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11 Feb 2019Working Paper Summaries

The IBM PC

by Carliss Y. Baldwin

The IBM PC was the first computer platform to be open by choice and not because of financial constraints. Initially, this openness kept IBM competitive. But IBM’s control over two strategic bottlenecks— standards embedded in the Basic Input Output System, and system integration and manufacturing of the computer itself—turned out to be weak.

Author Abstract

The IBM PC was the first digital computer platform that was open as a matter of strategy, not necessity. The purpose of this chapter is to understand the IBM PC as a technical system and set of organization choices in light of the theory of how technology shapes organizations. In Chapter 7, I argued that sponsors of large technical systems (including platform systems) must manage the modular structure of the system and property rights in a way that solves four inter-related problems: provide all essential functional components, solve system-wide technical bottlenecks wherever they emerge, control and protect one or more strategic bottleneck, and prevent others from gaining control of any system-wide strategic bottleneck. I use this framework to understand how IBM initially succeeded with the PC platform and then lost its position as platform sponsor in the industry it had created.

Paper Information

Full Working Paper Text
Working Paper Publication Date: January 2019
HBS Working Paper Number: HBS Working Paper #19-074
Faculty Unit(s):

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Carliss Y. Baldwin

Carliss Y. Baldwin

William L. White Professor of Business Administration, Emerita

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