Taylor A., Hefalt C.E.: Organizational Linkages for Surviving
Technological Change: Complementary Assets, Middle
Management, and Ambidexterity
“Give examples of successful technological transitions and unsuccessful ones! What have the authors
identified as sources of success in technological transitions? Also list possible causes of failure.”
Group 9: Matilda Akkola, Reetta Arokoski, Lauri Kokkila, Miikka Laitila
“The Big Picture”
Managerial
influences
Linking activities
Influences that affect the
willingness and ability of
middle managers to perform
linking activities
Communication and
coordination between and
within units
Technological
transition
Change from one
technology to another
Technological Transition in an Organization
= change from one technology to another technology
• New complementary assets
may be required
→ The organization needs
to keep up the old
technology simultaneously
while adopting the new
technology, this is called
ambidexterity
Organizational linkages
• Connect actors with different job responsibilities in an organization
• To succeed with a technological transition, interaction between different parts of
the organisation is required
•
Communication
•
Information flow
• Sometimes it might be better to keep the old and new assets separate from each
other
•
For example if the new technology is still under development
1
3 Types of Linkages
2
3
Picture // Taylor A., Hefalt C.E.: Organizational Linkages for Surviving Technological Change: Complementary Assets, Middle Management, and Ambidexterity
The Importance of Middle Management
• Work as linkages
• Big role in the implementation of transition
→ Middle managers behavior is critical for the transition success
•
Motivation
•
•
New technology might not be creating profit in the beginning,
which might look like “worse” results than when working with
the old technology
Structures
•
top management can create necessary linkages,
give instructions etc.
The Framework
Managerial influences
Linking activities
Organizational outcome
Structural influences
Organizational cognition
Core Technology to
complementary assets
links
Intercomplementary asset
links
Economic incentives
Intracomplementary asset
links
Social context
Technological transition
Organisational Structure and Cognition
STRUCTURAL INFLUENCES
ORGANIZATIONAL COGNITION
”Structures that exist to link together or coordinate
activities of interdependent subunits … including
rules and procedures, planning and control
systems, and specific coordinating units such as
product team or task forces” (Nadler, 1978)
”Shared assumptions and understanding within a firm
regarding how information is organized, how
knowledge is coded and the relationships between
different types of knowledge” (Walsh, 1995; DiMaggio,
1997)
•
•
Organisational setting affect (organisational
history) the shared assumptions.
•
Organisational cognition affects adoption of a
new technology.
•
Cognition can be altered with relentless
communication.
•
In turbulent environments, differentiated
and less centralized organisational
structures are adequate.
Organizational structure should facilitate to
utilize information across different units.
Economic and social rewarding
ECONOMIC INCENTIVES
SOCIAL CONTEXT
”Monetary rewards and salary-increasing
promotions to affect managerial behaviour.”
”Social rewards that prevail in organisational life
include group affiliation, emotional support, selfesteem, social status, and salient identity.”
•
Rewarding managers that integrate the
new technology and complementary assets
•
Under high uncertainty social status is a
primary and prevalent influence on
individual behaviour.
•
The challenge: most profits tend to come
from the old technology during the transition
+ cannibalizing the old technology
•
Top management can provide clarity to the
choice of the technology with social
rewarding.
•
May not be sufficient!
CASE EXAMPLE
IBM (Successful)
Before Computing Era (19391940)
Transition
(1940-1965)
After the transition
(1960)
NCR (Unsuccessful)
● Revenue: $39,5M
● Mechanical tabulation,
sales force management
and service
● 90% market share in
punchcard machines
● Revenue: $37,1M
● Mechanical tabulation,
sales force management
and service
● 88% market share in cash
registers
“Most successful transition into
the new technology”
(Taylor & Helfat, 2009)
“One of the greater errors in the
history of high technology”
(Flamm 1988)
● Revenue: $3 239M
● Revenue: $665M
Case IBM: Success factors of the transition
1. ECONOMIC
•
Leasing policy encouraged sales
managers to focus on new technology
2. STRUCTURAL
3. SOCIAL
•
Fast promotions and informal status based
on the knowledge of new technology
4. COGNITIVE
•
Cross-functional teams
•
•
Dedicated units with coordination
responsibility
Clear message and vision of top
management
•
Shared understanding of business focus
•
Responsible groups to make cognitive
change
Case NCR: Possible reasons for failure
1. ECONOMIC
•
Electronic (new) and mechanical (old)
sales were competing
•
Electronics units had limited amount of
salary promotions
2. STRUCTURAL
•
•
3. SOCIAL
•
Low formal and informal status for
individuals with electronics knowledge
4. COGNITIVE
Separate functions for new and old
technology
•
Mixed messages
•
Mechanical cognitive frame maintained
No rotation
•
Internal competition as a norm
SUMMARY
Managerial influences
1.
2.
3.
4.
Economic
Structural
Social
Cognitive
CASE EXAMPLE
A. IBM
a. Focus on new tech
b. Cross-functional teams
c. Clear message and
vision
B. NCR
a. Competing sales
b. No rotation
c. Mixed messages
Linking activities
3 types of asset links:
1. Core to complementary
2. Intercomplementary
3. Intracomplementary
Technological
transition
Change from one
technology to another