Assessing the performance of a vertically disintegrated chain by the DEA approach–a case study of Taiwanese semiconductor firms

The competitiveness of an individual firm depends upon the competitiveness of the value chain to which it belongs. The core constraint of virtually every chain is that chains are structured, measured and managed in parts, i.e. vertically disintegrated, rather than as a whole. Assessing the performance of vertically disintegrated firms can provide an insight of how each firm acts in such a value chain. This paper aims to study the operating performance of the vertically disintegrated chain in the integrated circuits (IC) industry. A performance evaluation was completed for 48 leading vertically disintegrated semiconductor companies in Taiwan, including 17 in design, 10 in fabrication and 21 in packaging/testing, using the data envelopment analysis (DEA) approach which inherently recognises tradeoffs among various measures. The empirical results indicate that the IC design firms perform better than IC fabrication and IC packaging/testing firms. Overall, semiconductor firms in Taiwan still have room for performance improvement. In addition, the empirical results suggest that an IC company's scale of size does play an important role in influencing its operating efficiency. One can increase performance by consolidating with other smaller units to achieve an optimal size. In addition, an analysis of operating performance by DEA can provide a semiconductor firms’ operations with insights into resource allocation competitive advantages, and help with strategic decision-making, especially regarding operational styles under an intense competitive environment.     

Innovation and Firm Growth: Is R&D Worth It?

The paper contributes to an emerging literature that critically questions the degree to which R&D, at the centre of national and transnational innovation policies, results in firm growth. The differences in how innovation affects firm growth is explored for small and large publicly quoted US pharmaceutical firms between 1950 and 2008. We observe that the positive impact of R&D on firm growth is highly conditional upon a combination of firm-specific characteristics such as firm size, patenting and persistence in patenting. For small firms, R&D boosts growth for only a subset of firms: namely, those that patent persistently for a minimum of five years. For large pharmaceutical firms, on the other hand, R&D may have a negative impact on growth; potentially resulting from the low R&D productivity these firms have suffered from since the mid-1990s. These results raise important issues around the R&D and firm growth relationship for small and large firms as well the role of persistence in innovation for boosting firm performance.     

Do the Performances of Innovative Firms Differ Depending on Market-oriented or Technology-oriented Strategies?

Despite a perception to the contrary, the performances and values of innovative firms can differ. While people are preconditioned to believe that these firms perform well and have high valuations, this is not always the case. In order to explain this phenomenon, we adopt a lens of strategic orientations that influence innovation: market orientation and technology orientation. By using 10-year panel data, and a content analysis examining the relative orientations of our sample firms, we find that the market-oriented and technology-oriented tendencies of innovative firms influence firm performance and value. Relatively market-oriented innovative firms can guarantee instant performance by offering customers new products and services that they want. However, customers may not be loyal to one particular innovative firm. By contrast, relatively technology-oriented innovative firms are not subject to customers' fastidious choices and have higher firm values. Furthermore, environmental uncertainty negatively influences the relatively market-oriented innovative firms' value as well as sales performance.     

Patterns of Technological Innovation in Knowledge‐Intensive Business Services

Employing data from a sample of 1,161 small firms, the paper draws broad comparisons between patterns of innovation expenditure and output, innovation networking, knowledge intensity and competition within Knowledge‐Intensive Business Services (KIBS; N = 563) and manufacturing firms (N = 598). In so doing, KIBS are further disaggregated along lines proposed by Miles et al. (1995 Miles, I., Kastrinos, N., Flanagan, K., Bilderbeek, R., den Hertog, P., Huitink, W. and Bouman, M. 1995. Knowledge Intensive Business Services: Their Role as Users, Carriers and Sources of Innovation EIMS Publication No. 15, Innovation Programme, DGXIII, Luxembourg [Google Scholar]). That is, as technology‐based KIBS (t‐KIBS; N = 264) and professional KIBS (p‐KIBS; N = 299). However, detailing such broad patterns is preliminary. The principal interest of the paper is in identifying the factors associated with higher levels of innovativeness, within each sector, and the extent to which such “success” factors vary across sectors. The results of the analysis appear to offer support for some widely held beliefs about the relative roles of “softer” and “harder” sources of knowledge and technology within services and manufacturing (Tether, 2004 Tether, B. 2004. Do Services Innovate (Differently)?, Manchester: University of Manchester. CRIC Discussion Paper 66 [Google Scholar]). However, some important qualifications are also apparent.     

