Embracing Bewilderment: Responding to Technological Disruption in Heterogeneous Market Environments

Abstract

In an age of rapid advances in technology, understanding how firms can respond to emergence of disruptive technologies is paramount for survival. While prior research on incumbents' responses to disruptive technologies assumes demand homogeneity, many firms, including multinational enterprises (MNEs), need to respond to technological disruption in heterogeneous markets. To address this lacuna in our understanding, we study how Ericsson tried to respond to the emergence of Cloud computing, a digital platform technology, across its operations in more than 170 countries. We reveal how incumbents need to match diverging customer demands with a complex innovation process, involving different approaches to experiments and trials, deployment strategy, and ecosystem development. We also find that the success of incumbents' responses depends on their capability for misalignment, which allows them to manage the inconsistencies in strategic direction, structure, and resource configuration associated with a complex innovation process.

Mutualism and the dynamics of new platform creation: A study of Cisco and fog computing

“…While creating a de novo platform is an uphill battle for any firm, it becomes particularly challenging for an established firm that has stakes in the existing platform ecosystem (Bennett, Seamans, & Zhu, 2015) as a client, partner, or complementor and does not want to undermine its position in that ecosystem. For instance, when an infrastructure leader such as Ericsson is aspiring to create a new digital platform (e.g., in transportation), it seeks legitimacy in the new ecosystem by providing distinct value but it does not want to undermine its legitimacy in its existing ecosystem where its key customers (e.g., a mobile operator) are targeting the same market (Khanagha, Ramezan Zadeh, Mihalache, & Volberda, 2018).…”

Past, ongoing, and future debate on the interplay between internationalization and digitalization

“…The second line of inquiry refers to the capabilities needed for internationalization in a context in which digital transformation is underway. Illustrative examples include the paper by Khanagha et al (2018) on the capabilities of internationalized firms that allow them to respond to disruptive technologies (Khanagha et al 2018), the paper by Mathews et al (2016) on how internet marketing capabilities contribute to international growth (Mathews et al 2016), or the paper by Mikalef and Pateli (2017) on how information-technology-enabled dynamic capabilities facilitate firms' agility, which in turn enhances the competitive performance of internationalized firms (Mikalef and Pateli 2017). In this group of papers, we also outline the focus on the role played by distance in the internationalization process of digital firms (Cheng and Yang 2017;Schu et al 2016;Schu and Morschett 2017) in the specific case of digitalization in multisided markets (Ojala et al 2018).…”

The external commercialisation of technology in emerging domains – the antecedents, consequences, and dimensions of desorptive capacity

“…However, a changing external environment can influence the conditions under which organisations can collaborate and they might therefore need to reassess or revise the processes and structures used for this. For organisations active in emerging technology domains, which are by nature dynamic and unstable, the ability to adapt has been argued to be particularly important (Volberda 1996;Khanagha et al 2018). Under such conditions, the notion of fitthe degree to which organisational practices involved in technology development are compatible with the technological base and requirements of potential adoptersneeds to be considered.…”