Research Policy 38 (2009) 1300–1312

Contents lists available at ScienceDirect

Research Policy
journal homepage: www.elsevier.com/locate/respol

The open kimono: How Intel balances trust and power to

maintain platform leadership
Robert K. Perrons a,b,∗
a
Queensland University of Technology, School of Management, GPO Box 2434, Brisbane, QLD 4001, Australia
b
Shell International Exploration & Production, 701 Poydras Street, New Orleans, LA 70139, USA

a r t i c l e i n f o a b s t r a c t

Article history: A small group of companies including Intel, Microsoft, and Cisco have used “platform leadership” with
Received 12 August 2008 great effect as a means for driving innovation and accelerating market growth within their respective
Received in revised form 29 May 2009 industries. Prior research in this area emphasizes that trust plays a critical role in the success of this strat-
Accepted 23 June 2009
egy. However, many of the categorizations of trust discussed in the literature tend to ignore or undervalue
Available online 25 July 2009
the fact that trust and power are often functionally equivalent, and that the coercion of weaker partners
is sometimes misdiagnosed as collaboration. In this paper, I use case study data focusing on Intel’s shift
Keywords:
from ceramic/wire-bonded packaging to organic/C4 packaging to characterize the relationships between
Trust
Power
Intel and its suppliers, and to determine if these links are based on power in addition to trust. The case
Intel study shows that Intel’s platform leadership strategy is built on a balance of both trust and a relatively
Inter-firm relationships benevolent form of power that is exemplified by the company’s “open kimono” principle, through which
Platform leadership Intel insists that suppliers share detailed financial data and highly proprietary technical information to
achieve mutually advantageous objectives. By explaining more completely the nature of these inter-firm
linkages, this paper usefully extends our understanding of how platform leadership is maintained by Intel,
and contributes to the literature by showing how trust and power can be used simultaneously within an
inter-firm relationship in a way that benefits all of the stakeholders.
© 2009 Elsevier B.V. All rights reserved.

1. Introduction stances (Afuah, 1998; Holton et al., 1996). Such an environment

Despite their high profile and dominant positions in their
respective markets, companies like Intel, Microsoft, and Cisco rely
on the R&D efforts of outside firms. The costs associated with
modern-day R&D projects are an increasingly daunting proposition
(Kumpe and Bolwijn, 1988; Manders and Brenner, 1995), and tech-
nology “has become so sophisticated, broad, and expensive that
even the largest companies can’t afford to do it all themselves”
(Leonard-Barton, 1995, p. 135). Technology-intensive companies
can also benefit by leveraging the R&D capacity of outside firms
to broaden the radius of new ideas to which they can gain access
(Chesbrough, 2003; Quinn and Hilmer, 1994; Rigby and Zook,
2002).
Left to its own devices, however, the multi-firm innovation
process can be both slow and frustratingly uncertain. Many of
the significant and commercially celebrated innovations that have
emerged from collaborative efforts over the years were brought
about by a convoluted process of serendipity and unique circum-
∗ Correspondence address: Shell International Exploration & Production, 701 Poy-
dras Street, New Orleans, LA 70139, USA. Tel.: +1 504 728 4303.
E-mail address: perrons@alum.mit.edu.
clearly creates a strategically precarious situation for any tech-
nology company whose products are linked to complementary
components within a broader platform or system. In the case of
Intel, for example, a microprocessor can achieve very little by itself
(Cusumano and Gawer, 2002). Its value is only realized when it
is plugged into some kind of broader platform or system that
consists of other companies’ products, such as operating systems,
software applications, software-development tools, and hardware
(Cusumano and Gawer, 2002; Grove, 1996; Teece, 1986; West,
2003). Companies like Intel are therefore faced with a dilemma:
how can the firm be certain that its key complementors will con-
tinue to produce market-expanding innovations as fast as Intel
does? Moreover, how can Intel be confident that complementors’
technologies are evolving in ways that are compatible with one
another?
Instead of leaving these issues to be resolved by chance and the
vagaries of the marketplace, several firms—particularly those in the
computing and information technology industries—have applied a
strategy of platform leadership to drive the innovation process and
accelerate market growth within their sector. Following Gawer and
Henderson (2007), I define a “platform” as a component or sub-
system of an evolving technological system in which each element
is functionally interdependent with most of the other elements in

