Complementarity Among Vertical Integration Decisions: Evidence from Automobile Product Development

Sharon Novak
Sharon Novak
[email protected]
MIT Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142
Search for more papers by this author
,
Scott Stern
Scott Stern
[email protected]
Kellogg School of Management, Northwestern University, Evanston, Illinois 60208
Search for more papers by this author

Sharon Novak

[email protected]

MIT Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142

Search for more papers by this author

Scott Stern

[email protected]

Kellogg School of Management, Northwestern University, Evanston, Illinois 60208

Search for more papers by this author

Published Online:24 Nov 2008https://doi.org/10.1287/mnsc.1080.0924

Supplemental Material

mnsc.1080.0924-sm-ec.pdf (259 KB)

Cited by
- The Organization of Innovation: Incomplete Contracts and the Outsourcing Decision
  American Economic Journal: Microeconomics, Vol. 18, No. 2
- Supplier concentration and firm performance: the role of relative size, relative reputation, and network position
  International Journal of Research in Marketing, Vol. 17
- When mimicry leads to divergence: Interdependence asymmetries and selective imitation among competitors
  5 August 2025 | Strategic Management Journal, Vol. 46, No. 12
- Carbon disclosure regulatory transmission in global supply chains: evidence of carbon emission from Chinese suppliers
  10 November 2025 | Asia Pacific Journal of Management, Vol. 8
- Addressing Endogeneity Using a Two-Stage Copula Generated Regressor Approach
  30 January 2025 | Journal of Marketing Research, Vol. 62, No. 4
- Production Chain Organization in the Digital Age: Information Technology Use and Vertical Integration in U.S. Manufacturing
  Chris Forman; ,
  Kristina McElheran
  30 April 2024 | Management Science, Vol. 71, No. 2
- VERTICAL SEPARATION REVISITED
  11 October 2023 | The Singapore Economic Review, Vol. 69, No. 08
- Acquisition or investment: a manufacturer quality improvement strategic choice
  7 April 2023 | The TQM Journal, Vol. 36, No. 4
- Drivers of consumer protection practices: implications for operational performance
  2 November 2023 | Supply Chain Management: An International Journal, Vol. 29, No. 2
- How does the stakeholder exposure of vertical integration influence environmental performance?
  International Journal of Production Economics, Vol. 267
- The Firm as a Subsociety: Purpose, Justice, and the Theory of the Firm
  Claudine Gartenberg,
  Todd Zenger
  19 December 2022 | Organization Science, Vol. 34, No. 5
- Building Supply Chain Resilience Through Vertical Control
  1 January 2023 | SSRN Electronic Journal, Vol. 57
- Dynamic resource redeployment in global semiconductor firms
  27 September 2021 | Strategic Management Journal, Vol. 43, No. 2
- Complementarity in Business Organisations- 20 Important Conclusions
  24 July 2022
- Addressing Endogeneity Using a Two-Stage Copula Generated Regressor Approach
  1 January 2022 | SSRN Electronic Journal, Vol. 120
- Performance and survival implications of sourcing choice sequence across an architectural innovation life cycle
  28 January 2021 | Journal of Operations Management, Vol. 67, No. 6
- More (new) products, more problems? A systems perspective on increased capability deployment and organizational errors
  Long Range Planning, Vol. 54, No. 3
- Sourcing decision in the presence of a complementary component
  Omega, Vol. 101
- Can systems integration lead to improved performance? The role of strategic alliances
  Industrial Marketing Management, Vol. 95
- Are you 110% sure? Modeling of fractions and proportions in strategy and management research
  18 June 2019 | Strategic Organization, Vol. 19, No. 2
- The Firm as a Subsociety
  SSRN Electronic Journal, Vol. 2
- Hicksian complementarity and perturbed utility models
  15 November 2019 | Economic Theory Bulletin, Vol. 8, No. 2
- The Cross-Border Mergers and Acquisitions of Local State-Owned Enterprises: The Role of Home Country Government Involvement
  9 April 2020 | Sustainability, Vol. 12, No. 7
- The Volkswagen Pre-Production Center Applies Operations Research to Optimize Capacity Scheduling
