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Leveraging resistance to change and the skunk works model of innovation

[journal article]

Fosfuri, Andrea; Rønde, Thomas

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Abstract We study a situation in which an R&D department promotes the introduction of an innovation that results in costly re-adjustments for production workers. In response, the production department tries to resist change by improving the existing technology. Resistance to change triggers competition between departments, which, in turn, spurs effort. We show that firms balancing the strengths of the two departments perform better. As a negative effect, resistance to change might distort the R&D department's effort away from radical innovations. The firm can solve this problem by implementing the so-called skunk works model of innovation where the R&D department is isolated from the rest of the organization. Several implications for managing resistance to change and for the optimal design of R&D activities are derived.
Keywords innovation
Classification Management Science
Free Keywords Resistance to change; Skunk works model; Contest
Document language English
Publication Year 2009
Page/Pages p. 274-289
Journal Journal of Economic Behavior & Organization, 72 (2009) 1
DOI http://dx.doi.org/10.1016/j.jebo.2009.05.008
Status Postprint; peer reviewed
Licence PEER Licence Agreement (applicable only to documents from PEER project)