Persisting under pressure: How organizations coordinate their response to disruptive innovation

Abstract

While significant progress has been made in understanding how individual organizations respond to disruptive innovation, far less is known about the collective dynamics bringing such individual responses together: How do organizations coordinate their response to disruptive innovation? This paper addresses this gap by examining the evolution of strategic alignment among diamond organizations in response to lab-grown stones. Through a longitudinal study, we identify the mechanisms and transitions that drive response coordination across four main phases: (i) self-centred coordination - where firms prioritize self-interest in their disruptive response; (ii) conformist coordination - where collective purpose takes precedence; (iii) stratified coordination - where firms align around a central leader; and (iv) harmonized coordination - where firms balance individual strategies with the norms and expectations of the broader group. By mapping response to disruptive innovation as an evolving social process, this paper highlights the interactive dynamics underscoring incumbents' strategic choices – showing how ongoing interorganizational interactions, rather than deliberate analysis, often drive how organizations react to the challenges and opportunities posed by disruptive innovation.