Dissertation:
Dissertation:
Organising AI: Tensions between Knowledge Efficiency and Bargaining Power
Organising AI: Tensions between Knowledge Efficiency and Bargaining Power
I study the impacts of technology adoption of AI on organisations. My papers focus on value creation and value capture for emerging technologies with a knowledge-based view. I explore the determinants of firms’ outsourcing decision during technological discontinuities. I am also interested in the investment of science in industry and the motivation to invest in the automotive industry .
I, Poon, Dibiaggio, L. & Kretschmer, T. Knowledge-Base Modularity and Boundary Choice Under Technological Discontinuity (JMP. Prepare for submission to Strategic Management Journal)
We examine how firms choose between internal development and external sourcing when adopting AI-related technologies under technological discontinuity. While modularity scholars argue modularity facilitates flexibility and outsourcing, industry architecture literature emphasizes shifting allocation of bargaining power of suppliers prevents firms from value capture. We investigate why does greater modularity not translate into uniformly greater outsourcing, and why does the modularity level at which outsourcing becomes attractive vary across firms? We argue that knowledge-base modularity has two opposing effects on outsourcing: it initially increases outsourcing by reducing coordination and interface burdens, but at higher levels it decreases outsourcing by raising the option value of internally retained, redeployable, and recombinable knowledge. We further argue that supplier capability distinctiveness under concentrated supply shifts this relationship rightward. Relying on patent data and outsourcing data from 2000-2021, we describe and analyse the strategic outsourcing decisions on AI-driven ADAS adoption in the automotive industry associated with their knowledge base modularity and advantages in capabilities. Our findings show support for both predictions. We contribute by showing an inverted curvilinear relationship between the outsourcing decision and the modularity of a firm’s knowledge base.
I, Poon, Dibiaggio, L. & Kretschmer, T. Bargaining Perspective on Modularity, Fungibility and Strategic Outsourcing.
Analyses of outsourcing decisions have traditionally focused on value capture and resource ownership. What has received significantly less attention is how outsourcing is shaped by the organization of firms’ knowledge bases and the recombination potential of technologies. Fungibility characteristic has therefore created both opportunities and constraints for outsourcing decisions, particularly during technological discontinuities. We provide a formal analysis in which technologies may be embedded within modular or non-modular knowledge systems. We show that the value of outsourcing differs across stages of technological advancement and depends on firms’ ability to exploit recombination opportunities. Greater fungibility expands firms’ recombination opportunities and increases the value of outsourcing when suppliers are better able to exploit such fungibility, strengthening their contribution to joint value creation and increasing their bargaining power. However, benefits from fungibility depend on technological uncertainty, as high uncertainty reduces firms’ ability to identify and exploit valuable recombination opportunities. Consequently, fungibility shapes the distribution of value captured among coalition members by altering their relative contribution to joint value creation. By incorporating fungibility into a bargaining framework, our analysis highlights how emerging general-purpose technologies such as AI can reshape coalition formation and the allocation of bargaining power across firms.