Disruptive firms and industrial change
Abstract. This study proposes the concept of disruptive firms: they are firms with market leadership that deliberate introduce new and improved generations of durable goods that destroy, directly or indirectly, similar products present in markets in order to support their competitive advantage and/or market leadership. These disruptive firms support technological and industrial change and induce consumers to buy new products to adapt to new socioeconomic environment. In particular, disruptive firms generate and spread path-breaking innovations in order to achieve and sustain the goal of a (temporary) profit monopoly. This organizational behaviour and strategy of disruptive firms support technological change. This study can be useful for bringing a new perspective to explain and generalize one of the determinants that generates technological and industrial change. Overall, then this study suggests that one of the general sources of technological change is due to disruptive firms (subjects), rather than disruptive technologies (objects), that generate market shifts in a Schumpeterian world of innovation-based competition.
Keywords. Disruptive technologies, Disruptive firms, Radical innovations, R&D management, Competitive advantage, Industrial change.
JEL. L20, O32, O33.
Ansari, S., Garud, R., & Kumaraswamy, A. (2016). The disruptor’s dilemma: Tivo and the U.S. television ecosystem. Strategic Management Journal, 37, 1829–1853. doi. 10.1002/smj.2442
Apple Inc. (2017). Accessed 16th June 2017. [Retrieved from].
Arora, A., Fosfuri, A., & Gambardella, A. (2001). Markets for Technology: The Economics of Innovation and Corporate Strategy. Cambridge, MIT Press, MA.
Arora, A., & Gambardella, A. (1995). The division of innovative labour in biotechnology. In N. Rosenberg, A.C. Gelijns & H. Dawkins, (Eds), Sources of Medical Technology: Universities and Industry, Ch. 8. Washington, DC: National Academy Press. Inductive
AstraZeneca, (2015). Annual Report 2015. Retrieved May 2016.
AstraZeneca, (2016). Accessed December 2016. [Retrieved from].
Au Yong, J. (2006). The drive to succeed. The Straits Times, p. 7. NewspaperSG January 8.
Backer, L.C. (2013). Transnational corporations’ outward expression of inward self-constitution: The enforcement of human rights by Apple, Inc. Indiana Journal of Global Legal Studies, 20(2), 805-879. doi. 10.2979/indjglolegstu.20.2.805
Barney, J.B. (1986). Organizational culture: can it be a source of sustained competitive advantage? Academy of Management Review, 11(3), 656-665. doi. 10.5465/AMR.1986.4306261
BBC News, (2007) Compact Disc Hits 25th birthday. 17 August 2007. [Retrieved from].
Bluetooth, (2017). Accessed January, 2016. [Retrieved from].
Calvano, E. (2007). Destructive Creation. SSE/EFI Working Paper Series in Economics and Finance, No.653. [Retrieved from].
Caner, T., Bruyaka, O., & Prescott, J.E. (2016). Flow signals: Evidence from patent and alliance portfolios in the us biopharmaceutical industry, Journal of Management Studies, doi. 10.1111/joms.12217
Cavallo, E., Ferrari, E., Bollani, L., & Coccia M. (2014). Attitudes and behaviour of adopters of technological innovations in agricultural tractors: A case study in Italian agricultural system. Agricultural Systems, 130, 44-54. doi. 10.1016/j.agsy.2014.05.012
Cavallo, E., Ferrari, E., Bollani, L., & Coccia M. (2014a). Strategic management implications for the adoption of technological innovations in agricultural tractor: the role of scale factors and environmental attitude. Technology Analysis & Strategic Management, 26(7), 765-779. doi. 10.1080/09537325.2014.890706
Cavallo, E., Ferrari, E., & Coccia M. (2015). Likely technological trajectories in agricultural tractors by analysing innovative attitudes of farmers. International Journal of Technology, Policy and Management, 15(2), 158-177. doi. 10.1504/IJTPM.2015.069203
Chesbrough, H., & Rosenbloom, R.S. (2002). The role of the business model in capturing value from innovation: Evidence from Xerox Corporation’s technology spinoff companies. Industrial and Corporate Change, 11(3), 529-555. doi. 10.1093/icc/11.3.529
Christensen, C. (1997). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Harvard Business School Press, Cambridge, MA.
Christensen, C. (2006). The ongoing process of building a theory of disruption. Journal of Product Innovation Management, 23(1), 39-55. doi. 10.1111/j.1540-5885.2005.00180.x
Christensen, C., & Raynor, M. (2003). The Innovator’s Solution. Harvard Business School Press, Boston.
Christensen, C., Raynor, M., & McDonald, R. (2015). What is disruptive innovation? Harvard Business Review. December, pp. 44-53.