  Christian Weckenborg,
  Karsten Kieckhäfer,
  Thomas S. Spengler,
  Patricia Bernstein
  11 March 2020 | INFORMS Journal on Applied Analytics, Vol. 50, No. 2
- The impact of competition on vertical integration: The role of technological niche width
  16 January 2020 | Business Strategy and the Environment, Vol. 29, No. 3
- The role of relationship scope in sustaining relational contracts in interfirm networks
  15 October 2019 | Strategic Management Journal, Vol. 41, No. 2
- The Organization of Innovation: Property Rights and the Outsourcing Decision
  SSRN Electronic Journal, Vol. 120
- What happened to inventory and cost after a vertical integration? A longitudinal analysis considering demand uncertainty
  5 March 2019 | International Journal of Production Research, Vol. 57, No. 24
- Can Outsourcing of Information Technology Foster Innovations in Client Organizations? An Empirical Analysis1
  1 September 2019 | MIS Quarterly, Vol. 43, No. 3
- Bibliographie
- Endogeneity and marketing strategy research: an overview
  23 February 2019 | Journal of the Academy of Marketing Science, Vol. 47, No. 3
- A test of strategic optimality theory: evidence from the social networking industry
  4 April 2019 | Innovation, Vol. 21, No. 2
- Industry-to-university knowledge transfer in ecosystem-based academic entrepreneurship: Case study of automotive dynamics & control group in Tsinghua University
  Technological Forecasting and Social Change, Vol. 141
- Contracting in Medical Equipment Maintenance Services: An Empirical Investigation
  Tian Heong Chan,
  Francis de Véricourt,
  Omar Besbes
  7 June 2018 | Management Science, Vol. 65, No. 3
- Firm Organization in the Digital Age: IT Use and Vertical Transactions in U.S. Manufacturing
  SSRN Electronic Journal, Vol. 31
- Firm Supply Chains
  SSRN Electronic Journal, Vol. 42
- Firm Integration and Supply Chains
  SSRN Electronic Journal, Vol. 4
- The Role of Venture Capital in the Formation of a New Technological Ecosystem: Evidence from the Cloud1
  1 December 2018 | MIS Quarterly, Vol. 42, No. 4
- Demand‐side strategy, relational advantage, and partner‐driven corporate scope: The case for client‐led diversification
  4 April 2018 | Strategic Management Journal, Vol. 39, No. 7
- Estimating matching games with transfers
  13 April 2018 | Quantitative Economics, Vol. 9, No. 1
- Architectural innovation and the emergence of a dominant design: The effects of strategic sourcing on performance
  Research Policy, Vol. 47, No. 1
- The Problems and Promise of Hierarchy: Voice Rights and the Firm
  1 January 2018 | Sociological Science, Vol. 5
- Sustainability of patent-based competitive advantage in the U.S. communications services industry
  1 November 2016 | The Journal of Technology Transfer, Vol. 42, No. 6
- Complementarities and Coordination: Implications for Governance Mode and Performance of Multiproduct Firms
  Joon Mahn Lee,
  Rahul Kapoor
  14 September 2017 | Organization Science, Vol. 28, No. 5
- Vertical integration in the real estate sector: three Swedish case studies
  Journal of European Real Estate Research, Vol. 10, No. 2
- How Sourcing of Interdependent Components Affects Quality in Automotive Supply Chains
  1 August 2017 | Production and Operations Management, Vol. 26, No. 8
- Product variety and vertical integration
  15 July 2016 | Strategic Management Journal, Vol. 38, No. 5
- How purchasing and supply management practices affect key success factors: the case of the offshore-wind supply chain
  Journal of Business & Industrial Marketing, Vol. 32, No. 2
- Subprime governance: Agency costs in vertically integrated banks and the 2008 mortgage crisis
  12 February 2016 | Strategic Management Journal, Vol. 38, No. 2
- Toward an integrated theory of the firm: The interplay between internal organization and vertical integration
  17 November 2015 | Strategic Management Journal, Vol. 37, No. 12
- Knowledge Inheritance, Vertical Integration, and Entrant Survival in the Early U.S. Auto Industry
  Academy of Management Journal, Vol. 59, No. 4
- Sourcing strategies of a multi-input-multi-product firm
  Journal of Economic Behavior & Organization, Vol. 127
