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Creative Self-Destruction among Organizations: An Empirical Study of Technical Innovation and Organizational Failure in the American Automobile Industry, 1885-1981

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  • Carroll, Glenn R
  • Teo, Albert C

Abstract

A hotly debated question of organizational theory--especially evolutionary theories of organization--asks how inert are organizational structures. Answering the question requires analysis of not only organizational change but also of the consequences of change for organizational survival. This study examines one such organizational change--technical innovation--and its effects on the failure rates of American automobile producers from 1885 to 1981. Technical innovations are shown to generate primarily beneficial effects for the firms spawning them and primarily detrimental effects for competitor firms. However, analysis of certain organizational contexts--large organizations in particular--suggests that the risks of innovation may on occasion outweigh benefits. The findings imply that some theories of strategic management need rethinking. Copyright 1996 by Oxford University Press.

Suggested Citation

  • Carroll, Glenn R & Teo, Albert C, 1996. "Creative Self-Destruction among Organizations: An Empirical Study of Technical Innovation and Organizational Failure in the American Automobile Industry, 1885-1981," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 5(2), pages 619-644.
    • Handle: RePEc:oup:indcch:v:5:y:1996:i:2:p:619-44
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    Citations

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    Cited by:

    1. Carroll, Glenn R. & McKendrick, David & Harrison, J. Richard & Teo, Albert C. Y. & Barnett, William P., 2004. "Differentiation, Variation and Selection: Evolutionary Implications of Technical Change among the Worldwide Population of Hard Disk Drive Makers, 1965-1998," Research Papers 1915, Stanford University, Graduate School of Business.
    2. Wezel, Filippo Carlo & Lomi, Alessandro, 2002. "Different trajectories of industrial evolution : demographical turnover in the European motorcycle industry, 1885-1993," Research Report 02G37, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    3. Barnett, William P. & McKendrick, David, 2001. "The Organizational Evolution of Global Technological Competition," Research Papers 1682, Stanford University, Graduate School of Business.
    4. William P. Barnett & John Freeman, 2001. "Too Much of a Good Thing? Product Proliferation and Organizational Failure," Organization Science, INFORMS, vol. 12(5), pages 539-558, October.
    5. Geroski, P. A. & Mazzucato, M., 2001. "Modelling the dynamics of industry populations," International Journal of Industrial Organization, Elsevier, vol. 19(7), pages 1003-1022, July.
    6. Stanislav D. Dobrev & Tai-Young Kim & Glenn R. Carroll, 2003. "Shifting Gears, Shifting Niches: Organizational Inertia and Change in the Evolution of the U.S. Automobile Industry, 1885–1981," Organization Science, INFORMS, vol. 14(3), pages 264-282, June.
    7. Liang Chen & Pengxiang Zhang & Sali Li & Scott F. Turner, 2022. "Growing pains: The effect of generational product innovation on mobile games performance," Strategic Management Journal, Wiley Blackwell, vol. 43(4), pages 792-821, April.
    8. Dirk Martignoni & Thomas Keil & Markus Lang, 2020. "Focus in Searching Core–Periphery Structures," Organization Science, INFORMS, vol. 31(2), pages 266-286, March.
    9. repec:dgr:rugsom:02g37 is not listed on IDEAS
    10. Ioannis Ioannou, 2014. "When Do Spinouts Enhance Parent Firm Performance? Evidence from the U.S. Automobile Industry, 1890–1986," Organization Science, INFORMS, vol. 25(2), pages 529-551, April.
    11. William P. Barnett & Elizabeth G. Pontikes, 2008. "The Red Queen, Success Bias, and Organizational Inertia," Management Science, INFORMS, vol. 54(7), pages 1237-1251, July.

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