Aging, Obsolescence, and Organizational Innovation
Abstract
This paper investigates the relationship between organizational aging and innovation processes to illuminate the dynamics of high-technology industries, as well to resolve debates in organizational theory about the effects of aging on organizational functioning. We test hypotheses based on two seemingly contradictory consequences of aging for organizational innovation: that aging is associated with increases in firms' rates of innovation and that the difficulties of keeping pace with incessant external developments causes firms' innovative outputs to become obsolete relative to the most current environmental demands. These seemingly contradictory outcomes are intimately related and reflect inherent tradeoffs in organizational learning and innovation processes. Multiple longitudinal analyses of the relationship between firm age and patenting behavior in the semiconductor and biotechnology industries lend support to these arguments.
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Especially when environmental dynamism is high and contextual change is fundamental and discontinuous, long-jump reorientations that require entirely novel solutions often prove more beneficial for a firm's competitive advantage than local adaptations from within the current set of available actions.
“Especially when environmental dynamism is high and contextual change is fundamental and discontinuous, long-jump reorientations that require entirely novel solutions often prove more beneficial for a firm's competitive advantage than local adaptations from within the current set of available actions”
From On the contingent value of dynamic capabilities for competitive advantage: The nonlinear moderating effect of environmental dynamism (2014) · cites this paper as Sørensen and Stuart, 2000
Given that a proven response to an identified problem exists in organizational memory, experimentation with alternatives becomes less attractive, crowding out explorative activities that would go beyond the beaten track.
“Given that a proven response to an identified problem exists in organizational memory, experimentation with alternatives becomes less attractive, crowding out explorative activities that would go beyond the beaten track (Levinthal, 1991;Levinthal and Myatt, 1994;Sørensen and Stuart, 2000).”
From On the contingent value of dynamic capabilities for competitive advantage: The nonlinear moderating effect of environmental dynamism (2014) · cites this paper as Sørensen and Stuart, 2000
Firms with a strong established new product development capability tend to develop a preference for pursuing incremental product improvements along existing trajectories rather than exploring radically different innovations.
“Firms with a strong established new product development capability tend to develop a preference for pursuing incremental product improvements along existing trajectories rather than exploring radically different innovations (Levinthal and Myatt, 1994;Sørensen and Stuart, 2000).”
From On the contingent value of dynamic capabilities for competitive advantage: The nonlinear moderating effect of environmental dynamism (2014) · cites this paper as Sørensen and Stuart, 2000
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- Authors
- Sørensen, J. B., & Stuart, T. E.
- Affiliations
- University of Chicago (US)
- Venue
- Administrative Science Quarterly
- Publisher
- JSTOR
- Published
- 2000-03
- Volume
- 45
- Issue
- 1
- Pages
- 81-112
- ISSN
- 0001-8392 (ISSN-L)
- 1930-3815
- OpenAlex
- W2149241253
- Cited by
- 1,862
- References
- 4
- Citations by year
- 2026: 47 · 2025: 68 · 2024: 74 · 2023: 96 · 2022: 93 · 2021: 92 · 2020: 105 · 2019: 104 · 2018: 87 · 2017: 85 · 2016: 95 · 2015: 109 · 2014: 118 · 2013: 104 · 2012: 88
- FWCI
- 43.13
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Administrative Science Quarterly (publishedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Firm Innovation and Growth
- Social Sciences › Business, Management and Accounting › Strategy and Management › Innovation and Knowledge Management
- Social Sciences › Business, Management and Accounting › Management of Technology and Innovation › Intellectual Property and Patents
- Keywords
- organizational aging, organizational innovation, obsolescence, high-tech industry, organizational learning, innovation rate, patenting behavior, semiconductor industry, biotechnology industry, firm age
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