Chapter

Technological Discontinuities, Organizational Capabilities, and Strategic Commitments

Richard S. Rosenbloom and Clayton M. Christensen

in Technology, Organization, and Competitiveness

Published in print March 1998 | ISBN: 9780198290964
Published online November 2003 | e-ISBN: 9780191596162 | DOI: http://dx.doi.org/10.1093/0198290969.003.0007
 Technological Discontinuities, Organizational Capabilities, and Strategic Commitments

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Innovations based on radically new technologies are believed to create advantages for entrants over incumbents in the relevant markets. This essay asks under what circumstances this is true, and to what extent do the disadvantages of incumbent firms stem from their failure to make timely commitments to new capabilities and new strategies as opposed to their inability to implement those commitments effectively. These questions are explored in relation to recent literature in economics and organization theory, and the concept of the ‘value network’ is introduced. Historical evidence suggests that entrants find greatest advantage when innovations disrupt established trajectories of technological progress, a circumstance that is associated with moves to new value networks. The incumbent's disadvantage, hence, seems to be associated with an inability to change strategies rather than technologies.

Keywords: economic theory; market entry; organization theory; organizational capabilities; strategic change; strategic commitments; technological change; technological innovations; technological progress; value network

Chapter.  12071 words.  Illustrated.

Subjects: Microeconomics

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