Submitted by

Bernhard Röster
K1354113

Submission
Institute of Leadership
and Change Management

Thesis Supervisor
Dr. Arne Keller

October 2021

Adaptation To Technological
Change – Rosenbauer’s Way To
Overcome Inertial Forces

Master Thesis

to confer the academic degree of

Master of Science

in the Master’s Program

Leading Innovative Organizations

SWORN DECLARATION
I hereby declare under oath that the submitted Master ‘s Thesis has been written solely by me
without any third-party assistance, information other than provided sources or aids have not been
used and those used have been fully documented. Sources for literal, paraphrased and cited quotes
have been accurately credited.

The submitted document here present is identical to the electronically submitted text document.

Place, Date

Signature

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Contents
1. Introduction......................................................................................................................................... 7

2. Theoretical Framework ..................................................................................................................... 10

2.1. Organizational inertia as a barrier to adaptation ....................................................................... 10

2.2. Processes leading to incumbent inertia ..................................................................................... 11

2.2.1. Path Dependence ................................................................................................................ 11

2.2.2. Identity ................................................................................................................................ 12

2.2.3. Organizational Capabilities .................................................................................................. 12

2.2.4. Cognition ............................................................................................................................. 13

2.2.5. Commitments ...................................................................................................................... 14

2.3. Peculiarities of family-influenced businesses in times of adaptation ........................................ 14

2.4. Problematization ........................................................................................................................ 16

3. Methods ............................................................................................................................................ 18

3.1. Research Approach..................................................................................................................... 18

3.2. Research Context........................................................................................................................ 19

3.3. Data Collection ........................................................................................................................... 19

3.4. Data Analysis .............................................................................................................................. 20

4. Company History ............................................................................................................................... 21

4.1. The foundations – Rosenbauer as a trading company (1851 – 1906)........................................ 21

4.2. Rosenbauer becomes a manufacturer (1906 – 1929) ................................................................ 23

4.3. Political and economic instability and the search for alternative business fields (1930-1949) . 28

4.4. Post-war boom, new headquarters, and the push towards market leadership (1950-1980) ... 31

4.5. Rosenbauer becoming the industry’s innovation and technology leader (1980-2010)............. 36

4.6. Excursion: Rosenbauer’s international growth through joint-ventures and M&A .................... 45

4.7. Digitalization takes over (2010-now) ......................................................................................... 48

5. Findings.............................................................................................................................................. 51

5.1. Key factors to stay competitive on the market .......................................................................... 51

5.2. Gaining and accessing knowledge as a prerequisite to adapt ................................................... 52

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 5.3. Organizational processes and structures as the foundation to flexibility .................................. 53

6. Discussion .......................................................................................................................................... 55

6.1. Theoretical Implications ............................................................................................................. 55

6.1.1. Overcoming Inertial Forces ................................................................................................. 55

6.1.2. The role of the family .......................................................................................................... 58

6.1.3. Further contributions to organizational inertia theory ....................................................... 60

6.1.4. The importance of ambidexterity and the development of technological competences .. 62

6.2. Practical Implications.................................................................................................................. 63

6.3. Limitations .................................................................................................................................. 63

6.4. Need for Future Research .......................................................................................................... 64

7. Conclusion ......................................................................................................................................... 65

8. Literature ........................................................................................................................................... 67

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Table of Figures
Figure 1: One of the first Rosenbauer ladders ...................................................................................... 22
Figure 2: First Rosenbauer Fire Trucks ................................................................................................. 27
Figure 3: Company Development in the late 1920's and 30's .............................................................. 29
Figure 4: Order Development during WW II. ....................................................................................... 30
Figure 5: The Rosenbauer 'Konzentrator II' ........................................................................................... 32
Figure 6: The Rosenbauer Family Tree ................................................................................................. 36
Figure 7: The first delivered 'Panther' .................................................................................................. 39
Figure 8: Stock price development of Rosenbauer International AG ................................................... 42
Figure 9: Technological Milestones in Rosenbauer's History ............................................................... 44
Figure 10: The new CFT truck ............................................................................................................... 50
Figure 11: Success Factors throughout Rosenbauer's History ............................................................. 51

