The objective is to enhance our understanding of internal and external firm-level factors that explain why some firms survive and thrive when faced with radical technological innovation while others fail. Understanding firm-level heterogeneity is a defining question in the field of strategy. Studying this question in the context of radical technological innovation allows us to synthesize a diverse set of literatures, and thus to bridge the fields of strategy, innovation, and organizational change.
In particular, I attempt to develop a modified model of radical technological innovation. While the point of the departure remains an exogenous innovation, the revised model accounts for firm-level differences through a focus on dynamic capabilities that firms can build through strategic alliances and by recruiting intellectual human capital, especially highly productive scientists ("stars"). These two factors combine internal and external mechanisms that appear to be most effective in accomplishing a change in a firm' capabilities. This model will be tested on multiple original longitudinal datasets, and thus exposed to empirical falsification.
Assuming the modified model of radical technological innovation receives empirical support, researchers should be able to explain and predict firm-level heterogeneity more readily. Such a model would not only have academic value, but also enable managers to harness technological and organizational innovation more effectively, thus enhancing competitiveness, while avoiding some of the large scale layoffs that frequently result because of delayed or misguided responses to radical innovation. The theoretical model proposed will not only be useful to analyze the implications of technological change, but could also be extended to other industries and situations in which other exogenous shocks produce large restructurings of the competitive landscape such as deregulation and global integration.
The objective of this CAREER proposal was to enhance our understanding of internal and external firm-level factors that explain why some firms survive and thrive when faced with radical technological innovation while others fail. Understanding firm-level heterogeneity is a defining question in the field of strategic. Studying this question in the context of radical technological innovation allows us to synthesize a diverse set of literatures, and thus to bridge the fields of strategy, innovation, and organizational change. We achieved our objectives along two key dimensions: 1) We completed several research studies (10 published in peer-reviewed academic journals and 2 in practitioner journals to achieve wider exposure) where we illuminated our understanding of how firm can build dynamic capabilities through external and internal mechanisms; and how they interact. Two of the academic research papers won awards, including the Alfred P. Sloan Foundation Industry Studies Best Paper Award. We were especially able to better understand the role of human capital and firm-level innovation in more detail. 2) As with any research, although we were able to generate some novel theoretical and empirical insights, perhaps most importantly, we unearthed a slew of additional research questions. Some of those are currently taken up in additional research; at least one new Ph.D. dissertation is being initiated. 3) As part of the education component, three Ph.D. dissertations were successfully completed during the funding period. All three scholars are now on tenure-track positions at U.S. research universities (University of Virginia, Florida International University, and Drexel University). In addition, teaching materials (including a book) were completed. Several undergraduate students were involved in data collection and able to learn about research first hand. In summary, we consider this project a sound success. This clearly would not have come to pass without the NSF funding, for which we are grateful.