0048-7333/$ – see front matter © 2009 Elsevier B.V. All rights reserved.
doi:10.1016/j.respol.2009.06.009
 R.K. Perrons / Research Policy 38 (2009) 1300–1312
the system.1 All end-user demand is consequently for the overall
system, and there is virtually no demand for isolated elements by
themselves. Conceptually similar in several ways to the “commu-
nity leaders” described by Kodama (2005, 2007), platform leaders
are essentially companies that drive industry-wide innovation for
an “ecosystem” of separately developed pieces of technology. The
platform leader is therefore highly dependent on innovations devel-
oped by the other firms, but ensures the overall long-term technical
integrity of its evolving technology platform (Gawer and Cusumano,
2002).
However, while these “ecosystems” often accelerate the rate at
which technological change can be brought about in an industry,
this strategy is not without peril. By playing a role in designing a
highly integrated technology platform, complementors frequently
expose themselves to a relatively high degree of risk. First, the
platform leader might fail to support the technology platform in
a way that is profitable to all of the collaborating firms, and a
supplier might find itself trapped with sizeable R&D investments
that are too specific to apply to any other customer or technology
(Balakrishnan and Wernerfelt, 1986; Monteverde and Teece, 1982;
Teece, 1986). Second, fellow complementors must necessarily share
highly proprietary design information so that their component or
subsystem can be successfully integrated with the others by the
platform leader. Will Swope, an Intel Vice President and director
of platform planning, openly acknowledges that, for his company’s
platform leadership strategy to work, many of Intel’s complemen-
tors must effectively “bet their company” (Gawer and Cusumano,
2002, p. 95). Trust is therefore an essential ingredient in the success
of platform leadership.
But prior research in the area of trust and relationships between
firms has shown that there are several different kinds of trust, and
that relationships based on trust and goodwill may exhibit dra-
matically different characteristics according to the nature of these
linkages (Galford and Drapeau, 2003; Tidd et al., 2001; Zaheer et al.,
1998). In spite of the fact that trust-based relationships can assume
a broad range of different forms with markedly different organi-
zational dynamics, however, many analyses of inter-firm research
linkages treat the notion of trust in a rather vague way (Joly and
Mangematin, 1996). Also, many of the categorizations of trust dis-
cussed in the literature tend to ignore or undervalue the fact that
trust and power are often functionally equivalent insofar as they can
both be used to coordinate actors’ expectations (Bachmann, 1998;
Luhmann, 1979), and that the coercion of weaker partners is some-
times misdiagnosed as collaboration (Hazen, 1994; Knights et al.,
1993). Nonetheless, despite the potentially critical role that power
might play in the inter-firm linkages underpinning a technology
platform, the literature reveals little about this important aspect of
how platform leadership works.
This paper sets out to extend the understanding of how plat-
form leadership is maintained by characterizing the relationships
between Intel and its suppliers, and by determining if and how
1
Prior research in the area of platform leadership that specifically discusses Intel
(Cusumano and Gawer, 2002; Gawer and Cusumano, 2002; Gawer and Henderson,
2007) has tended to focus principally on technologies outside of the microproces-
sor itself when discussing the “platform.” However, the evolutionary trajectory of
microprocessors suggests that a broader perspective on technology platforms should
be applied that encompasses the entire “ecosystem” rather than what is physically
inside or outside of a microprocessor. It was discovered during the course of this
investigation that many kinds of complementary functions and systems that used
to reside outside of the microprocessor—including miniaturized temperature sen-
sors, complex power delivery systems, and heat dissipation equipment—have been
integrated into modern microprocessor designs. Thus, in light of the fact that the line
between internal systems and external ones becomes blurred over the long-term, I
consider external organizations to be complementors within the evolving techno-
logical “ecosystem” whether their subsystem is physically inside the microprocessor
or outside of it.
1301
these linkages are based on power in addition to trust. The struc-
ture of the paper is as follows. I first build upon prior research in the
area of platform leadership by examining evidence from the fields
of supplier relationships, trust, and power. Several frameworks of
trust and power are explored, and I select one of them as a tool
for analyzing and assessing the nature of the linkages between
Intel and its suppliers. I then put forward case study evidence
from Intel’s transition to organic/C4 microprocessor packaging from
ceramic/wire-bonded packaging, and shed light on the motives and
circumstances that shaped the relationships between Intel and its
suppliers during this technology shift. Next, I distill the case study
data into a collection of decision and policy elements that are exam-
ined individually to characterize the nature of the linkages that
Intel created and maintained with its suppliers during this tran-
sition. Finally, I identify how this characterization constructively
adds to the existing body of research in the field of platform lead-
ership, underline the theoretical and practical implications of this
evidence, and recommend potentially fruitful research questions
for future investigations in this area.
2. Literature review and theoretical framework
2.1. Trust within multi-firm R&D collaborations
Although trust is a concept with many meanings and con-
nections to a diverse range of research disciplines (Bachmann
and Zaheer, 2006; Kramer, 2006; Lane and Bachmann, 1998;
Nooteboom and Six, 2003), inter-organizational trust is broadly
defined as an expectation that trading partners will behave or
respond in a predictable and mutually acceptable manner (Mayer
et al., 1995; Sako, 1992) or the willingness to believe in a fellow
collaborator when the actions taken by one partner could make the
others vulnerable (Doney et al., 1998; Mora-Valentin et al., 2004).
In other words, trust between firms is a leap of faith in which each
participant is interested in the welfare of the others, and none of
the parties in the relationship will act without first considering the
impact that an action might have on the other firms (Kumar, 1996).
The literature suggests that trust plays a prominent role in most
inter-firm relationships. Economic activities are frequently guided
by the emotional and more instinct-driven feelings of participants
(Barney, 1999; Foster, 2000; Glasmeier, 1997; Quinn, 2000), and
prospective members of a multi-firm collaboration may therefore
lend considerable weight to the strength of relationships (Leifer et
al., 2000). Much of the success of the Toyota Production System
has been attributed to the high degree of goodwill and openness
between lean manufacturers in Japan (Gietzmann, 1995; Liker et
al., 1996; Womack et al., 1990), and similarly positive results have
also been observed within highly cooperative networks of compa-
nies in the U.S. (Bozdogan et al., 1998; Dyer, 1996; Eisenhardt and
Schoonhoven, 1996).
Principal-agent theory (Sako, 1998) and institutional factors
(Lane and Bachmann, 1996) have both been used to explain more
generally why these tightly knit relationships often yield such
enviable results in the context of supplier relationships, but expla-
nations rooted in Transaction Cost Economics (TCE) are particularly
well suited to rationalizing these advantages within a R&D environ-
ment. All viable forms of contracting are unavoidably incomplete,
and it is impossible for managers to calculate exactly what the
future will hold (Williamson, 1993). Towards reducing their risk
when working with unfamiliar firms, managers often have to
expend significant amounts of time, money, and resources to put
together meticulous contracts outlining a legal framework for
these relationships (Williamson, 1993). But these agreements are
clearly less of a priority in situations where the firms already
have a long-term history of working together. Trust reduces the
1302 R.K. Perrons / Research Policy 38 (2009) 1300–1312
transaction costs associated with collaboration by curtailing oppor-
tunistic behavior, reducing complexity, and fostering coordination
and cooperation in ways that more formal contracts cannot (Hardy
et al., 1998). Thus, when each of the consenting parties trusts one
another, the legal framework between them usually does not have
to be so meticulously and explicitly spelled out, and both sides can
proceed comfortably even though their agreement remains incom-
plete (Kern and Blois, 2002; Sako, 1992).
This problem of “unavoidable incompleteness” is particularly
acute in R&D environments, as collaborating firms often find it
difficult to define rules and contracts to support products and tech-
nologies that are still in the nascent stages of development, or that
do not yet exist at all (Tidd et al., 2001). The technology manage-
ment literature accordingly offers several examples of how trust
and cooperation have played an important role in the development
of new innovations (Bartlett and Ghoshal, 2002; Blomqvist et al.,
2005; Hoecht and Trott, 1999, 2006; Minshall, 1999; Teece, 1992;
Van de Ven and Ring, 2006) and how, in many circumstances, trust
is even a precondition for collaborative research and technology
development (Das and Teng, 1998; Dodgson, 1993).
Although the literature is somewhat divided over the social
mechanisms by which trust is created and sustained (Axelrod, 1984;
Marsh, 1994; Streb, 2003; Zacharia and Maes, 2000), several frame-
works and systems of categorization have been put forward en
route to classifying the different kinds of trust-based relationships
that can exist within and between organizations (Kramer and Tyler,
1996). Trust can be created at both the personal and organizational
levels (Galford and Drapeau, 2003; Lane, 1998; Tidd et al., 2001;
Zaheer et al., 1998). Sako (1992) divides the spectrum of trust-
based relationships into three groups—mutual trust, competence
trust, and goodwill trust—according to the underlying reason for the
collaborating partners’ predictability in behavior. Other systems of
classification are based on the degree to which organizations think
alike and share common values (Child, 1998), whether the trust
between groups is weak or strong (Barney and Hansen, 1994), cul-
ture and international norms (Nooteboom, 1999), and the attitudes
and beliefs of the individuals within each firm (Brenkert, 1998).
While these frameworks are helpful in categorizing many of
the trust-based linkages that exist throughout the marketplace,
however, they fail to capture some of the potentially important
dimensions of the relationships at the heart of platform leader-
ship. Intel, Microsoft, and Cisco are markedly different from many
other companies insofar as they are very large organizations that
are typically much bigger than an overwhelming majority of their
collaborators, and that dominate their respective industries. All
three firms are listed in the Fortune Global 500 list of the world’s
largest corporations (Demos, 2007); most of their suppliers and
partners, by stark contrast, are not. Many of the categorizations
of trust discussed in the literature tend to ignore or undervalue
the fact that trust and power are often functionally equivalent in
that both forces can be used to allow actors to cooperate with each
other (Bachmann, 1998; Luhmann, 1979). Moreover, the coercion
of weaker partners is sometimes misdiagnosed as collaboration
(Hazen, 1994; Knights et al., 1993). Thus, while the literature shows
that firms within these technology “ecosystems” generally trust one
another, there is also the clear potential for pronounced imbalances
of power between platform leaders and their collaborators. Power
may therefore play an important role in platform leadership.
2.2. Power between organizations
Although the concept of power is often perceived quite differ-
ently by different academic disciplines (Bachrach and Baratz, 1962;
Clegg, 1989), some useful definitions have emerged in the litera-
ture. Weber (1947) defines power as “the probability that one actor
within a social relationship will be in a position to carry out his
own will despite resistance” (p. 152), which is conceptually similar
to Hart and Saunders’ (1997) representation of power as a firm’s
“capacity to influence change in another firm” (p. 26). Blau (1986)
broadens this definition by suggesting that power “refers to all kinds
of influence between persons or groups, including those exercised
in exchange transactions, where one induces others to accede to his
wishes by rewarding them for doing so” (p. 115).
However, power is quite often highly specific to a particular
context. A person or organization is not “powerful” or “powerless”
in general, but only with respect to other actors or organizations
within a specific relationship (Pfeffer, 1981). The relative nature of
power also extends to the amount that one party can have over
another (Molm, 1997). If two people or organizations are equally
dependent on each other, then the power in their relationship is
balanced. Of particular relevance to platform leadership, however,
are situations in which there is a pronounced power imbalance
between actors. Molm (1997) notes that these kinds of imbalances
of power “can derive from unequal value in the resources that [two
parties] control for each other, from unequal alternatives, or from
both” (p. 31).
But Hardy (1985) points out that much of the literature in the
area of power “has tended to focus exclusively on power employed
in situations of overt conflict” (p. 384). Power sometimes plays
a defining role in inter-firm relationships without precluding the
existence of more benevolent and constructive forces such as trust
(Bachmann, 2006a; Luhmann, 1979). Moreover, even if a platform
leader does use power to manage its technological “ecosystem,”
prior investigations in the area of platform leadership (Cusumano
and Gawer, 2002; Gawer and Cusumano, 2002, 2008; Gawer and
Henderson, 2007) leave little doubt that this power would be used
in addition to trust rather than instead of it. The next section will
therefore explore several integrative frameworks that show differ-
ent ways in which power and trust can be balanced in the linkages
between organizations.
2.3. Integrative frameworks of trust and power
Towards categorizing different kinds of strategic alliances, Das
and Teng (2001) offer a framework that characterizes collabora-
tive relationships according to the kinds of trust, control, and risk
that they are based on: trust can either be derived from goodwill
or competence; control can come in the form of behavior control,
output control, or social control; and risk can either be relational
in nature or performance-based. Long and Sitkin (2006) similarly
recommend a classification system based on the themes of trust
and control.
Rather than separating trust and power as independent
attributes of a relationship, Bachmann (2003, 2006b) suggests that
social linkages within and between organizations are normally
based on a combination of these two mechanisms, and that behav-
ior is guided by the dominance of one of these forces over the other.
He posits that power is “a ‘combinable functional equivalent’ to
trust” (Bachmann, 2006a, p. 393) insofar as power can be used to
coordinate actors’ expectations, thereby allowing them to cooper-
ate with each other (Bachmann, 1998; Luhmann, 1979). Based on
this “functional equivalence,” Bachmann (2006a) puts forward a
theoretical framework that distinguishes between “interactional”
and “institutional-based” forms of trust and power.
However, while the above integrative frameworks materially
contribute to the advancement of the literature in the area of trust
and power, they are largely theoretical in nature. Hardy et al. (1998)
build upon many of the same theoretical foundations used in the
above conceptualizations, but also add important insight gleaned
from case study data. Hardy et al. (1998) challenge many of the
distinctions suggested in the literature by showing that different
kinds of trust and power are often difficult to identify and ply apart
 R.K. Perrons / Research Policy 38 (2009) 1300–1312 1303

Table 1
Forms and Façades of Trust (Hardy et al., 1998).

Spontaneous trust Generated trust Manipulation Capitulation

Nature of cooperation Cooperation is trust-based Cooperation is trust-based Cooperation is power-based Cooperation is power-based

Dynamics of cooperation Cooperation emerges naturally, Cooperation is achieved Cooperation is achieved Cooperation is achieved
through gamble through management of through management of through dependency and
meaning meaning socialization

Synergy, innovation, and risk Trust emerges spontaneously: Trust is created through equal Dominant partner uses Subordinate acts as a tool of
synergy is high; risk is high participation which increases symbolic power to reduce risk dominant partner: risk to
synergy but also increases risk and to increase predictability; dominant partner is low;
synergy is reduced synergy is low

Power A “win-win” view of power is A “win-win” view of power A zero-sum view of power A zero-sum view of power
implicit although power is prevails as asymmetrical prevails as asymmetrical prevails as asymmetrical
largely ignored power is decreased power is either maintained or power is either maintained or
increased increased

Meaning Shared meaning already exists Shared meaning is mutually Meaning is shared but it has Meaning is shared but is
constructed by partners been distorted by one partner imposed by one partner on
another

Implications for Shared meaning may not be as Process of creating shared Relationship may look like Power imbalance may mean
research/practice “spontaneous” as it may appear meaning is difficult and may trust when it is based on power that partners are not as
involve conflict “independent” as they may
appear

