The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail

by Clayton M. Christensen

five fundamental principles of organizational nature that managers in the successful firms consistently recognized and harnessed. The firms that lost their battles with disruptive technologies chose to ignore or fight them. These principles are: Resource dependence: Customers effectively control the patterns of resource allocation in well-run companies. Small markets don’t solve the growth needs of large companies. The ultimate uses or applications for disruptive technologies are unknowable in advance. Failure is an intrinsic step toward success. Organizations have capabilities that exist independently of the capabilities of the people who work within them. Organizations’ capabilities reside in their processes and their values—and the very processes and values that constitute their core capabilities within the current business model also define their disabilities when confronted with disruption. Technology supply may not equal market demand. The attributes that make disruptive technologies unattractive in established markets often are the very ones that constitute their greatest value in emerging markets.