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Managing In The Modular Age: Architectures, Networks, and Organizations by Richard N. Langlois, Arun Kumaraswamy, Raghu Garud

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Chapter 9. DYNAMICS OF ORGANIZATIONAL COMMUNITIES AND TECHNOLOGICAL BANDWAGONS: AN EMPIRICAL INVESTIGATION OF COMMUNITY EVOLUTION IN THE MICROPROCESSOR MARKET

James Wade

The market success of a technology or design arises not simply because of its efficiency or technological superiority, but from the level of organizational support that the technology attracts. Here, organizational support refers to all organizations that have a stake in a given design or technology. For instance, Garud and Kumaraswamy (1993) suggest that Sun Microsystem's success is largely due to its open systems strategy. By providing rivals easy access to its technology, Sun has been able to create a broad network of organizational support for its products, including microprocessor manufacturers, software producers, and producers of Sun clones. Organizational support increases customer confidence that the technology will survive, thus making customers more likely to adopt. In turn, as more customers adopt the technology, it becomes increasingly viable for other firms to copy the product and produce associated products, making potential customers even more likely to adopt the system (Katz and Shapiro, 1985). Increasing returns can lead to nonobvious outcomes in which newer and technologically superior designs are not adopted because of the support that the older system has garnered (David, 1985).

Most observers agree, for instance, that the Beta video cassette standard (sponsored by Sony) was superior to the VHS ...

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