Decoupling market incumbency from organizational prehistory: locating the real sources of competitive advantage in RandD for radical innovation

The creative destruction literature has argued that differences in RandD performance of incumbent vs. entrant firms can be explained through organizational change theories about established vs. de novo firms. A disconnect exists between these theories and the available empirical evidence because oft...

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Bibliographic Details
Published inStrategic management journal Vol. 34; no. 2; pp. 245 - 255
Main Author Sosa, M Lourdes
Format Journal Article
LanguageEnglish
Published 01.02.2013
Subjects
Innovation
Market
Organization theory
Organizational change
Organizational effectiveness
Research and development
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Summary:The creative destruction literature has argued that differences in RandD performance of incumbent vs. entrant firms can be explained through organizational change theories about established vs. de novo firms. A disconnect exists between these theories and the available empirical evidence because often the best performing firms are established firms as well. I propose to resolve this disconnect by distinguishing between market incumbency (presence in a market prior to a discontinuity) and organizational prehistory (organizational experience prior to a transition, whether between technologies or between markets). Doing so allows me to contrast incumbent vs. entrant and de alio vs. de novo studies, and to suggest more robust future research designs. I illustrate my proposition using qualitative data from the anticancer and AIDS-treatment drug markets. Copyright © 2012 John Wiley & Sons, Ltd. Copyright John Wiley & Sons. Reproduced with permission. An electronic version of this article is available online at http://www.interscience.wiley.com
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ISSN:0143-2095
DOI:10.1002/smj.2012