Leadership, Capabilities, and Technological Change: The Transformation of NCR in the Electronic Era

Scholars have advanced various theories to explain the common failure of market leaders in the face of revolutionary technological change. The history of NCR Corporation provides an instructive exception to that general pattern. This paper examines how NCR addressed the introduction of electronics to the field of business equipment and the advent of digital computers to widespread use. It describes NCR's entry into the computer industry in the 1950s and its commitment to evolutionary adaptation of its core products. It shows how persistence in old modes of practice led eventually to a crisis, which was resolved favorably when new management and fundamental organizational transformations reversed adverse trends and restored robust profitability. While established academic theories can help to explain aspects of the story, no single theoretical perspective is sufficient to explain the path of NCR's behavior. NCR survived, we conclude, because new leadership provided the impetus to actualize latent dynamic capabilities. Copyright © 2000 John Wiley & Sons, Ltd.