The Strength of IT-Based (Virtual) Interfirm Ties in the Development of Complex Product Systems - Information Technology and Product Development - page 173

growth of the Internet. Also, online communication flows between people involved
in complex product development has increased because of the need for joint problem
solving and knowledge sharing in an era where the requirements for new complex
technological products can change rapidly.
This chapter explores the relatively unstudied, vast implications of virtually
embedded ties in the development of CoPS. Virtually embedded ties are interorga-
nizational linkages that are initiated and maintained through electronic technologies
and that provide distinctive solutions to the same exchange-relationship prob-
lems that socially embedded ties address (Fowler, Lawrence, & Morse, 2004;
Lawrence, Morse, & Fowler, 2005). Virtually embedded ties, like socially embed-
ded ties, embody some element of trust facilitated through exchange of proprietary
information and joint problem solving (c.f. Fowler et al., 2004; Uzzi, 1997).
The chapter elucidates the nature of firms' virtually embedded relationships
by showing how such relationships involve formal versus informal mechanisms
and shallow versus deep ties. The term formal mechanisms refer to linking inter-
actions that are under the sponsoring organization's control (e.g., organizational
e-mail/chat); informal mechanisms refer to links that are outside the sponsoring
organization's control (e.g., LinkedIn, Facebook, Skype). The term shallow mech-
anisms refer to fewer IT-based opportunities for the exchange of information, and
deep mechanisms entail greater opportunities for information to be shared through
multiple channels, virtually. These characteristics of virtually embedded ties are
used to describe the effects of IT on the virtual embeddedness between interfirm
teams for CoPS development. The chapter also suggests some meaningful directions
for further research.
The chapter is organized as follows. The following section briefly revisits the
annals of collaboration between firms within the overall framework of NPD of
CoPS. Specifically, virtual interfirm collaboration is considered in the context of
how it unveils significant organizational learning implications for collaborating
firms. Then the discussion turns to the potential for more interdisciplinary research
between information systems and organizational theory that can bring more clarity
to the research agenda of NPD in a virtual world. A key practical implication that
emerges from the proposed framework is that virtual embeddedness is a viable com-
plement for interfirm modularity as companies strive to effectively coordinate their
CoPS projects.
9.2 Collaboration Among CoPS Firms
9.2.1 Complex Product Systems
It's the rare product today that doesn't contain components incorporating, wholly distinct
and specialized technologies. It's the rare service today, whose performance doesn't com-
bine several specialized skills. And it's the rare business today that doesn't rely on its raw
materials, marketing, or distribution on people with diverse technological or market-specific
skills. Finding and assembling all those assets under the same roof is difficult, to say the
least. Often, it's not even desirable. (Gomes-Casseres, 1994: 63)