in practice. Some forms of power, they contend, are often clev-
erly disguised within relationships by a “façade of trust” (Hardy
et al., 1998). Thus, in the interest of separating and correctly iden-
tifying the different varieties of trust and power that might be
observed in a real-world setting, I used the framework put forward
by Hardy et al. (1998) to characterize the links between Intel and its
suppliers.
As noted in Table 1, Hardy et al. (1998) divide the spectrum of
trust-based linkages into four distinct classifications: spontaneous
trust, generated trust, manipulation, and capitulation. Spontaneous
trust refers to situations in which trusting relationships emerge nat-
urally and instinctively without any kind of deliberate intention
to create them. Generated trust describes relationships in which
trust was deliberately created, and a shared meaning or common
sense of purpose is jointly produced by all the participants. Manip-
ulation resembles generated trust in that both attempt to create
meaning to influence behavior and increase the predictability of
the relationship, but differs inasmuch as the dominant partner in a
manipulation relationship actively disguises the fact that it is try-
ing to gain more power at the expense of the other actors. Finally,
capitulation refers to relationships in which shared meaning exists,
but it has been imposed by the dominant partner. The weaker orga-
nization knows what is required of it, and acts accordingly.
3. Research methods
3.1. Data collection
I draw on extensive qualitative data collected during a 1-week
visit to Intel’s office and fabrication plant in Ireland, a second 1-
week visit to the company’s engineering and fabrication facility
in Chandler, Arizona, and a brief series of follow-up interviews
conducted by e-mail. The first visit to Ireland in February 2002
consisted of four semi-structured interviews with department
managers from different parts of the company. The overarching
objectives of this first round of discussions were to explore Intel’s
general approach to supplier relationships and outsourcing, and
to learn about the company’s guiding principles, procedures, and
culture. Finally, the Intel team and I discussed several candidate
technology transitions that could be used as case studies to shed
light on how Intel works with its suppliers to deliver changes and
improvements in its technology platforms. One technology transi-
tion was selected—specifically, the shift from ceramic/wire-bonded
microprocessor packaging to organic/C4 packaging—and a more
focused series of interviews was planned for the future.
Conducted in August 2002, the second round of discussions
in Arizona involved 14 separate one-on-one discussions last-
ing between 1 and 3 h each. Twelve of these semi-structured
interviews involved senior and mid-level managers from the engi-
neering, materials, commercial, and procurement teams that jointly
managed the transition to organic/C4 packaging. Most of the inter-
viewees in this group had been with Intel for many years, and had
worked in more than one of the company’s many functional groups.
The remaining two interviews were with Mr. Devadas Pillai and Dr.
Eugene Meieran, who both hold the position of “Intel Fellow.” Intel
Fellows are high-ranking subject matter experts whose full-time
job is to act as thought leaders that can be accessed when and as
required by the company’s executive-level managers.
Finally, several of the Intel employees that participated in the
case study were contacted again via e-mail in 2008. Because
the technology transition had occurred years earlier, the employ-
ees were asked to comment on whether or not Intel’s supplier
relationships and the company’s overall approach to platform
leadership had significantly changed since the interviews in
2002.
A case study was used in lieu of a quantitative approach
to add the “more complete, holistic, and contextual portrayal”
(Jick, 1979, p. 603) that qualitative research methods can provide.
Although qualitative investigations are notoriously difficult to repli-
cate (Eisenhardt, 1989; Jick, 1979), Yin (1994) points out that “case
studies are the preferred strategy when ‘how’ or ‘why’ questions
are being posed. . . and when the focus is on a contemporary phe-
nomenon within some real-life context” (p. 1).
An obvious limitation arising from the use of a single case study
is that this approach often makes it difficult to generate results
that can be generalized broadly (Eisenhardt, 1989). However, Yin
(1994) defends the single case approach where the case represents
an extreme situation that is “so rare that any single case is worth
documenting and analyzing” (p. 39). Similarly, Meredith (1998)
points out that some management phenomena involve organiza-
tions and situations that are highly unique, and that may not readily
lend themselves to broader types of analysis. Platform leadership
is therefore a strong candidate for a single case study approach
because the market clout usually required to achieve and maintain
platform leadership in an industry are of proportions that put this
strategy out of reach for all but a select few firms—most famously,
1304 R.K. Perrons / Research Policy 38 (2009) 1300–1312
Intel, Microsoft, and Cisco. I was able to get rare in-depth access to
Intel personnel and facilities, but could not make a similar arrange-
ment with Microsoft or Cisco.
Steps were taken, however, to ensure the validity of the obser-
vations in spite of the fact that they came from a single case study.
I attempted to minimize biases that could emerge in the data by
interviewing employees from a broad range of functional groups
at varying levels of responsibility within the company. To encour-
age honesty and the candid sharing of opinions, I agreed only to
attribute quotations directly to executives and Intel Fellows; quotes
from all other employees remain anonymous. Upon completing my
field work with Intel, consolidated versions of my trip notes and the
resulting case study were sent back to each of the interviewees so
that they could confirm that I had captured a fair reflection of their
opinions and perspectives.
3.2. Analysis of data
The data analysis for the case study consisted of three stages: (1)
distilling the case study data into a collection of decision elements
that could be examined individually; (2) coding the case study evi-
dence by using the classification system proposed by Hardy et al.
(1998) as an initial framework for analysis, and then iteratively
refining the coding scheme and framework; and (3) confirming the
mapping of the evidence to the revised framework by consulting
an independent reviewer.
In the first stage, I segmented the case study into eight indi-
vidual decisions or strategic guiding principles that significantly
shaped how Intel managed its suppliers throughout the shift from
ceramic/wire-bonded packaging to organic/C4 packaging. Follow-
ing the multiple contact model of engagement proposed by Gephart
(2004), the decision elements were then reviewed by case study
participants within Intel to ensure that they collectively captured
all of the major Intel policies and principles that played a significant
role in these relationships during this period.
Although Hardy et al. (1998) clearly have whole inter-
organizational relationships in mind for their framework rather
than individual decisions or strategic principles, I separated the
relationships into these smaller units of analysis so that each major
facet could be examined more closely and then compared and
contrasted later on. The early exploratory phase of the case study
revealed that Intel’s supplier relationships are complex, involving
many people in several countries. Moreover, it became clear early
in the study that Intel manages different aspects of its supplier
relationships differently depending on the circumstances. It was
therefore necessary to break down these linkages into smaller units
of analysis to capture a level of detail that sheds a useful amount of
light on how platform leadership works.
The second stage of analysis involved coding the case study evi-
dence. The most appropriate category of trust/power relationship
in the Hardy et al. (1998) framework—that is, the column of the
framework most closely resembling the data—was then selected for
each of the eight decision elements. However, early attempts to map
the evidence to this conceptual model revealed some deficiencies
in the framework. As is often done in qualitative research (Brown
and Eisenhardt, 1997; Rindova and Kotha, 2001), the framework
was then refined and modified iteratively with input from research
colleagues and case study participants to achieve a system of cat-
egorization that was mutually exclusive and exhaustive (Miles and
Huberman, 1994). This process resulted in the insertion of an addi-
tional category, “Trust and Benevolent Use of Power,” within the
Hardy et al. (1998) framework.
Following Anand et al. (2007), an independent reviewer who
had no prior exposure to the case study or the research topic was
then asked to interpret the case study data and map the evidence
to the revised framework. There was agreement for the mapping of
seven out of the eight decision elements, i.e. the reviewer indepen-
dently concurred with the mapping of the evidence arising from the
previous stage of analysis for all but one of the decision elements.
This result translates to a Cohen’s kappa for inter-rater reliability of
0.83, where 0.82 is considered an acceptable level of agreement (cf.
Lombard et al., 2002). This means that the independent reviewer’s
interpretation of the case study evidence essentially supported the
mapping from the second stage of the data analysis within accept-
able norms.
4. Case study
4.1. Background and industrial context
Credited with creating the world’s first microprocessor, Intel
plays a leading role in the semiconductor industry. The com-
pany has nearly 100,000 employees in several countries, generated
revenues in 2006 of over $35 billion (Demos, 2007), and manufac-
tures approximately 80% of the microprocessors used in computers
around the world (Nuttall, 2007). This uncommon size and suc-
cess has brought about a rather unique dynamic that significantly
influences how Intel deals with its suppliers, and how the com-
pany reacts to its competitors. One senior director summarized the
situation by describing the microprocessor sector as “very unbal-
anced.” The 20% or so of the world’s microprocessors that Intel does
not supply come from much smaller rivals such as Advanced Micro
Devices (AMD), Motorola, and the Taiwan Semiconductor Manufac-
turing Company (Nuttall, 2006). Several of Intel’s competitors offer
alternative products that are comparable in many regards to Intel’s,
but prospective challengers face major hurdles that help Intel to
defend its dominant position in the industry.
One particularly tall hurdle is that the semiconductor sector is
extremely capital-intensive. Intel’s managers are quite forthcoming
about the fact that companies like AMD and Motorola are able to
arrive at microprocessor designs that are both innovative and tech-
nically impressive. But all of Intel’s competitors face considerable
difficulty when it comes to high volume manufacturing and quickly
delivering their innovations to the market. Fabrication facilities for
semiconductors can each cost on the order of $3 billion (Tristram,
2003). This amount represents approximately one-twelfth of Intel’s
annual revenue stream—but is nearly half of AMD’s (AMD, 2007).
Intel’s massive size and deep pockets provide a natural and rather
daunting obstacle that its competitors find very difficult to over-
come.
4.2. The role of packaging in microprocessors
The traditional role of microprocessor packaging was merely
to provide an interface between the microprocessor’s microscopic
silicon-level interconnections and the much larger motherboard
while providing protection for the chip from the external environ-
ment (Mahajan et al., 2000, p. 1). As microprocessor performance
has advanced, however, packaging has evolved to take on a decid-
edly more sophisticated role. Because today’s semiconductors
consume considerably more electrical power than in the past,
modern packaging designs now include complex power delivery
systems and contain many more features for heat dissipation than
was required even 15 years ago. And this rate of change is not
expected to slow down anytime soon. Propelled by Moore’s Law2
and the breakneck pace of developments in silicon chip engineer-
2
Established in 1965 by Gordon Moore of Intel, Moore’s Law originally stated that
microprocessors tended to double in power and transistor density about every 2
years (an exponential growth rate). The timeframe for this doubling has since been
shortened to 18 months.
 R.K. Perrons / Research Policy 38 (2009) 1300–1312
ing, packaging is becoming an increasingly important area in the
field of microprocessor design and manufacturing.
The range of tasks and responsibilities managed by Intel’s pack-
aging business unit is quite broad. The process begins by using a
wafer saw to cut round silicon wafers into individual chips. Then the
chips, which are commonly referred to in the industry as “dies,” are
physically connected to the packaging substrate in the “die attach”
process and secured in place. The chip is then electrically connected
to the rest of the computer and hermetically sealed inside the pack-
aging with a ceramic lid to protect it from any kind of impact or
foreign material. After being fused together, the chip and packag-
ing are then subjected to a series of inspections known as “electrical
testing and burn-in.” Designed to weed out particularly sensitive
units, this stage entails subjecting the chip and packaging to volt-
ages and temperatures that are appreciably higher than what would
be expected in a normal operating environment. Finally, the fin-
ished product is marked with a unique serial number and product
specification code before being sent on to other parts of the com-
pany for distribution.
The introduction of the Pentium II generation of microproces-
sors brought about significant changes in two major aspects of the
above process: (1) the substrate material and (2) the method for
electrically connecting the chip to the packaging. Prior to the Pen-
tium II, Intel’s packaging units were built on ceramic substrates,
and silicon chips were electrically connected to the surrounding
packaging by a method called “wire bonding”; after the jump, the
substrates were made from “organic” composite materials, and
were connected by a technique known as “C4.” The change required
considerable effort and resources from both Intel’s packaging busi-
ness unit and its supply network, and is therefore a good example
of Intel’s approach to supplier management within the platform
leadership strategy.
4.3. The old technology: ceramic/wire-bonded packaging
Ceramics are essentially a class of inorganic and non-metallic
materials that was an attractive choice as a substrate material for
early generations of packaging because of their relative insensitiv-
ity to heat and near-zero electrical conductivity. The old packaging
technology consisted of applying a silver-filled epoxy to the chip
and connecting it to the substrate in the “die attach” process. While
the die attach process physically connected the chip to the packag-
ing, however, it did not electrically connect the chip to the rest of
the computer. This was the job of the wire-bonding process.
Wire bonding essentially consists of connecting extremely fine
gold or aluminum wires between pads on the chip and correspond-
ing pads on the surrounding packaging. Wire-bonding machines
are designed very specifically for this task, and Intel has thousands
of them around the world. A single building in the company’s fab-
rication facilities can contain as many as 100 of these machines.
Wire-bond technology and equipment are very mature by indus-
try standards, and this process can therefore be accomplished with
defect rates very close to zero.
Ceramic/wire-bonded packaging units were delivered to Intel
as nearly finished components by three Japanese suppliers: Kobe
Semiconductor, Shinto Electronics, and Nurimoto Packaging.3 Intel
had been purchasing packaging from all three companies for many
years. “Supplier re-use” is an important part of Intel’s strategy,
and the company goes through considerable lengths to make sure
that it can preserve relationships with its key suppliers for as long
as reasonably possible. At the root of this policy is the fact that
3
These are not the real names of the companies. The Intel Corporation maintains
a strict policy of not publicly disclosing its suppliers, and aliases are accordingly used
in this paper to identify them.
1305
Intel has to expend a lot of manpower and money to establish and
develop a productive relationship with a new supplier. The com-
pany has a reputation in the industry for having uncommonly high
standards and for expecting firms in its supply network to adopt
very precisely defined norms of conduct. One senior manager in
Intel estimated that it takes between 2 and 5 years to “Intel-ize” a
new supplier—that is, to teach them about Intel’s standards, proto-
cols, and ways of doing business. Eugene Meieran, an Intel Fellow,
explained that long-term relationships with suppliers are quite
common within Intel’s supplier networks. “Trust is a big issue,” he