Application and success of R&D subsidies: what is the role of firm age?

This article evaluates the propensity of firms to apply for R&D public grants, their capacity for obtaining subsides and how these relate to the firm age. This analysis is particularly relevant in understanding why young firms may be more or less successful in their application for public subsidies. Using data from an extensive database of 19,236 firms in Catalonia, we estimate a maximum likelihood probit model with sample selection. Our results show that firm age does not exert a significant direct impact on the application propensity in R&D public call, but younger firms tend to show a larger propensity to receive an R&D subsidy. They also show that firm age exerts a moderating role through different internal resources. They highlight the need to design R&D public policies that explicitly favour applications by young firms to help overcome their obstacles to innovation.     

Product design and development in small firms

Some of the problems experienced by small firms engaged in product design and development activities are examined. After a review of recent published material, a case history is presented which analyses a UK based small firm. In the discussion which completes the paper, areas for further research are indicated.     

Innovation, New Market and Governance Choices of Entry: The Internet Brokerage Market Case

This paper investigates the case of market entry strategies following the introduction of a disruptive innovation. Recognizing that market entry strategies have been envisioned in the literature as a discrete phenomenon, we develop an empirical framework that portrays these strategies as a capability building process. Three organizational modes are integrated into our model: acquisition, alliance and market transaction. We compare the first two with the third and test the model in the setting of the online brokerage industry by using a sample of 897 moves made by 98 firms between 1994 and 2000. We suggest that firms' entry modes can be differentiated along factors specific to market timing as well as the degree of specificity of targeted capabilities. Our findings show that acquisitions are used to access specific capabilities. This means that external sources can be used when firms face a make-or-buy decision in the aftermath of technological change. Alliances appear to play a limited role while market transactions are widely used. By suggesting that entry into a new industry is not a discrete phenomenon, our research should open the avenue to additional inquiries on this topic.     

Analysis and approximation for the performance of a workstation with various types of setups

Setups commonly exist in flexible manufacturing systems. Modelling the queue time correctly is of fundamental importance in evaluating the performance of manufacturing systems. An insightful classification is the first step towards correct modelling. Through the observation of practical production lines, two types of setups are classified: state-induced setups and product-induced setups. The product-induced setups can be a changeover setup or a replacement setup. Changeover setups are induced by switching manufacturing processes between products, whereas replacement setups are caused by changing components or consumables. Approximate models for the mean queue time of different setup types are proposed based on their distinct properties. The proposed models are validated with simulations and perform well in the examined cases.     

Exploring the relationship between types of family involvement and collaborative innovation in design-intensive firms: insights from two leading players in the furniture industry

ABSTRACT

Innovation in family firms has attracted considerable interest from scholars and practitioners in recent years. However, further theoretical and empirical research is needed to illuminate the intricate relationship between family involvement and innovation. This article studies the effect of different types of family involvement on the management of collaborative innovation. Based on empirical evidence from two leading Italian design-intensive firms in the furniture industry (B&B Italia and Cassina), this study illuminates how family involvement in control and management influences the way design-intensive firms collaborate with external designers to innovate their products. We use two indicators, design renewal and design identity, to capture differences in collaboration approaches through which design-intensive family firms involve external designers. Thus, our findings contribute to understanding how collaborative innovation is managed in family firms. This article also provides family firm owners and managers with insights on the forces that influence the collaborative innovation processes in design-intensive firms.     

The Persistence of Superior Performance at Industry and Firm Levels: Evidence from the IT Industry in Taiwan

The industrial organization economics and the resource-based view of the firm have led to disagreements over the question as to which of firm performance at the industry and firm levels has persisted longer since the 1970s. Acknowledging that the IT industry in Taiwan has become very competitive and has demonstrated outstanding performance in the world since the 1990s, this study calculates the persistence in the incremental components of the effects on profitability, and tests hypotheses that conform to the above mainstream views of relative rates of persistence. A persistence partitioning model is fitted to a new data set, and the results show that the incremental effects of firms on profitability persist longer than the incremental effects of industry. In other words, the long-term competitive advantages of IT firms in Taiwan are more predictable and sustainable in regards to firm factors than for industry influences. These findings support the predictions of the resource-based view of the firm, and provide some implications for corporate strategy.     

