Whether to make or buy is one of the most notoriously difficult of strategic decisions.1 While sustained value creation requires the constant expansion and modification of the firm, many of the assets and activities to which its corporate theory directs access are likely owned by others. Therefore, composing the value that your theory reveals demands sound decisions about when to acquire, configure, and own these assets (make) and when to merely contract for their outputs (buy).
There are vocal advocates, both in and out of the firm, for both paths. Open innovation gurus and outsourcing firms preach the near-universal virtue of outsourcing. Many voices within firms call for integration. All too often, our own intuition ...

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