Too Much of a Good Thing? Product Proliferation and Organizational Failure

When organizations make important changes, such as introducing new products, they may gain strategic advantage but they also experience disruptions. We argue that these disruptions are especially strong when organizations introduce multiple products simultaneously, leading to a temporary increase in the hazard of organizational failure. To test this hypothesis, we study the effects of new products introduction on the exit rates of U.S. semiconductor manufacturers. We find that while growth lowers organizational mortality rates, introducing multiple products initially raises mortality rates.