Managing knowledge in loosely coupled networks: Exploring the links between product and knowledge dynamics

The contemporary literature concentrates on 'make or buy' decisions in design and production activities, assuming that decisions about the underlying fields of technological knowledge will automatically be the same. Building on previous research on multitechnology firms and products, this paper argues that firms know more about technology than they apply in their own production. We propose two major dimensions according to which firms should adjust their knowledge and production boundaries, namely systemic interdependencies across components and uneven rate of change across components' underlying knowledge bases. We analyse the implications of this less-than-perfect overlap between knowledge and production boundaries for the management of firms' external relationships.