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Abstract
Technological change and consequently strategies that allow organizations to respond successfully to
such changes are tremendously important in an increasingly fast-paced environment. Extensive
scientific literature argues that over time, organizations become inert and struggle to adapt to
changing conditions. This paper is framed by organizational inertia theory and the processes that
make organizations inert. By conducting an in-depth historical case study that reconstructs the entire
history of Rosenbauer, an incumbent family-influenced company in the fire service industry, the
paper reveals success factors that help to overcome inertial forces. The company evolved from a
one-man trading company for firefighting equipment in the middle of the 19th century into today’s
global technology and innovation leader of the fire service industry while the top management
remained within the family throughout the entire history. Contrary to earlier scientific theorizing, the
results reveal that existing commitments to customers and employees can serve as a source of
change rather than inertia if these commitments are used as a source of motivation. The case also
sheds light into the importance of organizational identity in change processes. While the internal
identity of Rosenbauer is vaguely defined and therefore offers flexibility for exploration to the
employees, the external identity of the organization is clearly defined to provide legitimacy to the
organization. The case also supports the argumentation that family firms are quite distinct in their
adaptation process as the long-term orientation and relatively low dependency on external capital
providers allowed the organizations to focus on individualization as a distinct business model in the
industry.

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1. Introduction

The topic of technological change and subsequently the adaptation efforts of organizations to
respond to such changes has received tremendous scholarly attention. (Eggers & Park, 2018; Sull,
1999; Tushman & Romanelli, 1985) Especially the recent development around the digital
transformation of organizations is a vibrant topic for both, academia and organizations that are
coping with innovation and change processes required due to the increasingly fast-paced
environment. While several academic directions evolved to address this issue, the guiding question
has in principle remained the same: what makes some organizations survive, perhaps even thrive, in
the face of technological discontinuities while others fail to adapt?

Repeatedly, research has shown that technological change impacts the intensity of competition and
alters structural conditions such as barriers to entry and mobility, demand conditions and customer
preferences. (Lavie, 2006) Moreover, such changes have an unequivocal impact on economic growth
and the development of industries. (Solow, 1957; Klein, 1984; Lawrence & Dyer, 1983) Although
radical technological change might seem observable frequently in today’s times, historically
technological and organizational evolution can be described through a punctuated equilibrium model
which is characterized by relative long periods of stability and incremental change interrupted by the
rare occurrence of radical innovations and fundamental change. (Gersick, 1991; Tushman &
Anderson, 1986; Tushman & Romanelli, 1985; Tushman & Romanelli, 1994) The opportunities
presented by major advances in technology allow firms to gain first mover advantages if they
recognize and seize them early on. (Tushman & Anderson, 1986) However, the pressure resulting
from technological discontinuities or aggressive foreign competition occasionally leads to the
relinquishment of this initial lead. (Chandler, 1994) Even when managers are aware of the need to
change, they often fail to do so appropriately, partly because they repeatedly engage in the behavior
that made them successful in the past even though it might not fit the new context. (Johnson, 1988;
Sull, 1999) Thus, to remain competitive, organizations are required to be ambidextrous, meaning that
they must simultaneously embrace exploration while successfully exploiting old routines. (March,
1991; O'Reilly & Tushman, 2004; Smith & Tushman, 2005) Consequently, organizations must not only
be innovative and proactive to increase their adaptability, they must also be good at leveraging the
value of their assets. (Birkinshaw and Gibson, 2004) Moreover, successful enterprises must establish
a context for learning and performance while interpreting and using organizational routines and
structures as a source of flexibility and change instead of treating it as a source of inertia. (Feldman &
Pentland, 2003; Rindova & Kotha, 2001)