"Get Rich, or Die Trying": Lessons from Rambus' High-Risk Predatory Litigation in the Semiconductor Industry

Patent litigation is a visible and widespread feature of the semiconductor industry, as firms pursue judicial mechanisms to defend, or promote, their intellectual property portfolios. This study highlights the antecedents, strategic goals, tactics and outcomes of the most significant US trial of this type in the last decade, namely Rambus v. Infineon, whereby a smaller company (Rambus) successfully pursued a “do or die” litigation campaign against a larger rival, thus changing the rules of engagement for the semiconductor industry as a whole. This campaign is notable, not just because of its undoubted effects on the semiconductor industry, but because of the innovative nature of Rambus' strategy, which was extremely risky both in terms of its prospects of success and its potential damage to the company if it failed. Arguing that dominant logic and operating rules are important antecedents in the development and pursuit of patent litigation strategies, this paper analyses the Rambus case using a “dominant logic” and “effectuation” framework. Doing so demonstrates the innovative nature of Rambus' “high-risk predatory strategy”, the outcome of a dominant logic sustained by effectuation principles. The paper discusses the impact and significance of this new strategic form.     

Entrepreneurs and technology diffusion: How diffusion research can benefit from a greater understanding of entrepreneurship

This study builds on the work of Schumpeter and others who have recognised the role of entrepreneurs in the formation of entirely new industries around technological innovation. With this in mind, it critically reviews diffusion research, finding this work to be lacking in its treatment of entrepreneurship and its ability to integrate the wide range of factors that affect the diffusion process. In an effort to address these theoretical gaps, this study draws on management literature on the growth of the entrepreneurial firm, which puts entrepreneurs at the centre of analysis, and serves to integrate many of the traditional concerns of diffusion research. The authors hope that the proposed analytical framework will be applied to future case studies of technology diffusion in order that we might continue to better understand and explain the rate of technological advance in society.     

Successful e-marketplaces: An institutional perspective

Since their inception, e-marketplaces have witnessed a major shakeout and have undergone tremendous change with regard to their business models and products/service offerings. Only a few marketplaces survive, tend to grow and consolidate in this turbulent environment. This development represents an interesting challenge to prevailing institutional theory, which views the performance of organizations as strongly influenced by the orientation and characteristics of a number of key institutional frameworks. Our research, based on a case survey methodology, attempts to identify the characteristics underlying successful e-marketplaces. Results indicate the success of a marketplace strongly influenced by number of key institutional frameworks and firm-level strategies. Ownership and bias, service focus, value impact, market opaqueness, rapidity of response, complementary assets and appropriability, and industry regulations emerge as key variables.     

半导体制造业的物流效率研究

以晶圆代工模式下的半导体制造为主要研究对象,分析了其特殊的物流模式即双向物流模式,并基于这种物流特性,以改进物流效率为目标,分析并提出了造成物流停滞的两个主要环节,着重对这两个环节提出了一些改善方法。     

Innovation and the growth of service companies: the variety of firm activities and industry effects

This paper examines the relationship between innovation performance and employment growth in firms by taking a closer look at specific innovation activities and industry effects in the context of the services sector. Firm-level CIS data on Polish services firms in 2004–2009 are analysed using robust M-estimation. The results indicate that the effects of product, process and organisational innovations depend strongly on the level of technological opportunities in the industry in question. Given the widely acknowledged role of marketing innovations in services, possible synergies between innovations in the form of new products and new marketing techniques are also analysed. We demonstrate that marketing innovations are conducive to firm growth if they complement product innovations, but they are less likely to foster growth when applied in isolation.     

Knowledge-intensive sectors and the role of collective performance-related pay

ABSTRACT

The main contribution of this study is showing that the efficiency effects of collective performance-related pay (CPRP) are more pronounced in knowledge-intensive service sectors (KISs) than in other sectors. The hypothesis is that human resource practices such as CPRP are particularly useful for enhancing firm performance when innovation-supporting knowledge is distributed among multiple skill sets and employee creativity, knowledge creation and knowledge sharing are key success factors for the firm. Cross-sectional estimates obtained for a national sample of approximately 3,800 Italian firms confirm this prediction. These results are validated by adopting a treatment effect approach to solve the self-selection problem.