Hostname: page-component-586b7cd67f-tf8b9 Total loading time: 0 Render date: 2024-11-26T14:11:51.684Z Has data issue: false hasContentIssue false
  • English
  • Français

How History Shaped the Innovator's Dilemma

Published online by Cambridge University Press:  30 April 2021

Tom Nicholas
Get access Rights & Permissions [Opens in a new window]

Abstract

In 1993, four years prior to the publication of Clayton Christensen's highly influential book, The Innovator's Dilemma, the Business History Review published an article by Christensen titled “The Rigid Disk Drive Industry: A History of Commercial and Technological Turbulence.” The article relates the theory of disruptive innovation to Alfred D. Chandler's work on large vertically integrated enterprises. It was published during a pivotal era of scholarship on innovation, management practice, and industry evolution, much of which used the history of firms, industries, and technologies to build theory. I survey the impact and critiques of Christensen's research agenda, highlighting how it illustrates where the boundaries associated with the “lessons of history” should be drawn.

Keywords

Innovationdisruptive innovationClayton ChristensenHarvard Business Schoolrigid disk driveInnovator's Dilemma
Type
Research Article
Information
Business History Review , Volume 95 , Issue 1 , Spring 2021 , pp. 121 - 148
Copyright
Copyright © The President and Fellows of Harvard College 2021

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

I thank Walter Friedman, Geoff Jones, Josh Lerner, Rory McDonald, Richard Tedlow, Mary Tripsas, Mike Tushman, Derek Van Bever, and two anonymous referees for helpful comments and constructive criticisms. Funding was provided by the Division of Research and Faculty Development at Harvard Business School.

References

1 Tedlow, Richard, Andy Grove: The Life and Times of an American (New York, 2006), 396Google Scholar.

2 Isaacson, Walter, Steve Jobs (New York, 2011), 532Google Scholar.

3 See https://venturebeat.com/2014/12/02/marc-andreessen-teaches-startups-what-disruption-is-really-about-in-17-tweets/.

4 Christensen, Clayton M., “The Rigid Disk Drive Industry: A History of Commercial and Technological Turbulence,” Business History Review 67, no. 4 (1993): 531–88CrossRefGoogle Scholar.

5 In a 2014 interview with the Harvard Business Review he stated of his theory of disruption that people would “twist it” and then “use it to justify whatever they wanted to do in the first place.” Video interview by Adi Ignatius, June 27, 2014, www.youtube.com.

6 See, for example, James G. March, “Footnotes on Organizational Change,” Administrative Science Quarterly 26, no. 4 (1982): 563–97; Michael T. Hannan and John Freeman, “Structural Inertia and Organizational Change,” American Sociological Review 49, no. 2 (1984): 149–64; William J. Abernathy and Richard S. Rosenbloom, “Parallel Strategies in Development Projects,” Management Science 15, no. 10 (1969): B486–B505; Kathleen M. Eisenhardt and Behnam N. Tabrizi, “Accelerating Adaptive Processes: Product Innovation in the Global Computer Industry,” Administrative Science Quarterly 40, no. 1 (1995): 84–110; David J. Teece, “Firm Organization, Industrial Structure, and Technological Innovation,” Journal of Economic Behavior and Organization 31, no. 2 (1996): 193–224.

7 Rebecca M. Henderson and Kim B. Clark, “Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms,” Administrative Science Quarterly 35, no. 1 (1990): 9–30.

8 William J. Abernathy and Kim B. Clark, “Innovation: Mapping the Winds of Creative Destruction,” Research Policy 14, no. 1 (1985): 3–22.

9 The other types are “architectural,” “revolutionary,” and “regular.” Clark continued his research in this area. In a 1997 Harvard Business Review article, Carliss Baldwin and Kim Clark took a historical perspective, from railroads to the computer industry, to inform managers on how to navigate through a new wave of architectural changes following a trend toward building products through subsystems. See Baldwin and Clark, “Managing in the Age of Modularity,” Harvard Business Review, Sep./Oct. 1997, 84–93.

10 Edith T. Penrose, “The Growth of the Firm—A Case Study: The Hercules Powder Company,” Business History Review 34, no. 1 (1960): 1–23.

11 William A. Sahlman and Howard H. Stevenson, “Capital Market Myopia,” Journal of Business Venturing 1, no. 1 (1985): 7–30.

12 Christensen, “Rigid Disk Drive Industry,” 556.

13 Technically he uses the term “spinout,” as these firms were often founded by employees who had defected from incumbent firms. However, the terms “spinoff” and “spinout” are often used interchangeably in the literature. Some authors define a spinout as a new company formed by employees that has no direct link to the parent company, as distinguished from spinoffs, where the ties are loosely maintained. Because these instances are rarely fully separable, I use the term “spinoff” here, and later in the article, to refer to both types of entity.

