When＠Dinosaurs＠Flyz＠The＠Role＠Of＠Firm＠Capab

ｐ｡ｰ･ｲ＠ｴｯ＠｢･＠ｰｲ･ｳ･ｮｴ･､＠｡ｴ＠＠ｄｒｕｉｄＱＷｎｙｕ＠ｓｴ･ｲｮ＠ｓ｣ｨｯｯｬ＠ｯｦ＠ｂｵｳｩｮ･ｳｳＬ＠ｎ･ｷ＠ｙｯｲｫＬ＠ｊｵｮ･＠ＱＲＭＱＴＬ＠ＲＰＱＷｗｈｅｎ＠ｄｉｎｏｓａｕｒｓ＠ｆｌｙＺ＠ｔｈｅ＠ｒｏｌｅ＠ｏｆ＠ｆｉｒｍ＠ｃａｐａｂｉｌｉｔｉｅｓ＠ｉｎ＠ｔｈｅａｖｉａｎｉｚａｔｉｏｎ＠ｏｆ＠ｉｎｃｕｍｂｅｎｔｓ＠ｄｕｒｉｎｇ＠ｄｉｓｒｕｐｔｉｖｅｔｅｃｈｎｏｌｏｇｉｃａｌ＠ｃｈａｎｇｅｒ｡ｪ｡＠ｒｯｹｎｯｲｴｨ･｡ｳｴ･ｲｮ＠ｉｬｬｩｮｯｩｳ＠ｕｮｩｶ･ｲｳｩｴｹｍ｡ｮ｡ｧ･ｭ･ｮｴｲｲｯｹ｀ｮ･ｩｵＮ･､ｵｉｲｩｮ｡＠ｓｴｯｹｮ･ｶ｡ｐｨｩｬ｡､･ｬｰｨｩ｡＠ｕｮｩｶ･ｲｳｩｴｹｍ｡ｮ｡ｧ･ｭ･ｮｴｓｴｯｹｮ･ｶ｡ｉ｀ｰｨｩｬ｡ｵＮ･､ｵｃｵｲ｢｡＠ｌ｡ｭｰ･ｲｴｆｬｯｲｩ､｡＠ｉｮｴ･ｲｮ｡ｴｩｯｮ｡ｬ＠ｕｮｩｶ･ｲｳｩｴｹｍ｡ｮｧ･ｭ･ｮｴ＠｡ｮ､＠ｉｮｴ･ｲｮ｡ｴｩｯｮ｡ｬ＠ｂｵｳｩｮ･ｳｳ｣ｬ｡ｭｰ･ｲｴ｀ｦｩｵＮ･､ｵ＠＠ａ｢ｳｴｲ｡｣ｴｐｲｩｯｲ＠ｲ･ｳ･｡ｲ｣ｨ＠ｳｵｧｧ･ｳｴｳ＠ｴｨ｡ｴ＠ｬ｡ｲｧ･＠ｩｮ｣ｵｭ｢･ｮｴｳ＠ｷｩｬｬ＠｢･｣ｯｭ･＠ｶｩ｣ｴｩｭｳ＠ｯｦ＠､ｩｳｲｵｰｴｩｶ･＠ｴ･｣ｨｮｯｬｯｧｩ｣｡ｬ＠｣ｨ｡ｮｧ･Ｎ＠ｗ･ｩｮｶ･ｳｴｩｧ｡ｴ･＠ｴｨ･＠ｩｭ｡ｧ･＠ｳ･ｮｳｯｲ＠ｩｮ､ｵｳｴｲｹ＠ｩｮ＠ｷｨｩ｣ｨ＠ｴｨ･＠･ｭ･ｲｧ･ｮ｣･＠ｯｦ＠ｃｍｏｓ＠ｳ･ｮｳｯｲｳ＠｣ｨ｡ｬｬ･ｮｧ･､＠ｴｨ･＠ｭ｡ｮｵｦ｡｣ｴｵｲ･ｲｳｯｦ＠ｃｃｄ＠ｳ･ｮｳｯｲｳＮ＠ａｬｴｨｯｵｧｨ＠ｴｨｩｳ＠ｴ･｣ｨｮｯｬｯｧｩ｣｡ｬ＠､ｩｳｲｵｰｴｩｯｮ＠ｬ･､＠ｴｯ＠ｴｨ･＠､ｩｮｯｳ｡ｵｲｩｺ｡ｴｩｯｮ＠ｯｦ＠ｃｃｄ＠ｴ･｣ｨｮｯｬｯｧｹＬ＠ｩｴ＠｡ｬｳｯ＠ｬ･､ｴｯ＠｡ｶｩ｡ｮｩｺ｡ｴｩｯｮｯｲ＠ｳｴｲ｡ｴ･ｧｩ｣＠ｲ･ｮ･ｷ｡ｬｦｯｲ＠ｳｯｭ･＠ｩｮ｣ｵｭ｢･ｮｴｳＬ＠ｳｩｭｩｬ｡ｲ＠ｴｯ＠ｨｯｷ＠ｳｯｭ･＠､ｩｮｯｳ｡ｵｲｳ＠ｳｵｲｶｩｶ･､＠ｴｨ･＠ｭ｡ｳｳｃｲ･ｴ｡｣･ｯｵｳＭｔ･ｲｴｩ｡ｲｹ＠･ｸｴｩｮ｣ｴｩｯｮ＠｢ｹ＠･ｶｯｬｶｩｮｧ＠ｩｮｴｯ＠｢ｩｲ､ｳＮ＠ｗ･＠ｦｩｮ､＠ｴｨ｡ｴ＠ｃｃｄ＠ｭ｡ｮｵｦ｡｣ｴｵｲ･ｲｳ＠ｴｨ｡ｴ＠｡ｶｩ｡ｮｩｺ･､＠ｷ･ｲ･ｰｲ･｡､｡ｰｴ･､＠ｴｯ＠ｴｨ･＠､ｩｳｲｵｰｴｩｶ･＠ｃｍｏｓ＠ｴ･｣ｨｮｯｬｯｧｹ＠ｩｮ＠ｴｨ｡ｴ＠ｴｨ･ｹ＠ｰｯｳｳ･ｳｳ･､＠ｲ･ｬ･ｶ｡ｮｴ＠｣ｯｭｰｬ･ｭ･ｮｴ｡ｲｹ＠ｴ･｣ｨｮｯｬｯｧｩ･ｳ｡ｮ､＠｡｣｣･ｳｳ＠ｴｯ＠ｩｮＭｨｯｵｳ･＠ｵｳ･ｲｳ＠ｴｨ｡ｴ＠｡ｬｬｯｷ･､＠ｴｨ･ｭ＠ｴｯ＠ｳｴｲ｡ｴ･ｧｩ｣｡ｬｬｹ＠ｲ･ｮ･ｷ＠ｴｨ･ｭｳ･ｬｶ･ｳＮｊ･ｬ｣ｯ､･ｳＺｏＳＲＬＭ Powered by TCPDF (www.tcpdf.org) When Dinosaurs Fly ! ABSTRACT Prior research suggests that large incumbents will become victims of disruptive technological change. We investigate the image sensor industry in which the emergence of CMOS sensors challenged the manufacturers of CCD sensors. Although this technological disruption led to the dinosaurization of CCD technology, it also led to avianization—or strategic renewal—for some incumbents, similar to how some dinosaurs survived the mass Cretaceous-Tertiary extinction by evolving into birds. We find that CCD manufacturers that avianized were preadapted to the disruptive CMOS technology in that they possessed relevant complementary technologies and access to in-house users that allowed them to strategically renew themselves. INTRODUCTION One of the ‘truisms’ (Taylor and Helfat, 2009: 718) in the innovation literature is that incumbent firms struggle during radical technological changes. Researchers have noted that such changes often lead to the emergence of new product-markets with novel product performance features (Tushman and Anderson, 1986). Prior research underscores that preexisting competencies (Henderson and Clark, 1990), inability to master new capabilities (Dosi, 1982; Nelson and Winter, 1982; Tushman and Anderson, 1986), managerial beliefs (Benner and Tripsas, 2012), and firm incentives (Christensen, 1997) create inertia for incumbents. Literature, however, also provides evidence contrary to this dismal prediction for incumbent firms. Building on Teece’s (1986: 288) seminal work suggesting the importance of complementary assets—those dedicated to ‘marketing, competitive manufacturing, and after- sales support’—Mitchell (1989), Tripsas (1997), and others have underscored the importance of such assets as buffers for incumbents during technological changes (Danneels, 2004; Hill and Rothaermel, 2003). Additionally, scholars have also theorized that complementary assets often play a more proactive role, acting as catalyst for product innovation during technological ! "! When Dinosaurs Fly ! transitions (Helfat, 1997; Sosa, 2009, 2011; Taylor and Helfat, 2009; Wu, Wan, and Levinthal, 2014). Building on this stream