Organizing Innovation within Incumbent Firms: Structure Enabling Strategic Autonomy

In this paper we will discuss how large established firms can be effective in organizing innovation alongside their current business. We examine the trajectory of an incumbent firm in the telecommunication industry – Alcatel – which has been successful in exploring and exploiting the promises of broadband access technology (ADSL). Our findings reveal the effectiveness of a hybrid organizational structure, characterized by semi-permeability, which allows the simultaneous presence of entrepreneurial autonomy and the enactment of technological complementarities. Adopting such a structure seems especially relevant in high-velocity environments where technical configurations combine new components and functionality with existing technological infrastructures. Our analysis strongly suggests the relevance of combining insights stemming from the fields of strategic management, entrepreneurship and organizational design theory to arrive at more comprehensive accounts of the complex and challenging processes of reconciliation that incumbent firms face within dynamic environments.