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In his seminal works, Schumpeter (1934, 1942) popularized the term creative destruction as the
process by which new entrants replace existing firms, indicating that firms are destined to fail in the
face of radical technological change. And indeed, early work on radical innovation followed the
Schumpeterian concept arguing that incumbent organizations are restrained by inertial forces that
hinder the ability to adapt. (Tushman & Anderson, 1986) As incumbent’s failure to overcome these
forces of organizational inertia and their inability to adapt is extremely prevalent, the topic has
drawn tremendous scientific attention of both, conceptual and empirical work. (Hannan & Freeman,
1977; Henderson & Clark, 1990; Levinthal, 1992; Tushman & O’Reilly, 1996) While early scholars
mainly focused on the failure of adaptation (see Gilbert, 2005; Sydow et al., 2009; Tripsas & Gavetti,
2000), more recently scholars increasingly investigate the factors that allow organizations to
successfully deal with technological change. (see for example Cozzolino, Verona & Rothaermel (2018)
in their analysis of an Italian news media publisher) The practical world shows us that some long
existing companies managed to adapt successfully and have not been removed from the competitive
landscape, thus age and inertia must not be necessarily an antecedent of failure.

The following thesis is framed around the concept of organizational inertia which claims that
organizations are looking for stability as reliable structures are a prerequisite for effective
organizational acting. (Hannan & Freeman, 1984; Sydow et al., 2009) Organizations often react too
slow to a change in their environment due to inertial forces resulting from both, internal and external
sources. Scientific scholars have developed several concepts that explain the processes that make
organizations inert over time, for example Sydow et al. (2009) theorized about a path dependence
model where repeated patterns of actions lead to an inefficient lock-in that potentially blinds
organizations from opportunities. Furthermore, an organization’s core capabilities may turn into core
rigidities (Leonard-Barton, 1992), an organization’s identity potentially hinders the adaptive capacity
of organizations (Tripsas, 2009) and rigid mental models that are fostered over time make
organizations inert. (Eggers & Kaplan, 2009; Tripsas & Gavetti, 2000) All of these concepts argue that
it is difficult for established, long-standing companies to continuously adapt. In line with the scientific
argumentation, also practice shows us that only few companies managed the challenge of
continuous adaptation and were able to survive, respectively stay ahead of their competitors, for an
extended period of time. Some factors that make organizations inert including emotional ties to
existing assets are especially prevalent in family businesses which arguably make adaptation efforts
even more challenging in a family firm setting. (König, Kammerlander & Enders, 2013, Miller & Le
Breton-Miller, 2010)

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The underlying case study of this paper sheds light into the adaptation efforts of Rosenbauer, a
family firm operating in the firefighting industry for more than 150 years, which thrived in the face of
numerous incremental and also various disruptive technological changes. The company started as a
one-man trading company for fire service equipment in the middle of the 19th century and steadily
fought its way to the top of the industry. Nowadays, Rosenbauer is the world’s innovation and
technology leader in the firefighting industry whereas the top management remained within the
family throughout the entire history. Despite the odds, the company managed to overcome inertial
forces and was able to stay innovative and adaptive, thus making it an exceptionally interesting case
to study. The following paper is centered around the factors that allowed the firm to stay
competitive in the long run and again and again successfully adapt to changing conditions.

This paper first gives a detailed overview of existing literature, starting with the concept of
organizational inertia and the processes that are fostering inertial forces before briefly introducing
the peculiarities of family firms in times of change. Following that, the research approach is outlined
in the methods section. Subsequently, an in-depth description of the underlying case study follows
before eventually, the findings drawn from the organization’s historical development are discussed
against the theoretical background. Lastly, a conclusion is provided, and limitations and further
research avenues are briefly mentioned.

