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Leveraging Resistance to Change and the Skunk Works Model of Innovation

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  • Andrea Fosfuri
  • Thomas Rønde

Abstract

We study a situation in which an R&D department promotes the introduction of an innovation that results in costly re-adjustments for production workers. In response, the production department tries to resist change by improving the existing technology. Resistance to change triggers competition between departments, which, in turn, spurs effort. We show that firms balancing the strengths of the two departments perform better. As a negative effect, resistance to change might distort the R&D department's effort away from radical innovations. The firm can solve this problem by implementing the so-called skunk works model of innovation where the R&D department is isolated from the rest of the organization. Several implications for managing resistance to change and for the optimal design of R&D activities are derived.

Suggested Citation

  • Andrea Fosfuri & Thomas Rønde, 2009. "Leveraging Resistance to Change and the Skunk Works Model of Innovation," Post-Print hal-00699208, HAL.
    • Handle: RePEc:hal:journl:hal-00699208
    DOI: 10.1016/j.jebo.2009.05.008
    Note: View the original document on HAL open archive server: https://hal.science/hal-00699208
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    Cited by:

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    4. Elert, Niklas & Stenkula, Mikael, 2020. "Intrapreneurship: Productive, Unproductive, and Destructive," Working Paper Series 1367, Research Institute of Industrial Economics.
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    7. Katya Antonova & Pavlina Ivanova, 2023. "How to Manage People in a Dynamic Environment – Innovative Approaches and Practice," HR and Technologies, Creative Space Association, issue 1, pages 25-44.
    8. Geiger, Susi & Finch, John, 2016. "Making incremental innovation tradable in industrial service settings," Journal of Business Research, Elsevier, vol. 69(7), pages 2463-2470.

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    More about this item

    Keywords

    L2; M12; M54; O31; O32; Resistance to change; Innovation; Skunk works model; Contest;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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