Innovation ecosystems and the pace of substitution: Re‐examining technology S‐curves

Why do some new technologies emerge and quickly supplant incumbent technologies while others take years or decades to take off? We explore this question by presenting a framework that considers both the focal competing technologies as well as the ecosystems in which they are embedded. Within our framework, each episode of technology transition is characterized by the ecosystem emergence challenge that confronts the new technology and the ecosystem extension opportunity that is available to the old technology. We identify four qualitatively distinct regimes with clear predictions for the pace of substitution. Evidence from 10 episodes of technology transitions in the semiconductor lithography equipment industry from 1972 to 2009 offers strong support for our framework. We discuss the implication of our approach for firm strategy. Copyright © 2015 John Wiley & Sons, Ltd.     

Relationship between perceptions of corporate social responsibility and organizational cynicism: the role of employee volunteering

This study explores the role of positive corporate social responsibility (CSR) perceptions of employees in reducing cynicism toward the organization. As employee involvement in CSR activities through volunteering could influence the perceptions of CSR among employees, the moderating impact of employee volunteering on the relationship between CSR perceptions and cynicism is also tested. Considering that managers and non-managers can have different perceptions of CSR and organizational realities, the relationship between CSR and organizational cynicism is compared among managerial and non-managerial staff working in large organizations. The analysis of 348 questionnaires collected from 191 managers and 157 non-managers showed that positive perceptions of CSR were negatively correlated with organizational cynicism for both managers and non-managers, with significantly stronger negative correlations among managers. Employee volunteering did not significantly moderate the relationship between CSR and organizational cynicism in both groups. The implications of these results on human resource management theory and practice are discussed.     

Linking corporate strategy to capital structure: diversification strategy,type and source of financing

This study examines the relationship between corporate strategy and capital structure, specifically the diversfication and financing strategies of a firm. The results show that equity financing is preferred for related diversification and unrelated diversification is associated with debt financing. Additionally, firms diversifying through acquisitions are more likely to use public sources of financing and those emphasizing internal development of new businesses depend primarily on private sources of financing. Using simultaneous equation estimation, we found a reciprocal relationship between a firm's financial strategy and its corporate diversification strategy. Mode and nature of diversification are also reciprocally interrelated. © 1998 John Wiley & Sons, Ltd.     

Value creation in innovation ecosystems: how the structure of technological interdependence affects firm performance in new technology generations

The success of an innovating firm often depends on the efforts of other innovators in its environment. How do the challenges faced by external innovators affect the focal firm's outcomes? To address this question we first characterize the external environment according to the structure of interdependence. We follow the flow of inputs and outputs in the ecosystem to distinguish between upstream components that are bundled by the focal firm, and downstream complements that are bundled by the firm's customers. We hypothesize that the effects of external innovation challenges depend not only on their magnitude, but also on their location in the ecosystem relative to the focal firm. We identify a key asymmetry that results from the location of challenges relative to a focal firm—greater upstream innovation challenges in components enhance the benefits that accrue to technology leaders, while greater downstream innovation challenges in complements erode these benefits. We further propose that the effectiveness of vertical integration as a strategy to manage ecosystem interdependence increases over the course of the technology life cycle. We explore these arguments in the context of the global semiconductor lithography equipment industry from its emergence in 1962 to 2005 across nine distinct technology generations. We find strong empirical support for our framework. Copyright © 2009 John Wiley & Sons, Ltd.     

Enumeration of Nash equilibria for two-player games

This paper describes algorithms for finding all Nash equilibria of a two-player game in strategic form. We present two algorithms that extend earlier work. Our presentation is self-contained, and explains the two methods in a unified framework using faces of best-response polyhedra. The first method lrsnash is based on the known vertex enumeration program lrs, for “lexicographic reverse search”. It enumerates the vertices of only one best-response polytope, and the vertices of the complementary faces that correspond to these vertices (if they are not empty) in the other polytope. The second method is a modification of the known EEE algorithm, for “enumeration of extreme equilibria”. We also describe a second, as yet not implemented, variant that is space efficient. We discuss details of implementations of lrsnash and EEE, and report on computational experiments that compare the two algorithms, which show that both have their strengths and weaknesses.     

Coordinating and competing in ecosystems: How organizational forms shape new technology investments

We consider firms in the context of their business ecosystems and explore how differences in the ways in which firms are organized with respect to complementary activities affect their decision to invest in new technologies. We argue that, in addition to creating differences in incentives and bureaucratic costs, firm‐complementor organizational form plays an important role in the firm's ability to coordinate accompanying changes in complementary activities so as to shape the benefits from investing early in the new technology. We test our predictions in the U.S. healthcare industry from 1995–2006. The study makes a strong case for viewing firms' competitive strategies in the context of their business ecosystems and for the existence of an important link between firms' coordination choices and their strategic investments. Copyright © 2012 John Wiley & Sons, Ltd.