Navigators through the storm: A review of organization theories and the behavior of incumbent firms during transitions

Abstract

The literature on socio-technical transitions pays increasing attention to the role of incumbent firms during transitions. These firms have been found to variably further, delay, or to ignore transitions towards a more sustainable society. Yet, it remains unclear which factors cause incumbents to display different modes of behavior during transitions, and which factors affect the transition’s impact on an incumbent’s survival. We engage this issue by reviewing five prominent organization theories. We first discuss how the transitions literature conceptualizes incumbent behavior and relate the open questions to major debates in the organizational literature. We systematically summarize each organization theory’s assumptions and expectations about incumbent behavior, and derive typical modes of behavior. Lastly, we discuss how an incumbent’s characteristics influence its behavior and survival. Overall, our review provides stable footing for researchers seeking to conscientiously judge which theories are most appropriate to understand incumbent behavior in the transition process at hand.