Authors:

Brice Dattée – Emlyon Business School

Jean-Luc Arrègle – Emlyon Business School

Paolo Barbieri – University of Bologna

Thomas C. Lawton – Cork University Business School & Surrey Business School

Duncan N. Angwin – Nottingham University Business School

Interviewers:

Korinzia Toniolo – University of Bologna

Magdalena Winkler – WU Vienna

Article link: https://doi.org/10.1177/00018392221091850

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Note. This interview was conducted with the first author Brice Dattée.

• Could you provide some insights into the genesis of the paper’s idea and share what motivated the research?

Brice: After completing my Ph.D., I took on a Postdoctoral position at Imperial College within the Business School’s Innovation & Entrepreneurship Department. During this time, I collaborated with Professor James Barlow on two projects – one focusing on organizational change and the other on ecosystem emergence. While working with two prominent corporations, the research question emerged: “How do organizations decide which part of the system architecture to retain internally and which part to open up to external parties?” This marked the inception of the idea centered around distributed innovation and related ecosystem dynamics. Although the concept didn’t make it into the top journal we had in mind at that time, the lingering question persisted as I transitioned to my role as an Assistant Professor at EM Lyon.

Anyway, my time at Imperial was notably productive, with the vibrant atmosphere of the open space kitchen fostering engaging meetings and coffee conversations. One day, while conversing with Riccardo Fini from University of Bologna, who had recently completed his Marie-Curie fellowship at Imperial College, I expressed my desire to shift my focus to working with motorbikes and car companies. Riccardo mentioned Paolo Barbieri in Bologna, who had connections with Ducati. Excited about the prospect, I contacted Paolo, flew to Bologna, and initiated discussions with Ducati’s managers. We explored topics such as the technology premium associated with their products and the reliance on suppliers for components. The project expanded when Paolo suggested looking into Lamborghini, known for its technology-driven premium products. Enthusiastically, I agreed, and our discussions with Lamborghini delved into investigating unpredictable settings. Recalling the initial contact with Lamborghini, it was a tentative exploration of shared interests. Over subsequent discussions, we narrowed down the focus, contemplating how companies differentiate their products while heavily relying on innovations from suppliers.

In preparation for this interview, I revisited my field notes from 2011-2013 to refresh my memory about our empirical approach. The early contact with Lamborghini was characterized by a broad interest in the topic, leading to progressively more focused discussions. We explored themes such as managing differentiation while relying on suppliers for innovation and identifying the core competencies crucial for a firm. The research design initially envisioned a comparative case study with different dimensions in mind, but our collaboration with Lamborghini gained momentum. Ultimately, we decided to pursue a single, in-depth case study, deviating from the initially planned sequential cases. This marked the beginning of the entire project with Lamborghini.

• That’s interesting. Especially, what triggered the change of focus from the initial investigation of how technology-based luxury firms establish sources of competitive advantage while depending on innovation ecosystems? Because that is what you also say in the paper.

Brice: Our engagement with Lamborghini began by connecting with individuals in various departments. Initially, we met a buyer from the purchasing department and toured the assembly line, engaging in discussions with the production director. This phase aimed at establishing points of contact and gaining insights. The initial interviews commenced around November 2010, and my return in February 2012 marked a significant moment. I implemented a semi-directed interview protocol, encountering an unexpected hurdle when the interviewee, armed with a sheet of paper, insisted on having responses approved by public relations (PR). This deviation from the typical research process required some time to reestablish the relationship and clarify the collaboration dynamics. Following this adjustment, we gradually gained access to individuals within the department. Our focus shifted to selecting cases and conducting interviews primarily in the R&D and purchasing departments. We extended our reach to suppliers, creating a back-and-forth dynamic in the data collection process. This iterative approach continued until the point where our data collection efforts were concluded.

This journey with Lamborghini was intriguing, aligning with many ongoing discussions in the realms of product development and technology renewal. As we delved into data collection, a sense of excitement accompanied the exploration of the company’s history, vision, component selection, and supplier relationships. However, a critical concern emerged over the novelty factor – the question of whether there was a distinctive contribution to the existing literature. The initial set of questions focused on describing the company, its vision, and the decision-making processes regarding components and suppliers, categorized into technological development and business relationships.

Around 2014/15, facing the challenge of finding a unique angle, I decided to construct a case narrative from the amassed data. This narrative detailed the company’s history, including its acquisition, struggles, and subsequent developments. I extensively utilized interviews to provide a thorough description of various projects, such as the development of the gearbox, carbon monocoque, suspension, attempts at ceramic brakes, and exhaust coding. Despite having substantial data, a portion remained unused in the Administrative Science Quarterly paper, as we closely followed the evolution of numerous innovations in the car.

