Publications
Publications
- May–June 2014
- Organization Science
Paradigm-Changing vs. Paradigm-Deepening Innovation: How Firm Scope Influences Firm Technological Response to Shocks
By: Gautam Ahuja, Curba Morris Lampert and Vivek Tandon
Abstract
We examine the direction of firms' research efforts as they respond to the shock of a sharp increase in the price of a key input. In terms of direction, firms can respond to this shock with paradigm-changing investments that develop technologies to use substitute inputs or with paradigm-deepening investments that develop technologies to improve the utilization efficiency of the existing input. We develop a framework that suggests that firms' emphasis on paradigm-changing versus paradigm-deepening investments depends on the degree of input-relatedness across their businesses. We test our hypotheses by examining the responses of large manufacturing firms in the United States to the oil shock of the early 1980s. Our framework predicts and our results show that the more related a firm's businesses are, the larger its investments into paradigm-changing technologies are and the smaller its investments into paradigm-deepening technologies in response to the oil shock are. We identify the implications of these findings for technological evolution and diversification literatures.
Keywords
Technological Change; Innovation; Evolutionary Approaches; Shocks; Technological Innovation; System Shocks; Corporate Strategy
Citation
Ahuja, Gautam, Curba Morris Lampert, and Vivek Tandon. "Paradigm-Changing vs. Paradigm-Deepening Innovation: How Firm Scope Influences Firm Technological Response to Shocks." Organization Science 25, no. 3 (May–June 2014): 653–669.