Read the summary and the most important questions on Entrepreneurship in the Large Corporation: A Longitudinal Study of How Established Firms Create Breakthrough Inventions

• 1 Introduction

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• In which two distinctions can radical or breakthrough inventions be defined?

  1. Inventions that are radical from a technological perspective 
     
  2. Inventions that are radical from a user or market perspective
     

• Why do large firms fail to create breakthrough inventions?

  
  

  1. Lack of motivation
     
  2. Lack of ability 
     

• Whereon is a firm's survival and success based?

  On its ability to meet at least three sets of objectives:
  

  1. It must satisfy some market demand or needs
     
  2. In a competitive environment, to succeed a firm must attempt to develop a competitive advantage over other firms seeking to offer product to the same markets
     
  3. A firm needs to establish an internally consistent set of throughput processes that ensure that the above output and competitive advantage demands are met. 
     

• What is the dark side of each performance enhancing attributes that enable a corporation to survive?

  
  

  • The impetus to provide reliable solutions focuses a firm’s attention to mature technologies (trap 2).
    
  • The impetus to develop a competitive advantage favors the retention of routines that lead to distinctive competences (trap 1).
    
  • The first two objectives lead to structures that favors searching for proximate (=close to) domains of technology (trap 3).
    

• 1.1 The familiarity trap and novel technologies

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• What forms the cycle of experience and competence?

  Experience with a technology leads to enhanced absorptive capacity and increased competence with the technology. Greater competence with a technology fosters increased usage, and hence increases experience with the technology.

• What is a familiary trap?

  The increased ease of learning and problem solving in specific directions made possible by enhanced absorptive capacity and competence makes the adoption of alternate directions of development less attractive and potentially less rewarding. Since developing deeper expertise with familiar knowledge bases yields more immediate and likely returns, it is preferred to investing in unfamiliar technologies. Unfortunately, this path dependence increases the risks of the organization falling into a familiarity trap. 

• What are the benefits of exploring nover technologies?

  
  Provides firms with heterogeneity in problem solving arsenal
  
  Existing cognitive structures and cause-effect relationships are challenged.

• 1.2 The maturity trap and emerging technologies

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• What are the benefits of mature technologies?

  1. Mature technologies are usually well understood and offer greater reliability relative to more recently developed and less tested approaches. 
     
  2. They are likely to have highly developed value networks and organizational and extra-organizational assets that are co-specialized with these technologies. 
     
  3. They are well known in the industry and offer the benefits of legitimacy; even if new technologies hold the promise of superior performance, convincing customers to trust unproven technologies may be difficult and expensive. 
     

• What is the maturity trap?

  The failure to explore emerging technologies may, however, lead the firm into a maturity trap.

• What are the benefits of the maturity trap?

  1. As a technology matures, fewer major problems remain to be solved
     
  2. 
     The opportunity to make fundamental breakthroughs is higher in emerging technologies.
  3. 
     Adds a new set of knowledge elements to the existing universe of knowledge elements.