The focal point of the project evolved into understanding how Lamborghini collaborates with suppliers to co-create radical innovations, exploring the necessary internal competencies and external reliance dynamics. An unexpected revelation surfaced during interviews, revealing that post-acquisition, significant technological choices were influenced by Audi. This realization sparked curiosity about the tension between the desire to retain Lamborghini’s unique identity and the imposed decisions by Audi.

Initially hesitant about delving into M&A stories due to limited expertise in the field, we gradually recognized the tension within choices related to technology and supplier selection. The entry of Audi resulted in an audit of the supplier base, altering the dynamics from predominantly Italian small companies to those dictated by the group. This shift prompted questions about how Lamborghini continued to develop innovations with suppliers outside the group’s influence. Consulting with Tom Lawton, we reframed the case, focusing on its deviation from traditional M&A expectations, finding a unique angle that went beyond technological development.

The abundance of data I had gathered was undoubtedly exciting, but a crucial element was missing – a hook to make a significant contribution to the existing literature. Seeking guidance, we turned to an expert in the field who provided valuable insights. Typically, units facing choices like those Lamborghini encountered have limited options, often involving a rapid and somewhat ruthless post-merger integration (PMI) or leaving the unit to operate independently. This led us to characterize the relationship between Lamborghini and its parent company as symbiotic.

As we examined the data, a clear pattern emerged: Lamborghini’s R&D brought unique value to the table, surprising their parent company, Audi, with capabilities that their size shouldn’t normally afford. The question then arose – how did Lamborghini manage to regain autonomy, especially given their challenging situation pre-acquisition? The success of the Murcielago and Gallardo models under the PMI had established a strategic recipe, prompting us to delve into how and why the units sought more autonomy. Data from the years 2007-2009 highlighted interactions between Lamborghini and Audi’s board, becoming a critical aspect of our focus on the dialectic between unit and parent managers.

The shift in our focus necessitated a change in the research design and data collection. Initially, we had engaged with engineers, managers, purchasers, suppliers, CEOs, and project managers, gaining a detailed view of each component’s development and the associated innovations and supply chain arrangements. To deepen our understanding, we then moved up to interview individuals on the boards of both Lamborghini and Audi.

From 2016 to 2017, we conducted interviews with the board of directors, the CEO, and key figures from Audi. This phase involved a continuous loop of data collection, interviews, note-taking, and literature review. Despite the richness of the data collected over the 6-7 year period, a sense of stress crept in as we grappled with the challenge of translating the information into a meaningful contribution to the literature. The need for an explanation and a clear contribution to the field became paramount, making the years 2016 and 2017 particularly demanding.

One memorable interview with one of Audi top managers stood out as he discussed the evolving attitude and perception of Audi towards Lamborghini, sparking a captivating line of inquiry. This led to interactions with Audi managers and a realization that there was something intriguing to explore. In 2017, during a sabbatical at the London Business School, I delved into the M&A literature, an area unfamiliar to me until then. Presenting my findings to colleagues at the school, they helped me identified the significance of the concept I was exploring, propelling me back into the literature-data loop.

However, a hurdle emerged when discussing the change in attitude, as terms like trust and autonomy didn’t precisely encapsulate the dynamics at play. This led to a critical exploration of the concept of autonomy in the literature, revealing its pervasive yet unclear presence. The breakthrough came in 2019 with Wiedner and Mantere’s paper in ASQ on organizational separation processes, introducing the concept of appraisal respect. This proved to be the missing piece, providing clarity to the concept of autonomy and aligning it with my research.

With this newfound understanding, the focus shifted, and writing commenced. The initial paper resembled a typical M&A study, aligning with the expectation that unit autonomy decreases over time. However, the unique case of Lamborghini, fighting for autonomy despite significant integration, presented a departure from conventional M&A trajectories. Reviewer feedback prompted a shift in framing, emphasizing autonomy rather than adhering strictly to M&A perspectives. This transformation led to a nuanced exploration of autonomy, the role of parent managers, and the technology developed internally.

The paper, initially rooted in M&A, expanded to explore innovation ecosystems, supplier relationships, and the intricate dynamics of autonomy within the organizational structure. The iterative process of data collection, analysis, and refinement, guided by reviewer input, shaped the narrative into a comprehensive study highlighting the multifaceted relationship between a subsidiary, its parent company, and the quest for autonomy.

• Certainly, there are two key aspects here. First, regarding the extensive 400-page narrative, the concern is how you effectively communicate that information to your key informants. Can you shed light on your approach to sharing such a substantial document with them?

Brice: Alright, my apologies for the extensive answer, but let me break down the research design process. We began with different components, blending secondary data on Lamborghini’s history. Then, we delved into the vision for the event and examined each component in detail. This included understanding the vision for performance targets, innovations in architecture, and the dynamics of technological development and business relationships with suppliers.

