Abstract
How do firms adapt to technological change? The ability of firms to sense and implement new technologies and configure new processes that match new requirements is central to competitive advantage (Teece, 2014). But how do firms perform these steps? We look at the development of electric motor technologies in Japanese and German firms to explore these issues. We find substantial variety in how firms approach this change: Some firms have outsourced their electric motor production to Tier1 specialists. Other firms have kept the knowledge completely in-house. Yet other firms cooperate or outsource selectively to avoid these extremes. We offer some propositions on how the individual firm p osition and general features of the German and Japanese supplier settings influence firm strategi es.