of research, scholars have highlighted the importance of possessing a specific type of complementary asset—complementary technologies (CTs)—in value creation and preadaptation (Cattani, 2006) for incumbent firms. Recent explorations of the role of CTs (e.g., Anderson and Parker, 2013; Funk, 2013; Makri, Hitt, and Lane, 2010) build on rich evidence in the literature that draws attention to the critical role of these technologies in the emergence of new product and process innovations, such as the Toyota (or Just-in-Time) production systems (Ayres, 1991). These studies support Henderson’s (1995: 641) observation that CTs such as ‘production control techniques, better resist systems and finer control of alignment technology’ helped shift the ‘natural’ limits (Sahal, 1985) in the evolution of optical lithography aligners. Consistently, Cattani (2006: 306) noted that knowledge of relevant CTs, such as electronics, acquired from manufacturing optical fibers for medical and military applications, helped Corning ‘gain valuable experience' in the transition to optical fibers for telecommunication, despite the manufacturing methods being ‘significantly different.' Further, Funk (2013: 143) recently highlighted that CTs helped VHS and Betamax video recorder manufacturers improve the ‘magnetic recording density’ of their products. Despite the increasing attention that CTs have received in recent years (Anderson and Parker, 2013; Cattani, 2006;! Funk, 2013; Makri et al., 2010), relatively underexplored is if, and how, the possession of relevant CTs1 influence incumbent firms’ response during technological changes. Innovation research also highlights that understanding user needs is a critical firm-level capability necessary for introducing new product innovations. In his seminal paper, Teece (1992: !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1 Following Cattani (2006; p. 286) we define relevant CTs as knowledge of CTs that is ‘accumulated without anticipation of subsequent uses (foresight).’ ! #! When Dinosaurs Fly ! 9) notes that ‘[a] salient aspect of innovation is that it requires a close coupling of the developer of the new technology to the user. Commercially successful innovations require linking scientific, engineering, entrepreneurial, and management skills with an intimate understanding of user needs.’ Research emphasizes that understanding user needs becomes particularly important in high technology industries where ‘the world moves… rapidly’ (von Hippel, 1986: 796). Most recently, Roy and Sarkar (2016) building on Teece’s (1992: 10, italics in original) insights that ‘knowing what to develop and design… is absolutely essential for commercial success,’ suggested that the vital, yet often elusive!knowledge of user needs can be effectively harnessed by incumbents through access to in-house users2. Despite the recent interest in exploring the role of in-house users, scholars have somewhat overlooked the role of such users during a disruptive technological change (Christensen,1997)—a change that has received significant attention from both academic scholars (e.g., Ansari et al., 2016) and popular press (e.g., Lepore, 2014). Motivated by these recent investigations into the role of CTs and in-house users, and in an effort to better understand how firm-level capabilities affect the strategic renewal of large incumbents during a disruptive technological