Academic Publications: Product Development
Supply Chain Management: Technology, Globalization, and Policy at a Crossroads
M. Eric Johnson
Interfaces, Volume 36, 2006
The forces of globalization and technology are changing supply chains. In many cases, the supply chains are literally disintegrating. Product designers, marketers, and manufacturers that were previously housed in a single facility are now spread over several continents in organizations with different cultures, languages, and business objectives. For example, not long ago, apparel firms, such as Levi Strauss and Company, did it all—operating their own US production plants along with their core design and marketing activities. In the past few years, that has changed.
Paper in PDF Format (46K)
Inter-temporal Economics of Scope, Organizational Modularity and the Dynamics of Diversification
Constance E. Helfat
Strategic Management Journal, Volume 25, 2004
The question of whether corporations add value beyond that created by individual businesses has engendered much debate in recent years. Some of this debate has focused on the pros and cons of related vs. unrelated diversification. A standard explanation of the benefits of related diversification has to do with the ability to obtain intra-temporal economies of scope from contemporaneous sharing of resources by related businesses within the firm. In contrast, this paper deals with inter-temporal economies of scope that firms achieve by redeploying resources and capabilities between related businesses over time, as firms exit some markets while entering others. The transfer of resources due to market exit distinguishes our treatment of inter-temporal economies of scope from standard intra-temporal economies of scope. In addition, these intertemporal economies can benefit from a decentralized and modular organizational structure. This ability to obtain inter-temporal economies of scope via organizational modularity and recombination suggests that corporations do not necessarily need a high degree of coordination between business units in order to benefit from a strategy of related diversification.
Paper in PDF Format (183J)