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The Thin Red Line between Success and Failure: Path Dependence in the Diffusion of Innovative Production Technologies

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Abstract

The wide variation in the success of innovations obscures similarities in the process of firms being influenced by other firms when choosing production technology. We argue that diffusion processes are similar across successful and failed innovations. Production asset innovation success results not only from innovation quality differences. Early chance events and subsequent path-dependence are intrinsic to diffusion processes. Thus, diffusion processes do not reliably spread the best innovations, producing competitive advantage for firms with an early lead producing innovations, and firms adopting high-quality innovations. We test these predictions quantitatively by analyzing the diffusion of the DC-10 and L-1011 airplanes, and find support for our theory linking the social information provided by firm adoptions to the success of innovative production technologies.
... The interactive system between the organization and customers requires not only implementation but also incorporation as a learning process within the company, contributing to achieving competitive advantage (Kahai et al., 2003;Argote, 2013;Ngah and Wong, 2020). Employees and managers play a critical role in the implementation and facilitation of consumer learning experiences within their business units (Greve and Seidel, 2015;Lukes and Ute, 2017;Bratianu et al., 2021). Managers must ensure that their co-workers support this process, motivating and rewarding them for sharing their expertise (Stoffers et al., 2014;Rietzschel et al., 2015). ...
... According to several studies, innovative work behavior only thrives when idea generation relates to idea implementation. As a result, companies are now paying more attention to creating related structures and mechanisms that assist workers in feeling a sense of balance between their values and corporate values, enabling them to display innovative work behavior (Janssen et al., 2004;De Jong and Den Hartog, 2010;Greve and Seidel, 2015). As Nonaka and Takeuchi remark in their landmark book (1995), "Our dynamic model of knowledge creation is anchored to a critical assumption that human knowledge is created and expanded through social interaction between tacit knowledge and explicit knowledge" (p. ...
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Purpose The purpose of the present research is to introduce a combined framework that integrates innovative work behavior, product innovation process and customer knowledge management; then, to explore the mediating effect of customer knowledge management in the relationship between innovative work behavior and the product innovation process. Design/methodology/approach The basis for the present research is a cross-sectional design. Data collection from 154 employees occurred using the following structured questionnaires: Customer Knowledge Management (CKM), Innovative Work Behavior (IWB) and Product Innovation Process (PIP). Data processing used SPSS version 26.0, including the PROCESS (3.5) macro analysis. Findings The results show positive relationships between innovative work behavior and the product innovation process ( r = 0.420, p < 0.01). Pearson's correlation shows a coefficient of 0.42, meaning that 42% of the variations in perceived product innovation are due to variations in innovative work behavior. The second condition of the mediation test involved testing the relationship between the independent variable (Innovative Work Behavior) and the mediating variable (Knowledge Management) and showed a significant relationship ( r = 0.272, p < 0.01). The findings suggested that knowledge management that other determinants supported, such as collaboration in idea exploration, idea championing and encouragement of participation in idea implementation, significantly contributed to the product innovation process ( r = 0.509, p < 0.01). The bootstrapping method confirmed that innovative work behavior supports product innovation through the mediation of customer knowledge management ( z = 3.01, p = 0.002). Research limitations/implications The cross-sectional design, along with the relatively low number of participants and the self-reporting nature of the questionnaires, represent the current study's main limitations. Developing the research model could integrate new variables, such as customer co-creation processes, performance-based compensation, employee citizenship activities and transformational leadership. Practical implications This research has both theoretical and practical implications. These emphasize the importance of further investigation into the factors influencing companies' innovation processes. They also provide managers with a means of finding a fit between the deployment of customer knowledge mechanisms and the achievement of innovative workplace behavior, to improve innovation process efficiency. Originality/value The current study broadens the empirical research area of customer knowledge management and its impact on both innovative work behavior and the product innovation process, particularly in knowledge-intensive market scenarios that require organizations to be innovative.
... The result reveals that idea exploration (IE) is usually regarded as a strategic tactic for driving the innovation process, and it concerns the employee's interaction with customers, which usually requires effort and resources such as knowledge infrastructure research or studies related to proof of concept, among other things. It should be noted that the customer knowledge management process influences idea exploration, which in turn lowers the risk of failure and enhances product innovation [119,47]. Hypothesis 3 to Hypothesis 5. ...
... As a result, less than half of the respondents agreed with the assertions that idea generation for new and sustainable products or solutions occurred in their workplaces [113]. Employees mostly adhered to their daily work, as there was limited room for idea generation [119]. The frequency with which employees took the risk of being creative in solving problems was minimal. ...
