Research Interests: innovation, technology management and strategy, business ecosystems, firm boundaries, industry evolution
Rahul Kapoor is a Professor of Management at the Wharton School of the University of Pennsylvania. In his research, Rahul focuses on the management of industry disruption and ecosystems related to new technologies and business models. He has published numerous articles on these topics in leading peer-reviewed and practitioner journals from a perspective of both established firms and start-ups. He is currently the Chair of the Technology and Innovation Management Division of the Academy of Management. At Wharton, Rahul teaches undergraduate, MBA, Executive MBA, and PhD courses on technology and innovation strategy. He is also an active contributor to Wharton’s Executive Education, teaching in both the customized and open enrollment programs. He has received several awards for his research and teaching including the inaugural Academy of Management (Technology and Innovation Management Division) Emerging Scholar Award. He has also advised and consulted for several firms with respect to launching new innovation initiatives. Prior to joining academia, he spent over 7 years in the high-tech industry where he worked for Texas Instruments and was involved with two startups, one of which he co-founded.
Natalya Vinokurova and Rahul Kapoor (2020), Converting Inventions into Innovations in Large Firms: How Inventors at Xerox Navigated the Innovation Process to Commercialize Their Ideas, Strategic Management Journal.
Abstract: How can inventors in large firms navigate their organizations’ innovation processes to commercialize breakthrough inventions? Using historical case studies of three breakthrough inventions at Xerox—office workstations, personal computers, and laser printers, we illustrate how inventors navigated multiple evaluation criteria across different organizational units to attract resources towards inventions. These criteria stemmed from Xerox's first successful breakthrough invention, the 914 copier and the specific objectives of the organizational units. We highlight two approaches deployed by Xerox inventors—searching across the organization for more favorable evaluation criteria and shaping the evaluation criteria to help attract resources. While searching leveraged the heterogeneity of evaluation criteria across the different organizational units, shaping required the presence of evaluative uncertainty with respect to the appropriate criteria for evaluating breakthrough inventions.
Description: Best Paper Proceedings, Academy of Management Annual Meeting, 2020.
Martin Ganco, Rahul Kapoor, Gwendolyn K. Lee (2020), From Rugged Landscapes to Rugged Ecosystems: Structure of Interdependencies and Firms’ Innovative Search, Academy of Management Review.
Abstract: Managers and academics are increasingly viewing innovating firms as being interdependent on other firms in the business ecosystem. But how might the structure of interdependencies shape the innovativeness of firms in an ecosystem? To answer this question, we develop a search-based theory that considers a multiplicity of upstream and downstream firms simultaneously innovating in an ecosystem, contributing to and searching for novel combinations of components. We conceptualize two types of structural interdependencies between firms in an ecosystem based on the structure of technological interactions between components and the structure of input–output flows between stages of production. Using a simulation model, we show that downstream firms can benefit from mixing and matching components produced upstream, whereas upstream firms can benefit from optimizing their search more narrowly around their focal components. Importantly, these benefits that accrue to upstream and downstream firms are significantly impacted by the structure of technological and flow interdependencies in the ecosystem.
Rahul Kapoor and Thomas Klueter (2020), Progress and Setbacks: The Two Faces of Technology Emergence, Research Policy, 49 (1).
John C. Eklund and Rahul Kapoor (2019), Pursuing the New while Sustaining the Current: Incumbent Strategies and Firm Value during the Nascent Period of Industry Change, Organization Science, 30 (2), pp. 383-404.
