Research Interests: Schumpeter and Strategy

Presently, a rapid pace of technolgical, business and social changes begs the question in how far "creative destruction" by entrepreneurs favors the emeregnce of new companies versus established old and often large scale organizations.
The reason to connect strategy and Schumpeter is that industry development seems to involve a shift from entrepreneurial small companies to large scale bureaucratic ones, that produce innovations in a mechanized, routinized fashion. This shift in technological characteristics and organization size requires a switch between different tools and methods of strategy formulation, planning and implementation if companies go through the transition. Companies that are in different phases on this path or are faced with these different environments need different market entry (or defense) and innovation strategies. Companies that operate under different conditions need different tools and approaches that reflect their needs, obviously.

Entrepreneurs need different strategies than established companies. Likewise they have different sets of resources and capabilities. However both may posses what the other needs such that they could learn from one another.

Schumpeter has described the entrepreneurial type of company in his "Theory of Economic Development", while he the second one is depicted in "Capistalism, Socialism and Democracy". The later description is influenced by observations on industry concentration in the US running up to and large scale research projects during WWII.

In the 1980s, Foster and Kaplan's book on the Attacker's Advantage put small innovative companies back onto the screen, management literature-wise and academically, after increasing limits to growth had been experienced by established large companies in the 1960s and 1970s.

Nowadays, the creative and innovative virtues of young companies are widely acknowledged. There are calls for organizational giants to learn to dance (like these small companies). Successful change and rejuvenation programs such as GE's six sigma initiative have been implemented. However, the question is whether the emergence and importance of small companies, high speeds of technological change and associated fluid organizational forms are there to stay at relatively elevated levels - which also involve cost in terms of social strain and coordination cost. Alternatively, one can ask whether there will be a (relative) shift back to more routinized, bureaucratic, large-scale organization regimes, when todays start-ups grow into large organizations. These then explore the incremental possibilities of radical breakthrough innovations that have been discovered and developed until a certain point in time (which we might already have passed unwittingly). This issue is about the relative importance of radical and incremental, small and large scale organizations and fluid or stable patterns of development, not complete either-or scenarios.

These questions have important practical implications in terms of managing organizations and technologies and for strategy formulation and implementation.