Innovating without information constraints
Subtitle: organizations, communities, and innovation when information costs approach zero
By: Elizabeth J. Altman, Frank Nagle, Michael L. Tushman
Contributors: Nagle, Frank, author; Tushman, Michael, author; Harvard Business School
Series: Working paper / Harvard Business School -- 14-043; Working paper (Harvard Business School) -- 14-043
Publisher: Harvard Business School
Published: 2013
Place of publication: Boston
Language: eng
Number of pages: 65
Description: Innovation has traditionally taken place within an organization's boundaries and/or with selected partners. This Chandlerian approach to innovation has been rooted in transaction costs, organizational boundaries, and information processing challenges associated with distant search. Information processing, storage, and communication costs have long been an important constraint on innovation and a reason for innovative activities to take place inside the boundaries of an organization. However, exponential technological progress has led to a dramatic decrease in information constraints. In a range of contexts, information costs approach zero. In this chapter, we discuss how sharply reduced information costs enable organizations to engage with communities of developers, professionals, and users for core innovative activities, frequently through platform-based businesses and ecosystems and by incorporating user innovation. We then examine how this ease of external engagement impacts the organization and its strategic activities. Specifically, we consider how this shift in information processing costs affects organization boundaries, business models, interdependence, leadership, identity, search, and intellectual property. We suggest that much of the received wisdom in these areas of organization theory requires revisiting. We then discuss the implications for an organization's management of innovation and conclude with research opportunities.
Notes: "November 2013"--Publisher's Web site.

Includes bibliographical references (pages 56-65).