The Blurring of Industry Boundaries: an Explanatory Model Applied to Telecommunications

Abstract

Although never a straightforward task, the ‘drawing of lines’ between industry boundaries is becoming ever more difficult in today's economy. The blurring of interindustry boundaries has been attributed to such factors as deregulation, globalization, fundamental breakthroughs in science and the strategic importance of information technology. While this explanation certainly has face validity, it falls short of providing a systematic framework for explaining why firms engage in activities that lead to the blurring of inter-industry boundaries and why/how the nature of boundary crossing actions differs between firms. A conceptual model is developed which integrates economic and behavioral perspectives in an effort to address these issues within the context of the telecommunications industry.