chapter  12
30 Pages

Effects of Top Management Teams on the Organization of Innovation Through Alternative Types of Strategic Alliances

WithKathleen M. Eisenhardt, Claudia Bird Schoonhoven, Katherine Lyman

As Schumpeter (1942) described, successive waves of innovation continuously reshape the nature of competition among firms. Gales of creative destruction establish new market opportunities and demolish old ones, thereby shaping and transforming the competitive landscape. Empirical evidence confirms that innovation is extraordinarily critical for contemporary firms (Brown & Eisenhardt, 1995; Henderson & Cockburn, 1993; Jelinek & Schoonhoven, 1990). For example, a study (Eisenhardt & Tabrizi, 1995) of high-technology products demonstrates the importance of a rapid flow of innovative products to firm performance. The implication of this work is that the management of innovation is a central competence within firms, particularly among those operating in high-velocity environments where the pace of technical and competitive change is rapid, extreme, and unpredictable. Well-positioned and timed innovations can not only improve the competitive position of focal firms, but can also destroy the advantages of other firms (D’Aveni, 1994).