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  • Winter 2022
  • Article

Leading Disruption in a Legacy Business: A Compelling Growth Ambition Is a Critical Enabler for New Ventures
By: Andy Binns, Michael Tushman and Charles O'Reilly
Leading innovation in established corporations is difficult. Active inertia and dynamic conservatism are real. Still, leaders can drive disruptive ventures from inside large corporations. These leaders ideate, incubate, and scale innovations, much as an entrepreneur...  View Details
Keywords: Disruptive Innovation; Innovation and Management; Leading Change; Organizational Change and Adaptation; Business Model
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  • June 2020
  • Article

Lazy Prices
By: Lauren Cohen, Christopher J. Malloy and Quoc Nguyen
We explore the implications of a subtle "default" choice that firms make in their regular reporting practices, namely that firms typically repeat what they most recently reported. Using the complete history of regular quarterly and annual filings by U.S. corporations...  View Details
Keywords: Default Behavior; Inertia; Firms; Disclosure; Information; Business or Company Management; Behavior; Annual Reports; Corporate Disclosure; Financial Reporting; United States
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  • June 2020
  • Article

Start-up Inertia versus Flexibility: The Role of Founder Identity in a Nascent Industry
By: Tiona Zuzul and Mary Tripsas
Through an inductive, comparative study of four early entrants in the nascent air taxi market, we examine why start-ups, generally characterized as flexible, malleable entities, might instead exhibit inertial behavior. While two of the firms engaged in ongoing...  View Details
Keywords: Founder Identity; Nascent Industries; Entrepreneurship; Organizational Change and Adaptation; Identity
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  • Article

Frame Flexibility: The Role of Cognitive and Emotional Framing in Innovation Adoption by Incumbent Firms
By: Ryan Raffaelli, Mary Ann Glynn and Michael Tushman
Why do incumbent firms frequently reject nonincremental innovations? Beyond technical, structural, or economic factors, we propose an additional factor: the degree of the top management team's (TMT) frame flexibility, i.e., their capability to cognitively expand an...  View Details
Keywords: Innovation Adoption; Cognition; Framing; Emotional Resonance; Incumbent Inertia; Innovation and Invention; Technology Adoption; Organizational Change and Adaptation; Change Management
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  • 2021
  • Working Paper

Consumer Inertia and Market Power
By: Alexander MacKay and Marc Remer
We study the pricing decision of firms in the presence of consumer inertia. Inertia, which can arise from habit formation, brand loyalty, and switching costs, generates dynamic pricing incentives. These incentives mediate the impact of competition on market power in...  View Details
Keywords: Consumer Inertia; Market Power; Dynamic Competition; Demand Estimation; Consumer Behavior; Markets; Performance; Competition; Price
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  • 2019
  • Working Paper

Understanding and Overcoming Roadblocks to Environmental Sustainability. Past Roads and Future Prospects
By: Ann-Kristin Bergquist, Shawn A. Cole, John Ehrenfeld, Andrew A. King and Auden Schendler
This working paper examines key barriers to business sustainability discussed at a multidisciplinary conference held at the Harvard Business School in 2018. Drawing on perspectives from both the historical and business literatures, speakers debated the historical...  View Details
Keywords: Environmental Sustainability; Problems and Challenges; History; Governing Rules, Regulations, and Reforms; Opportunities
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  • 2022
  • Working Paper

Category Kings or Commoners? Marketing Shaping and Its Consequences in Nascent Categories
By: Rory McDonald
For a new market category to materialize, someone must actively bring it into existence. Yet it remains a mystery how entrepreneurs, whose resources are stretched thin, can accomplish this task. Prior research emphasizes the importance of market-shaping...  View Details
Keywords: Nascent Markets; New Categories; Innovation; Qualitative Methods; Emerging Markets; Strategy; Cultural Entrepreneurship; Innovation and Invention
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  • Article

The Perils of Proactive Churn Prevention Using Plan Recommendations: Evidence from a Field Experiment
By: Eva Ascarza, Raghuram Iyengar and Martin Schleicher
Facing the issue of increasing customer churn, many service firms have begun recommending pricing plans to their customers. One reason behind this type of retention campaign is that customers who subscribe to a plan suitable for them should be less likely to churn...  View Details
Keywords: Churn/retention; Field Experiment; Pricing; Tariff/plan Choice; Targeting; Customer Relationship Management; Price; Performance Effectiveness
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  • May 2014
  • Teaching Note

