The knowledge base of products: Implications for organizational structures

  • Ozman M
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This paper investigates the impact of two dimensions of product knowledge bases on organizational structures. The first dimension, knowledge breadth, measures the complexity of a product. The second dimension, knowledge depth, measures the extent to which the knowledge embedded in the product can be used in different contexts. An agent-based simulation study is carried out to analyse the structural characteristics of organizations that emerge when self-interested agents select partners to combine their expertise and produce together. Agents learn from their interactions, which shapes their choice of partners in the future. The results reveal that multi-product companies with fewer inter-firm relationships emerge when products are complex and knowledge is highly reusable in different contexts. A network of specialized firms is a dominant organizational structure when products are complex and deep. The results are demonstrated through a brief case study of the history of the computer industry. © The Author(s), 2010.

Author-supplied keywords

  • firm formation
  • knowledge
  • networks
  • simulation

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  • M Ozman

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