Could an incumbent firm develop a radically new medical technology with an old organizational capability?

Abstract

Our case study addresses how an incumbent firm from the pharmaceutical industry develops a radically new medical technology. We engage with the question as to whether such a radical innovation could be developed by relying on existent patterns of actions (existing organisational capability) or whether such novelty also requires doing innovation differently (new organisational capability). We argue that a sharp conceptual distiction between sustaining existent and developing new organizational capabilities is inadequate for describing organization of a radical innovation within an incubent firm. We propose that developing a radical innovation in a nascent innovation ecosystem requires multiple modifications across many systemic processes that constitute organisational capability for innovation. Hence, many small and interdependent innovations in organisational processes, practices and structures can make a big difference for developing radically new technology. Radical technological innovation goes hand in hand with management innovation. We argue that the nascent innovation ecosystem necessitates a careful balancing between legitimacy-seeking and advantage-seeking actions, which guides managers when adapting organisational capability for innovation. When complexity of an innovation ecosystem increases, broader changes across multiple systemic processes for innovation are required. A degree of continuity between existing and new organisational capabilities for innovation increases the internal acceptance of radical innovation.