〈日本知財学会誌〉Vol. 9 No. 1― 2012 : 6 12-Intellectual Property and Management
Theories
Ellie Okada, Ph.D. (President & CEO, Boston Cancer Policy Institute, Inc)

【Abstract】 This paper aims to identify what kind of opportunities we have in incorporating intellectual property (IP)elements in management theories, as well as in policy issues. Intellectual property issues and policy oriented issues
force us to conduct interdisciplinary research, and there is a critical difference in methodology between them. Basedon this, I find that “sticking to organizational issues” is the core elements in management theories. Here, the criteriathat connect IP to organizational issues is “codifiable vs. non-codifiable.” And what organizations need to keep orinclude inside of them are non-codifiable IP (non-measurable IP in spite of measurement efforts). Global patent
system can also be supported by a theory that derived from a fundamental question by Ronald Coase : “why organization
emerges.”【KEYWORD】 Management Theory and Intellectual Property
Policy Issues
Global Patent System

1.

Organization

Social Science Methodology

This notion is originally derived from a question set byIntroduction

Coase, R. (1937) : why an organization emerges. And
what organizations need to keep or include inside ofThis paper aims to identify what kind of opportunities we have in incorporating intellectual property (IP)1elements in Management Theories .

I also seek op-them are non-codifiable IP (non-measurable IP in spiteof measurement efforts).

Based on them,

1) Companies can change their organizational capa-

portunities in incorporating management theories inbilities by configuring external IP with internal

related policy issues.

IP accumulation ;The underlying questions arethat : what we can solve in incorporate IP elements in2) Companies can determine their organizational

management theories ; whether such management

structure, such as integration, alliances, and sotheories also help induce policy issues, implications, oron ; here, what must not be outsourced is non-verify policy-oriented hypothesis.

codifiable IP2, that is : early stage science IP and

In this paper, I

know-how.

stand on an assumption that IP is one of management
resources.

3) We can actively utilize such management theo-

I find that “sticking to organizational issues” is thecore in management theories.

Here, the criteria thatconnect IP to organizational issues are “codifiability vs.
non-codifiability.” (See, Kogut, B. and U. Zander, 1993).

6

ries in contributing to policy issues.
On the other hand, I identify the following difficulties :1) Current issues that are arising from science –ISSN 1349-421X© 2012IPAJ

All rights reserved.

Intellectual Property and Management Theories

based business and innovation policies push us

theories, law, etc.

to collaborate with natural scientists.

not natural sciences.

However,

In sum, a set of sciences that are
When I see a typical natural sci-methodologies of social science are distinctly dif-ence methodology, I can find the same feedback loop as

ferent from those of other sciences (see, Rudner,that in social sciences :R.S. 1966).

As a large part of intellectual prop-

erty professionals are trained in natural sciences,

The above figure is included in a standardized college-level textbook of biology.

When I see the figure,it is quite difficult to nurture mutual understand-I can find consistency between the methodologies thatings in a deeper level ;are used in natural sciences and social sciences in a2) Traditionally, a large part of management decisions has been derived from “art” based on theirexperiences, while “science“ constitutes of a re-broader sense.
When I focus on management theories, I can find differences in the followings :peated feedback cycle of “hypothesis-prediction–

1. In exploring management theories, we observetest” that enables others to reproduce out-

human behaviors reflected in organizations thatcomes ;

are partly affected by human emotions and per-In this paper, I try to resolve these contradictions.

ceptions, where as natural scientists observe

Here, management theories can be divided into

natural phenomena that are not affected by hu-

three disciplines-management of economic discipline,that of sociology discipline, and that of phycology discipline.

man emotions nor perceptions.
2. In management theories, we need to develop experimental conditions by using several tools at

In this paper, I discuss issues mainly alongwith Management of Economic Discipline.

the verification phase.

It is be-cause 1) I can find IP elements implicitly at the early

3. In order to develop experimental conditions, westage of this discipline, 2) the underlying assumption

often need to create operational definitions.

of this paper is that we regard IP as a corporate re-frequently use words same as those used in gen-source, whereas scholars in other disciplines tend toeral conversations for this purpose whereas

use intellectual property as a data for their hypothesis

whose meanings are completely different eachverification.

other. This make things complicated.

This paper consists as following chapters : first, I

We

4. Robustness of the tests is not as strict as naturalsciences.

will discuss the distinction of social science/management theory methodologies from those of natural sciences in order to nurture better understandings eachother.

