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Organizational Adaptive Strategies to Changes in Product Technological System: An Ongoing Research and Case Studies
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Typologies are an important way of organizing the complex cause-effect relationships that are key building blocks of the strategy and organization literatures. Here, I develop a novel theoretical perspective on causal core and periphery, which is based on how elements of a configuration are connected to outcomes. Using data on hightechnology firms, I empirically investigate configurations based on the Miles and Snow typology using fuzzy set qualitative comparative analysis (fsQCA). My findings show how the theoretical perspective developed here allows for a detailed analysis of causal core, periphery, and asymmetry, shifting the focus to midrange theories of causal processes.
This paper concerns the technological determinants of entrepreneurial behaviour. By applying a typology of technological regimes, which describes the nature of the technological environment in which firms operate, this paper examines the sources and obstacles to entrepreneurial entry related to the process of technical change. Two major points are suggested. First, innovation in technologies of high or increasing opportunities is not always associated with entrepreneurial behaviour, but can enhance the competitive advantage of existing firms. Second, opportunities for entrepreneurship are shaped by the nature of knowledge underlying different technologies. These points are illustrated using U.S. patent statistics classified by technical field and sector of firm's principal product activity. Different combinations of sources of technological entry barriers and technological opportunity are identified in science-based technologies, chemical technologies, core technologies in complex systems, product-engineering technologies and process-engineering technologies. This paper argues that such a characterisation of the dynamics of knowledge accumulation is important for interpreting the variety of dynamics of industrial competition.
This paper demonstrates that the traditional categorization of innovation as either incremental or radical is incomplete and potentially misleading and does not account for the sometimes disastrous effects on industry incumbents of seemingly minor improvements in technological products. We examine such innovations more closely and, distinguishing between the components of a product and the ways they are integrated into the system that is the product "architecture," define them as innovations that change the architecture of a product without changing its components. We show that architectural innovations destroy the usefulness of the architectural knowledge of established firms, and that since architectural knowledge tends to become embedded in the structure and information-processing procedures of established organizations, this destruction is difficult for firms to recognize and hard to correct. Architectural innovation therefore presents established organizations with subtle challenges that may have significant competitive implications. We illustrate the concept's explanatory force through an empirical study of the semiconductor photolithographic alignment equipment industry, which has experienced a number of architectural innovations.
Purpose
– The purpose of this paper is to highlight employee diversity at the workplace level in a MNC, and consider its impact upon management attempts to promote a global corporate culture.
Design/methodology/approach
– The investigation took the form of an ethnographic participant‐observation study, which involved interviews and archival research plus a three‐month period when the lead researcher worked on the plant's final assembly line. This provided insights into the personal and psychological issues of individuals within the workforce, and an experiential dimension to the study which is difficult to replicate in other ways.
Findings
– The management approach to cultural and diversity issues worked both for and against the development of cohesion and improved employee relations. Managers sometimes ignored the real impact of local ethnic diversity, focusing instead on inter‐management conflicts, which contributed to employee morale and communication problems. But where diversity was recognised, more success followed, in particular where the distinct history and identity of the plant was emphasised. The study also tentatively suggests that “crossvergence” may be a fruitful way of interpreting the complex determinants of employee attitudes.
Originality/value
– The paper highlights how global strategies are always mediated by local circumstances, thus strengthening the arguments for recognising the interaction between management elites and local workforces, acknowledging cultural diversity and its impact on global business, and looking beyond simplistic notions of “national culture” towards diversity within national boundaries. The key implication for managers is that the successful implementation of global corporate strategies works best not just with due acknowledgement of local workforce identities, but with positive engagement with local historical and cultural traditions.
This paper presents an evolutionary microeconomic theory of innovation and production and discusses its implications for development theory. Using the notions of technological paradigm and trajectory, it develops an alternative view of firm behavior and learning. It is shown then how these are embedded in broader national systems of innovation which account for persistent differences in technological capacities between countries. Finally, this "bottom-up" evolutionary analysis is linked with an institutional "top-down" approach and the potential fruitfulness of this dialogue is demonstrated.