said. “Intel usually prefers not to sever ties with a supplier in the
name of a 5–10% cost savings. What the company gets in return,
however, is a cadre of loyal suppliers who will help Intel through
crisis periods.”
Remaining true to Intel’s overarching principle of maintaining
supplier relationships, the company’s packaging unit has worked
with its supply base to foster what they refer to as an “open
kimono” culture in which detailed information can be openly
shared between the packaging unit and each of its principal sup-
pliers. The unit’s managers work closely with each of its top-tier
suppliers to develop highly detailed cost models and a deeply
rooted understanding of the technical details of their operations
so that Intel can work with the suppliers to reduce their overall
costs and improve quality. But this approach is, according to sev-
eral managers in the packaging business unit, not a typical one in
the industry. Competitors such as Motorola and AMD usually just
ask to see samples and prototypes from their suppliers, and are
much less concerned about—or simply may not have the resources
to focus on—the specific operational details and cost information
behind the units that they buy.
The flow of information between Intel and its supply base is
not one-way, however. Intel hosts an annual “Supplier Day” dur-
ing which the company reveals its long-term plans and intentions
to its principal collaborators and suppliers. “We basically use it as
an opportunity to let them know what we’re going to need and
why we’re going to need it. We want to get the suppliers working
together so that we can move things forward,” said one manager.
Despite the obvious economies of scale that might have been
achieved by purchasing all of its ceramic/wire-bonded packag-
ing from a single source, Intel preferred to buy them from the
three Japanese firms—that is, Kobe, Shinto, and Nurimoto. There
were four principal reasons behind this decision. First, as discussed
earlier, the semiconductor industry is quite capital-intensive com-
pared to other sectors, and the Intel team reasoned that any one
supplier would almost certainly face considerable difficulty in try-
ing to build enough production capacity to accommodate Intel’s
requirements. Intel usually expects its suppliers to absorb most of
the costs associated with acquiring new technologies and equip-
ment. “This is just their part of taking risks in the industry,” said one
Intel manager. Spreading this risk among three companies seemed
like a more realistic solution than asking a single firm to bear the
investment alone.
The second reason for outsourcing the production of the pack-
aging to three firms is that, by purchasing from multiple firms, Intel
considers itself less exposed to the naturally arising uncertainties
of the marketplace. Companies enter and exit the semiconductor
business on a fairly regular basis, and Intel usually prefers to use
multiple sources for a particular input as a means for minimizing
the likelihood that it will be left without any supply at all. One sup-
plier may fail, but it is extremely unlikely that all three of them
would falter simultaneously, thereby protecting the expertise and
accumulated know-how in the supply base. In this spirit of supply
chain robustness, Intel also typically prefers not to make any one
supplier too dependent on Intel’s business. The company’s man-
agers usually do not let more than 30% or so of a supplier’s revenue
come from Intel.
1306 R.K. Perrons / Research Policy 38 (2009) 1300–1312
Third, Intel’s management team uses its multiple source strat-
egy as a very effective mechanism for motivating its supply base.
If one firm begins to fall behind the others in delivering a particu-
lar component or input, Intel can use one supplier’s best practices
as a guideline for helping the other, less competitive suppliers to
improve.
Fourth, despite Intel’s size and impressive array of in-house R&D
activities, many of the company’s managers believe that they can
benefit from exposure to talented people and inventive ideas that
pop up in organizations outside their own. Procuring components
and services from multiple suppliers allows Intel to keep in touch
with outside developments, and maintaining links with more sup-
pliers almost surely makes it possible to talk to more people and
get exposed to more new ideas.
Despite the company’s clear preference for procuring its com-
ponents from multiple suppliers, however, Intel works very hard
to ensure that there is very little variation in the actual processes
and methods used by each supplier. A cornerstone of Intel’s overar-
ching strategy is its “copy exactly!” philosophy (McDonald, 1998).
When the Intel team finally converges on a successful design or
process for a specific product line, the company and its suppliers
quickly ramp-up production by making exact clones of the finalized
manufacturing environment and faithfully duplicating the origi-
nal inputs. No variables are changed or adapted whatsoever from
one plant to the next. Behind this approach is the belief that any
manufacturing process is subject to an overwhelming number of
influencing effects. Rather than trying to rationalize all of the com-
plexities of a manufacturing system and model the thousands of
variables involved, Intel prefers merely to reproduce a working
formula without necessarily understanding exactly why it is suc-
cessful. Using this strategy, the company has been able to ramp-up
production for new generations of microprocessors in less than half
the time of its competitors. Intel’s managers are therefore quite
adamant that the company’s suppliers should also adopt the “copy
exactly!” policy, which entails closely following the precise spec-
ifications handed to them by Intel. Attempts by the suppliers to
improvise on their own without Intel’s explicit approval are quite
unwelcome.
4.4. The new technology: organic/C4 packaging
Ceramic/wire-bonded packaging served Intel quite well for
many years, but advances in the speed of microprocessor designs
were beginning to make wire-bonding technology a somewhat
cumbersome option. Intel’s engineers realized that the natural
inductance of the wires connecting the chip to the packaging would
hinder the performance of Intel’s microprocessor designs as chips
with faster clockspeeds were introduced. The company’s managers
and engineers accordingly decided in 1996 to stop using wire-bond
designs and to replace them with “C4” connections, a new tech-
nology that made its Intel debut in the Pentium II generation of
microprocessors.
Controlled collapse chip connecting (C4), or “flip chip” as
it is sometimes called, offered a significant improvement over
wire bonding with regards to the electrical characteristics of
the chip-packaging interface. Developed by IBM in the 1960s for
ceramic substrate packaging, C4 connections resulted in consider-
ably less inductance than wire bonds, thereby causing less overall
impedance in the connections. The C4 approach also offered a sig-
nificant reduction in the surface area of the packaging compared to
wire bonding, which consequently helped the company’s technical
design teams in their constant drive towards miniaturization.
Instead of connecting pads on the chip and packaging with very
thin wires, C4 technology makes this connection via matching sets
of electrically conducting balls that are configured in an array on
both the silicon chip and the packaging. The packaging substrate
and die are then heated, and the die is lowered face-down on to the
packaging such that the connecting balls on the chip and packaging
gently touch each other. When two sets of connecting balls come
together, they form a grid of connections that solidifies when the
packaging and die are cooled.
In addition to the transition from wire bonding to C4 connec-
tions, Intel also chose the Pentium II generation of microprocessor
for making the jump from ceramic substrate packaging units to
“organic” ones. Organic packaging basically consists of a fibreglass
matrix that is impregnated with an epoxy resin and hardened. The
decision to make this change was largely motivated by economics:
ceramic packaging typically costs around $20/unit, while the price
of an organic unit can, after an initial learning period, cost as little as
$3. Organic packaging technology also offers a higher degree of pre-
cision and tolerance control than ceramics. And the new approach
resulted in a significant reduction in the dielectric properties of
the packaging material, thereby lessening the amount of undesir-
able electrical interference that the packaging would create for the
silicon chip while the microprocessor was in operation.
It is important to note, however, that Intel’s engineers are quite
forthcoming about the fact that neither the move from ceramic to
organic packaging nor the transition from wire bonding to C4 was
particularly challenging when considered separately. Both of these
jumps had been accomplished previously in other companies, and
the processes for each were reasonably well documented. What
made these technology jumps considerably more dramatic in this
particular case was the fact that they occurred together. Because
the C4 connection process entailed exposing the packaging and
the chip to very high temperatures and then letting them cool, the
coefficient of thermal expansion (CTE) for each component was a
key consideration. But silicon chips and organic substrates have
markedly different CTEs, and it was therefore not known at the
outset of the project whether the C4 connections would shear as
the microprocessor was cooling during the packaging operations.
It was therefore decided by Intel’s senior managers that, to achieve
this goal in time for the Pentium II generation, the company would
have to work closely with its suppliers.
Before the decision to move towards organic packaging with
C4 connections, Imoko Composites of Japan had very little prior
exposure to Intel’s packaging business unit. But with nearly 20
patents in the field, the company’s highly specialized experience
with high-precision epoxy and fibreglass molding made it an attrac-
tive partner for this undertaking, and the Intel team decided to bring
Imoko on board as a supplier for the new packaging technology.
As was usually done for R&D work with its packaging suppliers,
the Intel managers began with the assumption that Imoko should
play the principal role in developing and perfecting this technology,
and that Imoko would bear most of the costs for this. But it quickly
became clear to Intel that Imoko was experiencing considerable
difficulty in making this happen. While Imoko had made impres-
sive advances in developing C4 arrays on organic substrates over
the 10-year period prior to partnering with Intel, there were still
some rather troublesome problems with their process that clearly
needed to be solved. Engineers and managers from the two com-
panies examined the technology together and diagnosed that the
problems could probably be overcome—but it would take an addi-
tional investment of $250 million to achieve these goals in time for
the Pentium II.
The total capital value of Imoko at the time was estimated by
Intel to be on the order of $750 million, so an investment of $250
million clearly represented a nearly insurmountable obstacle for a
company of Imoko’s size. But the Intel team realized, too, that the
transition to the organic/C4 packaging was on the critical path for
the Pentium II generation microprocessor. Design teams working
on other parts of the microprocessor such as the silicon chip were
already basing their designs on the assumption that the organic/C4
 R.K. Perrons / Research Policy 38 (2009) 1300–1312
transition would be successful. Intel therefore decided towards the
end of 1996 to step in and help Imoko with a large investment
to accelerate the development process. Also, a group consisting of
between seven and twelve engineers from Intel’s U.S. fabrication
plants was assigned to work with Imoko’s R&D team on a full-time
basis in Japan. The size of the team varied according to the spe-
cific requirements of the project: extra manpower was temporarily
assigned to troubleshoot problem areas as required. Throughout
the first 10 months of 1997, Intel personnel worked on a regular
and repeating cycle consisting of 2 to 3 weeks of living and working
in Japan, followed by a 1-week trip home to the U.S. before returning
to Japan again. This rather intense schedule did pay off, however.
As 1997 drew to a close, the Intel and Imoko engineers announced
that they had successfully overcome the production problems, and
that the organic/C4 technology was officially ready for ramping up
to full production.
Remaining true to its longstanding policy of using multiple
suppliers, Intel then worked directly with Imoko to license the
organic/C4 technology to two other companies: Shinto Electron-
ics and Nurimoto Packaging, both of which had been suppliers
of ceramic/wire-bonded packaging to Intel for many years. In the
interest of saving traveling time and money, Intel did consider
licensing the technology to a handful of U.S.-based packaging man-
ufacturers. After a careful analysis of these firms, however, Intel’s
managers decided in favor of the Japanese packaging suppliers
because of their significantly larger commitment to R&D for the
new technology. The U.S. companies that Intel approached were
either financially unable to invest such a large sum of money or
were simply too risk-averse to pursue this new direction with Intel,
so the company was forced to look further afield for potential col-
laborators.
While Shinto Electronics and Nurimoto Packaging had consider-
able experience in microprocessor packaging, however, they were
not yet proficient with every aspect of the technologies directly
related to the new organic/C4 design. Nurimoto had some expe-
rience with the processes involved but, because Imoko’s version
of the technology had been adopted by Intel first and identified
as a “copy exactly!” technology, Nurimoto had to pay for a licens-
ing agreement so that they could use exactly the same materials
as Imoko. Shinto also had to adopt Imoko’s technology in order to
adhere to Intel’s “copy exactly!” principle, but Shinto had even less
experience in the field than Nurimoto, and therefore required sig-
nificantly more direct assistance throughout the transition to the
new technology. Shinto’s managers accordingly agreed to a licens-
ing agreement with Imoko that encompassed both the process
technologies and the required materials.
With the new licensing arrangements came a shift in Intel’s
manpower allocation strategy for the project. Because things were
winding down in the R&D phase, a few members from Intel’s team of
seven engineers at the Imoko facility were re-deployed to the Nuri-
moto and Shinto sites to aid in the technology transfer processes in
those companies. The Intel engineers worked with both suppliers
for several months until they were able to produce packaging units
that were virtually indistinguishable from Imoko’s.
But at the same time, there were other, larger forces at work that
were significantly hindering Shinto’s efforts to adopt the new tech-
nology. The widespread economic malaise throughout the Japanese
economy during this period had a dramatic effect on Shinto’s bot-
tom line. Nurimoto was nearly eight times as big as Shinto in terms
of market capitalization, and was therefore in a better financial sit-
uation to withstand the downturn. Moreover, a significant fraction
of Nurimoto’s income came from the automotive industry, which
tends to offer more robust demand schedules for its suppliers than
the highly volatile microprocessor industry. By contrast, Shinto did
not have any contracts with the automotive suppliers that could
help it through this difficult period. Shinto did indeed manage to
1307
become certified to supply organic/C4 packaging units to Intel, but
Intel’s managers had strong doubts about the supplier’s ability to
do so in the future. Intel consequently reversed its original verdict
and decided not to use Shinto as a supplier of organic/C4 packag-
ing units. However, to soften the blow for Shinto, Intel’s managers
encouraged Imoko to purchase a significant fraction of Shinto’s
organic/C4 production facility.
Perhaps just as notable as who did join Intel in its transition
to organic/C4 packaging is who did not. As explained earlier, Kobe
Semiconductor had also been a very large supplier of packaging to
Intel for decades prior to this transition— “practically forever in this
industry,” as one manager pointed out—but the company preferred
not to invest in the new organic/C4 technology. In spite of the fact
that hundreds of millions of dollars of Kobe’s revenue stream came
from Intel, Kobe’s managers fundamentally disagreed with Intel
about where the microprocessor sector was headed with respect
to packaging technologies. Kobe also had several other customers
for its ceramic packaging, and these other firms had indicated that
they were not particularly interested in moving towards organic/C4
packaging at the time. With billions of dollars in annual sales built
almost entirely on a core competence of ceramic products, Kobe had
a broad range of customers in many industries around the world.
The firm’s managers therefore quite naturally considered Kobe to
be a ceramics company first and foremost. To accommodate Intel’s
request to move to organic/C4 packaging would take the company’s
