The adoption of radical manufacturing technologies and firm survival

Rajiv K. Sinha, Charles H. Noble

Research output: Contribution to journalArticle

30 Scopus citations

Abstract

The emergence of dramatically innovative, or radical, new manufacturing technologies can force pivotal and life-threatening decisions for industry competitors. These technologies can represent a huge cost for adopting firms, but may also offer the chance to achieve competitive advantage through superior manufacturing. While prior research has considered a range of production process decisions (e.g., JIT, mass customization) and outcomes for end-product technologies, little attention has been given to adoption decisions relative to core manufacturing technologies. This study examines an industry's adoption of major manufacturing technologies over several decades and demonstrates that two groups of contingencies related to adoption (e.g., timing and cumulative effects) have a significant impact on firm performance. Based on a sample of over 1,000 firms, the results provide insights into the effects of adoption timing and 'manufacturing technology bundles' on firm survival. We also find that adoption of manufacturing technologies prior to the inflection point of the estimated Bass diffusion curve for each technology leads to significant reduction in firm mortality. Thus, we are able to demonstrate the ability of the Bass model to predict the survival outcomes of firms facing manufacturing technology adoption decisions. The strategic implications of these pivotal decisions are considered..

Original languageEnglish (US)
Pages (from-to)943-962
Number of pages20
JournalStrategic Management Journal
Volume29
Issue number9
DOIs
StatePublished - Sep 1 2008

Keywords

  • Bass model
  • Diffusion of innovation
  • Hazard modeling
  • Technology adoption

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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