From hierarchies to markets: Transformation of corporate innovation at Ericsson

This multi-year, in-depth qualitative case study examines an incumbent’s response to digital disruptions characterized by uncertain technologies and emergent business models, a relatively underexplored topic in Information Systems and Strategic Management literatures. In particular, the study documents Ericsson’s journey of transformation of corporate innovation in response to a wave of disruptive innovations, including cloud computing, Internet of Things, and the 5th Generation technologies coupled with changing customer requirements, increasing competition, and evolving industry landscape. The findings demonstrate how organizations can transform their corporate innovation strategy by employing a “long-tail” strategy as an openness imperative, thereby integrating a market of innovations within the traditional hierarchy of corporate R&D. This evolving hybrid model helps firms leverage the uncertainty during the period of digital disruption to their advantage.