2.2.

Discovery Phase Issues

Second, I discuss how management theories

When we think about the observation phase, meth-contribute to policy-oriented prescription theories.

ods that social scientists use seem to be misleading for

Finally, I will mention a concluding remark with impli-

natural scientists.

cations.

collect a certain organization’s case, interview people,

2.

Uniqueness of Social Science
Methodologyetc.

In management theories, we often

Some of us even accompany a certain individual

during a certain period. During this period, we must
do these by “suppressing our emotions” in order to remove perception biases.

2.1.

It may be easier for people

Management theory, Social science, andwho have a direct experience in the observing field or

Scientific Method

similar experiences in different fields to be aware ofSocial sciences include economics, management

research questions (Rudner, R.S. 1966). At the same7

〈日本知財学会誌〉 Vol.9 No.1― 2012

Fig. 1

Scientific Method

Source : Campbell and Reece ed. (2002)

time, such direct and indirect experiences often tend

strategies and organizational change.

to make perception biases.

observation, the inventor, Ariga, T. perceived that theHere, social scientists try

Based on myto complement their possible biased perceptions by

most difficult part of the whole processes from idea-

thoroughgoing observations.

hypothesis setting through clinical trials was the ex-

Difficulties are :traction of the specific effective compound, proantho-

It needs long-term trainings and practices to makecyanidin, from complicated natural products.

Then,thoroughgoing observations by suppressing ones emo-

isn’t it the same that we extract specific research ques-

tions ;

tions and set hypothesis from complicated events that

It is often very annoying for those who are observed ;are affected by imperfect human perceptions and behaviors ?

People tend to misunderstand that the observing so-

Rudner, R.S. (1966) also mentions that the differenc-

cial scientists have no specific opinions, since they are

es seen in the discovery phase are not fundamental dif-

suppressing their own emotions ;ferences.

People also tend to misunderstand that the observing social scientists have the same character as observed subjects.

2.3.

Validation Phase Issues

As for the validation or justification phase, social sci-

With these difficulties, social scientists need to ex-

entists confront with more difficulties.

I will describe

tract specific research questions through steady re-

the difficulties by focusing on management theories,

cording of facts, outside appearances, and perceptions

especially those of economic discipline.

of parties who are involved in.

Then, social scientists

move forward to set hypothesis.

front with is how to structure an experimental condi-

These observation methods look different fromthose of natural sciences.

However, I have come tonotice that both are essentially the same.

The critical difficulty that management theories con-

In 2007 andtion.

In case of behavioral social science, they havebeen traditionally experimenting human behaviors byrecruiting subjects and building a specific space.

For

2008, I traced perceptions and behaviors of an inventor

example, they test subjects (often university students)

of proanthosyanidin, together with the company’s

by gathering them in a certain experimental space, as-8

Intellectual Property and Management Theories

signing them specific roles, and examining how theytion and number of cases used : whether or not thereact to a certain stimuli.

They select samples socases used represent typical ones from which we canthat they can build an experimental situation where “allinfer more universal facts ; whether or not we canthe other things are equal.”

verify hypothesis through one or two cases.

Results of such experi-ments show direct effects from which we can infer
more universal events.

It is said that the origin of so-cial sciences existed in the behavioral science.

Here, the number of cases often depends on theavailability of internal data.

For example, Mayer, K.

and N. Argyres (2004) tested a hypothesis that “a for-However, we cannot experiment subjects directly in

mal contract strengthen trust” by using a single in-all the social sciences, because 1) when subjects are

depth case on an alliance between software companies

human beings, some of experiments can become prob-

in California and Tokyo.

In this case, their paper’s

lematic in an ethical sense, and 2) when subjects arecontribution to the field was to propose an objection

organizations or whole economy, it is impossible to ask

evidence to the transaction theory in which people re-such organizations or economy as a whole to involve ingard contract as a tool to resolve opportunistic behav-

experiments.

iors among related parties.

Then, in many cases, methodologies used at theverification phases are :origin viewpoint in the field of management of economic discipline.

1) Statistics

He brought a sociology

Although we need to accumulate

more case evidences, the in-depth analysis by using

From small sample through large sample

internal time series description on contract was strong

Non-linear and linear statistics through artificial

enough to be the verification evidence.

intelligent algorithm

Natural scientists will find difficulties to support this2) Case Observations

kind of idea.