Gunfire at Sea (multi-media case)
By: Michael Tushman
This short video illustrates the challenges of leading innovation and change. This classic case (one of the oldest in the HBS system) retains its timeliness. The case describes how Lt. Sims develops a new form of gunfire at sea—continuous aim gunfire. While 3,000% more...  View Details
Keywords: Leading Change; National Security; Innovation Leadership; Public Administration Industry; United States
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  • May 2014
  • Case

Gunfire at Sea (multi-media case)
By: Michael Tushman and Tom Ryder
This short video illustrates the challenges of leading innovation and change. This classic case (one of the oldest in the HBS system) retains its timeliness. The case describes how Lt. Sims develops a new form of gunfire at sea—continuous aim gunfire. While 3,000% more...  View Details
Keywords: Organization Behavior; Change; Innovation; Organizational Change and Adaptation; Leading Change; Innovation Leadership; United States
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  • Article

Organizational Ambidexterity in Action: How Managers Explore and Exploit
By: Charles A. O'Reilly III and Michael L. Tushman
Dynamic capabilities have been proposed as a useful way to understand how organizations are able to adapt to changes in technology and markets. Organizational ambidexterity, the ability of senior managers to seize opportunities through the orchestration and integration...  View Details
Keywords: Decision Choices and Conditions; Management Practices and Processes; Resource Allocation; Organizational Change and Adaptation; Organizational Design; Opportunities
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  • Article

A Choice Prediction Competition for Market Entry Games: An Introduction
By: Ido Erev, Eyal Ert and Alvin E. Roth
A choice prediction competition is organized that focuses on decisions from experience in market entry games (http://sites.google.com/site/gpredcomp/ and http://www.mdpi.com/si/games/predict-behavior/). The competition is based on two experiments: An estimation...  View Details
Keywords: Experience and Expertise; Decision Choices and Conditions; Forecasting and Prediction; Learning; Market Entry and Exit; Game Theory; Behavior; Competition
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  • 2008
  • Working Paper

Wellsprings of Creation: How Perturbation Sustains Exploration in Mature Organizations
By: David James Brunner, Bradley R. Staats, Michael L. Tushman and David M. Upton
Organizations struggle to balance simultaneous imperatives to exploit and explore, yet theorists differ as to whether exploitation undermines or enhances exploration. The debate reflects a gap: the missing mechanism by which organizations break free of old routines and...  View Details
Keywords: Disruption; Innovation and Management; Business Processes; Opportunities; Creativity
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  • 2007
  • Chapter

Process Management, Technological Innovation, and Organizational Adaptation
By: Mary Benner and M. Tushman
The promise of process management practices is that as organizations focus on variance reduction and increased process control, they will drive both speed and organizational efficiency. However, this promise also accentuates the dark side of process management. These...  View Details
Keywords: Competency and Skills; Innovation and Management; Technological Innovation; Management Practices and Processes; Business Processes; Organizational Change and Adaptation; Organizational Design
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  • May 2007
  • Article

Corporate Financing Decisions When Investors Take the Path of Least Resistance
By: Malcolm Baker, Joshua Coval and Jeremy Stein
We explore the consequences for corporate financial policy that arise when investors exhibit inertial behavior. One implication of investor inertia is that, all else equal, a firm pursuing a strategy of equity-financed growth will prefer a stock-for-stock merger to...  View Details
Keywords: Behavior; Investment; Policy; Corporate Finance
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  • April 2006 (Revised April 2020)
  • Case

"The Case of Leadership Inertia"
By: Rosabeth Moss Kanter
The CEO of an international bank has raised the bank's performance by emphasizing a new culture of leadership that empowers people at all levels. Managers are rated both on their business results and their leadership—how they model new behaviors—but 12 senior managers...  View Details
Keywords: Organizational Culture; Leadership Style; Leading Change; Performance Evaluation; Employee Relationship Management
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  • Article

Inertia and Incentives: Bridging Organizational Economics and Organizational Competence
By: Rebecca M. Henderson and Sarah Kaplan
Keywords: Motivation and Incentives; Economics; Competency and Skills
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  • 2005
  • Other Unpublished Work

Corporate Financing Decisions When Investors Take the Path of Least Resistance
By: Malcolm Baker, Joshua Coval and Jeremy Stein
We explore the consequences for corporate financial policy that arise when investors exhibit inertial behavior. One implication of investor inertia is that, all else equal, a firm pursuing a strategy of equity-financed growth will prefer a stock-for-stock merger to...  View Details
Keywords: Decisions; Behavior; Stocks; Mergers and Acquisitions; Policy; Investment; Financial Institutions; Equity; Corporate Finance
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