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This paper postulates that corporate core-rigidities affect an established firm's adaptation to technological innovation. This manuscript further clarifies that when the implementation of new activities is sacrificed at the cost of an established firm's core-rigidities, the firm may find it difficult to (incrementally or radically) incorporate new technological innovations into their operations. To analyze these issues in greater detail, this paper evaluates the Toyota Motor Company as a case study for an organization's struggle to simultaneously adapt two innovations. Interviews at the Chinese production base for Toyota served as the methodology for this case study.

This paper examines the growth trajectory and the current state of the Indian automobile industry, paying attention to factors that underpinned its transition from import substitution to integration into global production networks. Market-conforming policies implemented by the government of India over the past 2 decades, which marked a clear departure from protectionist policies in the past, have been instrumental in transforming the Indian automobile industry in line with ongoing structural changes in the world automobile industry. India has emerged as a significant producer of compact cars within global automobile production networks. Compact cars exported from India have become competitive in the international market because of the economies of scale of producing for a large domestic market and product adaptation to suit domestic market conditions. Interestingly, there are no significant differences in prices of compact cars sold in domestic and foreign markets. This suggests that the hypothesis of “import protection as export promotion” does not hold for Indian automobile exports.