Transcript Patterns of Industrial Organisation

MDA
Patterns
of
Industrial Organisation
Paolo Gurisatti
Kingston, 1 June 2009
MDA
Vertical Integration
• The sequence of stages belonging to the same
technical process may be vertically integrated
either into a “private territory” (company) or
into a “public/open territory” (industrial
district or open source global network)
• The integration choice is conditioned by
“social agreements”, transactional costs
(O.Williamson) and knowledge distribution
MDA
Integrated “Factory”
• The first choice is oriented to a social
agreement of asymmetric dependence:
– Common property of industry assets and
intellectual property (knowledge) reserved for
company members “only”
– Subordinate contracts and agreements
– Organisation based on hierarchy and “distrust”
– Centralisation of power, capital and surplus
MDA
Network Enterprise
• The second choice is oriented to a social
agreement of asymmetric cooperation:
– Divided property of industry assets, but common
property of artifacts, knowledge and brand
– Exclusive sub-contracting (franchising)
– Organisation based on “negotiation and contract”
– Centralisation of power and knowledge (IP),
asymmetric distribution of capital and surplus
MDA
Industrial District or Cluster
• The third choice is oriented to a social
agreement of generative relationship:
– Divided property of industry assets, knowledge
and artifacts, but shared local identity (trust)
– Supply chain co-management and co-design
– Organisation based on “trust” and common
“narrative structures”
– Decentralisation of power, capital and surplus
MDA
Patterns of industry organisation in footwear
Kind of
Organisation
Integrated Factory
Network Enterprise
Industrial District
Stage of
the Process
Design &
Trade Delivery
10
Montage
Sole Production
5
10
20
10
10
5
5
3
10
5
10
5
5
5
50
5
10
Leather Cutting
5
10
5
Sewing
2
10
Total
Employment = 100
Output = 100.000
10
10
5
10
5
Total
Employment = 100
Output = 100.000
10
5
10
5
5
5
Total
Employment = 100
Output = 100.000
5
MDA
District’s (Cluster) Peculiarities
• In the district’s (cluster) pattern:
– Artifact attributions and technology framework are
shared by the stakeholders and knowledge is
produced like as in an “open source” network
– Head/Leading companies “do not” control all the
available knowledge and “do not” plan providers’
supply (just design functional features of single
components and services to be developed)
– The value chain is composed by “accredited agents”
MDA
Advantages of District (Cluster)
• District pattern exploits four advantages:
– Flexibility: lower restructuring costs in front of
unpredictable markets
– Risk sharing: lower capital creation costs and
benchmarking on investment processes
– Profit sharing: surplus distribution and quick
respons to incremental innovation needs
– Knowledge sharing: knowledge production is not
concentrated at the “top” of the value chain
MDA
Generative Relationships
• District pattern reduces information and
power asymmetries (transactional costs):
– Independent social actors (neither friends, nor
strangers... providers/partners co-designing work
teams…)
– Competition and cooperation (community
participation to strategic issues of the territory,
but transparent selection of competing
solutions…)
MDA
Working Conditions
• District pattern has to develop an efficient
“market system”:
– Commun history of local agents and knowledge,
shared genealogy of independent units (spin offs
and competence networks)
– Commun institutions and rules promoting
constitutional processes (rise of local specific
intermediate structures – scaffolds – suited for
supporting industrial evolution )
MDA
Market Systems
• “By a market system we mean a set of agents
that engage with one another in recurring
patterns of interaction. These interactions are
organised around an evolving family of
artifacts.”
(David Lane and Robert Maxfield, mimeo 2006)
• Innovation, production of new knowledge and
design of new artifacts (functional systems)