focus away from this fundamental principle.
The managers within Intel’s packaging business unit were not
happy at the thought of severing their relationship with Kobe.
Its above-average size in the industry and the longstanding rela-
tionship that it shared with Intel made it a valuable partner, and
managers within the two companies had developed a tremendous
amount of trust and rapport. Towards preserving the relationship,
Intel even went so far as offering to hand over the new technology
to Kobe and to train the supplier’s engineers to become proficient
with it. But in the end, Kobe did not agree with Intel’s new direction
in the market, and politely declined the offer.
5. Discussion and conclusions
5.1. Characterizing Intel’s supplier relationships
The eight decision elements and strategic guiding principles
reveal several key pieces of evidence that provide insight into how
Intel interacts with its suppliers. First, Intel expended consider-
able resources and effort in an attempt to adhere to its “supplier
re-use” policy. On one hand, this policy was principally motivated
by Intel’s expectation that its suppliers would adopt very precisely
defined norms of conduct. This could be interpreted in the frame-
work as power-based manipulative behavior insofar as Intel was
trying to reduce its own risk by increasing the overall predictabil-
ity of the company’s supply network. But on the other hand, this
deeply rooted reluctance to sever relationships—and, indeed, the
suppliers’ awareness of this clearly stated objective—also resulted
in a transfer of power away from Intel towards the suppliers. Intel’s
willingness to accept this added risk suggests that this policy is not
the “façade of trust” that Hardy et al. (1998) describe, but does in
fact represent a more genuine variety of trust. Thus, as shown in
Table 2, this evidence fits into a new in-between category not orig-
inally reflected in the framework of Hardy et al. (1998): a mixture
of real trust and a relatively benevolent form of power.
Second, the “open kimono” culture that is fostered between
Intel and its suppliers is clearly aimed at reducing risk, and there-
fore exhibits the attributes and power asymmetries associated with
“manipulation” relationships. Intel worked with the suppliers to
develop highly detailed cost models so that the two companies
could jointly reduce the suppliers’ costs—but no such transparency
1308 R.K. Perrons / Research Policy 38 (2009) 1300–1312
Table 2
Mapping the case study evidence to the modified version of the framework from Hardy et al. (1998).
Characterization of relationship-related evidence according to modified version of framework from Hardy et al. (1998)
Spontaneous trust Generated trust
Elements/policies from case study evidence
Supplier Re-Use Policy
“Open Kimono”
“Supplier Day” 䊉
Multiple Source Strategy 䊉
“Copy Exactly!”
Direct Investment in Imoko 䊉
Shinto-Imoko Licensing Deal
Shinto Sale to Imoko 䊉
of cost structures was offered in the other direction. The meaning of
the “open kimono” policy was shared by Intel and its suppliers, but
the highly asymmetrical nature of the information exchange shows
that this element of the relationship was power-based.
Third, Intel was very forthcoming about the fact that its tradi-
tion of “Supplier Day” was intended to “let [suppliers] know what
we’re going to need and why we’re going to need it.” Suppliers are
not invited to this event so that Intel can solicit feedback from its
collaborators; rather, the company uses the occasion to socialize
its intentions in a way that could resemble a power-based “capit-
ulation” relationship. But this dimension of this practice seems
relatively minor in comparison to the fact that Intel also uses these
events to reveal its long-term intentions to a room full of people
whom it cannot entirely control, which makes Intel’s strategic foot-
ing more vulnerable. These plans could clearly be leaked to Intel’s
rivals. In spite of this obvious risk, Intel continues to lay its cards
on the table during this annual ritual. This heightened vulnerabil-
ity combined with Intel’s attempts to “manage the meaning” of the
design principles resembles the scenario outlined in the “generated
trust” profile.
Fourth, the multiple source strategy that Intel used to insulate
itself from supply disruptions made Intel less reliant on any one
of its suppliers.4 However, Intel maintained a balance of power
in the relationship by ensuring that this same robustness was
created for the suppliers. By refusing to let more than 30% of a
supplier’s revenue come from Intel, all parties were less strategi-
cally vulnerable. Intel dictated these terms as a manipulator might,
but this is overshadowed by the fact that both sides clearly ben-
efited in a “win-win” kind of way from this action. This policy
therefore most closely resembles the “generated trust” relationship
profile.
Fifth, Intel forced its suppliers to “copy exactly!” the principles of
the new packaging design once they had been agreed. Imoko Com-
posites, Shinto Electronics, and Nurimoto Packaging were consulted
during the R&D phase of the project, which resembles a “gener-
ated trust” kind of relationship, but the decision to freeze the final
technical specifications for the new packaging design and apply
them verbatim among all of the suppliers was entirely Intel’s. This
approach was intended to reduce Intel’s risk, and therefore exhibits
the kind of pronounced power asymmetry associated in the frame-
work with “manipulation.” The meaning and overall objectives of
4
Andy Grove, the former President and CEO of Intel, applied a similar kind of logic
to the “second sourcing” strategy that the company used to espouse until the mid-
1980s. Second sourcing entailed giving Intel’s technology and technical know-how
to direct competitors so that PC makers would get a broader supplier base for new
microprocessor technologies, thereby allowing PC makers to move more confidently
towards these innovations (Grove, 1996, p. 69).
Trust and Benevolent Use of Power Manipulation Capitulation
䊉
䊉
䊉
䊉
this aspect of the relationship were indeed shared, but were forced
on the suppliers by Intel with virtually no consultation.
Sixth, in spite of the fact that Intel typically expects its top-tier
suppliers to bear most of the costs of R&D for their respective com-
ponents, Intel provided Imoko with a cash investment and a team
of Intel engineers when Imoko began to experience difficulties with
delivering the new packaging technology.5 This action represented
a significant leap of faith on Intel’s part. Prior to the decision to move
towards organic packaging with C4 connections, Imoko Composites
had very little exposure to Intel’s packaging business unit, and Intel
therefore could not be certain that this sizeable investment was
safe—but it committed to the decision nonetheless. For this partic-
ular decision, the linkage between Imoko and Intel squarely fulfils
the definition of “generated trust.”
Seventh, Intel ensured that Shinto received a significant amount
of direct help from Imoko to make the transition to the new tech-
nology. While it is true that Intel forcefully brokered this agreement
between the two suppliers, thereby exhibiting some power-based
manipulative behavior, it is also true that Intel allowed Imoko to
profit significantly from this shift. In this way, Intel endorsed a “win-
win” solution that allowed Imoko to garner more power for itself.
The clear and material benefit enjoyed by Imoko from this decision
suggests that the trust and goodwill shown in this instance by Intel
is not the “façade of trust” that Hardy et al. (1998) describe, but
rather a more genuine form of trust. This decision element accord-
ingly fits into the new hybrid category of “Trust and Benevolent Use
of Power.”
Finally, when it became clear to Intel’s managers that Shinto’s
difficulties were more far-reaching than they had initially thought,
Intel reversed its earlier decision and decided not to use Shinto as a
supplier of organic/C4 packaging units. Instead of simply dropping
Shinto, however, Intel actively took steps to encourage Imoko to
purchase Shinto’s organic/C4 production equipment. Because this
turn of events was largely unexpected and a natural act of cooper-
ation among these firms rather than one that was preordained by
5
It is also worth noting that this instance of Intel rolling up its sleeves and directly
getting involved with a new technology area is not an isolated episode. In their anal-
ysis of Intel’s move to the PCI bus architecture for the first Pentium processors, Gawer
and Cusumano (2002) capture one Intel manager’s rationalization of the company’s
decision to create an in-house PCI bus architecture: “Why did we enter the chip set
business? We got into the chip set business in a major way to accelerate platform
transitions. To unleash the power of the Pentium, we had to introduce the new PCI
bus. We did start by giving specifications [to the chip set manufacturers]. We started
with traditional enabling, which is you give specs out, you evangelize that the pro-
cessor is going to need it, you make the technical case, you make a marketing case,
and you say that you’re going to advertise it to make it important to the industry.
But we realized that wasn’t good enough because they weren’t fast enough. One of
the most troublesome things was that it was really hard getting the other chip set
vendors to do PCI right” (pp. 87–88).
 R.K. Perrons / Research Policy 38 (2009) 1300–1312
Intel, this decision most closely resembles the “spontaneous trust”
profile in the framework.
Overall, the evidence summarized in Table 2 suggests that the
relationships between Intel and its suppliers are based on a bal-
anced mixture of both trust and a benevolent form of power.
Some policies and decisions are largely power-based and notice-
ably weighted in Intel’s favor; others are anchored in seemingly
sincere forms of trust that result in significant wins and increased
power for the suppliers. And this case study shows that a third sce-
nario is also possible: some of Intel’s decisions and policies seemed
to exhibit characteristics of power-based and trust-based relation-
ships at the same time. Intel applied a constructive amount of power
to push through technical and logistical sticking points on the crit-
ical path of its technology platforms, but not at the expense of its
reputation as a trustworthy partner. The company’s overwhelm-
ingly positive reputation in the market is demonstrated by the fact
that prospective collaborators vie aggressively to become preferred
Intel suppliers because they believe that Intel’s balanced use of trust
and power will result in “win-win” outcomes for all.
5.2. Implications for theory
The existing literature on platform leadership (Cusumano and
Gawer, 2002; Gawer and Cusumano, 2002, 2008; Gawer and
Henderson, 2007) makes it clear that trust plays an important role in
platform leadership but, as noted earlier, is rather vague about this
vital part of the strategy. And despite the potentially critical role that
power might play in the inter-firm links underpinning a technol-
ogy platform, prior investigations reveal little about this important
aspect of how platform leadership works. By specifically character-
izing the nature of the relationships between Intel and its suppliers
in terms of both trust and power, this paper usefully extends our
understanding of how platform leadership is maintained by Intel.6
This case study also offers compelling evidence that might help
to resolve a longstanding division in the literature regarding the
relative desirability of power and trust. Power frequently has a
much lower reputation than trust when viewed from a normative
point of view (Bachmann, 2006a), and is often classified as an
unacceptable means to control social communication (Bachmann,
2006b; Foucault, 1972; Habermas, 1984). This perception of power
as an undesirable means of establishing and enforcing cooperation
between actors is also reflected in the framework of Hardy et al.
(1998). But Luhmann (1979) and Giddens (1984) question this
view, and suggest that power should be seen as a potentially
useful mechanism for controlling the dynamics of relationships
under certain conditions. The evidence presented here essentially
supports this alternative perspective: power can sometimes be
applied in a way that is ultimately very beneficial for everyone in
a relationship. While it is clearly true that power is often abused
and used in a negative manner in situations where actors are in
direct competition with one another, the Intel example empirically
supports Luhmann (1979) and Giddens’ (1984) contention that
power is not always bad. When used in a relatively benevolent way,
power can dramatically accelerate the multi-firm innovation pro-
cess for the benefit of an entire technological “ecosystem.” Instead
of feeling negative about Intel’s attempts to steer major aspects of
the technological evolution of the platform, suppliers work hard
to remain preferred Intel partners because they believe that Intel’s
6
I should also note, however, that Blomqvist et al. (2005) similarly observe that
R&D collaborations between “asymmetric” partners—that is, firms with pronounced
imbalances in resources—should be based on a mixture of trust and contracts. The
case study presented here partially supports their proposition, but differs in that
Intel frequently uses power instead of contracts to reduce risk and increase the
predictability of developments within the overall technological platform.
1309
balanced use of trust and power will be profitable for all of the
stakeholders.
An important outcome from this finding is that integrative
frameworks of trust and power should be expanded in a way that
does not preclude a balanced approach to trust and power, and that
does not portray these social forces in a mutually exclusive way.
The Intel example discussed here offers real-world confirmation
of the alternative perspective espoused by Luhmann (1979) and
Giddens (1984), and future models should therefore include this
point of view. Accordingly, Table 3 shows a modified framework
that builds upon Hardy et al. (1998) by adding the additional cate-
gory, “Trust and Benevolent Use of Power,” that was introduced in
the Data Analysis section of the paper.
This new category exhibits many of the characteristics shown in
the other relationship profiles outlined in the Hardy et al. (1998)
framework, but reflects the fact that aspects of trust-based and
power-based linkages can co-exist simultaneously within a single
relationship. As shown in the case study evidence, the dominant
partner in a “Trust and Benevolent Use of Power” relationship can
use power to reduce risk and increase predictability in the same way
that the dominant actor in a “manipulation” relationship could, but
a genuine sense of trust is created between participants instead of
a façade of trust. Meaning is imposed on the weaker partner by the
stronger one, but the weaker partner is quite happy to let this hap-
pen because doing so will result in significant gains for the entire
“ecosystem.”
5.3. Implications for industry
The barriers to entry for establishing platform leadership in a
particular market segment are often large. A few cases of platform
leadership have emerged from humble beginnings—the success
of Linux within the web server operating system market against
formidable adversaries such as Microsoft and Sun Microsystems
is one particularly high profile example—but recent research in
this area underlines that many managers consider this strate-
gic option to be out of reach for most small or medium-sized
companies (Gawer and Cusumano, 2008). Gawer and Cusumano
(2008) point out that several smaller firms have created extremely
useful technologies that prospective complementors were able to
build upon, but these smaller “platform-leader wannabes” (Gawer
and Cusumano, 2008, p. 28) very often found it quite difficult to
convince other firms to follow them. Most companies simply do
not have the market clout to direct a focused innovation agenda
within their particular “ecosystem.” Thus, while this paper bol-
sters earlier research focusing on the generic benefits of trust in
R&D environments (Bartlett and Ghoshal, 2002; Blomqvist et al.,
2005; Hoecht and Trott, 1999, 2006; Minshall, 1999; Teece, 1992),
it is doubtful that the lessons learned here could be used pre-
scriptively for every small and mid-size company that aspires to
follow a platform leadership strategy. Intel’s success as a plat-
form leader would probably not have been possible without its
established and dominant position in the microprocessor sec-
tor.
However, the evidence presented here does have high-level
practical implications for research policy within the overall market
because of the sheer magnitude of the few companies that behave
like platform leaders. Intel, Microsoft, and Cisco collectively gen-
erated revenues of over $100 billion in 2006 (Demos, 2007), and
these firms therefore play significant roles in shaping the culture
and politics of strategically important sectors of the U.S. economy.
In other words, while there may only be a very small number of
platform leaders throughout the marketplace, the size and scope
of these firms’ activities is such that the accelerated rates of tech-
nological change brought about by this innovation strategy ripple
through many other industries.
1310 R.K. Perrons / Research Policy 38 (2009) 1300–1312

