Open Source Strategy Research Blog

Updating business strategy for a world embracing open source

Tuesday, April 2, 2013

Why Do Firms Use Open Source Strategies? – An Uncertainty Reduction Theory

I just received the good news that my paper has been accepted to the Business Policy and Strategy Division of the Academy of Management for presentation at the annual conference in Florida in August, 2013.  The abstract for the current version of the paper is below, along with a link to the draft.


Recent academic inquiry has questioned the traditional assumptions that successful market competition among profit-driven firms must be done in a closed manner to avoid competitors benefiting from knowledge spillovers by demonstrating that an open source strategy can be successful as well. Yet, it is still not well understood why firms choose an open source strategy when they have an array of more traditional strategies at their disposal.  I argue that firms select an open source strategy to reduce the impact of different types of uncertainty that impede the clarity of their strategic options.  An open source strategy allows firms to accept, disarm, share, compartmentalize, survive, and select uncertainty, reducing the negative impact of discontinuous change, transaction costs, loss of control, resource allocation problems, environmental selection, and poor fit.  This choice means that firms are not stuck with strategies requiring high-stakes bets, hedging practices, or luck in order to reduce uncertainty.  Instead, they can select an open source strategy that best reduces the types of uncertainty that they are facing.

Check out the full version of the current draft: Why Do Firms Use Open Source Strategies – An Uncertainty Reduction Theory

posted by Mekki at 1:07 pm  

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