Abstract: This study considers the nascent period of industry change when the prevalent business model is being threatened by a new model, but there is significant uncertainty with respect to whether and when the new model will dominate. We focus on the challenge of incumbents pursuing both models simultaneously during the nascent period, and the implications on their firms’ valuations. Our theory is premised on the adjustment costs incurred by incumbents associated with the sharing of resources across business models and the conflict between managers vying for limited resources. While firms’ assets and competitive environments are key drivers of their value, we argue that they also impact adjustment costs. Evidence from the U.S. electric utility industry, which is undergoing a change from a centralized to a decentralized model, offers strong support for our arguments. The greater the level of incumbents’ assets that are specific to the existing model, and the greater the level of competition that they face, the lower are their firms’ valuations when investing in the new model relative to when investing in the existing model. Hence, ironically, those incumbents potentially most threatened by the change seem to be least rewarded for their efforts to renew themselves. However, pursuing the new model via alliances can help mitigate adjustment costs. The study uncovers the challenges that incumbents face as they pursue the new model in tandem with the existing dominant model, and helps explain why some incumbents may successfully navigate the changing industry landscape while others may stumble.
Description: Best Paper Proceedings, Academy of Management Annual Meeting, 2016.
Rahul Kapoor (2018), Ecosystems: Broadening the Locus of Value Creation, Journal of Organization Design.
Abstract: The objective of this article is to introduce readers to the emerging research stream on business ecosystems, explicating the novelty and the usefulness of ecosystem-based theorizing, and hoping to pave the way for an influential but cumulative body of knowledge. The key tenets within an ecosystem-based perspective are outlined, and used to contrast this emerging perspective from other established perspectives of value chains, supply chains, alliances and networks. The article concludes by discussing the research approaches that can be employed to study ecosystems and the implications for organization design.
Rahul Kapoor, Thomas Klueter, James M. Wilson (2017), Challenges in the Gene Therapy Commercial Ecosystem, Nature Biotechnology, 35 (9), pp. 813-815.
Abstract: The emergence of biotech has resulted in a rich ecosystem of different types of actors contributing to the technological advance. Despite the enormous promise of biotech-based therapeutics, there is substantial uncertainty regarding when scientific discoveries will emerge, whether these discoveries will achieve clinical success, and how commercialized treatments will create value. Here we shed light on two contrasting episodes of technological advance, in monoclonal antibodies (mAbs) and gene therapy, and the roles played by different types of institutional actors from the 1990s to today. Both technologies created significant opportunities within the biotech ecosystem. But mAbs have followed a smooth trajectory of progress, whereas gene therapy has been slower to emerge from a set of clinical setbacks at the turn of the twenty-first century. Here, we contrast these two commercialization paths to shed light on the challenges in the gene therapy ecosystem.
Nathan Furr and Rahul Kapoor (2017), Capabilities, Technologies, and Firm Survival during Industry Shakeout: Evidence from the Global Solar Photovoltaic Industry, Strategic Management Journal.
Abstract: Explanations of entrants’ survival in an emerging industry are premised on pre-entry capabilities or technology choices prior to the emergence of the dominant design. We consider how these drivers interact to strengthen or nullify firms’ pre-entry advantage, as well as facilitate adaptation as the industry evolves. We also expand the treatment of exit by separating dissolution from acquisition, in which firms’ capabilities continue to be utilized in the industry. Studying a recent shakeout in the global solar photovoltaic industry, we find that pre-entry capabilities and technology choices act in a complementary manner for some firms, thereby enhancing survival, and as buffers against exit for others. Nearly half of exits were via acquisitions, and technology choice at entry played an important role in determining how firms exited.
Joon Mahn Lee and Rahul Kapoor (2017), Complementarities and Coordination: Implications for Governance Mode and Performance of Multiproduct Firms, Organization Science.
Abstract: We explore the fit between a firm’s product portfolio strategy and its governance mode with respect to complementary activities that underlies its product offering. We view firm’s governance choice through the lens of orchestrating complementary activities that entail multiple interrelated and often simultaneously occurring transactions. Our core premise is that a broader product portfolio while offering benefits through the bundle of complementary activities raises the coordination costs for firms, making integration of complementary activities a preferred mode of governance. We find strong support for our arguments in the context of the U.S. healthcare industry. Hospitals with a narrow service portfolio are more likely to have contracts with physicians as external service providers, and hospitals with a broad service portfolio are more likely to employ their own physicians. Moreover, hospitals that deviate from this fit-based relationship suffer a significant penalty in terms of their financial performance as measured by return on assets (ROA) and return on sales (ROS). Our findings allow us to shed new light on the linkage between strategy and governance mode, and enable us to illustrate that performance differences across multiproduct firms may be better understood by considering the fit between their strategy and their governance mode instead of simply focusing either on their strategy or on their governance mode per se.
