Technology Change or Resistance to Changing Institutional Logics: The Rise and Fall of Digital Equipment Corporation

This article uses an institutional lens to analyze organizational failure. It does this through a historical case study of Digital Equipment Corporation, an innovator and market leader of minicomputers who faltered and eventually failed during the period of technological change brought on by the emergence of the personal computer. The failure of Digital Equipment Corporation is interesting because it occurred despite its ability to adapt to changing technological forces. An institutional analysis shows that while Digital Equipment Corporation was able to develop personal computers widely considered technologically superior to its competitors, it resisted broader changes occurring in its institutional context. This study suggests that responding to external forces of change, such as technology, may not be enough. An organization must determine if and how such change might lead to a shift in its institutional context and then develop strategies to address such change.