The observations put forward here also point to interesting pos-

power is either maintained or

Power imbalance may mean

Cooperation is power-based

Subordinate acts as a tool of

“independent” as they may

imposed by one partner on
sibilities for other industries that, like the microprocessor sector, are

A zero-sum view of power

dominant partner: risk to
through dependency and

dominant partner is low;

prevails as asymmetrical

Meaning is shared but is

Cooperation is achieved

that partners are not as

led by very large firms and characterized by pronounced imbalances
of power. For example, major international oil companies such as
ExxonMobil, Royal Dutch Shell, and BP are considerably larger than

synergy is low
many of their complementors, and these firms openly admit that
socialization
Capitulation

increased
they are facing a broad range of daunting technological challenges

another

appear
(Tillerson, 2006). As the energy industry becomes increasingly
dependent on technology (Daneshy and Donnelly, 2004), platform
leadership—or perhaps a modified form of it that would allow a
few firms to jointly direct the sector’s R&D activities—could poten-

trust when it is based on power

tially become a useful model of innovation for Big Oil. Multinational
symbolic power to reduce risk
and to increase predictability;

been distorted by one partner

power is either maintained or

Meaning is shared but it has

Cooperation is power-based

mining companies such as Rio Tinto and BHP Billiton may also

Relationship may look like

A zero-sum view of power
prevails as asymmetrical
through management of

be similarly positioned. Before these structural strategic shifts can

Cooperation is achieved

Dominant partner uses

occur in these sectors, however, government agencies may have

synergy is reduced

to amend their antitrust regulations in a way that allows these

industry giants to collaborate intimately with their suppliers and
Manipulation

each other while ensuring that the benevolent spirit of platform

increased
meaning

leadership is maintained.

