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The Evolution of Collective Strategy Frames in High- and Low-Velocity Industries

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  • Sucheta Nadkarni

    (Department of Management, University of Nebraska, Lincoln, Lincoln, Nebraska 68588-0491)

  • V. K. Narayanan

    (Department of Management, Le Bow College of Business, Drexel University, 3141 Chestnut Street, Philadelphia, Pennsylvania 19104-2875)

Abstract

We argue that the collective assumptions of firms drive their actions and practices, and create the conditions of industry velocity. In our view, cognitive construction by firms is the primary driver of industry velocity. This is in contrast to the contingency views common in the literature, which hold that industry velocity plays a role by constraining and shaping firm strategies. Specifically, we suggest that firms develop unique assumptions, social networks, and feedback mechanisms; that these mechanisms perpetuate patterns of changes in collective beliefs and aggregate actions; and that these patterns in turn shape high- and low-velocity conditions. We examine these assertions by tracing the collective beliefs of three aircraft (low-velocity) and semiconductor (high-velocity) firms over a 20-year period (1977--1997). Our results suggest that the cognitive construction view of industry velocity is reasonable.

Suggested Citation

  • Sucheta Nadkarni & V. K. Narayanan, 2007. "The Evolution of Collective Strategy Frames in High- and Low-Velocity Industries," Organization Science, INFORMS, vol. 18(4), pages 688-710, August.
    • Handle: RePEc:inm:ororsc:v:18:y:2007:i:4:p:688-710
    DOI: 10.1287/orsc.1070.0268
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    7. Ernkvist, Mirko, 2015. "Velocity shifts in the creative economy: incumbent-entrant dynamics in the emergence of Japanese social games," Ratio Working Papers 267, The Ratio Institute.
    8. Wagner, Stefan & Goossen, Martin C., 2018. "Knowing me, knowing you: inventor mobility and the formation of technology-oriented alliances," IRTG 1792 Discussion Papers 2018-007, Humboldt University of Berlin, International Research Training Group 1792 "High Dimensional Nonstationary Time Series".
    9. Vecchiato, Riccardo, 2020. "Analogical reasoning, cognition, and the response to technological change: Lessons from mobile communication," Research Policy, Elsevier, vol. 49(5).
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