1 results
13 - Firm capabilities and managerial decision making: A theory of innovation biases
-
- By Janet E. L. Bercovitz, University of California, Berkeley, CA, John M. de Figueiredo, University of California, Berkeley, CA, David J. Teece, University of California, Berkeley, CA
- Edited by Raghu Garud, New York University, Praveen Rattan Nayyar, New York University, Zur Baruch Shapira, New York University
- Foreword by James G. March
-
- Book:
- Technological Innovation
- Published online:
- 07 October 2011
- Print publication:
- 28 April 1997, pp 233-259
-
- Chapter
- Export citation
-
Summary
There is no reason to suppose that large firms are any less (or more) innovative than small or new organizations. What may be true is that the type of entrepreneurship differs. The best entrepreneurial opportunities for large organizations may be those based on the redeployment of the firm's resources and the extension of its competitive positions. Those most attractive to individuals and small firms may be based on new opportunity and the creation of new markets
(Rumelt 1987,151–152)Introduction
Schumpeter's evolutionary theory of innovation suggests that the “gales of creative destruction” brought about by radical innovation will allow some organizations to gain competitive advantage and result in “… old concerns and established industries … perish[ing] that nevertheless would be able to live on vigorously and usefully if they could weather a particular storm [of this creative destruction]” (Schumpeter, 1942, 90). Although Schumpeter's argument does not specifically identify the organizational locus of the innovation, it does note that “new concerns or industries that introduce new commodities or processes” are likely to displace older industries (Schumpeter, 89).
Radical innovation and its organizational foundations became an important area of study in subsequent academic inquiry on innovation. Many commentators have highlighted the advantage small and de novo firms have over incumbent firms in generating and incubating radical innovations (Foster, 1986; Jewkes et al, 1958; Tilton, 1971; Abernathy & Utterback, 1978; Mitchell, 1989; Henderson & Clark, 1990). This suggests two key research questions.