Market-driven organizational lock-in: A case study of a former first mover

ABSTRACT

The article addresses the question of how an innovative firm develops from being a first mover to an innovation laggard and whether this process can be reversed. Informed by the evolutionary perspective and path-dependence theory, the authors explore how a low-tech Norwegian firm in the oil and gas industry has lost its foothold as an innovator. They also employ the concept of organizational architecture as an analytical tool to investigate the agency for breaking organizational paths. Through participant observation and semi-structured interviews, their study revealed that the innovation activity of the case firm is in a state of lock-in following a path-dependence development. Product development in the firm is linked to incremental changes to existing products based on the feedback from the customer, and the process is characterized by knowledge exploitation rather than knowledge exploration. The article adds to the literature on path dependence by identifying how a strong market pull can be a driver for organizational path dependence and lock-in.

EDITORS:

• Arnt Fløysand
• Catriona Turner

KEYWORDS:

• innovation
• lock-in
• market pull
• organizational architecture
• path dependence

Notes

1. Paper by J. Sydow, G. Schreyögg and J. Koch titled ‘Organizational paths: Path dependence and beyond’, presented at the 21st EGOS Colloquium, 30 June–2 July 2005, in Berlin, Germany.

2. Access to information relating to the case firm was conditional upon its anonymity being preserved.

3. The name of the university college has been kept anonymous to ensure that also the case firm's identity remains anonymous.

4. All quotes from interviewees were translated by the authors of this article.