TY  - JOUR
AU  - Puga,Diego
AU  - Trefler,Daniel
TI  - Knowledge Creation and Control in Organizations
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9121
PY  - 2002
Y2  - August 2002
UR  - http://www.nber.org/papers/w9121
L1  - http://www.nber.org/papers/w9121.pdf
N1  - Author contact info:
Diego Puga
IMDEA
Isaac Newton 2
28760 Tres Cantos
Spain
Tel: +34918073355
Fax: NA
E-Mail: diego.puga@imdea.org

Daniel Trefler
Rotman School of Management
University of Toronto
105 St. George Street
Toronto, ON M5S 3E6
CANADA
Tel: 416/946-7945
Fax: 416/978-5433
E-Mail: dtrefler@rotman.utoronto.ca
AB  - The incremental innovations that underly much of modern economic growth typically involve changes to one or more components of a complex product. This creates a tension. On the one hand, a principal would like an agent to contribute innovative components. On the other hand, ironing out incompatibilities between interdependent components can be a drain on the principal's energies. The principal can conserve her energies by tightly controlling the innovation process, but this may inadvertently stifle the agent's incentive to innovate. We show precisely how this tension between creating knowledge and controlling knowledge shapes organizational forms. The novel concepts introduced are illustrated with case studies of the flat panel cathode ray tube industry and Boeing's recent location decisions.
ER  -