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This chapter investigates how small- and medium-sized enterprises and large firms decide the sourcing strategies to explore and exploit. This study adopts a qualitative methodology and reports on the insights derived from interviews with 35 companies and 2 experts. A series of propositions are derived, and these propositions are used to propose a height–distance view of exploration and exploitation. The implications for theory and managerial practice are presented in the concluding remarks.

Combines theory with practice, based on experiences rather than philosophical speculation. The question posed is whether technological innovation must be regarded as an exogenous or endogenous variable in economic models. Neoclassical economics, even in such modified versions as developed by Samuelson and Solow, regard technology, labour economics and social change, exogenous. The belief is that they are endogenous, and innovations in the technological sphere are no less influenced by economic factors than the economy by technological developments. Examines the related decision‐making processes in one of the major electronics multinationals in order to obtain more insight into the complex interaction between economic and technological changes.

The paper gives a brief description of the transformation on a global scale of the old international production concept of mass production towards the new global concept of lean production as an explanation for the increasing inequality in income distribution since the 1980s. The information is based on research of the electronics industry. The salient point is that mass production heavily depends on conveyor‐belt work, while lean production (batch size one) is increasingly relying on sub‐contracting (co‐makership, just‐in‐time delivery) which is part of the strategy of large suppliers to concentrate production on their core activities, on global sourcing and on coalition‐forming. The former left room for low qualified employment and “on the job training”, while the concentration on core activities etc. tends to redirect work to highly remunerated but decreasing employment in large enterprises, and to poorly rewarded work in an increasing number of smaller subcontractor and co‐maker firms. The risks involved for income distribution are self‐evident.

Argues that the influence of developments in production technology and process innovation on the selection of the location of production has markedly increased and, as a consequence of this, the role of wage levels has diminished, in spite of the fact that many of the top managers of European enterprises stubbornly continue to maintain that the opposite is true. On the one hand challenges the statement that wage levels in The Netherlands are too high compared with other European countries and on the other hand (and more important) argues that the role of wage levels has diminished in the discussion of how to increase European employment. To illustrate the shift in industrial strategy, the actual (re)location behaviour of a large Dutch electronics concern, namely Philips Electronics, can be given. By examining this corporation′s behaviour side‐by‐side with the developments in production technology, demonstrates that, while wage costs played a significant role in determining the location policy in large‐scale enterprises in the 1960s and 1970s, the importance of this factor since the 1980s has diminished. Casts a different light on the constantly reiterated admonitions by European managers (and economists) that high wage levels in Europe will lead to the emigration of enterprises to low‐wage countries with disastrous consequences for the European levels of (un)employment.

The purpose of this investigation is to help establish: whether or not strong relationships between suppliers and customers improve performance; and if prescriptive frameworks on outsourcing radical innovations are dependent on industry clockspeed.

A survey of UK‐based manufacturers, followed by a statistical analysis.

Long‐term supplier links seem not to play a role in the development of radical innovations. Moreover, industry clockspeed has no significant bearing on the success or failure of any outsourcing strategy for radically new technologies.

Literature about outsourcing in the face of radical innovation can be more confidently applied to industries of all clockspeeds.

Prescriptions for fast clockspeed industries should be applied more broadly: all industries should maintain a high degree of vertical integration in the early days of a radical innovation.

Prior papers had explored whether or not a company should outsource radical innovations, but none had determined if this is equally true for slow industries and fast ones. Therein lies the original contribution of this paper.

To determine whether or not clockspeed is an important variable in outsourcing strategies throughout the development of radical innovations.

An internet‐based survey of manufacturing firms from all over the world.

An industry's clockspeed does not play a significant role in the success or failure of a particular outsourcing strategy for a radical innovation.

Conclusions from earlier research in this area are not necessarily industry‐specific.

Lessons learned via previous investigations about the computer industry need not be confined to that sector. Vertical integration may be a more robust outsourcing strategy when developing a radical innovation in industries of all clockspeeds.

Previous research efforts in this field focused on a single technology jump, but this approach may have overlooked a potentially important variable: industry clockspeed. Thus, this investigation explores whether clockspeed is an important factor.

Top managers of multinational enterprises are continuously confronted with “make‐or‐buy” decisions. These choices have to be made after corporate strategy has already been determined and the measures to realize the corporate aims have been taken. Elucidates why the decision to make components and/or production equipment in‐house, instead of buying them from professional suppliers, may more often than not be subversive of multinational corporations′ (MNCs) core activities. Relies on a case study at a research and development department of Philips International (The Netherlands). Illustrates how the decision to make production equipment in‐house evokes further decisions which are in conflict with the actual corporate strategy. The decision of a producer of consumer electronics to develop production equipment in‐house, instead of buying it in the marketplace, imposes on top management the need to decide whether or not to add this equipment to its consumer product range. The problem is that an affirmative decision may well give rise to a shift in the company′s core activities. Consequently, “make‐or‐buy” decisions are a potential threat to strategic core activities and top management would be well advised to be aware of this.

Some research in the area of make‐buy decisions for new technologies suggests that it is a good idea for a company to pursue a fairly rigorous “make” policy in the early days of a potentially disruptive innovation. Other studies prescribe exactly the opposite, promoting instead a “buy” strategy. Drawing from observations and lessons from the Prisoner's Dilemma, this paper seeks to bridge the gap between these perspectives by suggesting that both strategies are valid, but that they are most successfully applied in different market environments. The “make” prescription may be more suited to either extremely fast or extremely slow rates of technological change, while a “buy” strategy might be more appropriate in market sectors where technologies evolve at a medium pace. This paper highlights the importance of industry clockspeed and supplier relationships in make‐buy decisions for new technologies, and puts forward two new hypotheses that require empirical testing.

J. Zijlstra was Dutch Minister of Economics (1952‐1958), Minister of Finance (1959‐1963, 1966‐1967), Prime Minister (1966‐1967), and President of the Central Bank of The Netherlands (1967‐1981). During his terms of office he followed a Keynesian policy that placed on the government the responsibility for sustaining full employment. His policy involved not only the finance of the public sector but also the maintenance of equilibrium between production and expenditure. To achieve this he introduced a standardization of budget policy ‐ structural finance. The essence of this budgetary policy, which the Dutch Government pursued from 1960 to 1978, was to manage the national expenditure in a designed manner. The article deals with this approach and suggests an explanation why it eventually failed to produce the expected results.

This paper aims to present case study evidence on the changes in the relations between chief executive officers (CEOs) of large firms and shareholders in the past three decades of the twentieth century. In line with insights from agency theory, the CEOs have experienced increased scrutiny from their principals, the shareholders. This development has affected financial communication and investor relations as well as stock market prices.

The Dutch electronics firm Royal Philips NV in the transition period of 1971-2001 has been studied using publicly available disclosures and stock market prices. A descriptive case study approach is combined with event study methodology.

It was observed that the increased emphasis on shareholder interests has affected the interactions between Philips’ respective CEOs and the shareholders’ reactions to strategic decisions as measured by stock price changes. Around the beginning of the twenty-first century, clarity and openness in CEO communication was the norm and deviations were punished with volatile stock prices.

The study relies on publicly available data.

The case study of Philips can be extrapolated to other exchange-listed firms in the late twentieth century, which faced changed expectations about the role of the CEO, investor relations and the CEO’s accountability toward shareholders. This transition is relevant not only as a historical observation, but also as a background to studies in finance and management about top management and financial markets.