This paper explores the empirical link between, on the one hand, innovation and, on the other hand, industrial structure and dynamics in The Netherlands. We use the concept of 'technological regimes' as the guiding framework to interpret this relationship. The data are drawn from the Production Statistics and the Business Register of manufacturing firms in The Netherlands and the second Community Innovation Survey. A classification of technological regimes that refines Pavitt's taxonomy is applied to the data. Our analysis is aimed at identifying the variables that are best able to discriminate between technological regimes for our Dutch case. We find that a mix of innovation related and market structure related variables account for most variability and broad differences across regimes; dynamic market structure variables account for an additional share of variability and finer differences across regimes. Overall, we conclude that the concept of technological regimes provides a useful framework that helps to shed further light on the relationship between innovation and market structure. Copyright 2002, Oxford University Press.
Technology strategy variables tend to predominate as predictors of survival in the fast-changing rigid disk drive industry. Building on these previous studies, we here test the hypothesis that the technological and market strategies of a new entrant are highly interrelated and that their joint effect plays an important role in a firm's probability of survival. In particular, we propose that firms that target new market segments with an architectural innovation will tend to be more successful than those that target existing markets or innovate in component technology, even after controlling for all the competing predictors of survival.
This paper advances the existing literature on innovation by tracing the main technical elements of a dominant design in the rigid disk drive industry over time, and provides a much more rigorous definition of the concept of a dominant design than we have had in the past. We find the notion of first-mover advantage is not applicable in the rigid disk drive industry. Instead, we propose the idea of an entry-window tightly linked to the emergence of the dominant product design as defined.
This paper develops a framework for analyzing the competitive implications of innovation. The framework is based on the concept of transilience - the capacity of an innovation to influence the established systems of production and marketing. Application of the concept results in a categorization of innovation into four types. Examples from the technical history of the US auto industry are used to illustrate the concepts and their applicability. The analysis shows that the categories of innovation are closely linked to different patterns of evolution and to different managerial environments. Special emphasis is placed on the role of incremental technical change in shaping competition and on the possibilities for a technology based reversal in the process of industrial maturity.
Technology strategy variables tend to predominate as predictors of survival in the fast-changing rigid disk drive industry. Building on these previous studies, we here test the hypothesis that the technological and market strategies of a new entrant are highly interrelated and that their joint effect plays an important role in a firm's probability of survival. In particular, we propose that firms that target new market segments with an architectural innovation will tend to be more successful than those that target existing markets or innovate in component technology, even after controlling for all the competing predictors of survival. This paper advances the existing literature on innovation by tracing the main technical elements of a dominant design in the rigid disk drive industry over time, and provides a much more rigorous definition of the concept of a dominant design than we have had in the past. We find the notion of first-mover advantage is not applicable in the rigid disk drive industry. Instead, we propose the idea of an entry-window tightly linked to the emergence of the dominant product design as defined.
In today's business environment, there is no executive task more vital and demanding than the sustained management of innovation and change. Rapid changes in the marketplace make it essential to think in terms of the future. This article discusses the various types of innovation and focuses on how to organize for today's work while managing for tomorrow's innovation. It also deals with the role of leadership—specifically, the relationship between executive leadership and innovation.
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In this article I describe and compare ct number of alternative generic strategies for the analysis of process data, looking at the consequences of these strategies for emerging theories. I evaluate the strengths and weaknesses of the strategies in terms of their capacity to generate theory that is accurate, parsimonious, general, and useful and suggest that method and theory are inextricably intertwined, that multiple strategies are often advisable, and that no analysis strategy will produce theory without an uncodifiable creative leap, however small. Finally, I argue that there is room in the organizational research literature for more openness within the academic community toward a variety of forms of coupling between theory and data.
Commodity businesses, including many consumer goods, materials, and especially metals, appear to be suffering from a lack of demand, and from inflationary pressures. Corporate responses to this largely unexpected turn of events at best reflect the confusion felt by many in trying to understand what is happening, and at worst are pathological, causing great harm to companies' long-term chances of survival. However, some are finding the courage and the means for corporate renewal, creativity and growth, even in such a turbulent economic, technological and political environment.
