AThis study examines how product innovation contributes to the renewal of the firm through its dynamic and reciprocal relation with the firm's competences. Field research in five high-tech firms of varying age, size, and level of diversification is combined with analysis of existing theory to develop the findings of the study. Based on the notion that new products are created by linking competences relating to technologies and customers, a typology is derived that classifies new product projects based on whether a new product can draw on existing competences, or whether it requires competences the firm does not yet have. Following organizational learning theory, these options are conceptualized as exploitation and exploration. These organizational learning concepts are used to gain a dynamic and path-dependent view of product innovation and firm development, and to reveal the unique nature and challenges of different types of product innovation.

According to dynamic capability theory, some firms are better able than others at altering their resource base by adding, reconfiguring, and deleting resources or competences. This study focuses on the first form of dynamic capability: the competence to build new competences. Two such second‐order competences are studied: the ability to explore new markets and the ability to explore new technologies—referred to as marketing and R&D second‐order competences, respectively. Using two wave panel data on a sample of U.S. public manufacturing firms, five organizational antecedents of these second‐order competences are examined: willingness to cannibalize, constructive conflict, tolerance for failure, environmental scanning, and resource slack. Willingness to cannibalize, constructive conflict, scanning, and slack have contemporaneous effects, while scanning also has a lagged effect and slack has a U‐shaped lagged effect on marketing and R&D second‐order competences. Copyright © 2008 John Wiley & Sons, Ltd.

The popular work by Clayton Christensen and colleagues on disruptive technology serves as a springboard to examine five key issues concerning the effect of technological change on firms and industries. This article challenges and integrates current theory in this domain, and raises questions to initiate new work. The discussion is organized around the following themes: the definition of disruptive technology, the predictive use of the theory of technological disruption, explaining the success of incumbents, the implications of the theory for the merits of being customer-oriented, and the merits of creating a spin-off to commercialize the disruptive technology. Examination of these themes shows the relationship of the disruptive technology work with research in a variety of related areas. Many of these links have not been made explicit before, and several of them have been misunderstood. This article is intended to encourage further research on disruptive technology and spur debate by practitioners and scholars alike.

Smith Corona, formerly one of the world's leading manufacturers of typewriters, was challenged to exercise dynamic capability in the face of the dissipation of its main product category. A study of the last two decades of the life of the company shows how Smith Corona tried to alter its resource base by leveraging existing resources, creating new resources, accessing external resources, and releasing resources. Using the extended case method, this study advances dynamic capability theory by confronting it with an empirical case. The Smith Corona case provides rich insights into the resource alteration processes by which dynamic capability operates, and highlights resource cognition as a missing element in dynamic capability theory.

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