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Frequent incremental change, organizational size, and mortality in high-technology competition

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  • David G. McKendrick
  • James B. Wade

Abstract

While radical technological change is often characterized as hazardous, particularly to incumbents, incremental technological change has appeared to be immune from such risks. Little attention has been given to the possibility that under some circumstances incremental technological change can be quite risky. This article argues that there may be tradeoffs to high rates of incremental technological change. The costs are of two kinds: the organizational disruptions associated with frequent technological change and overestimating the advantages and receptiveness of the technological improvement. We argue that larger firms are better equipped than smaller firms to cope with these costs and will reap greater benefits from incremental changes. Using data on the population of worldwide floppy disk drive manufacturers, we find that frequent incremental technical changes decrease organizational mortality for large firms but increase it for smaller firms. We also find that large firms that frequently introduce incremental technological improvements are more potent competitors. This study helps us understand how frequent incremental change affects mortality as organizations grow. Advice to managers to engage in continuous incremental innovation can therefore be misguided because unless firms are large, they may incur costs that are so great that the firm actually "fails" by innovating frequently. Copyright 2010 The Author 2009. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

Suggested Citation

  • David G. McKendrick & James B. Wade, 2010. "Frequent incremental change, organizational size, and mortality in high-technology competition," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(3), pages 613-639, June.
  • Handle: RePEc:oup:indcch:v:19:y:2010:i:3:p:613-639
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    File URL: http://hdl.handle.net/10.1093/icc/dtp045
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    Cited by:

    1. Gavin M. Schwarz & Kuo-Pin Yang & Christine Chou & Yu-Jen Chiu, 2020. "A classification of structural inertia: Variations in structural response," Asia Pacific Journal of Management, Springer, vol. 37(1), pages 33-63, March.
    2. Wang, I. Kim & Seidle, Russell, 2020. "Ambition in innovation: Vicarious learning in the nascent electric scooter market in Taiwan," Technological Forecasting and Social Change, Elsevier, vol. 152(C).
    3. Christina Guenther & Simon Oertel & Peter Walgenbach, 2016. "It's all about Timing: Age–Dependent Consequences of Founder Exits and New Member Additions," Entrepreneurship Theory and Practice, , vol. 40(4), pages 843-865, July.
    4. Giachetti, Claudio & Mensah, Deborah Tiniwah, 2023. "Catching-up during technological windows of opportunity: An industry product categories perspective," Research Policy, Elsevier, vol. 52(2).
    5. Zofia Patora-Wysocka & Łukasz Sułkowski, 2019. "Sustainable Incremental Organizational Change—A Case of the Textile and Apparel Industry," Sustainability, MDPI, vol. 11(4), pages 1-27, February.
    6. J. Cameron Verhaal & Stanislav D. Dobrev & Lyda Bigelow, 2017. "When incremental is imperative: tactical innovation in the in-vitro fertilization industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 26(4), pages 709-726.

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