- The impact of vertical integration on inventory turnover and operating performance
  10 August 2015 | International Journal of Logistics Research and Applications, Vol. 19, No. 3
- Configuration and coordination of international marketing activities
  International Business Review, Vol. 25, No. 2
- Interdependence and Performance: A Natural Experiment in Firm Scope
  Gabriel Natividad,
  Evan Rawley
  25 June 2015 | Strategy Science, Vol. 1, No. 1
- Data in Action: Data-Driven Decision Making in U.S. Manufacturing
  SSRN Electronic Journal, Vol. 58
- Complementarity in Perturbed Utility Models
  SSRN Electronic Journal, Vol. 169
- Collaborative New Product Alliances: A Review of the Literature and Research Perspectives
  15 July 2015 | Strategic Change, Vol. 24, No. 4
- Supply chain management research in management journals
  International Journal of Physical Distribution & Logistics Management, Vol. 45, No. 5
- Introduction to Innovation WITHIN and ACROSS Borders: A Review and Future Directions
  28 April 2015 | Decision Sciences, Vol. 46, No. 2
- Servitization as Innovation in Manufacturing—A Review of the Literature
  9 April 2015
- When Policy Structures Technology: Balancing upfront decomposition and in-process coordination in Europe׳s decentralized space technology ecosystem
  Acta Astronautica, Vol. 106
- Structural models of complementary choices
  1 July 2014 | Marketing Letters, Vol. 25, No. 3
- Interdependent product cycles for globally sourced intermediates
  Journal of International Economics, Vol. 94, No. 1
- Transactional hazards, institutional change, and capabilities: Integrating the theories of the firm
  10 April 2013 | Strategic Management Journal, Vol. 35, No. 2
- Empirical Study on the Incentive Model of Knowledge Sharing Within Project-oriented Organization Based on Knowledge Potential Theory
  Journal of Applied Sciences, Vol. 14, No. 3
- Servitization: Disentangling the Impact of Service Business Model Innovation on Manufacturing Firm Performance
  SSRN Electronic Journal, Vol. 27
- Structural Models of Complementary Choices
  SSRN Electronic Journal, Vol. 16
- Contracting in Medical Equipment Maintenance Services: An Empirical Investigation
  SSRN Electronic Journal, Vol. 1
- Sustainability of Patent-Based Competitive Advantage
  SSRN Electronic Journal, Vol. 120
- Production Outsourcing and Demand Variability
  SSRN Electronic Journal, Vol. 14
- Product proliferation strategies and firm performance: The moderating role of product space complexity
  2 April 2013 | Strategic Management Journal, Vol. 34, No. 12
- Are there always synergies between productive resources and resource deployment capabilities?
  28 February 2013 | Strategic Management Journal, Vol. 34, No. 11
- Integration of Global Knowledge Networks
  1 November 2013 | Production and Operations Management, Vol. 22, No. 6
- Boundary choice interdependency: evidence from the construction industry
  28 November 2012 | Industrial and Corporate Change, Vol. 22, No. 5
- OUTSOURCING WHEN INVESTMENTS ARE SPECIFIC AND INTERRELATED
  24 July 2013 | Journal of the European Economic Association, Vol. 11, No. 4
- Vertical separation as a defense against strong suppliers
  European Journal of Operational Research, Vol. 228, No. 1
- Risk and vertical separation: the case of developing new technology
  19 April 2013 | Oxford Economic Papers, Vol. 65, No. 3
- Servitization: Disentangling the impact of service business model innovation on manufacturing firm performance
  7 March 2013 | Journal of Operations Management, Vol. 31, No. 4
- Supply Portfolio Concentration in Outsourced Knowledge-Based Services
  Mahka Moeen,
  Deepak Somaya,
  Joseph T. Mahoney,
  3 April 2012 | Organization Science, Vol. 24, No. 1
- Contracting for Innovation in Information Technology Outsourcing
  SSRN Electronic Journal, Vol. 109
- Sourcing Strategies of a Multi-Input-Multi-Product Firm
  SSRN Electronic Journal, Vol. 3
- The impact of complexity and managerial diseconomies on hierarchical governance
  Journal of Economic Behavior & Organization, Vol. 84, No. 2
- What Firms Make vs. What They Know: How Firms' Production and Knowledge Boundaries Affect Competitive Advantage in the Face of Technological Change
