Capabilities, cognition, and inertia: Evidence from digital imaging

There is empirical evidence that established firms often have difficulty ad apting to radical technological change. Although prior work in the evolutio nary tradition emphasizes the inertial forces associated with the local nat ure of learning processes, little theoretical attention has been devoted in this tradition to understanding how managerial cognition affects the adapt ive intelligence of organizations. Through an in-depth case study of the re sponse of the Polaroid Corporation to the ongoing shift from analog to digi tal imaging, we expand upon this work by examining the relationship between managers' understanding of the world and the accumulation of organizationa l capabilities. The Polaroid story clearly illustrates the importance of ma nagerial cognitive representations in directing search processes in a new l earning environment, the evolutionary trajectory of organizational capabili ties, and ultimately processes of organizational adaptation. Copyright (C) 2000 John Wiley & Sons, Ltd.