Title: Beyond resource allocation
Description: The challenge of innovation in response to external change lies at the heart of firm sustainability. While external shifts can take many forms, the particular problem of disruptive change has proved particularly problematic for incumbent firms. Previous research has described the challenge as one of resource commitment. But what happens when firms do commit sufficient resources? Does overcoming the problem of commitment imply effective incumbent response? Grounding the research in a series of case study experiments, I inductively build toward a model of firm response. There is evidence that the challenges of resource commitment described in the literature do exist and, uninterrupted, will act to starve the new business of the necessary resources for development. However, a strong sense of threat to the core organization can act as a catalyst to motivate resources that would otherwise be denied. Unfortunately, the same threat motivated mechanism that is required to trigger resources also leads to aggressive rigidity around the established market and product. This finding is supported by research in the threat rigidity literature. Finally, there are copying mechanisms that allow firms to de-couple the resource motivating benefits of threatened response from its rigidity producing behaviors. Separating the new business from the core organization allows managers the independence necessary to frame their efforts as an independent opportunity from the established business, relaxing the response rigidity and allowing the venture to innovate in a market that values the unique attributes of the new technology.