Scale and Process Innovation: The Adoption of the Basic Oxygen Process by Canadian Steel Firms

Buzacott, J.A. (1980). Scale and Process Innovation: The Adoption of the Basic Oxygen Process by Canadian Steel Firms. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-80-083

Preview

Text WP-80-083.pdf Download (1MB) | Preview

Abstract

At the workshop on "Size and Productive Efficiency -- The Wider Implications" held by the Management and Technology Area at IIASA in June 1979, one of the major topics of discussion was the relationship between scale and innovation, in particular the way in which the development and adoption of innovations are influenced by the size of the organization. It was, for example, suggested that for major process innovations there was an optimum organization size: not too small that there is an insufficient diversity of managerial experience, and not too large that there is bureaucratic rigidity and lack of common purpose.

However, rather than seeking an explanation in terms of organization behavioral characteristics it seems reasonable to first look for explanations which focus on the technical and economic characteristics of the competing processes. In this paper a specific major process innovation -- the adoption of the basic oxygen process in steel making -- is examined within the context of the decisions on timing, size and choice of process made by Canadian steel firms. A model of "rational" investment planning is used to evaluate the actual decisions and gain insight into the technical, economic and market factors which appear to support the proposition that there is an optimum "niche" for the introduction of major process innovations.

Actions (login required)

View Item