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Customer knowledge management (CKM) is a relatively new research domain, aiming at exploring the potential of customer knowledge for the open innovation process of companies. The present paper aims at performing a complex analysis of the serial mediation phenomenon of the impact of CKM on sustainable product innovation (SPI) by innovative work behavior (IWB). The dimensions considered for IWB in the present research are the following: idea exploration, idea generation, idea championing, and idea implementation. In the first phase of our research, we performed a semantic analysis of the main concepts, ideas, and theories, based on a critical literature review. Thus, we reached a deeper understanding of the complexity of the concept of knowledge by learning the theory of knowledge fields and knowledge dynamics. As a result of this conceptual phase, we designed the research model and a questionnaire to be addressed to managers from the business environment. In the quantitative phase of the present research, we used the statistical software packages, SPSS version 26.0, and the PROCESS macro for SPSS, version 3.5. We used well-known criteria for reliability, validation, and interpretation of the numerical results. The final results demonstrate a significant serial mediation phenomenon regarding the impact of CKM on SPI by the IWB. These results are important in developing the co-creation process of new products by using customer knowledge. The present research reveals some original ideas concerning the impact of CKM on SPI by using a serial mediation process performed by basic innovative work dimensions. The implications of the present research are significant for both academics and practitioners in designing open innovation in knowledge ecosystems.
... Technological uncertainty can be particularly detrimental to long-term crowdfunding outcomes (Matusik, 2014). Organizers may become 'locked-in' to a stated strategy, reducing their flexibility to adjust the underlying technology or product attributes to the extent which may be required (Greve & Seidel, 2015;Rycroft & Kash, 2002). Creating cognitive and operational path dependency in this way may prevent the organizer from pivoting to fulfill the stated market need (by changing the technology or business model) or applying the core principles of the idea to fulfil a different need. ...
... Building flexibility into the plan can mitigate the path dependencies that tend to promote failure (Greve & Seidel, 2015). In addition to developing and communicating contingency plans, managing expectations regarding product attributes and delivery times plays an important role in avoiding supporter disappointment (Zheng, Xu, Wang, & Chen, 2017). ...
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Crowdfunding platforms enable entrepreneurs to bring to life ideas that may otherwise have remained unrealized. When crowdfunding campaigns go well, campaigners are able to fulfill their vision, funders’ engagement is rewarded, and society gains access to a range of new offerings. But some recent high-profile medical-technology campaigns have failed to deliver their promised rewards despite reaching and at times far exceeding their funding goals. The objectives of this article are to shed light on why donors fund campaigns that turn out to be too good to be true and to examine how this engagement reduces trust in crowdfunding. To this end, I explore the role of product creativity as a dual mechanism for both funding success and postfunding delivery failure. Product creativity is typically associated with positive crowdfunding outcomes. But in the context of medical-technology campaigns, product creativity may make community members more attracted to campaigns that are less likely to deliver on their campaign promises. This phenomenon then increases the likelihood that the campaign will reduce trust in crowdfunding, hurting donors, the focal venture, and future campaigners. I offer practical implications for crowdfunding platforms, campaigners, and supporters interested in learning more about the pitfalls associated with initially successful crowdfunding campaigns.
... The problems an organization has encountered, the solutions it has tried, and the results of applying these solutions condition the future responses (Cyert and March, 1963: : ch. 6), just as path-dependence is seen across a broad range of organizational behaviors and outcomes (Greve and Seidel, 2014;Arthur, 1989;Berg, 2022). ...
Article
In the 20 years of Strategic Organization, how well has knowledge drawn from the behavioral theory of the firm contributed to the field of strategy? We see progress both in the pages of SO! and elsewhere in the field of strategy, but this progress has been held back by divisions between strategy and organization theory in what theories should predict, what mechanisms are preferable predictors, and what outcomes are of interest. Despite these divisions, the last few years have seen particularly rapid progress, turning the behavioral theory of the firm into one of multiple organization theory sources of strategy knowledge. It is time to reassess and consider the best future direction, and we propose a framework organized around how strategy is shaped by the 1) organizational structure, 2) organizational decision-makers, 3) organizational history, and 4) organizational environment. This subdivision captures the decision-making units in the theory (1-2), the importance of experience (3), and the role of context (4). We outline fruitful research topics based on this framework.
... Pertaining to the technology itself, consumers form complexity expectations (Wood & Moreau, 2006) of how challenging technologies will be to learn (Chung et al., 2012;Meuter et al., 2003;Thompson et al., 2005). Pertaining to the individual as a consumer of technology, an assessment of one's capability for learning new technology, self-efficacy (Lee et al., 2003), and a sense of oneself as a technology leader (Parasuraman, 2000) influence adoption (Greve & Seidel, 2015). In this scenario, the dark triad plays an important role. ...
