Research on Corporate Strategy and Management Control for Open Innovation

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Initial field research concerned with joint research, technology alliances, roles of third party such as technology information providers, that we conducted in Japan, Silicon Valley, and greater London, provided insights that various issues related to open innovation processes can be analyzed from a transaction cost economics perspective. In the context of open innovation, there are two types of transaction costs; those "costs associated with searching for counterpart" and those "costs associated with internal coordination". We conducted a survey research targeted at listed manufacturing companies in Japan to examine this perspective with a large sample. The survey was sent out to corporate research centers that and domains. We questioned issues related to "selling technology to outside" and "buying technology from outside" at corporate head quarter, and those related to "buying technology from outside" at domains. We obtained following findings from the large sample survey research. ( … More 1) Both "selling technology to outside" and "buying technology from outside" are more likely to be observed when there is an organizational unit whose role is to search counterpart. We interpret that this is because those organizational units effectively decrease search cost in general. On the contrary, costs associated with internal coordination differ by types of transactions and by types of organizational structures. (2) "Selling technology to outside" is less likely to happen when the number of domains in a company increases. This is because "sell or use" decision concerning the technology developed at corporate research centers requires coordination with domains, and the coordination costs increase as the number of domain increases. Consistent with this finding, "selling technology to outside" decreases when there is decentralized management control system where power of domain is relatively strong. This type of coordination costs become less decisive and it is more likely to occur that "selling technology to outside" when there exist mechanisms that facilitate sharing technological information among domains. On the other hand, it is more likely to happen that the technology push type of "selling technology to outside" when corporate research centers have relatively strong power. (3) "Buying technology from outside" is more likely to happen when the number of domains increases. The need-pull type of "buying technology from outside", which reflect needs of domains, is more likely to happen when there is decentralized management control system where domain has relatively strong power. (4) This affects "buying technology from outside" at domains. "Buying technology from outside" at domains is less likely to happen when management control system is more decentralized. Less