Why large and successful firms often fail in face of disruptive innovation

Firms are often faced with difficulties when pursing technological change. So far, tremendous efforts have been taken by researchers to examine the behavioral, social, and cognitive forces that underlie this phenomenon; however, there are still cases that cannot be fully explained by available theoretical models. Our research on Kodak Corporation holds promise for improving our understanding of inertial responses to technological opportunities.

In-depth Case Study Kodak/ Interviews

The problems that organizations encounter adapting to new technology have been well researched across various industries (Benner & Tushman, 2002; Christensen, 2000; Christensen & Bower, 1996; Henderson & Clark, 1990; Kaplan, 2008; Tripsas, 2009; Tripsas & Gavetti, 2000; Tushman & Anderson, 1986). Scholars have identified three main categories of reasons: routines/capabilities, cognition, and identity. Routines and standardized procedures that are codified in organizational capabilities, continue in the face of change and therefore can lead to weak responses to the need for renewal and innovation (Benner & Tushman, 2002; Glasmeier, 1991; Levinthal & March, 1993; Nelson & Winter, 1982; Rosenbloom, 2000). Cognition, the way members of an organization understand the world, influences strategic beliefs that drive managerial decisions. Even when a firm is engaged in exploration of a new technology, this may be interpreted as a threat, leading to actions to preserve existing routines (Christensen & Bower, 1996; Danneels, 2003, 2011; Eggers & Kaplan, 2009; Gilbert, 2005; Tripsas & Gavetti, 2000). And, finally, a strong identity, encompassing a set of norms that represent shared beliefs about legitimate behavior for a firm, may impose a filter that blinds members of an organization, preventing them from identifying and reacting to identity-challenging technological opportunities (Tripsas, 2009).

None of these three reasons fully captures the trajectory of Kodak’s evolution. Thus, an in-depth case study holds the promise of expanding current research. For example, it will contribute to the literature of technology management, while it aims to enhance our understanding of problems associated with the pursuit of new technological opportunities.

We started to look at Kodak in 2010 as part of another research project. Since then we have investigated an exhaustive compilation of documents released by or related to the company, and have conducted a series of semi-structured interviews with Kodak employees. In spring 2013 we spoke to ten individuals from the top management team, but also with staff in various functional areas, to get a comprehensive picture of the organization. Interviews lasted over two hours, were video-recorded, transcribed by a professional transcription service, and later followed up with e-mails to clarify key points. In November we continued interview sessions; however, whereas in the first session we had been focusing on entrepreneurial initiatives at Kodak, in the second session we had looked at change initiatives. Until today we have done some 30 interviews with people from various management levels.

Our goal in this research is to explore the criteria that help to explain organizational inertia in the face of radical technological change, beyond the known interplay of capabilities, cognition, and identity.