Interfirm Modularity and Its Implications for Product Development*

Industries characterized by interfirm modularity, in which the component products of different firms work together to create a system, are becoming increasingly widespread. In such industries, the existence of a common architecture enables consumers to mix and match the products of different firms. Industries ranging from stereos, cameras, and bicycles to computers, printing, and wireless services are now characterized by interfirm modularity. While the increasing presence of this context has been documented, the implications for the product development process remain underdeveloped. For the present study, in‐depth field‐based case studies of seven firms experiencing an environment of interfirm modularity were conducted in order to deepen understanding of this important phenomenon. What unique challenges did this context pose and why? What solutions did firms experiment with, and which seemed to work? Based on an inductive process of data analysis from these case studies, three primary categories of challenges raised by this environment were identified. First, firms were frustrated at their lack of control over the definition of their own products. The set of features and functions in products were constrained to a great extent by an architecture that the firm did not control. Second, while an environment of interfirm modularity should in theory eliminate interdependencies among firms since interfaces between products are defined ex‐ante, the present study found, ironically, that interdependencies were ubiquitous. Interdependencies continually emerged throughout the product development process, despite efforts to limit them. Third, firms found that the quantity and variegated nature of external relationships made their management exceedingly difficult. The sheer complexity was daunting, given both the size of the external network as well as the number of ties per external collaborator. Partners with whom control over the architecture was shared often had divergent interests—or at least not fully convergent interests. The solutions to these challenges were creative and in many cases counter to established wisdom. For instance, research has suggested many ways for a firm to influence architectural standards. While the firms in the present sample followed some of this advice, they also focused on a more neglected aspect of architecture—the compliance and testing standards that accompany modules and interfaces. By concentrating their efforts in a different area, even smaller firms in this sample were able to have some influence. Instead of focusing on the elimination of interdependencies, it was found that firms benefited from concentrating on the management of interdependencies as they emerged. Finally, while layers of management and “bureaucracy” are often viewed as unproductive, these firms found that adding structure, through positions such as Relationship Manager, was highly beneficial in handling the coordination and control of a wide range of external relationships.     

Workforce diversity initiatives of U.S. multinational corporations in Europe

Although most U.S. multinational corporations have substantial workforce diversity management programs in their U.S. operations, they are only beginning to consider parallel efforts in their overseas subsidiaries and affiliates. The internationalization issue is particularly prominent in the European Union, where competitive, demographic, legal, and political developments make workforce diversity issues unavoidable within the next few years. Instead of simply replicating U.S. programs, however, diversity initiatives in Europe need to adapt to each employer's strategic objectives, degree of organizational integration, and local needs. The experiences of Lucent Technologies Inc. and The Royal Dutch/Shell Group of Companies illustrate two contrasting approaches. The former has adopted a strongly multidomestic strategy, while the latter has a more global approach. © 2003 Wiley Periodicals, Inc.     

Learned helplessness as an explanation of elderly consumer complaint behavior

Studies of consumer complaint behavior have shown that many elderly consumers are very reluctant to pursue their rights through the complaint process when they encounter problems with products or services. This passive complaint behavior may be very costly to the elderly, who often live on fixed incomes. This paper presents a theory developed in experimental psychology that may help explain why clderly consumers are more likely than other consumers to incur losses rather than engage in complaint activity. The theory, known as learned helplessness (LH), refers to a process whereby noncontingent reinforcement produces the expectation that events are uncontrollable.The theory of learned helplessness is presented and related to specific behaviors of dissatisfied elderly consumers that have been reported in the literature. Strategy implications of the theory are discussed for counselors, consumer affairs practitioners, and others interested in helping elderly consumers exercise their rights.Mary C. LaForge is currently Associate Professor of Marketing at Clemson University. She received her Ph.D. in Marketing from the University of Georgia. Her current research interest focuses on the behavior of the elderly as consumers.     

Incremental approaches to establishing trust

We investigate cooperation using an incremental investment game in which the first-mover has the ability to make small, but increasing incremental investments in their counterpart. Our experiment is designed to test whether establishing trust in small increments is more effective than alternatives, including a one-shot investment game, a decrease only condition where the amount the first-mover sends to the second-mover must be less than the amount previously sent, and an unrestricted condition where the first-mover is not restricted by the amount previously sent. Although results were mixed, broadly, iteration affords greater cooperation than one-shot games and, when given the choice, participants seem to prefer to build trust gradually. Implications for institutional design are discussed.      

Dominion or Republic? Migrants to North America from the United Kingdom, 1870–1910

Late nineteenth–century Canada attracted a large number of immigrants from the UK, despite far lower average income per head there than in the US. While urban labour markets in the northern US were much larger than those in Canada, differences in outcomes between UK immigrants in Canadian and in northern US cities were small. Average annual real earnings by occupation group were only 10 to 15 per cent lower in Canadian cities. Individual–level census data indicate that the occupational distribution of UK immigrants in Canada was quite similar to that of their peers in the US.     

Developing social capital to achieve superior internationalization: A conceptual model

A conceptual model is proposed for analyzing the strategies of startups in the context of building social capital to achieve superior performance in internationalization. The study responds to calls for theoretical predictions based on comprehensive distinctions of network relationships, such as in the strength, number and content of ties. The effect of tie characteristics on formulating startup internationalization strategies and on subsequent performance depends on the combination of many weak ties and a few strong ties.     

The Incidence of Taxes on Casino Gambling: Exploiting the Tired and Poor

A bstract . The equity of taxes on casino gambling in Las Vegas and Atlantic City using recent survey data is examined. Daniel B. Suits (1977) study of the tax on casino gambling concluded that the tax was progressive when he used a national sample to estimate tax incidence. This result is challenged. Tax incidence is estimated using survey data obtained from people who either live in or have traveled to Las Vegas or Atlantic City. On the basis of the sample of people who have given themselves access to casino gambling , the tax is regressive; in fact, it is extremely regressive in Las Vegas. Therefore, in this time of easier access to casino gambling, policy-makers should be aware that the taxes on casino gambling place a proportionately heavier burden on low income groups.