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2. Theoretical Framework

This section begins with the introduction of the concept of organizational inertia which constitutes
the framework of this paper. Following that, the processes that cause organizations to become inert
are outlined before the peculiarities of family firms in times of adaptation are presented. But before
diving into theoretical concepts of adaptation and inertia, some essential definitions must be
provided. In its simplest meaning, technology can be defined as tools, devices, and knowledge that
mediate between inputs and outputs or that create new products and services. (Rosenberg, 1972)
Although technological change as a term is used in various ways and sometimes describes distinct
phenomena, the thesis follows the broad definition of Mokyr (1990) as any change in the application
of information to the production process to increase efficiency which eventually leads to a
production of a given output with fewer resources or the production of better or new products. To
successfully adapt to such a change, an organization must assemble a bundle of technological and
complementary resources that facilitate the development and commercialization of a new
technology. Thus, adaptation to technological change becomes about processes of acquiring and
organizing technological and complementary resources. (Eggers & Park, 2018)

2.1. Organizational inertia as a barrier to adaptation

One of the most prominent theories in regard to understanding adaptation, respectively the inability
to change, is the concept of structural inertia. The term refers to a relatively slow response rate of
organizations to upcoming threats and opportunities in their respective environment, thus inertia is
high if an organization is slower in their reorganization compared to the speed of changes in the
environment. (Hannan & Freeman, 1984) Consequently, the concept must be considered in a
dynamic context as learning and adjusting must be aligned with the temporal patterns of relevant
environments rather than viewing change regardless of the developments in the environment. The
slow response rate is due to inertial pressure on structure arising from both internal arrangements
such as internal politics, precedents becoming normative standards and sunk costs as well as from
external factors including legal barriers and public legitimation. (Hannan & Freeman, 1977, Hannan &
Freeman, 1984) The theory suggest that corporations are seeking for hyperstability, arguing that the
intended establishment of reliable organizational structures is a precondition for effective
organizational acting but eventually it may become a burden to an organization’s survival in a
changing environment. (Sydow et al., 2009) However, it does not mean that organizations do not
change at all, they rather react to slow. On a similar note, Sull (1999) found that organizations are
responding with active inertia rather than inaction, meaning that they persist in activities that
contributed to the past success even if the competitive environment and technology changes. In

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addition, outdated and expensive structures, knowledge and processes from the past are difficult to
dismantle, thus some core competencies evolve into core rigidities. (Rosenbloom, 2000) Another
reason to become inert are explicit and implicit social commitments to customers, communities and
employees. (Sull, Tedlow, and Rosenbloom, 1997) Structural inertia theory suggests that older
organizations are limited in their ability to adapt to changing environmental demands due to a
declining probability to attempt a change in core features. (Hannan & Freeman, 1984) However,
contrary to such arguments, some scholars argue that organizations become more fluid with age.
(Singh et al., 1988) The concept also stresses that frequent attempts to change an organization’s core
features, even though the adaption might lead to a better fit with the changing environment, makes
organizations vulnerable to short time failure due to a renewed liability of newness - thus,
organizational failure often are a result of the organization’s attempts to survive. (Hannan &
Freeman, 1984; Baum & Shipilov, 2006)

Gilbert (2005) introduced the distinguishment between two types of rigidities. While resource rigidity
is defined as the failure to change resource investment patterns or an unwillingness to invest (see
also Christensen & Bower, 1996; Henderson, 1993), routine rigidity refers to the failure to change
organizational processes or the inability to change the patterns and logic that are underlying
investments. (see also Leonard-Barton, 1992; Nelson & Winter 1982) It is important to distinguish
between these two concepts because different influencing factors affect the adaptive capacity of
organizations differently, thus seeing inertia as one holistic concept is not sufficient. For example, the
perception of threat on organizations’ adaptability showed contradictory results as some scholars
found evidence that observed threat can be a catalyst to overcome inertia, while others argue that
threat actually increases inertia. (Barr & Huff, 1997; Dutton & Jackson, 1987) By separating between
resource and routine rigidity, scholars found that perceived threat amplifies routine rigidity through
reduced experimentation and contradiction of authority while it simultaneously helps to overcome
resource rigidity. (Gilbert, 2005; Staw, Sandelands & Dutton, 1981)

