SCIP Research Highlights
"Technical Progress and Co-Invention in Computing and in the Uses of Computers," Timothy Bresnahan & Shane Greenstein
"Competing on the Edge: Strategy as Structured Chaos," Shona Brown & Kathleen M. Eisenhardt, July 1997
Previous research highlights are also available on-line.
Information Technology: Our investigations of information technology firms themselves continue to center around the management challenges associated with the "new computer industry" (identified by Andy Grove.) Tremendous speed and flexibility have been achieved by dividing invention up into specialized inventing firms, and the Silicon Valley model is rightly praised. It does, however, by its very novelty, pace of change, and innovativeness, provide a new set of challenges to managers. New results illuminate both the size of this problem and some early solutions to it. New survey and interview results from our Organization & Strategy group (headed by Kathy Eisenhardt, and working in combination with Andersen Consulting, Hitotsubashi University and Insead) turn up large differences in firms' capabilities and organizations in response to the new challenge. One of the most interesting results is the emergence of the "dumb fast" firm. These are not-very-capable firms who notice the increased pace of competition and the increased speed with which their competitors make decisions. Their response is to make decisions faster, sacrificing the quality of those decisions. Related results document the variety of ways in which firms organize key elements, such as decentralization of decision authority, use of alliances, and so on. We are building an operational taxonomy of alliance-building strategies.
Organizations: In related results, our Technology, Organizations & Markets group (headed by Haim Mendelson) earlier reported on the superior performance of "information age" companies in rapidly-changing competitive environments, and built an operational and quantitative measure of effective organizational information processing. This year, the group has extended the same analysis to product structure, finding that narrowly focused product strategies have high performance payoffs in the same kinds of competitive environments as do information-age qualities. This brings forward evidence for a common explanation of a new industry structure -- specialized and vertically disintegrated -- and new firm structure, information-age.
IT in Use: On the user-company side, we have moved forward from our studies of the value of information technology in use and the nature of the complementary co-investments user companies make to a set of closely related issues about labor. Technical change in computing and in computer networks has meant that a great many new applications, and even new kinds of applications have been enabled. Invention of the organizational and market forms in which full advantage is taken of these enabling technologies is ongoing lagging (as always) behind the technologies themselves. New work by Timothy Bresnahan and by Bresnahan, Erik Brynjolfsson and Lorin Hitt in our IT in Use group examines the hypothesis that the organizational changes taking advantage of information technology have been an important driver of the recent spread out in the income distribution. These studies work primarily with statistical methods, though some company interviews and interactions are involved as well. An early finding is that organizational computing -- as opposed to technical or personal computing -- is an important substitute for medium-earnings white collar workers but actually increases the demand for higher-earning white collar workers.
Software: Another labor-market finding comes from our software group, which has been investigating the software talent shortage. The research here is based on collaborations with people in larger and smaller companies, government, and associations. The February Software Labor Roundtable was instrumental in starting several initiatives in government and industry. This years' preliminary findings relate more to the implications of the software talent shortage. (Last year's related to its size and worldwide character.) Entry into the software publishing industry itself is getting more difficult because of the talent shortage. The shortage is also a factor in moving the software services industry offshore. It has different implications for corporate and government applications projects, where quality problems and project delays arise. These delays and problems are particularly problematic at the present moment of transition from traditional computing modes to networked computing modes supporting a wide range of new types of applications. We conjecture the software talent shortage makes the co-invention bottleneck worse than usual.
Networks: Our newest initiative on the user company side is spearheaded by Francois Bar of our Networks group and looks closely at the use of intranets in large organizations. This multi-firm deep-case study has only a few preliminary findings to date, but they speak to the variety of justifications and modes of deployment of corporate intranets. Surprisingly, in the present corporate IT environment the majority of intranets are cost-justified (savings on photocopy costs if a manual is delivered electronically, etc) rather than justified by the prospect of real transformation. Less surprisingly, users of the intranet and its technology sponsors do not uniformly agree about the purposes or extent of use. We look forward to a much fuller set of results from this effort as the multi company working group will meet many times each quarter this academic year.