Dominant designs, new firm survival and competitive dynamics in nascent market categories

Abstract

Technological change represents a key driver to shape new market categories and organizations. Characterized by a process of social technological variation, selection and retention, the growth of a nascent market category manifests changing competitive dynamics and the success (or failure) of entrepreneurial organizations, particularly in the face of dominant designs — technologies that achieve absolute dominance in specific market categories. In spite of accumulated research on dominant designs in diverse perspectives (e.g., economics, marketing and strategic management), the understanding of this dynamic process is yet incomplete. Building upon the punctuated equilibrium model of technological change, I address several research questions in regard to the interface between technological evolution, dominant designs, competitive dynamics, and institutional entrepreneurship. I conduct three separate yet interconnected studies in search of conceptual links among these areas of research.The first essay organizes the diverse but fragmented management literature on dominant designs based on the meta-theoretical scheme developed by Astley and Van de Ven (1983). The essay systematically reviews and assesses the “central perspective(s)” of over 89 relevant papers in influential journals in management, marketing and management related disciplines. Cumulative research streams on this topic have stayed within a single central perspective, the development of research across the four central perspectives has been uneven, and works incorporating multiple central perspectives have been limited in number. The essay argues for complex models that take into account the two boundary conditions — technological complexity and institutional environment — which have been implicit in the extant literature. The essay calls for more theoretically grounded works in collective action and strategic choice views, but the major opportunity lies in integrative works that will take this research one step closer to a comprehensive view of dominant designs.In the second essay, I posit a conceptual link between the punctuated equilibrium model of technology change and dynamics of entrepreneurship. I develop hypotheses addressing the relationships between competitive environment (including competitors), firm strategy (resources) and survival of entrepreneurial firms seeking the establishment of dominant designs. This effort to investigate the edge between technological change and entrepreneurship improves our understanding of the opportunities and threats facing new organizations in the technological field, as well as the strategies that innovative new ventures may deploy to enhance survival chance in turbulent industries.The third essay adds insights to the sustained work on the process models of dominant designs by empirically examining the association between technological evolution and competitive dynamics to define dominant designs. This essay discusses how the frequency and complexity of firms’ competitive actions surrounding dominant designs…