics
companies.
A novel contribution of this paper is its focus on inter-organizational knowledge creation. I
first describe Taiwan´s achievements in the computer industry. The dominance of SMEs and
their role as a source of flexibility is documented in part II. Part III describes some policy
innovations that have shaped the process of knowledge creation. The rest of the paper
inquires how inter-organizational knowledge creation has benefited from a variety of
linkages with large domestic and foreign firms; I also address some industrial upgrading
requirements that result from this peculiar type of knowledge creation
AB - This paper addresses a puzzle related to firm size and competition. Since Stephen Hymer´s
pioneering contribution (Hymer, 1960/1976), theories of the firm implicitly assume that
only large, diversified multinational enterprises can compete in industries that combine high
capital intensity, high knowledge-intensity and a high degree of internationalization. Small
firms, by definition, have limited resources and capabilities and are unlikely to possess
substantial ownership advantages. They also have a limited capacity to influence and shape
the development of markets, market structure and technological change. One would thus
expect that they are ill-equipped to compete in a knowledge-intensive industry that is highly
globalized.
Taiwan’s experience in the computer industry tells a different story: despite the dominance
of small- and medium-sized enterprises (SMEs), Taiwan successfully competes in the
international market for PC-related products, key components and knowledge-intensive
services. The paper inquires into how this was possible. It is argued that organizational
innovations related to the creation of knowledge are of critical importance. Taiwanese
computer firms were able to develop their own distinctive approach: due to their initially
very narrow knowledge base, access to external sources of knowledge has been an essential
prerequisite for their knowledge creation. Such “inter-organizational knowledge creation”
(Nonaka and Takeuchi, 1995) was facilitated by two factors: active, yet selective and
continuously adjusted industrial development policies; and a variety of linkages with large
Taiwanese business groups, foreign sales and manufacturing affiliates and an early
participation in international production networks established by foreign electronics
companies.
A novel contribution of this paper is its focus on inter-organizational knowledge creation. I
first describe Taiwan´s achievements in the computer industry. The dominance of SMEs and
their role as a source of flexibility is documented in part II. Part III describes some policy
innovations that have shaped the process of knowledge creation. The rest of the paper
inquires how inter-organizational knowledge creation has benefited from a variety of
linkages with large domestic and foreign firms; I also address some industrial upgrading
requirements that result from this peculiar type of knowledge creation
M3 - Working paper
SN - 8778730430
T3 - DRUID Working Paper
BT - The Social Embeddedness of Knowledge: Problems of Knowledge Sharing and Organisational Learning in International High-Technology Ventures
PB - DRUID - Danish Research Unit for Industrial Dynamics
CY - Frederiksberg
ER -