Cognitive and Structural Antecedents of Innovation: A Large-Sample Study

Abstract

This paper studies how cognitive and structural antecedents affect adaptation to disruptive innovations. We do so by analyzing how video game firms adapted to the free-to-play business model around the period of disruption (2012–2015). Our data set (which contains 461 firms, collectively employing 83,157 individuals) allows us to characterize each firm’s organizational structure and each employee’s experience profile; it also captures the performance of firms under the existing and new technological regimes (that is, firms that do and do not adopt the disruptive innovation). We show that adoption, implementation under the existing regime, and implementation under the new regime are affected by cognitive and structural antecedents in different and often opposite ways. We also point out conditions under which cognitive and structural antecedents can compensate for each other. Overall, our study contributes to a better understanding of how firms should organize to face disruptive innovations.