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David G. McKendrick
Information Storage Industry Center
University of California at San Diego
La Jolla, CA 92093-0519
dmckendrick@ucsd.edu
William P. Barnett
Graduate School of Business
Stanford University
Stanford, CA 94305
fbarnett@gsb.stanford.edu
Click here for the paper abstract
Click here to download the paper (PDF format)
Report 2001-04 November, 2001
The Information Storage Industry Center
Graduate School of International Relations and Pacific Studies
University of California
9500 Gilman Drive
La Jolla, CA 92093-0519
http://isic.ucsd.edu/
University of California, San Diego
Funding for the Information Storage Industry Center is provided by the Alfred P. Sloan Foundation. To receive a hard copy of this document, send an e-mail with your address to the Publications Coordinator at isic@ucsd.edu.
Olga M. Khessina and Glenn R. Carroll
Abstract
Various industries are marked by rapid technological change and increasingly global competition. We explain how such developments provide a context for "Red Queen" competition, where organizational learning and competition accelerate each other over time. Arguing that competition stimulates organizational development, we predict that organizations experiencing a history of competition are less likely to fail. This implies that a strategy of technological differentiation generates short-run survival advantages, but backfires over time as isolated organizations suffer from increasing rates of failure. Also, we argue that the Red Queen magnifies differences in competitiveness among organizations due to underlying differences in their propensities to learn, so that technologically leading organizations are especially strong competitors. This strength, paradoxically, makes technological leadership a hazardous strategy because technological leaders must compete against stronger rivals. We find support for these conjectures in a study of the worldwide hard disk drive market, estimating organizational ecology models that allow for increasing global competition over time and that help to explain national differences in organizational survival rates. Click here to download the paper (PDF format)
* * Thanks for comments from Glenn Carroll and Dan Levinthal. We appreciate support from the Alfred P. Sloan Foundation (to McKendrick), and from the Stanford Computer Industry project and the Stanford Graduate School of Business (to Barnett).
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