This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Leveraging Resistance to Change and the Skunk Works Model of Innovation

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Andrea Fosfuri (Universidad Carlos III de Madrid)
Thomas Rønde (Department of Economics, University of Copenhagen)
Abstract

We study a situation in which an R&D department promotes the introduction of an innovation that results in costly re-adjustments for a production department. In response, the production department tries to resist change by improving the existing technology. 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.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.econ.ku.dk/CIE/Discussion%20Papers/2007/2007-10.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number 2007-10.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length: 22 pages
Date of creation: Apr 2005
Date of revision: Jun 2007
Handle: RePEc:kud:kuieci:2007-10

Contact details of provider:
Postal: Studiestraede 6, DK-1455 Copenhagen K., Denmark
Phone: (0045) 35 32 30 54
Fax: +45 35 32 30 00
Web page: http://www.econ.ku.dk/cie/
More information through EDIRC

Order Information:
Email:

For technical questions regarding this item, or to correct its listing, contact: (Henriette Aabo Hansen).

Related research
Keywords: resistance to change innovation skunk works model contest

Find related papers by JEL classification:
L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executive Compensation
M54 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Labor Management
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Segal, Ilya, 1999. "Complexity and Renegotiation: A Foundation for Incomplete Contracts," Review of Economic Studies, Blackwell Publishing, vol. 66(1), pages 57-82, January. [Downloadable!] (restricted)
  2. Arye L. Hillman & John G. Riley, 1987. "Politically Contestable Rents and Transfers," UCLA Economics Working Papers 452, UCLA Department of Economics. [Downloadable!]
  3. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-64, October. [Downloadable!] (restricted)
    Other versions:
  4. Hart, Oliver & Moore, John, 1999. "Foundations of Incomplete Contracts," Review of Economic Studies, Blackwell Publishing, vol. 66(1), pages 115-38, January. [Downloadable!] (restricted)
    Other versions:
  5. Julio J. Rotemberg & Garth Saloner, 1995. "Overt Interfunctional Conflict (and its Reduction Through Business Strategy)," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 630-653, Winter. [Downloadable!] (restricted)
  6. Juan J. Ganuza & Esther Hauk, 2002. "Allocating Ideas: Horizontal Competition in Tournaments," Economics Working Papers 594, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
  7. Yeon-Koo Che & Ian Gale, 2003. "Optimal Design of Research Contests," American Economic Review, American Economic Association, vol. 93(3), pages 646-671, June. [Downloadable!] (restricted)
    Other versions:
  8. Konrad, Kai A., 2006. "Silent interests and all-pay auctions," International Journal of Industrial Organization, Elsevier, vol. 24(4), pages 701-713, July. [Downloadable!] (restricted)
    Other versions:
  9. Meyer, Margaret & Milgrom, Paul & Roberts, John, 1992. "Organizational Prospects, Influence Costs, and Ownership Changes," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 1(1), pages 9-35, Spring.
    Other versions:
  10. Roberto Burguet & Yeon-Koo Che, 2004. "Competitive Procurement with Corruption," RAND Journal of Economics, The RAND Corporation, vol. 35(1), pages 50-68, Spring.
  11. Maskin, Eric & Tirole, Jean, 1999. "Unforeseen Contingencies and Incomplete Contracts," Review of Economic Studies, Blackwell Publishing, vol. 66(1), pages 83-114, January. [Downloadable!] (restricted)
Full references

Statistics
Access and download statistics

Did you know? You too can volunteer with RePEc.

This page was last updated on 2008-8-27.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.