Managing Public and Private Firm Knowledge Within the Context of Flexible Firm Boundaries

Abstract

Abstract The continued growth of interfirm partnering, from strategic alliances to contingent work use in core value-creation activities to networkbased competition, presents a host of complex issues surrounding how these arrangements affect firm knowledge and, ultimately, firm competitiveness. On the one hand, more porous boundaries present the firm with easier access to public knowledge resident outside of its boundaries. This may facilitate the absorption of external public knowledge and the fusion of this public knowledge with existing private firm knowledge. On the other hand, more porous boundaries may also make it easier for proprietary private firm knowledge to seep out into the external environment. This dissemination may have negative consequences particularly for firms that seek to appropriate supernormal returns from this private knowledge. This chapter focuses on partnering for the purpose of knowledge. Although there are many other kinds of partnering arrangements-such as those dedicated only to marketing or distribution-a limited focus allows for a more detailed analysis of the partnering issues that affect core value-creation activities of the firm. This study aims to provide a navigational chart through the large bodies of research on knowledge and on partnering to outline the issues that inform the competitive implications of knowledge-focused partnering.