Currently, two modelsof innovation are prevalent in organization science. The "private investment" model assumes returns to the innovator resultfsu private goods andef ficient regimesof intellectual property protection. The "collective action" model assumes that under conditionsof market f ailure, innovators collaborate in order to produce a public good. The phenomenonof open sourcesofc are development shows that users program to solve their own as well as shared technical problems, andfd./( reveal their innovations without appropriating private returnsftu selling thesofL are. In this paper, we propose that open sourcesofc are development is an exemplarof a compound "private-collective" modelof innovation that contains elementsof both the private investment and the collective action models and canof f society the "bestof both worlds" under many conditions. We describe a new setof research questions this model raisesfi scholars in organization science.

Employees are motivated intrinsically as well as extrinsically. Intrinsic motivation is crucial when tacit knowledge in and between teams must be transferred. Organizational forms enable different kinds of motivation and have different capacities to generate and transfer tacit knowledge. Since knowledge generation and transfer are essential for a firm s sustainable competitive advantage, we ask specifically what kinds of motivation are needed to generate and transfer tacit knowledge, as opposed to explicit knowledge.

Numerous contradictions are apparent in the knowledge management literature. For instance, tacit knowledge is regarded as an organiza- tion's primary source of competitive advantage. Knowledge management and organizational learning theories instruct organizations how to make this tacit unarticulatable knowledge, which is typically embedded in individuals, explicit and part of the organization's knowledge repository. However, once this tacit knowledge is explicit, it is vulnerable to replication, implying a loss of a firm's competitive advantage. Does this mean that the attempt to manage knowledge could destroy an organization's knowledge advantage? In order to explore this and other contradictions, this paper reviews some of the knowledge management literature in the areas of strategy, management, and information systems. Applying Burrell and Morgan's (1979) paradigms of social and organizational inquiry, this paper categorizes the research in knowledge management accord...

Infusing hierarchies with elements of market control has become a much-used way of simultaneously increasing entrepreneurialism and motivation in firms. However, this paper argues that such “internal hybrids, ” particularly in their radical forms, are inherently hard to successfully design and implement because of a fundamental incentive problem of establishing credible managerial commitments to not intervene in delegated decision making. This theme is developed and illustrated, using the case of the world-leading hearing aids producer, Oticon. In the beginning of the 1990s, Oticon became famous for its radical internal hybrid, the “spaghetti organization. ” Recent work has interpreted the spaghetti organization as a radical attempt to foster dynamic capabilities by organizational means, neglecting, however, that about a decade later the spaghetti organization has given way to a more traditional matrix organization. In contrast, an organizational economics interpretation of Oticon organizational changes is developed. This lens suggests that a strong liability of the spaghetti organization was the above incentive problem: Frequent managerial meddling with delegated rights led to a severe loss of motivation, and arguably caused the change to a more structured organization. Refutable implications are developed, and the discussion is broadened to more general issues of economic organization.

On behalf of:

All authors contributed equally. The names are arranged in alphabetical order

The capitalist and socialist societies of the 20 th century assigned firms different roles within their economic systems. Enterprises transforming from socialist to market economies thus face fundamental organizational restructuring. Many former state-owned firms in the transition economies of Central and Eastern Europe have failed at this task. These firms have pursued primarily defensive downsizing, rather than strategic restructuring, as a result of both internal and external constraints on restructuring strategies. Building on the organizational learning and resource-based theories, we analyze strategies available to management in privatized, former state-owned enterprises in transition economies to restructure their organization. Both internal forces promoting or inhibiting the restructuring process, and external constraints arising in the transition context are examined. A model and testable propositions are developed that explain post-privatization performance. Implications of our research point to the ways in which firms should manage and develop their resource base to transform to competitive enterprises.

Despite the growing body of literature describing the open-source phenomenon, few contributions have been theoretically grounded and research has largely focused on the software industry. Drawing on transaction cost economics, we go beyond these limitations and advance that open source constitutes a new generic governance structure---which we label bazaar governance--- based on a specific contract. We characterize this structure in terms of its strengths and weaknesses and in comparison with market, firm and network structures. We consider how bazaar governance is actualized within an industry and the institutional entrepreneur's crucial role in this process. Finally, we propose that bazaar governance has a profound impact on the structure of the industry in which it is introduced. Our propositions offer a potential basis for future research further developing governance theory.

2003 I dedicate this thesis to my son, Shuntaro, who came into this world on December

This paper develops an approach to organizational governance decisions that recognizes how the choice of organizational governance form affects both the creation and appropriation of economic value. The paper begins with a detailed survey of three theoretical approaches— transaction cost economics (TCE), the resource based view (RBV), and real options analysis (RoA) to the study of organizational governance. This review serves to provide background material on each theory as well as to identify the similarities and differences in the assumptions underlying these perspectives. A concluding section provides a series of propositions for future empirical research that may help to integrate these theories by incorporating notions of both value creation and value appropriation.