Trivializing the future: Cognitive dissonance and incumbents’ underinvestment in radical innovations on the example of cellular agriculture

Abstract

Incumbent organizations often struggle to manage the significant challenges posed by radical innovations, risking loss of market share, reduced profitability, and long-term success. While the question of why incumbents fail to adapt to radical innovations has been extensively discussed in the literature, the reasons for their frequent failure remain incompletely understood. Drawing on cognitive dissonance theory, the present paper proposes a new explanatory mechanism for incumbent’s failure to embrace radical innovations. It was hypothesized that 1) the confrontation with a radical innovation arouses cognitive dissonance in organizational members, with the dissonance being greater the more organizational members are negatively affected by the innovation, 2) to cope with the cognitive dissonance, organizational members trivialize the radicalness of a radical innovation, and 3) the trivialization of an innovation’s radicalness has a negative effect on organizational members’ willingness to invest in the innovation. To test the hypothesized relationships, a survey-based experiment was conducted with 380 participants from the meat industry using cellular agricultural products (cell-cultured meat and cell-cultured fish) as an example of a radical innovation. The results of a t-test and a structural equation model support the formulated hypotheses. An additional survey-based experiment provides further support for the proposed relationships. The findings contribute to a better understanding of the mental barriers that prevent incumbent organizations from investing in emerging radical innovations, thereby contributing to micro-level innovation research.