  Rahul Kapoor,
  Ron Adner,
  10 August 2011 | Organization Science, Vol. 23, No. 5
- Contractual Flexibility, Rent Seeking, and Renegotiation Design: An Empirical Analysis of Information Technology Outsourcing Contracts
  Anjana Susarla,
  18 April 2012 | Management Science, Vol. 58, No. 7
- Vertical integration moment in dynamic markets
  Strategic Outsourcing: An International Journal, Vol. 5, No. 2
- Organizational Structure and the Limits of Knowledge Sharing: Incentive Conflict and Agency in Car Leasing
  Lamar Pierce,
  28 February 2012 | Management Science, Vol. 58, No. 6
- The Extroverted Firm: How External Information Practices Affect Innovation and Productivity
  Prasanna Tambe,
  Lorin M. Hitt,
  Erik Brynjolfsson,
  13 January 2012 | Management Science, Vol. 58, No. 5
- Three-Way Complementarities: Performance Pay, Human Resource Analytics, and Information Technology
  Sinan Aral,
  Erik Brynjolfsson,
  Lynn Wu,
  9 March 2012 | Management Science, Vol. 58, No. 5
- Impact of Performance-Based Contracting on Product Reliability: An Empirical Analysis
  Jose A. Guajardo,
  Morris A. Cohen,
  Sang-Hyun Kim,
  Serguei Netessine,
  10 February 2012 | Management Science, Vol. 58, No. 5
- Supply Chain Vertical Integration Timing Strategy
  IFAC Proceedings Volumes, Vol. 45, No. 6
- The Impact of Vertical Contracting on Firm Behavior: Evidence from Gasoline Stations
  SSRN Electronic Journal, Vol. 27
- Integration Decisions When Outsourcing, Offshoring, and Distributing Knowledge Work
  SSRN Electronic Journal, Vol. 53
- A Test of Sequential Versus Simultaneous Complementarity in Technology Diffusion Using Survival Type Data: The Adoption of CAD and CNC
  SSRN Electronic Journal, Vol. 50
- Safety hazard and time to recall: The role of recall strategy, product defect type, and supply chain player in the U.S. toy industry
  28 June 2011 | Journal of Operations Management, Vol. 29, No. 7-8
- Organizational Structure and the Limits of Knowledge Sharing: Incentive Conflict and Agency in Car Leasing
  SSRN Electronic Journal, Vol. 22
- Firm Focus and Performance: A Natural Experiment
  SSRN Electronic Journal, Vol. 55
- Impact of Performance-Based Contracting on Product Reliability: An Empirical Analysis
  SSRN Electronic Journal, Vol. 110
- Global Sourcing of a Complex Good
  SSRN Electronic Journal, Vol. 97
- Diversification, Diseconomies of Scope, and Vertical Contracting: Evidence from the Taxicab Industry
  Evan Rawley,
  Timothy S. Simcoe,
  3 August 2010 | Management Science, Vol. 56, No. 9
- Supply Portfolio Concentration in Outsourced Knowledge-Based Services
  SSRN Electronic Journal, Vol. 84
- Diversification, Vertical Contracting and Diseconomies of Scope: Evidence from the Taxicab Industry
  SSRN Electronic Journal, Vol. 24
- Complementarity, capabilities, and the boundaries of the firm: the impact of within‐firm and interfirm expertise on concurrent sourcing of complementary components
  3 April 2009 | Strategic Management Journal, Vol. 30, No. 10
- Related Diversification and Outsourcing in the Taxicab Industry
  SSRN Electronic Journal, Vol. 24
- Vertical Separation as a Defense against Strong Suppliers
  SSRN Electronic Journal, Vol. 12
- Project Sourcing Decisions in the Presence of Learning and Integration Costs
  SSRN Electronic Journal, Vol. 25

Volume 55, Issue 2

February 2009

Pages iv-332

Article Information

Supplemental Material

Metrics

Information

Received:October 12, 2004
Published Online:November 24, 2008

Cite as

Sharon Novak, Scott Stern, (2008) Complementarity Among Vertical Integration Decisions: Evidence from Automobile Product Development. Management Science 55(2):311-332.

https://doi.org/10.1287/mnsc.1080.0924

Keywords

PDF download

Available Issues

Available Issues

Available Issues

Available Issues

Available Issues

Available Issues

Available Issues

Available Issues

Available Issues

Complementarity Among Vertical Integration Decisions: Evidence from Automobile Product Development

Supplemental Material

Volume 55, Issue 2

Article Information

Supplemental Material

Metrics

Information

Cite as

Keywords

Sign Up for INFORMS Publications Updates and News