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Sustainable Growth Through Strategic Innovation

Driving Congruence in Capabilities

Mitsuru Kodama

From detailed reviews of existing dynamic capabilities, this book presents a theoretical model of a strategic innovation system as a corporate system capability to enable a large company to achieve strategic innovation. The book includes in-depth case studies to illustrate the importance of strategic innovation capabilities.
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Chapter 8: Strategic innovation capabilities through capabilities integration: the cases of Qualcomm and TSMC versus Japanese semiconductor manufacturers

Driving Congruence in Capabilities

Mitsuru Kodama

Extract

As a first discussion, this chapter presents the examples of the global semiconductor businesses of Qualcomm and TSMC, and how these large corporations coordinate virtual and vertically integrated value chains through global partnerships with horizontal divisions of tasks in the semiconductor industry not only to drive their innovation activities, but also to offer new value for customer innovation. Skillfully using their semiconductor industry business models, the business strategies at both Qualcomm and TSMC are to configure modular organizations and networked modular organizations as dynamic organizational forms that include their customers and partner corporations. Thus, business model through orchestration of co-specialized assets dispersed both in an out of the company is central to their organizational strategy. This chapter observes and analyses these research questions from perspective of the three factors of capabilities congruence, and describes how Qualcomm and TSMC redefine their corporate boundaries to maximize the success of their open innovation by executing capabilities congruence by configuring dynamic organizational forms to respond to dynamic changes in the environment. Contrasting that, the chapter also presents how standardized and regulated unified development, design and manufacturing brought about excessively inflexible intangible capabilities that hindered capabilities congruence at Japanese semiconductor manufacturers.

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