Technological discontinuities and organizational environments

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Citation: Michael L. Tushman, Philip Anderson (1986) Technological discontinuities and organizational environments. Administrative Science Quarterly (RSS)
Internet Archive Scholar (fulltext): Technological discontinuities and organizational environments
Tagged: Business (RSS) innovation (RSS), change (RSS)

Summary (Abstract)

Technological discontinuities and organizational environments is an ambitious and groundbreaking article that offers an important piece of what has become the dominant approach to the consideration of patterns of change in technological innovation. The paper makes several important contributions. First, it argues that organizational environments are shaped heavily by technological change -- itself not an argument that had been made widely before. In particular, the authors argue that major technological changes represent technological discontinuities which change an organizations environment in a way that is similar to a punctuated equilibrium model. Second, the authors argue that these changes can either be competence-enhancing or competence-destroying.

Competence-enhancing innovation will allow organizations to take advantage of their current resources, skills, knowledge, and routines and will tend to consolidate or reinforce industry positions. If an innovation is competence enhancing, the authors hypothesize that there will be less entry and more exit of firms. On the other hand, competence destroying innovations will tend to create environments that support the creation of new forms or the reorganization of industry positions because the existing large player are going to find that their existing competencies are of little use in the new technological environment. These should see higher number of new entrants and more exit of existing firms.

After offering this theory, the paper proceeds through an empirical component where the authors test their theory in three industries: the airline transport industry (i.e., plane operators rather than manufacturers), portland cement, and minicomputer manufacturing. Although the authors empirical settings are somewhat limited (e.g., there are no competence destroying innovations in the airline industry), the authors basic hypotheses are all supported.

Theoretical and Practical Relevance

Technological discontinuities and organizational environments is a seminal article in the literature both on organizations and on technological innovation in particular and it has been cited more than 3,000 times. The idea of technological discontinuities continures to be influential. The paper also helped launch a subliterature on the way that envionrments can be shaped by technology that has been hugely important in subsequent research. Perhaps more important, the idea of competence-enhancing or competence-destroying innovation has become a central and highly important idea in the literature on innovation and industry dynamics.