Organization Science Vol. 18, No. 2, March–April 2007, pp. 217–232 issn 1047-7039  eissn 1526-5455  07  1802  0217 inf orms ® doi 10.1287/orsc.1060.0233 ©2007 INFORMS When Is a New Thing a Good Thing? Technological Change, Product Form Design, and Perceptions of Value for Product Innovations Violina P. Rindova McCombs School of Business, University of Texas at Austin, Austin, Texas 78712, violina.rindova@mccombs.utexas.edu Antoaneta P. Petkova 353 Business Building, San Francisco State University, San Francisco, California 94132, apetkova@sfsu.edu I nnovation researchers recognize that the uncertainty with regard to the value-creating potential of product innovations increases with their technological novelty, and have argued that the usefulness and value of novel products are socially constructed. Despite this recognition, researchers have not explored how the outer form in which a technological innovation is embodied influences the processes through which the innovation’s value is constructed and perceived. In this paper we argue that by embodying novel technologies in objects with specific functional, symbolic, and aesthetic properties, innovatingfirmsalsoendowtheirproductswithcuesthattriggeravarietyofcognitiveandemotionalresponses.Drawingon psychological research we articulate how such cognitive and emotional responses underlie initial perceptions of value and theorize how innovating firms can influence them through product form design. Our framework explains how product form contributes to perceptions of value by modulating the actual technological novelty of a product innovation and facilitating how customers cope with it. Our theoretical framework makes an important contribution to innovation research and practice because it articulates how product form can be used strategically to achieve specific cognitive and emotional effects and enhance the initial customer perceptions of the value of an innovation. Key words : innovation; product design; value creation Strategy scholars view innovation as a primary means forvaluecreation(MoranandGhoshal1999)thatenables firms to disrupt the competitive status quo in markets and displace entrenched competitors. Through innova- tion, firms renew the value of their asset endowments anddiscovernovelusesandcombinationsfortheirexist- ing resources (Dougherty 1992, McGrath et al. 1996). Empirically and conceptually, product innovation has been related to firm market share (Chaney and Devin- ney 1992), survival (Tripsas 1997b), and adaptation to changing market and technological conditions (Eisen- hardt and Tabrizi 1995). Although strategy researchers laud the importance of innovationforvaluecreation,theyalsostresstheconsid- erable uncertainties associated with innovation. On the demand side, uncertainty arises about what valued func- tionality a given set of technologies will deliver; on the supply side, uncertainty arises about competencies that would be needed to deliver this functionality (Abernathy and Clark 1985, Tripsas and Gavetti 2000). Indeed, innovation researchers have observed that customers encounter considerable difficulties in recognizing the value of truly novel products, and have stressed repeat- edly the need to better understand the sociocognitive processes involved in the adoption of new technologies (Basalla 1988; Clark 1985; Dougherty 1990, 2001; Har- gadon and Douglas 2001; Leonard-Barton 1995; Pinch and Bijker 1987; von Hippel 1988). In response to this call, innovation researchers have studied the processes through which the value of novel technologies is constructed. In a series of case studies, Dougherty (1992, 2001) observes that successful prod- uct innovation is a creative process involving successive cyclesoflearningbycustomersandproducers.Shenotes thatinmarketsfornovelproducts,customersmaynotbe able to articulate their needs, and that these needs may change over time as they learn to use the products. Rosa et al. (1999) similarly document how interactions among producers, customers, and the media lead to the con- structionoftheattributesthatcometodefinethevalueof a new type of vehicle—the minivan. Theseauthorscon- clude that new markets emerge when producers and cus- tomersdevelopsharedknowledgestructures,orschemas. HargadonandDouglas(2001)analyzehowEdisonshaped the market for electrical energy by creating similarities between the light bulb and the kerosene lamp in an efforttotapintoexistingcustomerschemasandfacilitate the comprehension of the new technology. These stud- ies show that (a) new technologies are characterized by considerable interpretative flexibility with regard to how 217