How do firms create and capture value in large technical systems? In this paper, I argue that the points of both value creation and value capture are the system's bottlenecks. Bottlenecks arise first as important technical problems to be solved. Once the problem is solved, the solution in...

This study empirically investigates the relationship between design structure and organization structure in the context of new infrastructure development projects. Our research setting is a capital program to develop new school buildings in the city of Manchester, UK. Instead of creating a...

The mirroring hypothesis predicts that organizational ties within a project, firm, or group of firms (e.g. communication, collocation, employment) will correspond to the technical patterns of dependency in the work being performed. A thorough understanding of the phenomenon is difficult to...

Modularity is a means of partitioning technical knowledge about a product or process. When state-sanctioned intellectual property rights are ineffective or costly to enforce, modularity can be used to hide information and thus protect intellectual property (IP). We investigate the impact of...

Modularity describes the degree to which a complex system can be broken apart into subunits (modules) which can be recombined in various ways. Modularity is important for organizations and the economy because the boundaries of organizational units and corporations are likely to match the...

In this paper we explain how firms seeking to take advantage of distributed innovation and outsourcing can bridge the tension between value creation and value capture by modifying the modular structure of their technical systems. Specifically, we introduce the concept of “IP modularity”, a...

Our paper tests a key prediction of property rights theory, specifically, that agents will respond to marginal incentives embedded in property rights when making non-contractible, revenue-enhancing investments. (Grossman and Hart, 1986; Hart and Moore, 1990). Using rich project-level data from the...

Systems of distributed innovation – so-called business ecosystems – have become increasingly prevalent in many industries. These entities generally encompass numerous corporations, individuals, and communities that might be individually autonomous but related through their connection with an...

The existing theory of modularity explains how modular designs create value. We extend this theory to address value appropriation. A product or process design that is modular with respect to intellectual property (IP) allows firms to better capture value in situations where knowledge and value...

The boundaries and contours of design sciences continue to undergo definition and refinement. In many ways, the sciences of design defy disciplinary characterization. They demand multiple epistemologies, theoretical orientations (e.g. construction, analysis or intervention) and value...