Article
Masstige marketing represents the democratization of luxury to middle-class consumers. The purchase of luxury brands aims to satisfy utilitarian and hedonic customers’ motives, based on their personality traits, even the dark ones (such as narcissism, Machiavellianism, and psychopathy). The continuous evolution of technologies pushes consumers to face their technological adoption propensity. Smartphones can be considered as objects able to extend the self of consumers and their status. The interest of our research is to investigate the masstige perception of smartphone brands, through the lens of the antecedents of consumers' behavior and the dark side of their personalities. The relationship is explored considering the technological propensity of consumers. We analyzed three market leader brands in the smartphone industry – Apple (iPhone), Samsung, and Huawei. The research contributes to the academic literature on the impact of the dark side of personalities on masstige marketing and technology adoption propensity.
... The pharmaceutical industry missed the early days of biotechnology [7]: it was the start-up company Genentech, rather than the traditional pharmaceutical companies, that first invented biotech drugs [8], and the European car industry has great difficulties adapting to the possibilities provided by alternative propulsion technologies (electric propulsion, hydrogen fuel cell technologies) [9]. While technological path dependence and the difficulty of breaking out of it are hardly disputed facts in the empirical literature [5,10], it is also widely acknowledged that companies have not found efficient ways to overcome it [11,12]. ...
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Switching to a new technological path is often a serious economic challenge for companies. Incumbents, in particular, are often led by their organizational routines, traditional technological orientation, and experience, and run the risk of losing contact with new technologies, which can decrease their competitiveness. We analyze whether opening up the innovation process to external knowledge partners can help to overcome such path dependence and enable firms to operate successfully on a new technological path. We develop a theoretical concept that shows the potential of external knowledge sources for operating successfully on a new technological path and test it empirically using the example of green technologies. Green technologies are not only relevant for addressing the current environmental problems, but they are also an example of a new technological path that is proving difficult for companies to switch to. Overall, we find strong direct effects of external (green) knowledge on green innovation success. The results even indicate that the direct effect of external knowledge tends to be larger for green than for non-green innovation.
... Cyert & March, 1963), and that failure motivates because it is built around performance feedback (e.g. Greve & Seidel, 2015). Our argument recognizes these conventions but suggests that failure is not always a terminal point to build forward-looking strategy and options, helping us establish that there are other possible positive interpretations of failure as it occurs. ...
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This paper considers the way organizations respond to failure by actively repositioning the failed outcome as success. When an organization fails to meet planned goals, they do not necessarily learn from the experience, automatically terminate the plan, or persist with the failing course of action. Instead, another response is to shift original aspirations by recasting what was achieved, acting as if the ensuing failure is positive, despite indicators suggesting otherwise. As a mode of organizational interpretation, this repositioning reformats the criteria for what is success in order to move forward, enabling organizations to continue failed outcomes and their tasks that are well past their use-by date. After detailing this adjustment, we model an active-acceptance protocol on failure, discussing whether organizational effectiveness is predictable from how firms respond to failure in this way. The paper fills a gap in dialogue specific to failing by opening an alternative path to understand how organizations frame failure differently.
... Networks of similarly trained specialists, professional societies, and trade associations are particularly useful partners in the conduct of dissemination research (Dearing et al. 2006;LaJeunesse et al. 2019), which relies on formative evaluation to identify bestsuited nodes in peer networks to influence adoption decisions (Donohue et al. 2018). Re search about how to best disseminate or scale up innovations from management and mar keting as well as health services includes identification and management of barriers to diffusion (Talke and Hultink 2010), seeding of innovations with policy entrepreneurs who bridge vertical boundaries sector to sector (Faling et al. 2019), diffusion path dependence (Greve and Seidel 2015), product launch timing (Calantone et al. 2012), and resistance to innovations by intermediaries (Ferlie et al. 2005;Jonsson 2009). ...
Chapter
and Keywords The main concepts of the diffusion of innovations represent a hybrid change research and practice paradigm that blends ideas that can now be found in life cycle, evolutionary, and teleological theories of social change. This chapter discusses why the paradigm devel oped in the ways that it did, including the shortcomings of this approach, especially for studying the role of organizations in change processes. The chapter also examines the rapid rise of dissemination and implementation science as conducted by health services and public health researchers and how those new literatures are related to diffusion. This paradigmatic evolution from descriptive and explanatory studies to intervention research utilizing diffusion concepts is a theme of this chapter, with emphases on organizational implementation of innovations, inter-organizational diffusion, external validity of innova tions and how a recognition of the agency of adopters can reshape diffusion study.
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