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Technological Expansion: the Interaction Between Diversification Strategy and Organizational Capability

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  • Rongxin Chen

Abstract

This study analyses technological expansion by examining the interaction between firms' diversification strategy and internal capabilities. We argue that when new technologies emerge, firms that were actively pursuing diversification do not have equal intention to adopt the technologies. For firms that possess internal capabilities similar or relevant to the new technologies, their diversification strategy facilitates technological expansion, otherwise diversification strategy negatively affects technological adoption. This study improves our understanding on technological expansion. Existing studies try to identify organizational characteristics that facilitate or impede firm entry into new technological fields. This research reveals that the same organizational characteristic (e.g. diversification strategy) can exhibit different effects on technological adoption. It facilitates technological expansion if firms' existing capabilities can be applied to new technologies, otherwise it impedes new technological adoption.

Suggested Citation

  • Rongxin Chen, 1996. "Technological Expansion: the Interaction Between Diversification Strategy and Organizational Capability," Journal of Management Studies, Wiley Blackwell, vol. 33(5), pages 649-666, September.
    • Handle: RePEc:bla:jomstd:v:33:y:1996:i:5:p:649-666
    DOI: 10.1111/j.1467-6486.1996.tb00813.x
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    Cited by:

    1. Coppola, Adele & Pascucci, Stefano, 2007. "The Role of Innovations in the Competitive Strategies of Italian Agri-Food Enterprises," 2007 1st Forum, February 15-17, 2007, Innsbruck, Austria 6584, International European Forum on System Dynamics and Innovation in Food Networks.
    2. Galende, Jesus & de la Fuente, Juan Manuel, 2003. "Internal factors determining a firm's innovative behaviour," Research Policy, Elsevier, vol. 32(5), pages 715-736, May.
    3. Lee, Jong-Seon & Kim, Nami & Bae, Zong-Tae, 2019. "The effects of patent litigation involving NPEs on firms’ patent strategies," Technological Forecasting and Social Change, Elsevier, vol. 149(C).
    4. Coronado, Daniel & Acosta, Manuel & Fernández, Ana, 2008. "Attitudes to innovation in peripheral economic regions," Research Policy, Elsevier, vol. 37(6-7), pages 1009-1021, July.
    5. Antinori, Camille M. & Rausser, Gordon C., 2000. "Vertical integration in Mexican community forestry," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt7kd903jn, Department of Agricultural & Resource Economics, UC Berkeley.
    6. Pascucci, Stefano & Royer, Annie & Bijman, Jos, 2011. "Should I Make or Should I Buy? Innovation Strategies and Governance Structures in the Italian Food Sector," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 2(2), pages 1-14, December.
    7. Forcadell, Francisco Javier, 2007. "Corporate diversification and R&D intensity dynamics," UC3M Working papers. Economics we078249, Universidad Carlos III de Madrid. Departamento de Economía.
    8. Alonso-Borrego, César & Forcadell, Francisco Javier, 2010. "Related diversification and R&D intensity dynamics," Research Policy, Elsevier, vol. 39(4), pages 537-548, May.
    9. Pascucci, Stefano & Royer, Annie & Bijman, Jos, 2012. "To Make or to Buy: Is this the Question?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(3), pages 1-20, September.
    10. Cho, Sam Yul & Kim, Sang Kyun, 2017. "Horizon problem and firm innovation: The influence of CEO career horizon, exploitation and exploration on breakthrough innovations," Research Policy, Elsevier, vol. 46(10), pages 1801-1809.
    11. Angel Sevil & Alfonso Cruz & Tomas Reyes & Roberto Vassolo, 2022. "When Being Large Is Not an Advantage: How Innovation Impacts the Sustainability of Firm Performance in Natural Resource Industries," Sustainability, MDPI, vol. 14(23), pages 1-20, December.

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