In the past, it was difficult for us to handle, in statis-of them, a company description is no more than thetics, a small sample and those whose distributions areat a glance scattered.

In these days, thanking for the

What I recently found is that, for many

company’s advertising.
According to Rudner, R.S.,

advance of statistics, computer and application soft-“To hold that the social sciences are methodological-

ware, we can handle small samples, and those that doly distinct from the nonsocial sciences is to hold̶thenot follow normal distribution, extract meaningful pat-startling view that the social sciences require a differ-terns from at-a glance scattered data, and even handle

ent logic of inquiry.

emergence.

to deny that all of science is characterized by a com-

To hold such a view, moreover, isHowever, difficulties are :mon logic of justification in its acceptance or rejection1) It is hard to build a situation that “all the otherof hypotheses or theories.”

things are equal,” andThe above notion falls“within the area of philosophical interest called the2) Parameters used are proxy variables.

context of validation, or the context of justification, inThose difficulties make us need a technique and in-contrast to that area of empirical inquiry which is called

terpretation ability to acquire a robustness of the test.

the context of discovery.”In addition, as the variables are proxy ones, results do
not necessarily show details of the concrete reality.
Then, those who are involved in management theories often add cases, or use cases solely, to test the validity of hypothesis.
Here, discussions often center around the qualifica9

〈日本知財学会誌〉 Vol.9 No.1― 20123.

garded as in line with it.

Management Theories
and Intellectual Property

Here, what I stress is that firm-specific knowhow and very early stage IP are the typical IP organization should internalize.

3.1.

Incorporating Intellectual Property inManagement Theories

Such organization specific IP determine the organization structure, that is, vertical integration including

I can find elements of IP in literatures that are clas-

merger and acquisition, while companies can use IP

sified into management of economic discipline at theirexternal to their core by alliance.

early stage.

spin-out new businesses that include novel IP external

1) Management of economic discipline originally
started with the industry structure analysis in
the field of economics.

to their core.
Agency theory and incomplete contract theory,

Michael E. Porter’samong others, were derived from this discipline asseminal strategy concepts of “positioning” “com-management theories. Finding links with IP in thempetitive advantage” (1985) are extensively usedis the future subject.

not only in corporate strategies but also in na-

3) Wernerfelt, B. and Remult, R.P. (1984) initiatedtions’ strategies (Porter, M.E., 1990). It is said

resource based view that regards organizationthat we can find its origin in the industry analy-

specific resources as competitive advantage ofsis.

Porter, M.E. (1985) did not necessarily in-clude IP in his analysis.

However, IP managers

the organization.

Penrose, E. (1954) can be an

implicit origin of this school.

In Penrose, E.

are familiar with the positioning concept, since(1954), she proposed that unused resources are athey need to identify a good positioning for IP tosource of future organizational growth.

She ex-be created.

plicitly included IP in such resources.

Teece et.

They also compare the positioningof IP already created with their competitors’ IP,

al. (1997) also included IP in corporate resources

globally.

explicitly, and proposed to configure external re-2) Transaction cost theory is derived from “theoryof the firm” initiated by an economist, Coase,
Ronald (1937).

sources with firm-specific resources.
We can obtain implications from it that we canCoase, R. (1937) set a specificutilize university IP and combine them with or-question on why organization was generated.

ganization specific resources in order to advance

According to him, people create organization andour capabilities.
──────────internalize goods when transaction costs become
Then, Wil-

Resource based view including dynamic capa-

liamson, O. (1975) developed “transaction costbility view is helpful for firms to motivate man-theory” by proposing a concept of “opportun-

agers to identify their firm-specific IP and utilize

ism.”

them in combination with internal and externalhigher in the market transaction.

According to him, organizations internal-ize resources that are not traded in the market,
that is, company proprietary asset.

10Companies can also

Since such

resources.

One the other hand, resource based

view often generate misunderstandings.

First,

assets are difficult to measure for the governancein terms of science, natural scientists, and evenpurposes, opportunistic behavior of related par-a part of social scientists, find it difficult to un-

ties will involve in.

derstand that they can acquire a repetitive feed-

Chandler’s time series

analysis on evolving processes of large Americanback loop in the resource-based view.

corporations, (Chandler, A. 1977) can be also re-cause evidences for verification are usually cases

It is be-Intellectual Property and Management Theories

that describe internal resources of firms.

Sec-

ness (national border) stimulate cross- border

ond, although they describe internal resources ofinnovation efforts.

