Although prior literature argues that product adaption is critical to survival in new or dynamic industries, we have very limited information about the antecedents to product adaptation. This paper focuses on start-up top management teams (TMTs) and explores the impact of different types of preentry experience—preentry experience breadth, depth, and type (entrepreneurial and business experience)—on the likelihood that start-ups adapt their products. The hypotheses are tested among the population of U.S. solar photovoltaic start-ups during a period of industry emergence from 1992 to 2007. The analysis suggests that preentry experience breadth and experience in other dynamic settings (entrepreneurial) increases the ability of start-up TMTs to learn quickly about their environment, thereby increasing the likelihood of product adaptation. By contrast, deep preentry experience in the industry, although valuable in many other ways, can lead to narrow learning that decreases the likelihood of adaptation. These results underscore the importance of preentry experience to product adaptation. The results also underscore the role and patterns of product adaptation in firm, industry, and technology evolution.

Abstract While organizational processes, such as internationalization, acquisition, and alliance, are a fundamental concept within many literatures and central to firm capabilities, controversy exists regarding how they become high performing. One view emphasizes the role of experience while a second view emphasizes cognition and, in particular, the role of articulated heuristics. Using qualitative and quantitative field data on the internationalization process of entrepreneurial firms from three culturally distinct regions (Finland, U.S., Singapore), we juxtapose these two competing theoretical views to better gain insight into organizational processes and capabilities. The core contribution of our paper is insight into the structure of firm capabilities. Results show that organizational heuristics more closely relate to the development of a high performing process and hence a firm capability. At a broader level, we contribute to strategy by empirically validating the strategic logic of opportunity, a logic that is particularly relevant in dynamic markets and growth oriented firms. We also contribute to entrepreneurship by adding to the opportunity discovery vs. opportunity creation debate, and by shedding light on the relationship between structure and performance in new ventures. Overall, we contribute to the emerging but growing body of research emphasizing a more cognitive view of firms. Copyright © 2007 Strategic Management Society.

Although the canonical view of technology substitution describes the frequent failure of incumbent firms to adapt to new technologies, research suggests that firms adopt a variety of strategies when faced with a substitution. These include extending the incumbent technology, bridging to the new by creating hybrids of incumbent and threatening technology, and retreating to market niches in which incumbent technologies retain a competitive advantage. Because ex post views can depict such strategies as ineffectual in the face of inevitable substitution, we have a limited view of the impact of these strategies—whether, when, and how technology substitution occurs. In a study of technology substitution in the population of automobile carburetor manufacturers between 1979 and 1992, we find that these “technology counteroffensive” strategies effectively improved product performance, temporarily deferred technology substitution, and contributed to the continued survival of many firms. Significant firm outcome differences result from these strategies. The paper concludes by suggesting both a theory of technology hybrids and an ex ante theory of technology substitution as a complement to the dominant ex post view.

The resource-based view (RBV) makes a significant contribution to strategy by explaining the relationship between resources and firm performance. Particularly in low uncertainty markets, executives have the foresight and time to build strategically valuable resources in current markets and leverage them into related markets. RBV is also relevant for understanding strategies for market entry, extending the value of technology resources, and broadening the locus of resources within ecosystems. Conversely, in high uncertainty markets like nascent or disrupted ones, RBV seems less germane. Resources may not yet exist or their value (and rarity) may be indeterminate (or changing). Here, we contribute the Strategy Creation (SC) view—joining strategizing by doing, thinking, and shaping. It offers a strategic logic that fits highly uncertain markets. Finally, we contribute the insight that RBV and SC are complements under moderate uncertainty, such as growth markets and technology transitions. Overall, we propose that uncertainty forms a crucial boundary condition for RBV that distinguishes between qualitatively different strategic logics.

During technological discontinuities, incumbents frequently develop hybrids of competing technical generations. Although some prior work implies that such intergenerational hybrids may be the result of organizational dysfunction, we propose that in some cases hybrids may be sophisticated learning tools that shape organizational adaptation to a technological discontinuity. In this paper, we suggest two mechanisms through which intergenerational hybrids may affect organizational adaptation: spillbacks and spillforwards. In an empirical test among the population of automobile carburetor manufacturers during a technological discontinuity, we observe that organizations developing intergenerational hybrids capture spillback benefits—knowledge spillovers from an emerging technology generation to the current generation. Furthermore, we find that these same organizations also capture spillforwards—spillover benefits from developing higher-performing intergenerational hybrids that improve their product performance in the future technology generation. These results suggest that intergenerational hybrids may be stepping-stones for organizations to learn about and adapt to technology discontinuities.

Abstract We evaluate the effects of component choices on firms' performance following a negative shock to the ecosystem's alignment structure. We advance a theoretical framework that relates three levels of ecosystem structure—local component interdependence, component clusters, and central components—to the firms' performance. In the setting of the e‐commerce industry impacted by the General Data Protection Regulation, our results support the predictions that a reduction in local component interdependence and an increase in component dispersion across clusters have a positive effect on firm performance, but the impact of an increased use of central components disappears when controlling for local interdependence. These findings contribute to the literature on performance consequences of structures of interdependencies within innovation ecosystems. Managerial summary We use data on the component choices of e‐commerce firms to study how the structure of the business ecosystem around these components affects firms' performance following a negative shock. We find that while firms which increased interdependence among their components may fare well in a stable environment, their performance will suffer following a negative shock relative to those that are not affected by the shock. Second, firms that draw their components from multiple component clusters perform better during a negative shock relative to those unaffected by the shock. Executives should actively manage the interdependencies among their technological components at different levels. This will help their firms to remain flexible, minimize disruption, allow for innovative recombination and prepare for future technological developments.

Entrants in new industries pursue distinct technologies in hopes of winning the technology competition and achieving sustainable competitive advantage. We draw on the complementary assets framework to predict entrants' technology choices in an emerging industry. Evidence from the global solar photovoltaic industry supports our arguments that entrants are more likely to choose technologies with higher technical performance and for which key complementary assets are available in the ecosystem. However, diversifying entrants are more likely to trade off superior performance for complementary asset availability whereas start‐up entrants are more likely to trade off complementary asset availability for superior performance. This difference is largely due to diversifying entrants with pre‐entry capabilities related to the industry. The study offers a novel illustration of how complementarities and competition shape entry strategies . Copyright © 2013 John Wiley & Sons, Ltd.

Our purpose is to clarify the microfoundations of performance in dynamic environments. A key premise is that the microfoundational link from organization, strategy, and dynamic capabilities to performance centers on how leaders manage the fundamental tension between efficiency and flexibility. We develop several insights. First, regarding structure, we highlight that organizations often drift toward efficiency, and so balancing efficiency and flexibility comes, counterintuitively, through unbalancing to favor flexibility. Second, we argue that environmental dynamism, rather than being simply stable or dynamic, is a multidimensional construct with dimensions that uniquely influence the importance and ease of balancing efficiency and flexibility. Third, we outline how executives balance efficiency and flexibility through cognitively sophisticated, single solutions rather than by simply holding contradictions. Overall, we go beyond the caricature of new organizational forms as obsessed with fluidity and the simplistic view of routines as the microfoundation of performance. Rather, we contribute a more accurate view of how leaders effectively balance between efficiency and flexibility by emphasizing heuristics-based “strategies of simple rules,” multiple environmental realities, and higher-order “expert” cognition. Together, these insights seek to add needed precision to the microfoundations of performance in dynamic environments.