Organizational Structure, Risk Preferences and Timing of Technology Commercialization Decisions

Abstract

This study examines the effects of organizational structure and organizational risk on the entry timing of new technologies. Using quarterly product-level data on the world’s major mobile handset manufacturers for the period 2000–2009, we analyze how decentralization of technology commercialization decisions and the desired level of risk in the organization influence entry timing following a pioneering firm. We develop a theory according to which organizational structure affects entry timing through information processing and the way managers respond to organizational risk. We find that while greater firm risk speeds timing decisions, decentralization attenuates these effects. Our results indicate that the interaction between structure and risk is critical for understanding entry timing, and contributes to theories of risk and technology commercialization.