5.4. Recommendations for future research

Although the use of a single case study in this investigation

Dominant partner uses power
Cooperation is based on both

Weaker partner is content to

makes it difficult to generalize these results broadly (Eisenhardt,

Trust and Benevolent Use of

A “win-win” view of power

cede power on some issues

imposed by one partner on
to reduce risk and increase
predictability, but overall

1989), this evidence serves a useful purpose as a preliminary

Meaning is shared but is
through management of
Cooperation is achieved

potential for “win-win”

because of pronounced

qualitative exploration in an important dimension of platform lead-

ership. Nevertheless, several key questions remain unanswered.
synergy increases
trust and power

First, it is not yet clear how platform leadership differs among

the small number of companies that use this approach. I have
meaning

prevails

another

used the term “platform leadership” throughout this paper to

Power

describe a spectrum of approaches and relationships that have

been used with considerable success by Intel, Microsoft, and Cisco.
But even though all three companies similarly apply this strat-
egy on a macro-level, Gawer and Cusumano (2002) note that
synergy but also increases risk
Trust is created through equal
participation which increases

these firms are different in many important ways. One poten-

meaning is difficult and may
Shared meaning is mutually
A “win-win” view of power
Cooperation is trust-based

Process of creating shared

tially fruitful area for future research, therefore, would be to

prevails as asymmetrical
through management of

constructed by partners
Cooperation is achieved

examine Microsoft and Cisco towards characterizing these com-

power is decreased

panies’ relationships with complementors, and to determine if

Generated trust

involve conflict

these other firms use trust and/or power in the same way that
Intel does.
meaning

Second, the research methodology raises obvious questions

about the reliability of the data. This paper offers no direct evidence
of how Intel’s supplier relationships looked from the perspective of
the suppliers themselves. Intel did not offer me direct access to
these firms throughout this investigation, but these complemen-
“spontaneous” as it may appear
Cooperation emerges naturally,

Shared meaning may not be as

Shared meaning already exists
Trust emerges spontaneously:

tors could probably provide important insights and points of view

A “win-win” view of power is
A proposed expanded version of framework from Hardy et al. (1998).

synergy is high; risk is high

Cooperation is trust-based

that Intel employees simply could not.

implicit although power is

Third, the evidence in this case study sheds light on how Intel
has balanced trust and power to maintain its role as a platform
Spontaneous trust

leader, but the evidence offers little insight into how a company
through gamble

largely ignored

can become a platform leader. Although Intel, Microsoft, and Cisco

are currently able to exert this kind of influence on their com-
plementors, it is unlikely that they were able to apply this same
strategy in their formative years. So how does platform leadership
get started?
A fourth question concerns how Intel, Microsoft, and Cisco
Implications for research/practice

would behave when their technology platforms are overlapping.

The hierarchy within a particular technological “ecosystem” seems
Synergy, innovation, and risk

relatively clear when only one of these platform leaders is involved.

Dynamics of cooperation

However, some systems and technical issues—like optimizing a

Nature of cooperation

Microsoft operating system for one of Intel’s chip designs, for

example—may bring about situations in which platform leaders
have to work with each other. This paper explores how platform
leaders balance trust and power to manage smaller complemen-
Meaning
Table 3

