Multi-Technology Corporations: Why They Have “Distributed” Rather Than “Distinctive Core” Competencies

TLDR

Technological diversity drives corporate growth, R&D, external linkages, and new business opportunities, while dispersing competencies across sectors and challenging conventional management concepts. The article contests the notion that firms should focus on a narrow set of core technologies, that major innovations require destroying existing competencies, that technology should be downsized or outsourced like production, and that firms should specialize in a limited set of core businesses.

Abstract

Technological diversity in corporations is a driving force behind four major features of contemporary business: corporate growth; increasing RD increasing external linkage for new technologies by various means and opportunities to engage in technology-related new businesses. Corporate technological competencies are dispersed over a wider range of sectors than their production activities, and this range is increasing. Technologies are not the same as products arid must be dealt with differently. Increases in technological diversity in both companies and products challenge conventional wisdom and a number of widely accepted management concepts. This article challenges four of these notions: first, that for every company there exists a narrow set of core technological competencies on which the company should focus; second, that major new innovations are often associated with major competence destruction; third, that companies should not only downsize but disintegrate and out-source technological competencies just like production; and fourth, that companies should focus or specialize on a narrow set of core businesses. These notions do contain some truth, and they do apply in sonic companies in some periods of their life. However, as with any simple concept, they can be dangerous when carried to extremes