38: Discovered but Unused: When Organizations Hinder Their Own Innovations (Sungyong Chang)

Prerecorded session

https://video.wixstatic.com/video/ec1421_ab389d7cc15d43059ce444f71ca81594/720p/mp4/file.mp4

Live session

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Overview

The lecture flips the usual question of innovation research. Rather than asking how firms create new things, I ask why firms so often fail to use the valuable things they have already discovered. Across three empirical cases (artists in the music industry, ideas at Samsung, oncology drugs), the same pattern emerges: the organization that discovers a valuable innovation often hinders its own use of that innovation. I read this through the Behavioral Theory of the Firm and argue that aspirations, informal networks across subgroups, and slack each operate as an internal obstacle between discovery and use.

Required readings

Chang, S. (2023). Two Faces of Decomposability in Organizational Search: Evidence from Singles vs. Albums in the Music Industry 1995-2015. Strategic Management Journal, 44(7): 1616-1652.

Chang, S., Lee, J., and Song, J. (2023). Giant Cluster Formation and the Integrating Role of Bridges in Social Diffusion. Strategic Management Journal, 44(12): 2950-2985.

Chang, S., and Kang, S. (Working Paper). When do firms provide early access to investigational drugs? Evidence from expanded access in the oncology drug market 1990-2020. Available at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4885005

Discussion questions

Q1. (Theoretical) The lecture identifies three behavioral mechanisms that hinder the use of discovered innovations: aspiration adjustment, network fragmentation, and slack scarcity. What other mechanisms, whether from the behavioral tradition or elsewhere, might hinder the use of discovered innovations, and at which stage of the discovery-to-use process would each operate?

Q2. (Empirical) For one of the additional mechanisms you nominated in question 1, can you think of an empirical setting in which to test it, and how would you set up such a test?

Group members

Faculty advisors

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Participants

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