Rahul Kapoor and Shiva Agarwal (2017), Sustaining Superior Performance in Business Ecosystems: Evidence from Application Software Developers in the iOS and Android Smartphone Ecosystems, Organization Science, 28 (3), pp. 531-551.
Abstract: We study the phenomenon of business ecosystems in which a platform firm orchestrates the functioning of the ecosystem by providing a platform and setting the rules for other complementor firms to participate in it. We develop a theoretical framework to explain how the structural and evolutionary features of the ecosystem may shape the extent to which participating complementor firms can sustain their superior performance. The structural feature, which we refer to as ecosystem complexity, is a function of the number of unique components or subsystems that interact with the complementor’s product. We incorporate the evolutionary features by considering the role of generational transitions initiated by platform firms over time as well as the role of complementors’ ecosystem-specific experience. Evidence from Apple’s iOS and Google’s Android smartphone ecosystems supports our arguments that higher ecosystem complexity helps app developers sustain their superior performance, and that this effect is stronger for more experienced firms. In contrast, platform transitions initiated by Apple and Google make it more difficult for app developers to sustain their performance superiority, and that this effect is exacerbated by the extent of ecosystem complexity. The study offers a novel account of how the performance of complementor firms in business ecosystems may be shaped by their ecosystem-level interdependencies.
Shiva Agarwal and Rahul Kapoor (Working), Two Faces of Value Creation in Business Ecosystems: Leveraging Complementarities and Managing Interdependencies.
Abstract: A given innovation often does not stand alone. Rather it is connected with other elements in the ecosystem that impacts its value creation. We draw on this premise in a platform-based ecosystem in which participating firms innovate around a platform. We introduce the notion of connectedness to refer to the extent to which a given innovation interacts with the platform (i.e., platform connectedness) and also with the other complements in the ecosystem (i.e., complement connectedness). On the one hand, higher connectedness may allow the innovation to leverage complementarities. On the other hand, it may subject the innovation to an array of interdependencies that may limit its value creation. We explore these arguments on apps launched by software developers for Apple’s iPhone platform between 2008 and 2013. We find that higher platform and complement connectedness is in general associated with a greater likelihood of app’s successful commercialization. However, the benefit of platform connectedness is weakened when Apple updates its platform with a new generation. In contrast, the benefit of complement connectedness is strengthened when Apple updates its platform and if the complements themselves have low platform connectedness. These findings shed light on two faces of value creation in ecosystems -- the opportunities associated with leveraging complementarities and the challenges associated with managing technological interdependencies.
The course is designed to meet the needs of future managers, entrepreneurs, consultants and investors who must analyze and develop business strategies in technology-based industries. The emphasis is on learning conceptual models and frameworks to help navigate the complexity and dynamism in such industries. This is not a course in new product development or in using information technology to improve business processes and offerings. We will take a perspective of both established and emerging firms competing through technological innovations, and study the key strategic drivers of value creation and appropriation in the context of business ecosystems. There is definitely an overlap in content with other courses in intermediate microeconomics, or managerial economics. Nevertheless, the treatment is sufficiently distinctive to make it complementary to those other treatments for a student who is particularly interested in economic change, or is otherwise interested in acquiring a broader view of economics. Students need to have taken a first college course in economics. Multivariate calculus is generally useful in economic theory at this level, but does not carry significant weight in this course. Similarly, an understanding of basic linear algebra enhances the value of the linear programming analysis of the firm, but is not a prerequisite. The course is reserved for Wharton juniors and seniors.
The course is designed to meet the needs of the future managers, entrepreneurs,consultants and investors who must analyze and develop business strategies in technology-based industries. The emphasis is on learning conceptual models and frameworks to help navigate the complexity and dynamism in such industries. This is not a course in new product development or in using information technology to improve business processes and offerings. We will take a perspective of both established and emerging firms competing through technological innovations, and study the key strategic drivers of value creation and appropriation in the context of business ecosystems. In addition to prerequisites, this course is exclusively reserved for Management and Technology students.
