Thanks to Ken. I stand corrected. I have just gone back to my notes, I did get confused. 'vertically integrated model' is used to describe value chain indeed. I should not have used a well-established concept without care.
Ken, would you say that I got mixed up with business models and organizational models for innovation? Would it be more accurate(better), If I have said: organizationally, Bell Labs (in its heydays) was centralized; and Silicon Valley in which Face Book is a part, is decentralized? However, no organization or firm is purely one or the other but switches between them in emphasis at different times as company strategy changes. I know that Silicon Valley is not AN organization as such, but in some innovation literature, Silicon Valley has been treated as an (organizational) model of innovation.
I have not read much specifically on Face Book. But anecdotally, I can say that at an internal conference held by Intel, the Chairman of EIT (http://eit.europa.eu/) used Face Book as an example to argue/illustrate something has to change in Europe when it comes to innovation. The take home message was R&D was necessary but not sufficient for innovation, Europe needed much stronger entrepreneur culture or I interpreted him to be saying that Europe needed more young, bold, ambitious, talented, university drop outs/deviants who defied the 'system'. I had EIT ICT ( http://eit.ictlabs.eu/) in mind when I mentioned that I know some companies are mixing 'Bell Labs and Facebook'.
Rosan
-----Original Message-----
From: Ken Friedman [mailto:[log in to unmask]]
Sent: Sonntag, 4. März 2012 03:49
Subject: Re: AT&T vs FB; was: Invention and Innovation
I don’t think I’m distorting Rosan’s intent. She has been asking important questions in an effort to understand the sources of invention and innovation in successful business models.
What I am addressing here is the way that she describes two companies.
Rosan wrote: “organizationally, Bell Labs represented the ‘vertically integrated model’ and the silicon valley in which Facebook is a node, represents a ‘distributed model’.”
...The issues, then is whether Bell Labs in some way “represents” a vertically integrated model. It does not. Bell Labs played no part in the AT&T supply chain or the value chain of the AT&T business model.
...While it is true that Rosan described Silicon Valley as a distributed model, this is also somewhat inaccurate. Silicon Valley represents an important innovation cluster, but it is not distributed in the sense that one may somehow transfer goods and services among actors without contracts or payment. While many Silicon Valley firms are linked with one another as business firms and social networks, these are not the same firm. To describe a business firm based on a model of vertical integration by contrasting it with a business firm based on a distributed business model means that we are describing models applicable to single organizations or conglomerates.
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