Clovis Oncology, (2015). Accessed February 2015. [Retrieved from].
Coccia, M. (2006). Classifications of innovations: survey and future directions. Working Paper Ceris del Consiglio Nazionale delle Ricerche, 8(2), 1-19. [Retrieved from].
Coccia, M. (2009). A new approach for measuring and analyzing patterns of regional economic growth: empirical analysis in Italy. Italian Journal of Regional Science- Scienze Regionali, 8(2), 71-95. doi. 10.3280/SCRE2009-002004
Coccia, M. (2012). Evolutionary growth of knowledge in path-breaking targeted therapies for lung cancer: radical innovations and structure of the new technological paradigm. International Journal of Behavioural and Healthcare Research, 3(3-4), 273-290. doi. 10.1504/IJBHR.2012.051406
Coccia, M. (2012a). Converging genetics, genomics and nanotechnologies for groundbreaking pathways in biomedicine and nanomedicine. International Journal of Healthcare Technology and Management, 13(4), 184-197. doi. 10.1504/IJHTM.2012.050616
Coccia, M. (2014). Path-breaking target therapies for lung cancer and a far-sighted health policy to support clinical and cost effectiveness. Health Policy and Technology, 1(3), 74-82. doi. 10.1016/j.hlpt.2013.09.007
Coccia, M. (2014a). Converging scientific fields and new technological paradigms as main drivers of the division of scientific labour in drug discovery process: the effects on strategic management of the R&D corporate change. Technology Analysis & Strategic Management, 26(7), 733-749, doi. 10.1080/09537325.2014.882501
Coccia, M. (2015). Technological paradigms and trajectories as determinants of the R&D corporate change in drug discovery industry. International Journal Knowledge and Learning, 10(1), 29-43. doi. 10.1504/IJKL.2015.071052
Coccia, M. (2015a). General sources of General Purpose Technologies in complex societies: Theory of global leadership-driven innovation, warfare and human development. Technology in Society, 42, 199-226. doi. 10.1016/j.techsoc.2015.05.008
Coccia, M. (2016). Problem-driven innovations in drug discovery: co-evolution of the patterns of radical innovation with the evolution of problems. Health Policy and Technology, 5(2), 143-155. doi. 10.1016/j.hlpt.2016.02.003
Coccia, M. (2016a). Sources of technological innovation: Radical and incremental innovation problem-driven to support competitive advantage of firms. Technology Analysis & Strategic Management, 29(9), 1048-1061. doi. 10.1080/09537325.2016.1268682
Coccia, M. (2016b). Radical innovations as drivers of breakthroughs: characteristics and properties of the management of technology leading to superior organizational performance in the discovery process of R&D labs. Technology Analysis & Strategic Management, 28(4), 381-395. doi. 10.1080/09537325.2015.1095287
Coccia, M. (2017). The source and nature of general purpose technologies for supporting next K-waves: Global leadership and the case study of the U.S. Navy's Mobile User Objective System, Technological Forecasting and Social Change, 116, 331-339. doi. 10.1016/j.techfore.2016.05.019
Coccia, M. (2017a). Fundamental interactions as sources of the evolution of technology, Working Paper CocciaLab No.23. [Retrieved from].
Coccia, M., & Finardi, U. (2012). Emerging nanotechnological research for future pathway of biomedicine. International Journal of Biomedical Nanoscience and Nanotechnology, 2 (3-4), 299-317. doi. 10.1504/IJBNN.2012.051223
Coccia, M., & Finardi, U. (2013). New technological trajectories of non-thermal plasma technology in medicine. International Journal of Biomedical Engineering and Technology, 11(4), 337-356. doi. 10.1504/IJBET.2013.055665
Coccia, M., & Rolfo, S. (2000). Ricerca pubblica e trasferimento tecnologico: il caso della regione Piemonte. In S. Rolfo (ed), Innovazione e piccole imprese in Piemonte, Franco Angeli Editore, Milano.
Coccia M., & Wang, L. (2015). Path-breaking directions of nanotechnology-based chemotherapy and molecular cancer therapy. Technological Forecasting & Social Change, 94, 155-169. doi. 10.1016/j.techfore.2014.09.007
Coccia, M., & Wang, L. (2016). Evolution and convergence of the patterns of international scientific collaboration. Proceedings of the National Academy of Sciences of the United States of America, 113(8), 2057-2061. doi. 10.1073/pnas.1510820113
Cooper, R.G. (1990). Stage-gate systems: a new tool for managing new products. Business Horizons, 33(3), 44-54. doi. 10.1016/0007-6813(90)90040-I
Csaszar, F.A. (2013). An efficient frontier in organization design: Organizational structure as a determinant of exploration and exploitation. Organization Science, 24(4), 1083-1101.