14 Christensen, “Rigid Disk Drive Industry,” 545.

15 Christensen, “Rigid Disk Drive Industry,” 562.

16 Christensen, “Rigid Disk Drive Industry,” 584.

17 Clayton M. Christensen, The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail, reprint ed. (Boston, 2016), 28.

18 Clayton M. Christensen and Joseph L. Bower, “Customer Power, Strategic Investment, and the Failure of Leading Firms,” Strategic Management Journal 17, no. 2 (1996): 197–218.

19 Philip Anderson and Michael L. Tushman, “Technological Discontinuities and Dominant Designs: A Cyclical Model of Technological Change,” Administrative Science Quarterly 35, no. 4 (1990): 604–33.

20 James G. March, “Exploration and Exploitation in Organizational Learning,” Organization Science 2, no. 1 (1991): 71–87.

21 Clayton M. Christensen and Richard S. Rosenbloom, “Explaining the Attacker's Advantage: Technological Paradigms, Organizational Dynamics, and the Value Network,” Research Policy 24, no. 2 (1995): 233–57.

22 William J. Abernathy and James M. Utterback, “A Dynamic Model of Process and Product Innovation,” Omega 3, no. 6 (1975): 639–56.

23 Clayton M. Christensen, Fernando F. Suárez, and James M. Utterback, “Strategies for Survival in Fast-Changing Industries,” Management Science 44, no. 12 (1996): 219.

24 Steven Klepper and Kenneth L. Simons, “Innovation and Industry Shakeouts,” Business and Economic History 25, no. 1 (1996): 81–89.

25 Naomi R. Lamoreaux, Daniel M. G. Raff, and Peter Temin, “Beyond Markets and Hierarchies: Towards a New Synthesis of American Business History,” American Historical Review 108, no. 2 (2003): 404–33.

26 Leslie Hannah, “Marshall's ‘Trees’ and the Global ‘Forest’: Were ‘Giant Redwoods’ Different?,” in Learning by Doing in Markets, Firms, and Countries, ed. Naomi R. Lamoreaux, Daniel M. G. Raff and Peter Temin (Chicago, 1999), 253–94.

27 Louis Galambos, “Recasting the Organizational Synthesis: Structure and Process in the Twentieth and Twenty-First Centuries,” Business History Review 79, no. 1 (2005): 1–38.

28 Mila Davids and Geert Verbong, “Intraorganizational Alignment and Innovation Processes: Philips and Transistor Technology,” Business History Review 80, no. 4 (2006): 681.

29 Christopher McDonald, “Western Union's Failed Reinvention: The Role of Momentum in Resisting Strategic Change, 1965–1993,” Business History Review 86, no. 3 (2012): 527–49.

30 Donald N. Sull, “The Dynamics of Standing Still: Firestone Tire & Rubber and the Radial Revolution,” Business History Review 73, no. 3 (1999): 430–64.

31 James W. Cortada, IBM: The Rise and Fall and Reinvention of a Global Icon (Cambridge, MA, 2019), 599, 660.

32 Cortada, IBM, 419–500.

33 Jill Lepore, “The Disruption Machine: What the Gospel of Innovation Gets Wrong,” New Yorker, 16 June 2014, 34–35.

34 Drake Bennett, “Clayton Christensen Responds to New Yorker Takedown of ‘Disruptive Innovation,’” Bloomberg Business, 21 June 2014.

35 Andrew A. King and Baljir Baatartogtokh, “How Useful Is the Theory of Disruptive Innovation?” MIT Sloan Management Review 57, no. 1 (2015): 85.

36 Ashish Sood and Gerard J. Tellis, “Demystifying Disruption: A New Model for Understanding and Predicting Disruptive Technologies,” Marketing Science 30, no. 2 (2011): 352.

37 Erwin Danneels, “Disruptive Technology Reconsidered: A Critique and Research Agenda,” Journal of Product Innovation Management 21, no. 4 (2004): 246–58.

38 Andrew A. King and Christopher L. Tucci, “Incumbent Entry into New Market Niches: The Role of Experience and Managerial Choice in the Creation of Dynamic Capabilities,” Management Science 48, no. 2 (2002): 171–86.

39 See, for example, Ufuk Akcigit and William R. Kerr, “Growth through Heterogeneous Innovations,” Journal of Political Economy 126, no. 4 (2018): 1374–443.

40 Constantinos Markides, “Disruptive Innovation: In Need of Better Theory,” Journal of Product Innovation Management 23, no. 1 (2006): 19–25.

41 Joshua Gans, The Disruption Dilemma (Cambridge, MA, 2016).

42 Josh Lerner, “An Empirical Exploration of a Technology Race,” Rand Journal of Economics 28, no. 2 (1997): 228–47.

43 Jennifer F. Reinganum, “Uncertain Innovation and the Persistence of Monopoly,” American Economic Review 73, no. 1 (1983): 741–48. For the alternative argument, that a leading firm has an incentive to preemptively react to its rivals by investing more in R&D to improve its technology, see Richard Gilbert and David M. Newbery, “Preemptive Patenting and the Persistence of Monopoly,” American Economic Review 72, no. 3 (1982): 514–26.