Now, when it comes to suppliers, it gets interesting. I sought opinions from Lamborghini about their suppliers and vice versa. For each supplier, I inquired about the project’s initiation, technological targets, relationship dynamics, developmental phases, technological risks, and the evolving business relationship. Here’s where it gets fortunate. I asked Lamborghini what they thought of a particular supplier, and then I asked the same of the supplier about Lamborghini. This dual perspective proved invaluable, especially when we introduced the concept of organizational identity, particularly concerning external image construction. Moving on, I shared lessons learned and discussed the future plans for suppliers.

And then the same approach was taken for the Aventador supercapacitor vision target. We examined the development process, delving into the details of what the company is, their operations, how technology development unfolds, and their relationships and business strategies, along with the lessons learned. Similar methods were applied to other components like the table pipe, chassis dictation, and addressing issues like suspension and tires. It’s an exciting case with numerous compelling quotes and anecdotes gathered through qualitative research. However, due to space constraints, not all of them could be included in the paper.

Additionally, I discussed Audi, drawing from secondary and primary data from Lamborghini’s perspective. I explored how Audi influenced Lamborghini in 2015, the support they provided, and the mutual learning between the two. The comparison between Ducati and Lamborghini was also considered.

The process involved documenting the company’s history and vision, utilizing slides from workshops, and integrating primary and secondary data. The document covers each component in detail, capturing the essence of the interviews and the relationships involved. The extensive 400 pages include insights into what happened, who was involved, and why, supported by pictures from field notes, with confidential information carefully handled to respect supplier confidentiality agreements. The case narrative was shared with Lamborghini, ensuring transparency, while confidential field notes were meticulously managed to maintain privacy.

I had to exercise caution in handling certain aspects, particularly when it came to sharing pictures from site visits. For instance, there was an instance where a supplier explicitly requested, “please don’t share that.” The photographs captured during these visits form part of the extensive documentation, providing a visual narrative of the story until 2015.

In addition to photographs, I maintained detailed field notes, exemplified by instances where I documented my observations outside the factory. These notes covered various aspects, such as the cleanliness of the floor, the ambience with a bit of music, and the attire of the people. Field notes became crucial during moments like lunches or informal interactions, where individuals might share insights that they wouldn’t disclose during the formal interviews with the recorder.

This non-confidential data also shed light on the dynamics, tensions, issue resolutions, and the motivations behind keeping certain technological aspects confidential. Lamborghini’s cooperation and openness in the study were acknowledged, with an emphasis on the long-term nature of the study. Visits to the R&D department and interactions with key personnel provided valuable insights, such as glimpses of future car developments. Throughout, the focus remained on aspects like negotiation dynamics and access, rather than delving into intricate technical details or revealing proprietary information. The emphasis was on understanding the management and organizational aspects, with an awareness of the need to respect trade secrets and patents.

• On the other hand, in terms of analysis, we’re curious about your discovery process. How did you come across the use of causal loop diagrams? Were there specific authors or existing methodologies that influenced your choice of coding and data analysis methods?

Brice: During my Ph.D., I delved into simulation, particularly computer simulation employing system dynamics. My interest in this field grew as I applied it to model and address research questions. With an industrial engineering background, I appreciated formal modeling and simulations. Visiting MIT Sloan annually heightened my interest in system dynamics. I faced challenges in publishing my simulation work, but the methodology involved capturing relationships between concepts and formalizing them in mathematical terms.

Drawing from my simulation background, I transferred the approach to understand interrelationships in my study. For instance, in the case of the appraisal respect, our analysis hit a snag as existing concepts like trust didn’t quite fit.

My previous work in Organization Science and AMJ papers also utilized diagrammatic approaches for multi-level organization adaptation. This seemed effective for process studies, focusing on interdependencies among existing concepts to explain behavior. System dynamics appealed to me for its ability to generate complex, endogenous trajectories without relying on external factors. Causal loop diagrams, in particular, offered a way to depict intricate behavior generated by causal structures.

In exploring changes in autonomy through the PMI process at Lamborghini, I faced the challenge of explaining shifts and changes across different phases. The complexity lay in creating an explanation robust enough to replicate variations in autonomy. Causal loop diagrams, although established, were not well-executed, demanding a balance between explanatory depth and clarity. My MIT external supervisor emphasized the art of finding the right granularity level in both diagram creation and data analysis to avoid being overly complex or overly simplistic.

Interviewer bios:

Korinzia Toniolo is a Ph.D. candidate in Management at the University of Bologna in Italy. Her research delves into the adoption and implementation of Artificial Intelligence technology in private organizations. She holds a particular interest in investigating emerging technologies at the intersection of technology and innovation management.

Magdalena Winkler is a PhD student in Management at WU Vienna. She is interested in the emergence of fields, markets, and technologies. Her doctoral research focuses on the emerging field of cellular meat.