CONCLUSIONS
This study highlights an important issue for managers and scholars who strive to understand the
reasons why strong, capably managed firms stumble when faced with particular types of technological change. While many scholars see the issue
primarily as an issue of technological competence,
we assert that at a deeper level it may an issue
of investment. We have observed that when competence was lacking, but impetus from customers
to develop that competence was sufficiently
strong, established firms successfully led their
industries in developing the competencies
The Failure of Leading Firms 215
required for sustaining technological change.
Importantly, because sustaining technologies
address the interests of established firms’ existing
customers, we Saw that technological change
could be achieved without strategy change.
Conversely, when technological competence
existed, but impetus from customers was lacking,
we saw consistently that firms were unable to
commercialize what they already could do. This
is because disruptive technologies initially tend
to be saleable only in different markets whose
economic and financial characteristics render them
unattractive to established firms. Addressing these
technologies therefore requires a change in strategy in order to attack a very different market. In
the end, it appears that although the stumbles
of these established firms are associated with
technological change, the key issue appears to be
firms’ disabilities in changing strategy, not technology.
Our model is not presented as the path every
firm follows when faced with disruptive technology. We believe, however, that it may contribute several insights for scholars interested in the
factors that affect strategic change in firms. First,
it notes that the allocation of resources to some
product development and commercialization pro-
grams, and the denial of resources to others, is
a key event or decision in the implementation of
strategy, The model highlights the process by
which impetus and consequent resources may be
denied to technological opportunities that do not
contribute to the needs of prominent customers.
These findings suggest a causal relationship might
exist between resource allocation processes, as
modeled by Bower (1970) and Burgelman (1983a,
1983b), and the phenomenon of resource dependence (Pfeffer and Salancik, 1978). Our findings
suggest that despite the powerful forces of
resource dependence, however, managers can, in
fact, wield considerable power, and wield it effectively, in changing the strategic course of their
firms in directions other than those in which its
resource providers are pulling it. By understanding the processes that link customer needs,
impetus, and resource allocation, managers can
align efforts to commercialize disruptive technology (which entails a change in strategy) with
the forces of resource dependence. This involves
managing disruptive technology in a manner that
is out of the organizational and strategic context
of mainstream organizations—where of necessity,