Emerging enterprises, the focus in this course, are small, new, fast-growing organizations. Their founders and managers face multifaceted challenges: how to assess the competitive position of their business model and develop a strategy; how to develop the internal organizational structure, culture, and policies for selecting and managing employees; and how to pursue global opportunities. We cover these challenges in separate modules on strategy, human and social capital, and global issues. The human and social capital module covers classic management challenges of aligning interests of the individual and the organization; managing individual psychological needs and social influences; and developing employee capabilities that provide competitive advantage. Also covered are unique challenges that yound organizations face, i.e. building an effective culture; recruiting, selecting, and retaining talent; building systematic approaches to motivating employees; coping with the stresses of rapid growth; and leveraging the benefits (and avoiding the liabilities) of the founder's powerful imprint. The strategy module covers fundamental issues central to the competitiveness of the enterprise. Because the strategy field is broad, MGMT 612 emphasizes topics and frameworks that are most relevant for younger firms, such as innovation, disruption, managing resource constraints, and building capabilities. However, a key insight of the module is the importance of seeing the playing field from the perspective of the competition. Thus, by the end of this section, students will have a robust grounding in strategy that will allow them to succeed, whether their career path leads to a Fortune 100 firm or a garage start up. The global module covers the emerging firm's decision about when (and whether) to internationalize. This decision must address which foreign markets to enter; the mode of entry; the sequence of moves to develop capabilities; what organizational form to choose; where to establish HQ; and how to adapt to the unique economic and institutional features of different markets. In all these issues, the emphasis is on how young, resource-constrained firms can position themselves profitably in globally competitive markets. For the final project, student teams provide integrated analysis across the modules for an emerging enterprise of their choice.
The course is designed to meet the needs of future managers, entrepreneurs, consultants and investors who must analyze and develop business strategies in technology-based industries. The emphasis is on learning conceptual models and frameworks to help navigate the complexity and dynamism in such industries. This is not a course in new product development or in using information technology to improve business processes and offerings. We will take a perspective of both established and emerging firms competing through technological innovations, and study the key strategic drivers of value creation and appropriation in the context of business ecosystems. The course uses a combination of cases, simulation and readings. The cases are drawn primarily from technology-based industries. Note, however, that the case discussions are mainly based on strategic (not technical) issues. Hence, a technical background is not required for fruitful participation.
This quarter-length doctoral seminar deals with major streams of management research in technology strategy and innovation. We will focus on both classical topics such as incumbents' management of technological change and industry evolution, and new emergent topics such as ecosystems and platforms. The emphasis will be on understanding the link between technologies and firms in terms of both strategy choices and performance outcomes.
This course is designed to provide students with an understanding of the methodological approaches we commonly think of as qualitative, with special emphasis on ethnography, semi- structured interviews, case studies, content analysis, and mixed-methods research. The course will cover the basic techniques for collecting, interpreting, and analyzing qualitative (i.e. non-numerical) data. In the spring quarter, the course will operate on two interrelated dimensions, one focused on the theoretical approaches to various types of qualitative research, the other focused on the practical techniques of data collection, such as identifying key informants, selecting respondents, collecting field notes and conducting interviews. In the fall semester, the course will operate on two interrelated dimensions, one focused on the theoretical approaches on building arguments and theory from qualitative data, the other focused on the practical techniques of data collection, such as analyzing data, writing, and presenting findings. Note: This class is part of a two-part sequence which focuses on qualitative data collection and analysis. The first of this course, offered in the Spring, focuses on data collection and the second half of the course, offered the following Fall, will focus on qualitative data analysis. Each course is seven weeks long. Students may take either class independently or consecutively.
Despite its financial ills, Argentina's longer-term economic prospects are looking brighter, thanks to a new generation of leaders who are embracing digital transformation.Knowledge @ Wharton - 2018/05/17