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Organization Science (Forthcoming)

Firm-Specific, Industry-Specific, and Occupational Human Capital and the Sourcing of Knowledge Work. Organization Science (Forthcoming). Kyle J. Mayer Univ. of Southern California. Deepak Somaya UIUC. Ian O. Williamson Melbourne Business School. Presented by: Danielle Jones.

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Organization Science (Forthcoming)

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  1. Firm-Specific, Industry-Specific, and Occupational Human Capital and the Sourcing of Knowledge Work Organization Science (Forthcoming) Kyle J. Mayer Univ. of Southern California Deepak Somaya UIUC Ian O. Williamson Melbourne Business School Presented by: Danielle Jones

  2. Key Terms & Definitions

  3. Motivation & Objective Previous research Research Question What drives heterogeneity in firm capabilities? Objective To explore and demonstrate how capability differences may result from governance choices (“make-or-buy” decisions) related to the focal activity and how firms accumulate capabilities in the firm-specific, industry-specific, and occupational human capital necessary to perform knowledge work.

  4. Proposed Theory Knowledge sourcing choice Prior governance choices Capabilities Buyer-supplier differences in governing skilled employees Outsource (supplier) Internal sources Make or Buy Firm-specific Industry-specific Occupational

  5. Data • 129 publicly listed U.S. firms in the 1989 Fortune 500 survey in technology-based industries • Industries: chemicals; computer manufacturing; electronics; pharmaceuticals; scientific and photographic equipment • Patents that were filed and obtained (patent prosecution) during 1990-1995 • Core sample of 80,129 patents

  6. Variables and Logit Model Specification

  7. Hypothesis 1: Firm-Specific Human Capital

  8. Hypothesis 2: Industry-Specific Human Capital

  9. Hypothesis 3: Interaction Between Firm-Specific & Industry-Specific HC

  10. Hypothesis 4: Occupational Human Capital

  11. Hypothesis 5: Occupational Human Capital – Size of Internal Staff as a Moderator

  12. Discussion • Contributions: • Extend Castanias & Helfat’s (1991, 2001) framework of firm-specific, industry-specific, and general HC by focusing on occupational HC as a subset of general HC • Demonstrate how governance choices impact HC-based capability development, which influences knowledge sourcing decisions • Integrate TCE (governance) and RBV (capabilities) theories • Use unstructured manager interviews to corroborate findings • Limitations: • Sample only includes large Fortune 500 firms • Takes a dichotomous approach to outsourcing (a firm either outsources or it doesn’t) • Implications • Organizations should carefully consider the long-term effects of outsourcing decisions on the development of HC

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