Corporate Vision and Rapid Technological Change: The Evolution of Market Structure

Corporate Vision and Rapid Technological Change: The Evolution of Market Structure

Corporate Vision and Rapid Technological Change: The Evolution of Market Structure

Corporate Vision and Rapid Technological Change: The Evolution of Market Structure

Synopsis

This book examines the role of strategic visions of future technological development in the evolution of market structure. This perspective offers a novel way of resolving some of the puzzles that have arisen in understanding the effects of rapid technology change and market structure. Strategic visions are seen to play a central role in corporate strategy, and industrial policy. The authors develop some theoretical tools to study these questions, and present 5 case studies of high technology industries, with conclusions for policy. The book will be of interest to industrial economists concerned with the effects of rapid technological change, and to those interested in technology management. It will also be of interest to economists and others working in high technology industries, and in government.

Excerpt

This chapter examines the idea of a vision of the future of a technology or a market. These visions are often widely articulated within the organisation and sometimes widely publicised outside, especially in markets with rapid technology change. Indeed an organisation’s vision could be said to be an essential part of its technology strategy.

The concern in this chapter is less with the ex post factual accuracy of these visions; rather we shall concentrate on how the visions are articulated and publicised, and what their effects are on the subsequent development of the technology and market structure.

What is important here is that the vision defines the range of technological and market outcomes for which the organisation can be prepared. If the actual path of the technology strays too far from a company’s vision, then that company may only be able to follow at a cost or time disadvantage. in such circumstances, and where most firms’ visions have turned out to be incorrect, small organic firms may be at an advantage. Conversely, when a large organisation finds that the vision is accurate, that organisation will be well placed to take advantage of economies of scale that arise from having an organisational structure designed to cater for that vision.

Visions can be updated, of course, but that is not unproblematic at the level of the organisation, as firms become accustomed to organisational routines (Nelson and Winter, 1982), and visions become embodied in corporate or organisational structure (Metcalfe and Boden, 1993). To change the vision, and in a manner that will allow the economies of scale to be exploited, requires a corresponding change in organisational routines and structure.

Of course, this inertia is not necessarily inefficient. On the contrary, when the vision is correct, the mechanistic structure is a source of economies of scale. When a technology settles down, so that its path can be foreseen, it is firms of this type that will have an advantage. the organic structure is more or less an irrelevance at that stage. But when the technology is at an early stage . . .

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