In other words, a global patentfirms, a perspective that management scientists

system that internalizes transaction costs derived fromhave for the verification is often quite different

market incompleteness helps facilitate cross-borderfrom perspectives that practitioners have.

joint R&D.

Mis-

understandings generated in such manners makediscussions never merge each other.

Currently, we can find that scientists conduct R&D
jointly and simultaneously from different countries byusing advanced information technology.

3.2.

For example,

Policy Objectives and Management

I observed in 2007 that nano-bio-IT scientists in Palo

Theories

Alto and Europe observed cells through a high voltage

Management theories that are derived from industry

microscope at Osaka University, that a scientist in

analyses are extensively used in policy discussions

Osaka operated it.

(For example, Porter, M.E. 1990). So, I will here dis-rangements prevailing in Palo Alto.

cuss other kinds of management theories of economic

confront with was the nation specific patent registra-

discipline.

tion, identification of location of invention, as well as

In social sciences, we also need to discuss “objectives” and “prescription.”

We could see similar research ar-differences of rules.

What scientists

These difficulties generate bur-den upon scientists who involve in joint research proj-

In so-called deductive logic in the field of social sci-

ects.

Based on the transaction cost theory, such bur-ences, we place a specific “objective” before “observa-

den refers to “transaction costs” on joint innovation

tions.”

efforts.

We induce a feedback loop to test whether re-sults support the “objective.”

In social sciences, theobjective is a specific “policy” objective.

Then, I can infer a hypothesis that suchtransaction costs on joint innovation efforts will be re-

For exam-solved when scientists could register their invention atple, “stimulating innovation,” “promoting utilization ofa supra-national institution as a part of global patent

university IP” “fastening the process of technology

system.

transfer” are examples of policy objectives.

has an effect to internalize national borders.

Here, an issue derived from it is whether or not we
can discuss prescription in sciences.
In the past, it was regarded that discussing prescrip-

It is because such supra-national institution

At present, we do not have exactly the same supranational institution that can be observed directly.
However, we can observe similar policy examples suchtion was not science matters, or scientists must not

as Patent Prosecution Highway.

discuss remarks such as whether we “should” increasemulate evidences for verifications on the way to the

productivity, or whether we “should” promote innova-

global patent system.

tion.

In these days, discussing prescription came tobe accepted in social sciences.
For example, there is a prescriptive policy remark

4.

Then, we can accu-

Concluding Remark
and Implications

that “we should promote the path towards global patent system.”

Examples include notions by Arai,In this preliminary research paper, I started with dis-

Hisamitsu, former WIPO (World Intellectual Property

cussing distinctive differences of methodologies be-

Organization) Advisory Commission, among others

tween those of social sciences and natural sciences.

(See, Arai, H. 1999).

As intellectual property issues and policy-oriented is-

For this prescriptive policy re-mark, I can build the following hypothesis : internaliz-sues force us to conduct interdisciplinary research, I

ing transaction costs derived from market incomplete-found it critical at first to nurture mutual understand11

〈日本知財学会誌〉 Vol.9 No.1― 2012

ings by identifying and discussing critical methodology
differences.
Then, I argued how we can link intellectual property
elements to existing management theories ; especiallytheories that derived from a question on “why organization emerges.”
Based on the above mentioned, I proposed opportunities for social scientists in the field of management
theories to involve in policy-oriented issues.

Here I

used the prescriptive remark on global patent system
as the example.
From my viewpoint, the supra-national system willcontribute to internalize market incompleteness.

It

implies that such organization or system will resolve
burdens on global research efforts and advance joint
research.

Setting hypothesis on concrete strategies

and organizational/institutional forms will follow as anext step.

Institutional devices such as Patent Prose-

cution Highway will be used for this purpose.
I find that fundamental research questions on why
organization emerges (Coase, R. 1937) is still usefulfor intellectual property issues and policy issues currently exist.

Questions that arise from organizationand market have abundant opportunities for solving intellectual property, science business, and related policy
issues.

12

NOTE
1 Opinions expressed in this paper are the author’s personal and independent opinion.
2 The vertical integration process of currently large American corporations is explicitly mentioned in Chandler, A.
(1977). On the other hand, IP managers may perceive
their link to management in“marketing”and“finance.”
Both needs evaluation of IP itself. Such evaluation requires in-depth science and technology and legal knowledge, and not necessarily relate to organizational management. So I do not discuss it here.
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