Co-operation and Outsourcing in the Global Economy
New Perspectives on the Modern Corporation series
Edited by Mario Morroni
Chapter 3: The Governance of the Knowledge-Intensive Firm in an Industry Life Cycle Approach
3. The governance of the knowledgeintensive ﬁrm in an industry life cycle approach Jackie Kraﬀt and Jacques-Laurent Ravix INTRODUCTION1 3.1 Today, a growing body of literature is developing the concept that diﬀerent types of rules and norms should govern entrepreneurial and public ﬁrms diﬀerently, depending on the industry in which they operate and the stage of development of the industry (Fransman 2002; Lazonick and O’Sullivan 2002; Filatotchev and Wright 2004; Becht et al. 2005). The present chapter contributes to this new literature by adding the empirical dimensions that are pointed out in the industry life cycle (ILC) literature. The purpose is to investigate the nature of the governance of the knowledge-intensive ﬁrm as seen from the perspective of an industry life cycle approach. By knowledge-intensive ﬁrm, we mean that ﬁrms, independently of their age and size, may be involved in the creation of new knowledge and may be the key actors in the development of innovation processes. As we shall see, the ILC can provide an appropriate, though incomplete, approach to analyse this question. This approach explicitly considers that small new ﬁrms enlarge product characteristics and are thus the initiators of innovation in the phases of emergence and growth of the industry, while large mature ﬁrms continue the process of innovation by investing in process capacities in the phases of maturity and decline of the industry. In the meantime, this framework is silent on modes of governance of the ﬁrm in relation to the development of the...
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