A LOCK-IN IN DEVELOPING SUB-OPTIMAL TECHNOLOGY AT THE INDUSTRY DISCONTINUITY: A CASE STUDY OF CUSTOMER ORIENTATION INDUCED ENTRAPMENT

摘要

Satisfying customer needs has always been a significant part of the research and development activities apart from purely concentrating on technology development. The cornerstones of current product development management thinking is that corporations need to recognize and satisfy customer needs to survive in a competitive marketplace (e.g. Day, 1994). In current literature, even though opposing arguments have been made, there exists a consensus that customer orientation in general leads to competitive advantages and better company performance (e.g. Hult & Ketchen, 2001; Slater & Narver, 1998). However, customer orientation may also result in technology development that drives towards technological lock-in (e.g. Cowan & Hulten, 1996). Especially at the early phases of technology evolution i.e. at the industry discontinuity the technology developers have very little guidance as what is the most likely winning technology at the marketplace. In the current literature there exists contradicting views on whether the industry conditions influence the performance results of customer orientation and further the theories of attributes that influence the relationship between customer orientation and a firm's technological lock-in at the industry discontinuity remain largely under-developed. In this paper we discuss technological lock-in in R&D of sub-optimal technologies as a result of customer orientation at the industry discontinuity. Our case study involves ATM (Asynchronous Transfer Mode) telecommunications technology development and selection process between end-user, operator and technology vendor in the mid-1990. At the time there were also rival IP- and routing - based technologies gaining popularity and at this industry discontinuity customer orientation of the technology developer directed its development investments in the sub-optimal ATM technology. Our case study findings provide evidence that customer orientation indeed may easily lead to failure in industry discontinuity conditions. We further demonstrate that the negative consequences of being customer oriented are due to path dependencies and its unpredictable sources. In addition we discuss managerial implications of the results in managing customer orientation and research and development activities in a highly intertwined supply chain.