change, we formulate a normative theory of the firm to explain innovation outcomes during such a change. Unlike prior research, which has mostly concentrated on either the acquisition or the generation of new knowledge (Agarwal and Helfat, 2009), we use insights from recent research as our theoretical building blocks and investigate the leveraging of knowledge across divisions of a firm for strategic renewal. In the process, we aim to extend the conversation on the role of firm-level capabilities for strategic renewal of firms to the context of a disruptive technological change. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 2 Following Roy and Sarkar (2016), we define in-house user as a division within the focal firm that is a user of products manufactured by other divisions within the same firm. ! $! When Dinosaurs Fly ! The period of technological change that we concentrate on in this paper is the advent of the disruptive complementary metal oxide semiconductor (CMOS) sensors in the image sensor industry. This industry emerged on October 18, 1969 at AT&T Bell Labs; NASA was the first major customer of Charge-Coupled Device (CCD) sensors. Between the late 1960s and early 2010s, CCD sensors remained the backbone of digital photography, which included the Hubble Space Telescope and the yet to be launched James Webb Telescope. Beginning with the Kodak- Nikon DCS digital camera (1MP resolution) launched in 1990, to the Nikon D3000 (10.2 MP resolution) launched in December 2009, CCD sensors were used by all the major Digital Single Lens Reflex (DSLR) camera manufacturers. In 1992, NASA/Jet Propulsion Laboratory (JPL) developed and patented the ‘active- pixel’ CMOS sensors (CMOS APS, the focus of this study; which hereafter we refer to simply as CMOS). Similar to Christensen’s (1997) predictions, during the 1990s and 2000s, the CMOS sensors underperformed CCD sensors in picture resolution—the critical performance feature that users valued in digital cameras. While underperforming in critical performance feature, the CMOS sensors brought in new performance features such as lower power consumption and system-on-a-chip integration. By the early 2010s, following Christensen’s (1997) predictions, CMOS sensors eventually improved in picture resolution and disrupted the market for CCD image sensors.3 However, unlike Bower and Christensen’s (1995: 47, italics in original) predictions that ‘well-managed companies…..are incapable of funneling resources into programs that current customers explicitly don't want’ and therefore become victims of disruption, we find that several of the largest CCD manufacturers, such as Sony, successfully transitioned from CCD to CMOS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 3 For lack of space, we could not include a detailed description of how, and why, the transition from CCD to CMOS fit the description of a disruptive technological change according to the criteria described by Govindarajan and Kopalle (2006). The note is available from authors upon request. ! %! When Dinosaurs Fly ! manufacturing and did not succumb to the change. Rather, similar to some dinosaurs evolving and thriving as avians, or birds, after the catastrophic Cretaceous-Tertiary extinction, we find that Sony, Sharp, and other large CCD sensors manufacturers avianized themselves and became some of the largest CMOS sensor manufacturers in the world.

Load more