Using the PIMS SPIYR data base, which pools cross-section and timeseries data, an empirical study to identify business strategy types was undertaken. Using a two-stage methodological approach combining principal component and cluster analysis on both a consumer products and an industrial products data base, two sets of strategy typologies were identified. Six strategy types were identified for consumer products: (1) harvest, (2) builder, (3) cashout, (4) niche or specialization, (5) climber, and (6) continuity. For industrial products, four strategy types were identified: (1) low commitment, (2) growth, (3) maintenance, and (4) niche or specialization. A discussion of the characteristics of each strategy type is offered.
Current models of competitive advantage emphasize economic factors as explanations for a firm’s success but ignore sociocognitive factors. This paper integrates economic and cognitive perspectives, and shows how firms and constituents jointly construct the environments in which firms compete. We argue that competitive advantage is a systemic outcome that develops as firms and constituents participate in six processes that entail, not only use and exchange of resources, but also communication about and interpretations of those exchanges. The interpretations that firms and constituents make of competitive interactions affect decisions about how to exchange and use resources. As interpretations and evaluations of a given firm fluctuate, so do the resources the firm has access to and its competitive advantage in the marketplace. The actions and interpretations of constituents and rivals produce the shifting terrain on which competition unfolds. We illustrate these dynamics with a discussion of IBM’s changing competitive advantage in the computer industry in the 1980s. Copyright © 1999 John Wiley & Sons, Ltd.
At least since Schumpeter (1934 and 1942), researchers have been interested in identifying the dimensions of technology regimes that facilitate new firm formation as a mode of technology exploitation. Using data on 1,397 patents assigned to the Massachusetts Institute of Technology during the 1980-1996 period, I show that four hypothesized dimensions of the technology regime---the age of the technical field, the tendency of the market toward segmentation, the effectiveness of patents, and the importance of complementary assets in marketing and distribution---influence the likelihood that new technology will be exploited through firm formation.
Understanding when entrants might have an advantage over an industry's incumbent firms in developing and adopting new technologies is a question which several scholars have explained in terms of technological capabilities or organizational dynamics. This paper proposes that the value network—the context within which a firm competes and solves customers' problems—is an important factor affecting whether incumbent or entrant firms will most successfully innovate. In a study of technology development in the disk drive industry, the authors found that incumbents led the industry in developing and adopting new technologies of every sort identified by earlier scholars —at component and architectural levels; competency-enhancing and competency-destroying; incremental and radical—as long as the technology addressed customers' needs within the value network in which the incumbents competed. Entrants led in developing and adopting technologies which addressed user needs in different, emerging value networks. It is in these innovations, which disrupted established trajectories of technological progress in established markets, that attackers proved to have an advantage. The rate of improvement in product performance which technologists provide may exceed the rate of improvement demanded in established markets. This mismatch between trajectories enables firms entering emerging value networks subsequently to attack the industry's established markets as well.
This article examines the determinants of new venture performance. Specifically, it rejects the traditional academic model of new venture performance, which argues that success is based solely on the characteristics of the entrepreneur, i.e., NVP = f(E); and supports instead the broader model of venture capitalists, which claims that success depends not only on the characteristics of the entrepreneur, but also on the structure of the industry entered and the strategy of the venture involved, i.e., NVP = f(E,IS,S).
Why some firms die while others survive? Survival has long been recognized as a basic goal for a manufacturing firm. At least in the long term, survival should be related to various measures of performance, such as market share and profitability. Advocates of population ecology have argued that life chances of organizations are affected by population density at the time of founding. According to this argument, organizations founded during periods of intense competition will have persistently higher age-specific rates of mortality than those founded during periods with lower numbers of competitors. At least for the case of manufacturing firms, there may be more profound causes than competitive turmoil that explain a firm's survival chances. These have to do with the evolution of technology in an industry. Population density may only be a reflection of underlying driving forces based on technological change that determine the form and level of competition, the attractiveness of entry, and ultimately the structure of an industry.
