Taylor A., Hefalt C.E.: Organizational Linkages for Surviving Technological Change: Complementary Assets, Middle Management, and Ambidexterity “Give examples of successful technological transitions and unsuccessful ones! What have the authors identified as sources of success in technological transitions? Also list possible causes of failure.” Group 9: Matilda Akkola, Reetta Arokoski, Lauri Kokkila, Miikka Laitila

“The Big Picture” Managerial influences Influences that affect the willingness and ability of middle managers to perform linking activities Linking activities Communication and coordination between and within units Technological transition Change from one technology to another

Technological Transition in an Organization New complementary assets may be required → The organization needs to keep up the old technology simultaneously while adopting the new technology, this is called ambidexterity = change from one technology to another technology

Organizational linkages Connect actors with different job responsibilities in an organization To succeed with a technological transition, interaction between different parts of the organisation is required Communication Information flow Sometimes it might be better to keep the old and new assets separate from each other For example if the new technology is still under development

3 Types of Linkages Picture // Taylor A., Hefalt C.E.: Organizational Linkages for Surviving Technological Change: Complementary Assets, Middle Management, and Ambidexterity

Work as linkages Big role in the implementation of transition → Middle managers behavior is critical for the transition success Motivation New technology might not be creating profit in the beginning, which might look like “worse” results than when working with the old technology Structures top management can create necessary linkages, give instructions etc. The Importance of Middle Management

The Framework Managerial influences Economic incentives Structural influences Social context Organizational cognition Core Technology to complementary assets links Intercomplementary asset links Intracomplementary asset links Technological transition Linking activitiesOrganizational outcome

STRUCTURAL INFLUENCES ”Structures that exist to link together or coordinate activities of interdependent subunits … including rules and procedures, planning and control systems, and specific coordinating units such as product team or task forces” (Nadler, 1978) In turbulent environments, differentiated and less centralized organisational structures are adequate. Organizational structure should facilitate to utilize information across different units. Organisational Structure and Cognition ORGANIZATIONAL COGNITION ”Shared assumptions and understanding within a firm regarding how information is organized, how knowledge is coded and the relationships between different types of knowledge” (Walsh, 1995; DiMaggio, 1997) Organisational setting affect (organisational history) the shared assumptions. Organisational cognition affects adoption of a new technology. Cognition can be altered with relentless communication.

Economic and social rewarding ECONOMIC INCENTIVES ”Monetary rewards and salary-increasing promotions to affect managerial behaviour.” Rewarding managers that integrate the new technology and complementary assets The challenge: most profits tend to come from the old technology during the transition + cannibalizing the old technology May not be sufficient! SOCIAL CONTEXT ”Social rewards that prevail in organisational life include group affiliation, emotional support, self- esteem, social status, and salient identity.” Under high uncertainty social status is a primary and prevalent influence on individual behaviour. Top management can provide clarity to the choice of the technology with social rewarding.

CASE EXAMPLE IBM (Successful)NCR (Unsuccessful) Before Computing Era ( ) ●Revenue: $39,5M ●Mechanical tabulation, sales force management and service ●90% market share in punchcard machines ●Revenue: $37,1M ●Mechanical tabulation, sales force management and service ●88% market share in cash registers Transition ( ) “Most successful transition into the new technology” (Taylor & Helfat, 2009) “One of the greater errors in the history of high technology” (Flamm 1988) After the transition (1960) ●Revenue: $3 239M●Revenue: $665M

1. ECONOMIC Leasing policy encouraged sales managers to focus on new technology 2. STRUCTURAL Cross-functional teams Dedicated units with coordination responsibility 3. SOCIAL Fast promotions and informal status based on the knowledge of new technology 4. COGNITIVE Clear message and vision of top management Shared understanding of business focus Responsible groups to make cognitive change Case IBM: Success factors of the transition

Case NCR: Possible reasons for failure 1. ECONOMIC Electronic (new) and mechanical (old) sales were competing Electronics units had limited amount of salary promotions 2. STRUCTURAL Separate functions for new and old technology No rotation 3. SOCIAL Low formal and informal status for individuals with electronics knowledge 4. COGNITIVE Mixed messages Mechanical cognitive frame maintained Internal competition as a norm

SUMMARY Managerial influences 1.Economic 2.Structural 3.Social 4.Cognitive CASE EXAMPLE A.IBM a.Focus on new tech b.Cross-functional teams c.Clear message and vision B.NCR a.Competing sales b.No rotation c.Mixed messages Linking activities 3 types of asset links: 1.Core to complementary 2.Intercomplementary 3.Intracomplementary Technological transition Change from one technology to another