Article Abstract:
This article examines the impact of downsizing on product innovation. It compares the experiences of product innovators in companies with a high degree of downsizing with those in companies with less downsizing. Higher downsizing hinders innovation by reducing people's ability to connect their product strategically to the firm. Specifically, downsizing breaks the network of relationships that innovators use to make these vital strategic connections. To overcome the negative consequences of downsizing on product innovation, managers should support innovation sponsors and champions, and retain "old timers" who constitute the network. They should also bolster the network by building more connections among departments, and between new and established businesses. Finally, they should incorporate innovation directly into their firm's strategy. (Reprinted by permission of the publisher.)
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Article Abstract:
We examined problems with sustained product innovation in 15 firms that averaged 96 years of age, 54,000 employees, and $9.4 billion in annual revenues. Findings reveal that the inability to connect new products with organizational resources, processes, and strategy thwarted innovation in these large, mature organizations and that innovators lacked the power to make these connections. We suggest that these organizations must reconfigure their systems of power to become capable of sustained innovation and offer recommendations for practice. (Reprinted by permission of the publisher.)
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Article Abstract:
We tested the effects of innovation and market complexity on firm performance. Generational technological change - a major advance within a technology regime - fosters the emergence of niches and local rivalry. Findings from the U.S. microcomputer industry between 1982 and 1991 suggest accelerated markets reward innovativeness that differentiates firms within a niche but not across niches. Changing niches confers a short-term penalty. Strong performers adopt new technology quickly, without changing niches. (Reprinted by permission of the publisher.)
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