What is Open Source Corporate Strategy (OSCS) ? : The firm’s strategic perspective on open source

OSCS is a new concept signifying the process by which the firm incorporates open source principles into its business model, as an effective diversification strategy to gain and sustain competitive advantage, in the context of a globally interconnected society. This process entails firms willingly giving up control of a core asset, making it available to the public at large, and encouraging them to build upon that asset collaboratively. The shared asset acts as the subject of interaction between the firm and globally distributed non-employees. These wide-spectrum and large-scale interactions give the firm a global knowledge-bridging competitive advantage.

Open Source Corporate Strategy (OSCS): Reaching outside the firm’s boundaries to tap upon global talent

Christopher Tucci, Juan Andrei Villarroel Fernandez

We propose a new concept, OSCS, seeking to explain the process by which the firm incorporates open source principles into its business model, as an effective diversification strategy to gain and sustain competitive advantage, in the context of a globally interconnected society. Several large firms, such as IBM, Netflix, Sun Microsystems, Amazon, have willingly given up control of core assets of their firms, making them available to the public at large, and encouraging them to build upon those assets collaboratively. Ultimately, there is evidence that firms following this strategy are getting large numbers of innovative global non-employees to create new value that benefits the firm and helps steer its way into the future. Interestingly, this advantage is based upon assets that the firm relinquishes control over. We suggest that there is a need to reconcile existing theory with the existence of an advantage outside the boundaries of the formal interorganizational fabric, bridging into the public domain. We will discuss how the open-source view may offer new insights and normative grounds for firm-level strategies that extend and complement the prescriptions offered by those with an industry-structure view (Porter 1985), resource-based view (Barney 1991), or relational-view (Dyer and Singh 1998). The panelists build upon their research on important concepts such as “openness”, “knowledge bridging”, “broadcast search”, “internet business models”, as they relate to firm strategy and contribute towards the OSCS concept. These insights and the open interactive discussions shall provide additional material for thought and inquiry in this nascent paradigm in management.

2007

Open source corporate strategy (OSCS)

Juan Andrei Villarroel Fernandez

This doctoral dissertation defines and sheds light on a nascent phenomenon in management, informally referred to as "crowdsourcing". I term this concept Open Source Corporate Strategy, or OSCS, which borrows insights from the open source innovation literature, as well as from the strategy literature. This new concept explains how the firm may incorporate open source principles into its business model, as an effective diversification strategy to gain and sustain competitive advantage, in the context of a globally interconnected society. Firms implementing OSCS make use of a "loose" intellectual property regime to extend their operations outside the formal boundaries of the organization, and orchestrate knowledge work via informal globally distributed communities of practice. Empirical evidence discussed throughout this dissertation shows that these, among others, could be new and important sources of competitive advantage for the firm. Over the last few years we have seen a tremendous increase in the ability of firms to expand operations beyond their boundaries: (1) outside the focal organization, by formally trading knowledge with other organizations external to the firm (Chesbrough 2003, 2006), and more recently, (2) outside the scope of the formal interorganizational fabric, by informally sharing knowledge with external online communities of practice (Lakhani et al., 2007; Villarroel and Tucci 2006). The research developed in this doctoral dissertation was designed to explore this phenomenon, by means of: (1) case studies of firms implementing such open initiatives, (2) computational models of open innovation and open sourcing unveiling their impact on system-level learning performance, complemented by (3) a survey-based study of the online community associated to one such firm-sponsored initiative unveiling the motivation factors that determine participation and contribution performance.

EPFL2008

Open source corporate strategy (OSCS)

Juan Andrei Villarroel Fernandez

EPFL2008