Ad. Henderson, Firm strategy and age dependence: A contingent view of the liabilities of newness, adolescence, and obsolescence, ADM SCI QUA, 44(2), 1999, pp. 281-314
Unlike prior research on organizational age dependence, which has described
entire populations as exhibiting a liability of newness, adolescence, or o
bsolescence, this study adopts a contingent view by considering the interac
tive effects of age and technology strategy. Distinctions are drawn between
proprietary strategists, who use internally developed, firm-specific techn
ologies, and standards-based strategists, whose technologies conform with o
pen and publicly available specifications. Results of a study of the firms
in the U.S. personal computer industry show that technology strategy had tw
o important influences on aging. First, age dependence varied across strate
gies. For example, standards-based strategists exhibited a liability of ado
lescence in their failure rates, while proprietary strategists exhibited a
liability of obsolescence. Second, the joint effects of age and strategy pr
oduced long-term trade-offs across different performance outcomes. For inst
ance, rates of sales growth increased with age for proprietary strategists,
yet so did their risks of failure. Overall, this study suggests that multi
ple patterns of age dependence may simultaneously exist within a single pop
ulation.