The procedures and the nature of “technologies” are suggested to be broadly similar to those which characterize “science”. In particular, there appear to be “technological paradigms” (or research programmes) performing a similar role to “scientific paradigms” (or research programmes). The model tries to account for both continuous changes and discontinuities in technological innovation. Continuous changes are often related to progress along a technological trajectory defined by a technological paradigm, while discontinuities are associated with the emergence of a new paradigm. One-directional explanations of the innovative process, and in particular those assuming “the market” as the prime mover, are inadequate to explain the emergence of new technological paradigms. The origin of the latter stems from the interplay between scientific advances, economic factors, institutional variables, and unsolved difficulties on established technological paths. The model tries to establish a sufficiently general framework which accounts for all these factors and to define the process of selection of new technological paradigms among a greater set of notionally possible ones.The history of a technology is contextual to the history of the industrial structures associated with that technology. The emergence of a new paradigm is often related to new “schumpeterian” companies, while its establishment often shows also a process of oligopolistic stabilization.
The purpose of the paper is to describe and explain sectoral patterns of technical change as revealed by data on about 2000 significant innovations in Britain since 1945. Most technological knowledge turns out not to be “information” that is generally applicable and easily reproducible, but specific to firms and applications, cumulative in development and varied amongst sectors in source and direction. Innovating firms principally in electronics and chemicals, are relatively big, and they develop innovations over a wide range of specific product groups within their principal sector, but relatively few outside. Firms principally in mechanical and instrument engineering are relatively small and specialised, and they exist in symbiosis with large firms, in scale intensive sectors like metal manufacture and vehicles, who make a significant contribution to their own process technology. In textile firms, on the other hand. most process innovations come from suppliers.These characteristics and variations can be classified in a three part taxonomy based on firms: (1) supplier dominated; (2) production intensive; (3) science based. They can be explained by sources of technology, requirements of users, and possibilities for appropriation. This explanation has implications for our understanding of the sources and directions of technical change, firms' diversification behaviour, the dynamic relationship between technology and industrial structure, and the formation of technological skills and advantages at the level of the firm. the region and the country.
Why didn't a single minicomputer company succeed in the personal computer business? Why did only one department store-Dayton Hudson-become a leader in discount retailing? Why can't large companies capitalize on the opportunities brought about by major, disruptive changes in their markets? It's because organizations, independent of the people in them, have capabilities. And those capabilities also define disabilities. As a company grows, what it can and cannot do becomes more sharply defined in certain predictable ways. The authors have analyzed those patterns to create a framework managers can use to assess the abilities and disabilities of their organization as a whole. When a company is young, its resources - its people, equipment, technologies, cash, brands, suppliers, and the like-define what it can and cannot do. As it becomes more mature, its abilities stem more from its processes - product development, manufacturing, budgeting, for example. In the largest companies, values - particularly those that determine what are its acceptable gross margins and how big an opportunity has to be before it becomes interesting define what the company can and cannot do. Because resources are more adaptable to change than processes or values, smaller companies tend to respond to major market shifts better than larger ones. The authors suggest ways large companies can capitalize on opportunities that normally would not fit in with their processes or values; it all starts with understanding what the organizations are capable of.