Daidj, N. (2016). Strategy, Structure and Corporate Governance: Expressing Inter-firm Networks and Group-affiliated Companies. CRC Press, Taylor &Francis Group.
Damanpour, F., & Aravind, D. (2012). Organizational structure and innovation revisited: From organic to ambidextrous structure. In M.D. Mumford (Ed.) Handbook of Organizational Creativity, (pp.502-503). Elsevier.
Danneels, E. (2004). Disruptive technology reconsidered: A critique and research agenda. Journal of Product Innovation Management, 21(4), 246-258. doi. 10.1111/j.0737-6782.2004.00076.x
Danneels, E. (2006). Dialogue on the effects of disruptive technology on firms and industries. Journal of Product Innovation Management, 23(1), 2–4. doi. 10.1111/j.1540-5885.2005.00174.x
Dosi, G. (1988). Sources procedures and microeconomic effects of innovation. Journal of Economic Literature, 26(3), 1120-1171.
Durisin, B., & Todorova, G. (2012). A study of the performativity of the “Ambidextrous organizations” theory: Neither lost in nor lost before translation. The Journal of Product Innovation Management, 29(S1), 53-75. doi. 10.1111/j.1540-5885.2012.00981.x
Eisenhardt, K.M., & Graebner M.E. (2007). Theory building from cases: Opportunities and challenges. The Academy of Management Review, 50(1), 25-32. doi. 10.5465/AMJ.2007.24160888
Eisenhardt, K.M. (1989). Building theories from case study research. The Academy of Management Review, 14(4), 532-550. doi. 10.5465/AMR.1989.4308385
Fogliasso, C.E., & Williams, A. (2014). Analysis of the business, societal and governmental relationships of Apple Inc. Leadership & Organizational Management Journal, 1, 161-175.
Garud R., Jain S., & Kumaraswamy A. (2002). Orchestrating institutional processes for technology sponsorship: the case of Sun Microsystems and Java. Academy of Management Journal, 45(1), 196-214. doi. 10.2307/3069292
Garud, R., Simpson, B., Langley, A., & Tsoukas, H. (2015). The Emergence of Novelty in Organizations, Oxford University Press.
Garud, R., Kumaraswamy, A., & Karnøe, P. (2010). Path dependence or path creation? Journal of Management Studies, 47(4), 760–774. doi. 10.1111/j.1467-6486.2009.00914.x
Gilbert, C., & Bower, J. (2002). Disruptive change: When trying harder is part of the problem. Harvard Business Review, 80(5), 94-102.
Gioia, D.A., & Chittipeddi K. (1991). Sensemaking and sensegiving in strategic change initiation. Strategic Management Journal, 12(6), 433-448. doi. 10.1002/smj.4250120604
Goda, K., & Kitsuregawa M. (2012). The History of Storage Systems. Proceedings of the IEEE, 100, 1433-1440. doi. 10.1109/JPROC.2012.2189787
Henderson, R., (1994). The evolution of integrative capability: Innovation in cardiovascular drug discovery. Industrial and Corporate Change, 3(3), 607-630. doi. 10.1093/icc/3.3.607
Henderson, R., (2006). The innovator’s dilemma as a problem of organizational competence. Journal of Product Innovation Management, 23(1), 5-11. doi. 10.1111/j.1540-5885.2005.00175.x
Henderson, R., & Clark, K.B. (1990). Architectural innovation: The reconfiguration of existing product technologies and the failure of established firms. Administrative Science Quarterly, 35(1), 9-30.
Heracleous, L. (2013). Quantum strategy at Apple Inc. Organizational Dynamics, 42(2), 92-99. doi. 10.1016/j.orgdyn.2013.03.002
Hill, C., & Rothaermel, F. (2003). The performance of incumbent firms in the face of radical technological innovation. Academy of Management Review, 28(2), 257–274. doi. 10.5465/AMR.2003.9416161
Jenkins, M. (2010). Technological Discontinuities and Competitive Advantage: A Historical Perspective on Formula 1 Motor Racing 1950–2006. Journal of Management Studies, 47(5), 884-910. doi. 10.1111/j.1467-6486.2010.00928.x
Kapoor, R., & Klueter, T. (2015). Decoding the adaptability-rigidity puzzle: Evidence from pharmaceutical incumbents’ pursuit of gene therapy and monoclonal antibodies. Academy of Management Journal, 58(4), 1180-1207. doi. 10.5465/amj.2013.0430
King, A., & Baatartogtokh, B. (2015). How useful is the theory of disruptive innovation. MIT Sloan Management Review, 57, 77-90.
