The Role of Dominant Design in a Product Developing Firm's Digital Innovation

By Hylving, Lena; Henfridsson, Ola et al. | JITTA : Journal of Information Technology Theory and Application, June 2012 | Go to article overview

The Role of Dominant Design in a Product Developing Firm's Digital Innovation


Hylving, Lena, Henfridsson, Ola, Selander, Lisen, JITTA : Journal of Information Technology Theory and Application


Abstract

Digital technology offers new options for product-developing firms. However, to reap the benefits of digital technology, firms need to handle the tensions between these options and the institutionalized practices established over long periods of incremental innovation. We report on a twenty-month intensive case study of a global automaker's efforts to innovate instrument clusters and explore the influencing role of established innovation practices. We develop a conceptual model for understanding how digital technology shapes, and is conditioned by, the dominant design of a product class. Our research contributes to the emerging literature of digital innovation and offers lessons learned for established firms dealing with the contradictory logics of digitized products.

Keywords: digital innovation, dominant design, intensive case study

INTRODUCTION

The integration of software in physical products is radically challenging the innovation processes of established firms (Lenfle and Midler 2009). On one hand, it multiplies the space of digital options available for augmenting existing offers and launching radically new ones (Jonsson et al. 2008; Yoo et al. 2010). On the other hand, seizing emergent digital options is difficult because established product innovation practices may not involve the necessary IT capabilities or organizational agility (Henfridsson et al. 2009; Sambamurthy et al. 2003).

In the innovation literature, significant attention has been paid to the tension between options provided by new technology and institutionalized practices established over long periods of incremental innovation (Anderson and Tushman 1990; Hargadon and Douglas 2001). In particular, the notion of dominant design has been coined to capture how innovation practices typically congeal over time as a template for product innovation within an industry (Murmann and Frenken 2006; Suarez 2004; Teece 1986). Dominant designs help firms organizing their innovation processes so that they capitalize on their intellectual, relational, and technical resources. Over time, this leads to a reciprocal relationship between the product design and the cross-organizational processes involved in carrying out product innovation. Baldwin and Clark (2000) refer to this relationship as the fundamental isomorphism between task structure and design structure.

As a response to recent calls for more IS research on the digitization of physical artifacts and infrastructures (Tilson et al. 2010; Yoo et al. 2010), we elaborate this relationship between the organization and product in the context of digital innovation. We refer to digital innovation as "the carrying out of new combinations of digital and physical components to produce novel products" (Yoo et al. 2010, p. 725). Viewing innovation as recombination (Arthur 2009; Schumpeter 1934) necessarily involves a focus on both the technology that is combined into a new product and the organizational configurations that allow such combination. While tight linkages between these entities are important to leverage a dominant design and existing capabilities, numerous studies have documented how such coupling lowers a firm's capability to respond to new technology (Anderson and Tushman 1990; Baldwin and Clark 2000; Eisenhardt et al. 2010; Murmann and Frenken 2006). Therefore, it can be suggested that integrating digital components into a tangible product represents a similar challenge for established firms (Yoo et al. 2010). While existing innovation processes embed an organizing logic fine-tuned for tangible artifacts, digital components introduce an alien innovation logic (Svahn et al. 2009) that requires new architectural knowledge (Andersson et al. 2008; Henderson and Clark 1990). As a result, a pressing issue is how to handle upcoming tensions and contradictions between established product innovation practices and new digital options.

The research question addressed in this paper is: How can we understand the role of dominant design in the digital innovation of product-developing firms? …

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