Analyzes how successful firms fail when confronted with technological and market changes, prescribing a list of rules for firms to follow as a solution. Precisely because of their adherence to good management principles, innovative, well-managed firms fail at the emergence of disruptive technologies - that is, innovations that disrupt the existing dominant technologies in the market. Unfortunately, it usually does not make sense to invest in disruptive technologies until after they have taken over the market. Thus, instead of exercising what are typically good managerial decisions, at the introduction of technical or market change it is very often the case that managers must make counterintuitive decisions not to listen to customers, to invest in lower-performance products that produce lower margins, and to pursue small markets. From analysis of the disk drive industry, a set of rules is devised - the principles of disruptive innovation - for managers to measure when traditional good management principles should be followed or rejected. According to the principles of disruptive innovation, a manager should plan to fail early, often, and inexpensively, developing disruptive technologies in small organizations operating within a niche market and with a relevant customer base. A case study in the electric-powered vehicles market illustrates how a manager can overcome the challenges of disruptive technologies using these principles of disruptive innovation. The mechanical excavator industry in the mid-twentieth century is also described, as an example in which most companies failed because they were unwilling to forego cable excavator technology for hydraulics machines. While there is no "right answer" or formula to use when reacting to unpredictable technological change, managers will be able to adapt as long as they realize that "good" managerial practices are only situationally appropriate. Though disruptive technologies are inherently high-risk, the more a firm invests in them, the more it learns about the emerging market and the changing needs of consumers, so that incremental advances may lead to industry-changing leaps. (CJC)
Sumario: There are at least three perspectives on the interaction between strategy and technology. The first focuses on the effect of current technology on current strategy of the firm, the second on the effect of current strategy on future technology, and the third on the effect of current technology on future strategy. The essence of these effects are respectively: strategy capitalizes on technology, strategy cultivates technology, and technology drives cognition of strategy. As we go from the first to the third, it becomes less conventional, less oriented to economics, more development-oriented and more process and organization-oriented. Past strategy research has been dominated by the first perspective and thus has been too narrow and static. This paper tries to rectify this imbalance
Sumario: The Marxian doctrina -- Can capitalism survive? -- Can socialism work? -- Socialism and democracy -- A historical sketch of socialist parties -- Prefaces and comments on later developments
This paper examines the relationship between firm behavior (in terms of basic strategies and organization) and tecbnological
regimes (defined in terms of opportunity, appropriability and cumulativeness conditions, and of the complexity of the knowledge
base). This paper advances two major points. First, technological regimes define broad prescriptions and trade-offs which
identify the basic dynamic mechanisms and viable firm behavior. Second, the menus of viable technology strategies and organizations
of innovative activities increas the higher and the more pervasive are technological opportunities, the higher is the degree
of cumulativeness of technical change, the lower is the degree of appropriability of innovations and the more complex is the
relevant knowledge base. These points are illustrated with evidence from the semiconductor, biotechnology and computer industries.
The survival rates of over 11,000 firms established in 1976 are compared across manufacturing industries. The variation in ten-year survival rates across industries is hypothesized to be the result of differences in the underlying technological regime and industry-specific characteristics, especially the extent of scale economies and capital intensity. Based on 295 four-digit standard industrial classification industries, new-firm survival is found to be promoted by the extent of small-firm innovative activity. The existence of substantial scale economies and a high capital-labor ratio tends to lower the likelihood of firm survival. However, these results apparently vary considerably with the time interval considered. Market concentration is found to promote short-run survival, while it has no impact on long-run survival. Copyright 1991 by MIT Press.
Companies find it difficult to change strategy for many reasons, but one stands out: strategic thinking is not a core managerial competence at most companies. Executives hone their capabilities by tackling problems over and over again. Changing strategy, however, is not usually a task that they face repeatedly. Once companies have found a strategy that works, they want to use it, not change it. Consequently, most managers do not develop a competence in strategic thinking. This Manager's Tool Kit presents a three-stage method executives can use to conceive and implement a creative and coherent strategy themselves. The first stage is to identify and map the driving forces that the company needs to address. The process of mapping provides strategy-making teams with visual representations of team members' assumptions, those pictures, in turn, enable managers to achieve consensus in determining the driving forces. Once a senior management team has formulated a new strategy, it must align the strategy with the company's resource-allocation process to make implementation possible. Senior management teams can translate their strategy into action by using aggregate project planning. And management teams that link strategy and innovation through that planning process will develop a competence in implementing strategic change. The author guides the reader through the three stages of strategy making by examining the case of a manufacturing company that was losing ground to competitors. After mapping the driving forces, the company's senior managers were able to devise a new strategy that allowed the business to maintain a competitive advantage in its industry.
This study distinguishes two sources of critical contingencies for organizations: environment and strategy. In turn, it explores how coping with each type of contingency is related to power within top management teams. Executives had high power if, by virtue either of their functional area of scanning behavior, they coped with the dominant requirement imposed by their industry's environment. Power patterns within each industry were further affected by the extent to which executives coped with the contingencies posed by their organizations' particular strategies. A temporal critical contingencies model of power is proposed.
