Chapter 3. The Power of Lock-in
“Lock-in” is the foundation for Schumpeter’s claim that businesses cannot transition to new technologies and business models like markets can.
Why is it that even after a business knows it is well along in its life cycle and realizes it is not doing well, managers continue undertaking actions that do not effectively address known problems? What drives management to keep doing what it always did?
Businesses Use Lock-in to Implement Their Success Formulas
Lock-in comes from economics and means committing to a behavior, structural process, or cost element to achieve a perceived benefit. For example, if a construction company always uses the same concrete supplier, the company knows the type of concrete it will receive, ...