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Politecnico di Milano

Dipartimento di Ingegneria Gestionale

P.zza Leonardo da Vinci 32 - 20133 - Milano

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20/12/2017 15:06

23/01/2018 Lunch Seminar: Convergence in Technologies and Divergence in Firms: How Smart Manufacturing / Industry 4.0 Relates to Organizational Boundaries for Incumbents and Challengers Differently

23 January 2018 - 12:15-13:45

Room 0.1 - Building B26/B, ground floor.

Via Lambruschini 4/B, Milano

Deniz Tuncalp

Istanbul Technical University (ITU)

Convergence stands for blurring and gradual breaking down of boundaries between different technologies, which, in turn, brings diverse products, markets and industries closer. Previous merger and disruption of media, telecoms, Internet and financial services industries and recently appearing industry 4.0/smart manufacturing phenomena are different examples of convergence. Convergence phenomena fundamentally change industry structures, competitive landscapes, and organizational competencies. However, our knowledge of how it attends to boundaries of converging organizations themselves is insufficient. In this paper, we explain how different convergence situations attend to the rearrangement of firm boundaries, also considering their position in their respective value-chain. Drawing on the Transaction Cost Theory and the broader framework of market failures, we develop a new convergence taxonomy that accounts for contingencies impacting firm boundaries in convergence situations. We also consider mechanisms of market failure and properties of network platforms and argue that the direction of convergence, whether it is towards higher or lower market failure, is also relevant in understanding how firm boundaries are going to get demarcated. To conclude, we discuss how convergence can be realized and managed in firms facing convergence, together with theoretical implications and potential further research.

Deniz Tuncalp is Associate Professor of Management at the Istanbul Technical University (ITU), Department of Management Engineering. 

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