This paper focuses on the relationships between observed patterns of innovative activities within a sector and the related context and underlying microeconomic processes that might account for them. It claims that there are some invariant features (with respect to relative prices and incentives mechanisms) of learning and knowledge accumulation that greatly affect the rate and structure of innovative activity. These features are different across sectors. The paper proposes that the specific pattern of innovative activity of a sector can be explained as the outcome of different technological regimes that are implied by the nature of technology and knowledge. The notion of technological regime provides a synthetic representation of some of the most important economic properties of technologies and of the characteristics of the learning processes that are involved in innovative activities. Copyright 1997 by Oxford University Press.
The purpose of this paper is to weave together the new theories and empirical evidence analyzing firms and industries in motion,
or what has been termed ‘industrial demographics’. In particular, the links between the technological regime underlying an
industry and the observed patterns of industry demography are emphasized. Although a major conclusion of this new literature
is that the structure of industries is perhaps better characterized by a high degree of fluidity and turbulence than stability,
the patterns of industry demographics vary considerably from industry to industry. And what apparently shapes the evolution
of firms particular to a specific industry is, as much as anything else, the knowledge conditions shaping the technological
regime underlying that industry.
Using patent data for four countries (Germany, France, United Kingdom, and Italy) for the period 1968-86, the authors find that the patterns of innovative activities differ systematically across technological classes, while remarkable similarities emerge across countries in the patterns of innovative activities for each technological class. This result strongly suggests that 'technological imperatives' and technology-specific factors (closely linked to technological regimes) play a major role in determining the patterns of innovative activities across countries. (c) 1995 Academic Press, Inc. Copyright 1995 by Oxford University Press.
This empirical study analyzes the patterns of innovation within and across industries using firm-level survey data from Finland and Denmark. The theoretical starting point is evolutionary theory with its premise that firms in different technological regimes pursue different paths to innovation. Similar modes of behaviour are found in the two datasets, and they closely correspond to those found in earlier studies. Contrary to prevailing assumptions, however, the results show that industries are not at all uniform in terms of how firms innovate; in almost all four- or five-digit NACE industries, three or more different modes of innovation can be identified. This suggests that firms’ strategic differentiation or local search activities overcome pressures in the technological environment towards homogenous behaviour, at least in the short term.
This paper has attempted to analyse the effects of de-regulation policy, introduced in India during the mid 1980s, on technology acquisition and competitiveness [defined in terms of market share changes] in the Indian automobile industry during the 1980s. Following evolutionary theoretical framework, the paper argues that asymmetry among firms in terms of technology acquisition [through technology imports and in-house efforts] explain much of the firm level differences in competitiveness. Asymmetry in technology acquisition is largely due to differences in the firms' ability to bring about technological paradigm and trajectory shifts. The results of the econometric exercise support the view that, even in an era of capacity licensing, development of competitive skills crucially depended upon the ability to build specific technology trajectory advantages. This is achieved by successfully complementing imported technology with in-house technological efforts. Competitiveness in a de-regulated regime would, however, depend upon the ability of the firm to bring about technological paradigm shifts. New firms who depended on intra-firm transfer of technology and firms with in-house R&D efforts, to accomplish paradigm shifts, appear more successful. Further, in a liberal regime, advantages of vertical integration over sub-contracting also appear to be important in the determination of competitiveness.
This paper develops a framework for analyzing the competitive implications of innovation. The framework is based on the concept of transilience — the capacity of an innovation to influence the established systems of production and marketing. Application of the concept results in a categorization of innovation into four types. Examples from the technical history of the US auto industry are used to illustrate the concepts and their applicability. The analysis shows that the categories of innovation are closely linked to different patterns of evolution and to different managerial environments. Special emphasis is placed on the role of incremental technical change in shaping competition and on the possibilities for a technology based reversal in the process of industrial maturity.
The paper analyzes the patterns of diffusion of information- and microelectronics-based production technologies in Western Europe, USA and Japan. The evidence suggests asymmetries in both levels and rates of changes in their adoptions between the three areas and within Europe itself, with little support to any hypothesis of long-term convergence among these regional and national patterns. Some suggestions on why diffusion rates differ are then examined together with the likely consequences on the patterns of competitiveness.