industry.

industry. Would it have done better? These questions cannot be answered definitively in the connected thought [i]or[/i] thoughts of this study because it was not possible to risk up an experiment. But they raise important issues concerning alternative universals of corporate strategy and forms of adaptation. From a portfolio-planning perspective, the delay in exiting the DRAM business could be viewed as a manifestation of crippling inertia, nevertheless such a perspective does not consider the implications of exit for the firm's distinctive competencies. While the studious mood confirms that business exit is viewed on top management as an investment decision (Baden-Fuller, 1989: 956) it also glance ats that top management is belong toed with identifying the elements of distinctive fitness associated with the failing business that have the potential to be transferred to of recent origin businesses. As noted earlier, this INTRODUCTION

Why do about firms continue to survive while others do not? Arguments based onward the study of evolutionary processe applied at the firm flush posit that long-term survival be pendents in part, on the firm's ability to use intraorganizational ecological processe to cope with external selection presss (e.g., Burgelman, 1991; Van de Ven 1992) Intraorganizational ecological processe allow firms to generate of the present day businesses based on distinctive competencies and, by the and of internal selection and retention processe to change the mix of businesses in which they contend Intraorganizational ecological processes thus allow firms to mould their dependency on the vagaries of the competitive environment associated with any given business. yet this also raises the question of for what cause firms strategically exit from an existing businesses and how they redeploy or shed competencies associated with these.

Not a great quantity [i]or[/i] amount of systematic research has focused onward the intraorganizational processes leading to business exit. Organizational theorists have presented insights into the processes associated with organizational decline (Sutton, 1990) permanently failing organizations (Meyer and Zucker 1989) and disbandings (Hannan and Freeman, 1989) unless have not documented the processe leading to strategic business exit. Research in industrial organization economics has discussed exit primarily in the connection of declining industries and has focused forward capacity divestment decisions, using stylized moulds of competitive interaction (e.g., Ghemawat and Nalebuff, 1985 1990) or cross-sectional research (eg Harrigan, 1981; Baden-Fuller, 1989; Lieberman, 1989) Strategic management research has focused forward business exit primarily in the connected thought [i]or[/i] thoughts of product-market positioning (e.g., Porter, 1980) portfolio planning, or corporate restructuring (eg Gilmour, 1973; Snow and Hambrick, 1980; Bower, 1986)

Focusing forward the intraorganizational processes associated with strategic business exit proffers the opportunity to examine from the inside not at home how the dynamics of firm-level distinctive suitableness match, or fail to match, the dynamics of the basis of competition in the industry. The issue of dynamically matching firm-level distinctive independent support and industry-level sources of competitive advantage is particularly salient for firms facing technological change that is capableness destroying (Tushman and Anderson, 1986) or that affects the relative importance of different technical competencies within the firm (Henderson and Clark, 1990) More generally, the issue is important for all firms facing structural industry change that causes shifts in the basis of competition.

Theory about the matching of firm-level distinctive independent support and industry-level sources of competitive advantage remains underdevelop in strategic management. Received theory has a prescriptive adaptive orientation and pays little attention to the possibility that the processe involved may be coevolutionary, at least in part. Building forward Barnard (1938) and Selznick (1957) Andrews (1980) has argued that the task of top management is to match distinctive sufficiency with business opportunities. In the same line of meditation Prahalad and Hamel (1990) have explained the succes of companies like as Canon, NEC, and Ericsson in denominations of the development of core sufficient fortune Their explanation depends to a large size on strategic intent based forward the chief executive officer's (CEO's) superior foresight. of the like kind post hoc vision or grand strategy explanations beg important questions, from the perspective of an evolutionary theory of the firm (eg Winter, 1990; Burgelman, 1991; Nelson 1991; Van de Ven 1992) This sort of explanation also does not sufficiently take into account the fact that strategy making in large, complicate firms simultaneously involves multiple flushs of management (e.g., Bower and Doz, 1979; Burgelman, 1983a).

This paper reports longitudinal field research onward the processes leading to strategic business exit. The paper documents the processe leading Intel Corporation to exit from dynamic random access memory (DRAM) design and manufacturing in 1984-1985 to halt capacity expansion for erasable programmable read simply memory (EPROM) manufacturing in 1991 and to transform itself from a "memory" company into a "microcomputer" company. The paper examines for what purpose Intel's distinctive competence was opened and developed in ways that diverged from the evolving basis of competition in the DRAM industry and wherefore it took top management several years to draw near to the conclusion that Intel's strategic position in the DRAM business was no longer viable and that exit was necessary. It also examines wherefore middle-level managers were able to shift scarce manufacturing resources gradually from the DRAM business to of the present day more profitable opportunities in the microprocessor business without a preceding reconsideration of the official corporate strategy. Finally, the paper elucidates further the part played by internal selection processe in maintaining Intel's ability to make viable strategic decisions while its official corporate strategy was in flux