44 Kenneth Arrow, “Economic Welfare and the Allocation of Resources to Invention,” in The Rate and Direction of Inventive Activity: Economic and Social Factors, ed. National Bureau Committee for Economic Research and the Committee on Economic Growth of the Social Science Research Councils (Princeton, 1962), 467–92; Jean Tirole, The Theory of Industrial Organization (Cambridge, MA, 1997).

45 Lerner, “Empirical Exploration,” 244.

46 Mitsuru Igami, “Estimating the Innovator's Dilemma: Structural Analysis of Creative Destruction in the Hard Disk Drive Industry, 1981–1998,” Journal of Political Economy 125, no. 3 (2017): 804.

47 Christensen, “Rigid Disk Drive Industry,” 568.

48 David J. Teece, Gary Pisano, and Amy Shuen, “Dynamic Capabilities and Strategic Management,” Strategic Management Journal 18, no. 7 (1997): 509–33.

49 Charles A. O'Reilly and Michael L. Tushman, “The Ambidextrous Organization,” Harvard Business Review, Apr. 2004, 74–81.

50 Mary Tripsas, “Unraveling the Process of Creative Destruction: Complementary Assets and Incumbent Survival in the Typesetter Industry,” Strategic Management Journal 18, no. S1 (1998): 119–42.

51 Clayton M. Christensen, Rory McDonald, Elizabeth J. Altman, and Jonathan E. Palmer, “Disruptive Innovation: An Intellectual History and Directions for Future Research,” Journal of Management Studies 55, no. 7 (2018): 1043–78.

52 Abernathy and Utterback, “Dynamic Model.”

53 David J. Teece, remarks on scholarship delivered upon acceptance of an honorary doctorate at Saint Petersburg State University, Saint Petersburg, Russia, 1 July 2002.

54 March, “Exploration and Exploitation.”

55 Jiyang Dong, James G. March, and Maciej Workiewicz, “On Organizing: An Interview with James G. March,” Journal of Organization Design 6 (2017): article 14.

56 Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York, 1980), 61.

57 Steven Klepper, “Entry, Exit, Growth, and Innovation over the Product Life Cycle,” American Economic Review 86, no. 3 (1996): 562–83. See also Steven Klepper and Kenneth L. Simons, “The Making of an Oligopoly: Firm Survival and Technological Change in the Evolution of the U.S. Tire Industry,” Journal of Political Economy 108, no. 4 (2000): 728–60.

58 Steven Klepper and Sally Sleeper, “Entry by Spinoffs,” Management Science 51, no. 8 (2005): 1291–306.

59 Rajshree Agarwal, Raj Echambadi, April M. Franco, and M. B. Sarkar, “Knowledge Transfer through Inheritance: Spinout Generation, Development and Survival,” Academy of Management Journal 47, no. 4 (2004): 501–22.

60 Joseph L. Bower and Clayton M. Christensen, “Disruptive Technologies: Catching the Wave,” Harvard Business Review, Jan./Feb. 1995, 43–53.

61 Lazonick, William, “The Innovative Firm,” in The Oxford Handbook of Innovation, ed. Fagerberg, Jan, Mowery, David, and Nelson, Richard (Oxford, 2006), 29–55Google Scholar.

62 Rosenbloom, Richard S. and Cusumano, Michael A., “Technological Pioneering and Competitive Advantage: The Birth of the VCR Industry,” Califomia Management Review 29, no. 4 (1987): 51–76CrossRefGoogle Scholar.

63 Klepper, Steven and Simons, Kenneth L., “Technological Extinctions of Industrial Firms: An Inquiry into their Nature and Causes,” Industrial and Corporate Change 6, no. 2 (1997): 379–460CrossRefGoogle Scholar.

64 Agarwal, Rajshree and Braguinsky, Serguey, “Industry Evolution and Entrepreneurship: Steven Klepper's Contributions to Industrial Organization, Strategy, Technological Change, and Entrepreneurship,” Strategic Entrepreneurship Journal 9, no. 4 (2015): 380–97CrossRefGoogle Scholar.

65 Karen Dillon, “Disruption 2020: An Interview with Clayton M. Christensen,” MIT Sloan Management Review, 4 Feb. 2020.

66 Iansiti, Marco and Khanna, Tarun, “Technological Evolution, System Architecture and the Obsolescence of Firm Capabilities,” Industrial and Corporate Change 4, no. 2 (1995): 333–61CrossRefGoogle Scholar.

67 Stone, Brad, The Everything Store: Jeff Bezos and the Age of Amazon (New York, 2013), 233–37Google Scholar.

68 Toni Mack, “Danger: Stealth Attack,” Forbes, 25 Jan. 1999.

69 Clayton M. Christensen, Michael E. Raynor, and Rory McDonald, “What Is Disruptive Innovation?,” Harvard Business Review, Dec. 2015, 11.