Power

tors, but it fails to explain how these leaders work with each other
when they have to.
 R.K. Perrons / Research Policy 38 (2009) 1300–1312
Finally, previous research in the area of trust and power sug-
gests that culture plays an important role in how trust is established
(Doney et al., 1998; Fox, 1974; Sako, 1992, 1998), and that people
from different parts of the world sometimes perceive the relation-
ship between trust and power very differently (Bachmann, 2006b).
The case study presented here focuses on a principally American
platform leader and a small number of Japanese suppliers. It is quite
possible that the relationships among these firms were significantly
shaped by the cultural differences of the managers and employees
acting on behalf of these companies. It would therefore be quite
interesting to see if Intel conducts itself differently when dealing
with firms based in other parts of the world and, more broadly,
how culture impacts the dynamics of inter-firm linkages within
technology “ecosystems.”
Acknowledgements
The author thanks Ken Platts, Elizabeth Garnsey, Annabelle
Gawer, Tyson Browning, Scott Wilson, Rachel Parker, Mat Hughes,
and two anonymous reviewers for their helpful comments on ear-
lier versions of this manuscript. Financial support for this research
was provided by the Intel Corporation, the UK Engineering and
Physical Sciences Research Council (EPSRC), and the Natural Sci-
ences and Engineering Research Council (NSERC) of Canada. All
errors remain the responsibility of the author.
References
Afuah, A., 1998. Innovation Management: Strategies, Implementation, and Profits.
Oxford University Press, New York.
AMD, 2007. AMD 2006 Annual Report on Form 10-K, accessed on 1 September 2007
via www.annualreport.amd.com.
Anand, N., Gardner, H.K., Morris, T., 2007. Knowledge-based innovation: emergence
and embedding of new practice areas in management consulting firms. Academy
of Management Journal 50 (2), 406–428.
Axelrod, R.M., 1984. The Evolution of Cooperation. Basic Books, New York.
Bachmann, R., 1998. Conclusion: trust—conceptual aspects of a complex phe-
nomenon. In: Lane, C., Bachmann, R. (Eds.), Trust Within and Between
Organizations. Oxford University Press, Oxford, pp. 298–322.
Bachmann, R., 2003. Trust and power as a means of coordinating the internal rela-
tions of the organization: a conceptual framework. In: Nooteboom, B., Six, F.
(Eds.), The Trust Process in Organizations. Edward Elgar, Cheltenham, UK, pp.
58–74.
Bachmann, R., 2006a. Trust and/or power: towards a sociological theory of orga-
nizational relationships. In: Bachmann, R., Zaheer, A. (Eds.), Handbook of Trust
Research. Edward Elgar, Cheltenham, UK, pp. 393–408.
Bachmann, R., 2006b. Trust, power, and control in trans-organizational relations.
In: Kramer, R.M. (Ed.), Organizational Trust: A Reader. Oxford University Press,
Oxford, pp. 445–475.
Bachmann, R., Zaheer, A., 2006. Handbook of Trust Research. Edward Elgar, Chel-
tenham, UK.
Bachrach, P., Baratz, M.S., 1962. The two faces of power. American Political Science
Review 56 (4), 947–952.
Balakrishnan, S., Wernerfelt, B., 1986. Technical change, competition and vertical
integration. Strategic Management Journal 7 (4), 347–359.
Barney, J.B., 1999. How a firm’s capabilities affect boundary decisions. Sloan Man-
agement Review 40 (Spring), 137–145.
Barney, J.B., Hansen, M.H., 1994. Trustworthiness as a source of competitive advan-
tage. Strategic Management Journal 15, 175–190 (Special Issue: Competitive
Organizational Behavior).
Bartlett, C.A., Ghoshal, S., 2002. Building competitive advantage through people. MIT
Sloan Management Review 43 (Winter), 34–41.
Blau, P.M., 1986. Exchange and Power in Social Life. Transaction Publishers, New
Brunswick, New Jersey.
Blomqvist, K., Hurmelinna, P., Seppänen, R., 2005. Playing the collaboration game
right—balancing trust and contracting. Technovation 25 (5), 497–504.
Bozdogan, K., Deyst, J., Hoult, D., Lucas, M., 1998. Architectural innovation in prod-
uct development through early supplier integration. R&D Management 28 (3),
163–173.
Brenkert, G.G., 1998. Trust, morality, and international business. In: Lane, C., Bach-
mann, R. (Eds.), Trust Within and Between Organizations: Conceptual Issues and
Empirical Applications. Oxford University Press, Oxford, pp. 273–297.
Brown, S.L., Eisenhardt, K.M., 1997. The art of continuous change: linking complexity
theory and time-paced evolution in relentlessly shifting organizations. Admin-
istrative Science Quarterly 42 (1), 1–34.
Chesbrough, H.W., 2003. The era of open innovation. MIT Sloan Management Review
44 (Spring), 35–41.
1311
Child, J., 1998. Trust and international strategic alliances: the case of sino-foreign
joint ventures. In: Lane, C., Bachmann, R. (Eds.), Trust Within and Between
Organizations: Conceptual Issues and Empirical Applications. Oxford University
Press, Oxford, pp. 241–272.
Clegg, S.R., 1989. Frameworks of Power. Sage Publications, London.
Cusumano, M.A., Gawer, A., 2002. The elements of platform leadership. MIT Sloan
Management Review 43 (Spring), 51–58.
Daneshy, A., Donnelly, J., 2004. A JPT roundtable: the funding and uptake of new
upstream technology. Journal of Petroleum Technology 56 (6), 28–30.
Das, T.K., Teng, B.-S., 1998. Between trust and control: developing confidence in part-
ner cooperation in alliances. Academy of Management Review 23 (3), 491–512.
Das, T.K., Teng, B.-S., 2001. Trust control and risk in strategic alliances: an integrated
framework. Organization Studies 22 (2), 251–284.
Demos, T., 2007. The world’s largest corporations: global 500. Fortune 156 (2), July
23 issue, 131–143.
Dodgson, M., 1993. Learning, trust and technological collaboration. Human Relations
46 (1), 79–96.
Doney, P.M., Cannon, J.P., Mullen, M.R., 1998. Understanding the influence of national
culture on the development of trust. Academy of Management Review 23 (3),
601–620.
Dyer, J.H., 1996. How Chrysler created an American keiretsu. Harvard Business
Review 74 (July–August), 42–56.
Eisenhardt, K.M., 1989. Building theories from case study research. Academy of Man-
agement Review 14 (4), 532–550.
Eisenhardt, K.M., Schoonhoven, C.B., 1996. Resource-based view of strategic alliance
formation: strategic and social effects in entrepreneurial firms. Organization
Science 7 (2), 136–150.
Foster, J., 2000. Is there a role for transaction cost economics if we view
firms as complex adaptive systems? Contemporary Economic Policy 18 (4),
369–385.
Foucault, M., 1972. The Archeology of Knowledge. Pantheon, New York.
Fox, A., 1974. Beyond Contract: Work, Power and Trust Relations. Faber and Faber,
London.
Galford, R., Drapeau, A.S., 2003. The enemies of trust. Harvard Business Review 81
(February), 88–95.
Gawer, A., Cusumano, M.A., 2002. Platform Leadership: How Intel, Microsoft, and
Cisco Drive Industry Innovation. Harvard Business School Press, Boston, Mas-
sachusetts.
Gawer, A., Cusumano, M.A., 2008. How companies become platform leaders. MIT
Sloan Management Review 49 (Winter), 28–35.
Gawer, A., Henderson, R., 2007. Platform owner entry and innovation in complemen-
tary markets: evidence from Intel. Journal of Economics & Management Strategy
16 (1), 1–34.
Gephart, R., 2004. From the editors: Qualitative Research and the Academy of Man-
agement Journal. Academy of Management Journal 47 (4), 454–462.
Giddens, A., 1984. The Constitution of Society. Polity, Cambridge.
Gietzmann, M.B., 1995. Make or buy revisited: some lessons from Japan. Manage-
ment Accounting: Magazine for Chartered Management Accountants 73 (1),
24–25.
Glasmeier, A., 1997. Technological discontinuities and flexible production networks:
the case of Switzerland and the World Watch Industry. In: Tushman, M.L.,
Anderson, P. (Eds.), Managing Strategic Innovation and Change: A Collection of
Readings. Oxford University Press, New York, pp. 24–42.
Grove, A.S., 1996. Only the Paranoid Survive: How to Exploit the Crisis Points That
Challenge Every Company and Career. Currency-Doubleday, New York.
Habermas, J., 1984. The Theory of Communicative Action. Polity, Cambridge.
Hardy, C., 1985. The nature of unobtrusive power. Journal of Management Studies
22 (4), 384–399.
Hardy, C., Phillips, N., Lawrence, T., 1998. Distinguishing trust and power in interor-
ganizational relations: forms and façades of trust. In: Lane, C., Bachmann, R.
(Eds.), Trust Within and Between Organizations: Conceptual Issues and Empiri-
cal Applications. Oxford University Press, Oxford, pp. 64–87.
Hart, P., Saunders, C., 1997. Power and trust: critical factors in the adoption and use
of electronic data interchange. Organization Science 8 (1), 23–42.
Hazen, M.A., 1994. A radical humanist perspective of interorganizational relation-
ships. Human Relations 47 (4), 393–415.
Hoecht, A., Trott, P., 1999. Trust, risk and control in the management of collaborative
technology development. International Journal of Innovation Management 3 (3),
257–270.
Hoecht, A., Trott, P., 2006. Innovation risks of strategic outsourcing. Technovation 26
(5–6), 672–681.
Holton, G., Chang, H., Jurkowitz, E., 1996. How a scientific discovery is made: a case
history. American Scientist 84 (4), 364–376.
Jick, T.D., 1979. Mixing qualitative and quantitative methods: triangulation in action.
Administrative Science Quarterly 24 (4), 602–611.
Joly, P.B., Mangematin, V., 1996. Profile of public laboratories, industrial partnerships
and organisation of R&D: the dynamics of industrial relationships in a large
research organisation. Research Policy 25 (6), 901–922.
Kern, T., Blois, K., 2002. Norm development in outsourcing relationships. Journal of
Information Technology 17 (1), 33–42.
Knights, D., Murray, F., Willmott, H., 1993. Networking as knowledge work: a study
of strategic interorganizational development in the financial services industry.
Journal of Management Studies 30 (6), 975–995.
Kodama, M., 2005. New knowledge creation through leadership-based strategic
community—a case of new product development in it and multimedia business
fields. Technovation 25 (8), 895–908.
1312 R.K. Perrons / Research Policy 38 (2009) 1300–1312
Kodama, M., 2007. Innovation through boundary management—a case study in
reforms at Matsushita electric. Technovation 27 (1–2), 15–29.
Kramer, R.M., 2006. Organizational Trust: A Reader. Oxford University Press, Oxford.
Kramer, R.M., Tyler, T.R., 1996. Trust in Organizations. Sage, London.
Kumar, N., 1996. The power of trust in manufacturer–retailer relationships. Harvard
Business Review 74 (November–December), 92–106.
Kumpe, T., Bolwijn, P.T., 1988. Manufacturing: the new case for vertical integration.
Harvard Business Review 66 (March–April), 75–81.
Lane, C., 1998. Introduction: theories and issues in the study of trust. In: Lane, C.,
Bachmann, R. (Eds.), Trust Within and Between Organizations: Conceptual Issues
and Empirical Applications. Oxford University Press, Oxford, pp. 1–30.
Lane, C., Bachmann, R., 1996. The social constitution of trust: supplier relations in
Britain and Germany. Organization Studies 17 (3), 365–395.
Lane, C., Bachmann, R., 1998. Trust Within and Between Organizations: Conceptual
Issues and Empirical Applications. Oxford University Press, Oxford.
Leifer, R., McDermott, C.M., Colarelli O’Connor, G., Peters, L.S., Rice, M., Veryzer,
R.W., 2000. Radical Innovation: How Mature Companies Can Outsmart Upstarts.
Harvard Business School Press, Boston, Massachusetts.
Leonard-Barton, D., 1995. Wellsprings of Knowledge: Building and Sustaining the
Sources of Innovation. Harvard Business School Press, Boston.
Liker, J.K., Kamath, R.R., Wasti, S.N., Nagamachi, M., 1996. Supplier involvement
in automotive component design: are there really large US Japan differences?
Research Policy 25 (1), 59–89.
Lombard, M., Snyder-Dutch, J., Bracken, C.C., 2002. Content analysis in mass
communication: assessment and reporting of intercoder reliability. Human
Communication Research 28 (4), 587–604.
Long, C.P., Sitkin, S.B., 2006. Trust in the balance: how managers integrate trust-
building and task control. In: Bachmann, R., Zaheer, A. (Eds.), Handbook of Trust
Research. Edward Elgar, Cheltenham, UK, pp. 87–106.
Luhmann, N., 1979. Trust and Power. John Wiley & Sons, Chichester.
Mahajan, R., Brown, K., Atluri, V., 2000. The evolution of microprocessor packaging.
Intel Technology Journal 4 (3), 1–10.
Manders, A.J.C., Brenner, Y.S., 1995. Make or buy: the potential subversion of corpo-
rate strategy–the case of Philips. International Journal of Social Economics 22
(4), 4–11.
Marsh, S.P., 1994. Formalising Trust as a Computational Concept. Unpublished PhD
Thesis. University of Stirling, Stirling, United Kingdom.
Mayer, R.C., Davis, J.H., Schoorman, F.D., 1995. An integrative model of organizational
trust. Academy of Management Review 20 (3), 709–734.
McDonald, C.J., 1998. The evolution of Intel’s copy EXACTLY! technology transfer
method. Intel Technology Journal 2 (4), 1–6.
Meredith, J., 1998. Building operations management theory through case and field
research. Journal of Operations Management 16 (4), 441–454.
Miles, M.B., Huberman, A.M., 1994. Qualitative Data Analysis: An Expanded Source-
book, second ed. Sage Publications, Thousand Oaks, CA.
Minshall, T., 1999. A resource-based view of alliances: the case of the handheld com-
puter industry. International Journal of Innovation Management 3 (2), 159–183.
Molm, L.D., 1997. Coercive Power in Social Exchange. Cambridge University Press,
Cambridge.
Monteverde, K., Teece, D.J., 1982. Supplier switching costs and vertical integration
in the automobile industry. Bell Journal of Economics 13 (1), 206–213.
Mora-Valentin, E.M., Montoro-Sanchez, A., Guerras-Martin, L.A., 2004. Determin-
ing factors in the success of R&D cooperative agreements between firms and
research organizations. Research Policy 33 (1), 17–40.
Nooteboom, B., 1999. Innovation and inter-firm linkages: new implications for policy.
Research Policy 28 (8), 793–805.
Nooteboom, B., Six, F., 2003. The Trust Process in Organizations. Edward Elgar, Chel-
tenham, UK.
Nuttall, C., 2006. Intel Still Convinced that Two Brains Are Better Than One. Financial
Times (Europe edition), December 27 issue, p. 12.
Nuttall, C., 2007. Intel’s Architect of Ever Smaller Things. Financial Times (US edition),
August 6 issue, p. 12.
Pfeffer, J., 1981. Power in Organizations. Ballinger Publishing Company, Cambridge,
MA.
Quinn, J.B., 2000. Outsourcing innovation: the new engine of growth. Sloan Manage-
ment Review 41 (Summer), 13–28.
Quinn, J.B., Hilmer, F.G., 1994. Strategic outsourcing. Sloan Management Review 35
(Summer), 43–55.
Rigby, D., Zook, C., 2002. Open-market innovation. Harvard Business Review 80
(October), 5–12.
Rindova, V.P., Kotha, S., 2001. Continuous “Morphing”: competing through dynamic
capabilities, form, and function. Academy of Management Journal 44 (6),
1263–1280.
Sako, M., 1992. Prices, Quality, and Trust: Inter-firm Relations in Britain and Japan.
Cambridge University Press, Cambridge, United Kingdom.
Sako, M., 1998. Does trust improve business performance? In: Lane, C., Bachmann, R.
(Eds.), Trust Within and Between Organizations: Conceptual Issues and Empiri-
cal Applications. Oxford University Press, Oxford, pp. 88–117.
Streb, J., 2003. Shaping the national system of inter-industry knowledge exchange:
vertical integration, licensing and repeated knowledge transfer in the German
plastics industry. Research Policy 32 (6), 1125–1140.
Teece, D., 1986. Profiting from technological innovation: implications for integra-
tion, collaboration, licensing and public policy. Research Policy 15 (6), 285–
305.
Teece, D., 1992. Competition, cooperation, and innovation: organizational arrange-
ments for regimes of rapid technological progress. Journal of Economic Behavior
and Organization 18 (1), 1–25.
Tidd, J., Bessant, J., Pavitt, K., 2001. Managing Innovation: Integrating Technolog-
ical, Market, and Organizational Change, second ed. John Wiley & Sons Ltd.,
Chichester, UK.
Tillerson, R., 2006. The high-tech reality of oil. Newsweek, “Issues 2007” Special
Edition, 54–55.
Tristram, C., 2003. Reinventing the transistor. Technology Review 106 (7), 54–62.
Van de Ven, A.H., Ring, P.S., 2006. Relying on trust in cooperative inter-organizational
relationships. In: Bachmann, R., Zaheer, A. (Eds.), Handbook of Trust Research.
Edward Elgar, Cheltenham, UK, pp. 144–164.
Weber, M., 1947. The Theory of Social and Economic Organization. Oxford University
Press, New York.
West, J., 2003. How open is open enough? Melding proprietary and open source
platform strategies. Research Policy 32 (7), 1259–1285.
Williamson, O.E., 1993. The logic of economic organization. In: Williamson, O.E.,
Winter, S.G. (Eds.), The Nature of the Firm: Origins, Evolution, and Development.
Oxford University Press, Oxford, pp. 90–116.
Womack, J.P., Jones, D.T., Roos, D., 1990. The Machine that Changed the World. Raw-
son Associates, New York.
Yin, R.K., 1994. Case Study Research: Design and Methods, second ed. Sage Publica-
tions, Thousand Oaks, CA.
Zacharia, G., Maes, P., 2000. Trust management through reputation mechanisms.
Applied Artificial Intelligence 14 (9), 881–907.
Zaheer, A., McEvily, B., Perrone, V., 1998. Does trust matter? Exploring the effects of
interorganizational and interpersonal trust on performance. Organization Sci-
ence 9 (2), 141–159.