The Role of NASA’s In-House Efforts in Shaping the Prototype of the Space Shuttle

Abstract

We explore the role of NASA’s inhouse efforts to develop the prototype of a complex system. We uncover a nuanced process by which the inhouse skunkworks helps the parent firm overcome technological uncertainties and meet the demands of various stakeholders, including the potential lead users. Whereas prior research suggests that designing nascent products are vulnerable to supplier opportunism, our investigation reveals the skunkworks’ role in mitigating such opportunism while designing the prototype of a complex system. We also find that the parent firm validated the skunkworks’ designs both internally and externally to curb agency problems.