The paper examines the response of the five largest American producers of automotive tires to a radical technological change, the introduction of radial tires.
Many theories attempt to explain firms' response to radical technological change.
The effects of new technologies on economic incentives and on established firm capabilities are the factors highlighted in existing theory. The tire producers invested heavily in radial technology despite the expected destruction of manufacturing competencies and the prospect of poor financial returns. This paper suggests that an additional factor, managerial commitments, can also play an important role in shaping firms' response to disruptive technology.