Technological and organizational designs for realizing economies of substitution

Raghu Garud, Arun Kumaraswamy

Research output: Contribution to journalArticlepeer-review

265 Scopus citations

Abstract

Today's industrial landscape is characterized by rapid change and systemic technologies. Rapid change results in ever shorter product life cycles that demand continual innovation from firms. The systemic nature of technologies makes it difficult, if not impossible, for any one firm to manufacture all components of a technological system. We propose that these challenges be met by designing technological systems that have the potential to yield economies of substitution. Additionally, we propose that these economies be realized by adopting the network mode of governance. We examine the network mode at three levels—intrafirm, interfirm, and institutional—to illuminate the inherent tension between cooperation and competition at each level, and to explore the implications of this tension for industrial dynamics.

Original languageEnglish (US)
Pages (from-to)93-109
Number of pages17
JournalStrategic Management Journal
Volume16
Issue number1 S
DOIs
StatePublished - 1995

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Strategy and Management

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