Lehman, G., & Haslam C. (2013). Accounting for the Apple Inc. business model: Corporate value capture and dysfunctional economic and social consequences. Accounting Forum, 37(4), 245-248. doi. 10.1016/j.accfor.2013.08.001
Liao, C., Chuang, S.H., & To, P.L. (2011). How knowledge management mediates the relationship between environment and organizational structure. Journal of Business Research, 64(7), 728-736. doi. 10.1016/j.jbusres.2010.08.001
Lin, H.-E., & McDonough III E.F. (2014). Cognitive frames, learning mechanisms, and innovation ambidexterity, Journal of Product Innovation Management. 3(S1), 170-188. doi. 10.1111/jpim.12199
Madsen, T.L., & Leiblein, M.J. (2015). What factors affect the persistence of an innovation advantage?, Journal of Management Studies, 52(8), 1097-1127. doi. 10.1111/joms.12154
Markides, C. (2006). Disruptive innovation: In need of better theory. Journal of Product Innovation Management, 23, 19-25. doi. 10.1111/j.1540-5885.2005.00177.x
Markides, C., & Geroski, P. (2005). Fast Second: How Smart Companies Bypass Radical Innovation to Enter and Dominate New Markets. Jossey-Bass, San Francisco.
Markman, G.D., & Waldron, T.L. (2014). Small entrants and large incumbents: a framework of micro entry. Academy of Management Perspectives, 28(2), 179-197. doi. 10.5465/amp.2011.0112
Mee, C.D., & Daniel, E.D. (1996). Magnetic Storage Handbook. McGraw Hill.
Nicholls-Nixon, C.L., & Woo, C.Y. (2003). Technology sourcing and output of established firms in a regime of encompassing technological change. Strategic Management Journal, 24(7), 651–666. doi. 10.1002/smj.329
O’Reilly, III C.A., Chatman, J., & Caldwell, D.F. (1991). People and organizational culture: A profile comparison approach to assessing person-organization fit. Academy of Management Journal, 34(3), 487-516. doi. 10.2307/256404
O’Reilly, III C.A., & Tushman, M.L. (2004). The ambidextrous organization. Harvard Business Review, 82(4), 74–81.
O’Reilly, III C.A., & Tushman, M.L. (2008). Ambidexterity as a dynamic capability: Resolving the innovator’s dilemma. Research in Organization Behavior, 28, 185-206. doi. 10.1016/j.riob.2008.06.002
Paruchuri, S., & Eisenman, M. (2012). Microfoundations of firm R&D capabilities: A study of inventor networks in a merger. Journal of Management Studies, 49(8), 1509-1535. doi. 10.1111/j.1467-6486.2012.01066.x
Ryan, J.C., & Tipu, S.A.A. (2013). Leadership effects on innovation propensity: A two-factor full range leadership model. Journal of Business Research, 66(10), 2116-2129. doi. 10.1016/j.jbusres.2013.02.038
Schein, E.H. (2010). Organizational Culture and Leadership. Vol. 2, John Wiley & Sons.
Teece, D.J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533. doi. 10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z
Tellis, G.J. (2006). Disruptive technology or visionary leadership? Journal of Product Innovation Management, 23(1), 34-38. doi. 10.1111/j.1540-5885.2005.00179.x
Tushman, M., & Anderson, P. (1986). Technological Discontinuities and Organizational Environments. Administrative Science Quarterly, 31(3), 439-465. doi. 10.2307/2392832
USB, (2005). USB ‘A’ Plug Form Factor Revision 1.0, USB Implementers Forum, Inc. (USB-IF).
Van de Ven, A., & Garud, R. (1994). The coevolution of technical and institutional events in the development of an innovation. In: J.A. Baum & J.V. Singh (eds), Evolutionary dynamics of organizations. (pp.425-43). Oxford University Press.
Van de Ven, A., Polley, D., Garud, R., & Venkataraman, S. (2008). The Innovation Journey, Oxford University Press.
von Hippel, E. (1988). The Sources of Innovation, Oxford University Press.
Wessel, M., & Christensen, C.M. (2012). Surviving disruption. It’s not enough to know that a threat is coming. You need to know whether it’s coming right for you. Harvard Business Review, 90(12), 56-65.
Windows, (2012). All ears! A pictorial history of Bluetooth headsets. Part 1, [Retrieved from].
Wozniak, S. (2007). Homebrew and How the Apple Came to Be. Digital Deli. Retrieved June 16, 2017.
Wright, G. (1997). Towards a more historical approach to technological change. The Economic Journal, 107(444), 1560-1566. doi. 10.1111/j.1468-0297.1997.tb00066.x
- There are currently no refbacks.
Journal of Economic and Social Thought - J. Econ. Soc. Thoug. - JEST - www.kspjournals.org
Copyright © KSP Library