Learning at the boundary of the firm : learning-by-interaction between a manufacturer and its users

Abstract

My dissertation centers on the very nature of the interaction and the learning that happens between users and manufacturers, and explores various micro-level mechanisms, which I call, "learning-by-interaction." The core concept, learning-by-interaction at the boundary of a firm, challenges the conventional perspectives - unidirectional and iterative - that failed to recognize the interactive learning process that happens between a manufacturer and its users. At the center of collaborative development of new products lies the issue of a language problem. When manufacturer and its users are engaged in the new product development process, they will naturally speak different languages. Investigation into the communication between seemingly disparate groups - a manufacturer and its users - reveals that the language boundary can be mitigated by local coordination based on the technical interdependencies between user requirement and technological implementation. Chapter 2 initiates this discussion by laying the foundation of the phenomenon. By reviewing the extant literature on firm boundaries, I extract relevant mechanisms in which the user-manufacturer boundary can be better designed. The language-oriented perspective is then presented as the main perspective of this dissertation. By conducting an exploratory study at a financial services firm, Fidelity Investment, I identify a long tail of the users' language diversity. This indicates that a substantial amount of commonality and a substantial amount of diversity coexist among the users.

(cont.) Chapter 3 extends what we know about firm boundaries from the existing theories and empirical findings, and focuses on a specific type of collaborative product design process between a manufacturer and its users. By using the grounded theory building method with multiple data sources from a manufacturing company in Canada, I develop a process model of how user-manufacturer problem-solving language differences can negatively affect the collaboration. Then the discussion shifts towards the actual process of how the language boundary can be mitigated by local coordination based on the technical interdependencies between user requirement and technological implementation. In Chapter 4, I identify the learning-by-interaction process between a manufacturer and its users in the product development stage. By examining 359 user-manufacturer co-development projects, I demonstrate that a focal manufacturer and its users have a learning curve identical to that observed within the boundary of the firm. But in contrast from what the traditional learning-curve effect suggests, I show that this learning-byinteracting with users benefits the design process rather than the manufacturing process. To understand the process of learning-by-interaction more deeply, I analyzed 2,365 communication data consisting of emails and phone call records and found that the timely and responsive feedback of interdependent information is critical in continuous-design problem-solving in this user-manufacturer learning process. The effects of prior templating - problem-solving with the products used against the use context - and distance - both spatial and temporal - on learning were examined as well, but it was revealed that they did not have a significant role in the context of this field study.