2.2. Processes leading to incumbent inertia

2.2.1. Path Dependence

The theory of path dependency has its focus on the process of how organizations become rigid in
their actions due to narrowing their scope of action over time. Whereas in an early phase, alternative
solutions and decision options are broadly available and considered, the decisions taken are having
unintended consequences if they are coupled with positive feedback processes. Eventually, repeating
these patterns of action persistently leads to an inefficient lock-in phase where alternative solutions
get crowded out. (Sydow et. al., 2009) However, path dependence is not always dysfunctional,
particularly in early phases it is potentially functional as a result of increasing returns as there are
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obvious benefits if specific patterns of action or routines are repeated. (Sydow et al., 2020) To avoid
that inefficiency resulting from an organizational lock-in, organizations need to realize circumstances
when path-breaking practices are required.

2.2.2. Identity
An organization’s identity has severe impact on its ability to adapt. By its nature, innovation is about
change and creating something new whereas identity is rooted in stability and endurance. (Anthony
& Tripsas, 2016) Thus, a natural tension between these two variables may occur. Existing research
suggests that organizational identity can be both, a filter that productively focuses an organization’s
attention but also a limitation that blinds firms from competitive opportunities. (Tripsas, 2009)
Especially in the context of change it is challenging for organizational members to cope with a
potential identity misalignment, specifically between who we are and who we used to be. (Ravasi,
Tripsas & Langley, 2020) To realize if a company is acting in character, it must be able to recognize if
their actions are consistent with its founding or adopted core values, thus highlighting the
importance of the organization’s history. (Gioia et al., 2013) Tripsas (2009) proposed the
distinguishment between external and internal identity. External identity in short is how outsiders
perceive the organization, what characteristics they associate with it, and it guides expectations how
organizations should act – thus, it provides legitimacy to outside actors. (Hsu & Hannan, 2005;
Benner, 2007) The internal identity is the perception of insiders like employees of what the company
is and in what business fields the company is operating in and thus serves as the guiding lens for
strategic decision-making, the development of capabilities and the acquisition of knowledge. (Dutton
& Dukerich, 1991, Tripsas, 2009) Since identity develops only slowly over time, it often leads to very
rigid patterns of thinking that are slow to change and severely impact an organization’s ability to
adapt.

2.2.3. Organizational Capabilities

Organizational capabilities are a prerequisite to adapt. To stress the dynamic nature of these
capabilities, Leonard-Barton (1992) argued that core capabilities are constantly evolving, and the
organization’s survival depends upon successfully managing the evolution. Over time these
capabilities get institutionalized and may lead to inertia in the face of environmental change.
(Lieberman & Montgomery, 1988) Institutionalization in this context means that the capabilities are
part of the organization’s taken for granted reality which is the result of events in corporate history
and decisions made over time. (Kimberly, 1987; Tucker, Singh & Meinhard, 1990) To dive deeper into
the specifics of core capabilities, Leonard-Barton (1992) defined the term as the knowledge set that
distinguishes a firm from its competitors and provides competitive advantage. This knowledge set
contains four dimensions: first, the employee knowledge and skills including both, firm-specific

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techniques and scientific understanding. Second, technical systems where this knowledge is
embedded as a result from years of accumulating, structuring and codifying the tacit knowledge of
people. Third, managerial systems including both, formal and informal ways of creating and
controlling knowledge and lastly, values and norms associated with the various types of knowledge
and the processes of knowledge control and creation. (Leonard-Barton, 1992) All of these dimensions
have a connection to the organizational past, which makes them unique and difficult to copy, but
also enables the occurrence of rigidities. For example, technical systems and skills are strongly
influenced by past products, managerial systems develop in response to employees' interpretation of
organizational roles (Giddens, 1984), and values are strongly influenced by company founders and
past leaders, which is often referred to as imprinting. (Kimberly, 1987, Tucker, Singh & Meinhard,
1990) Thus, this orientation towards existing technologies infused by historical paths may prohibit
effective firm response and ultimately lead to competency traps. (Leonard-Barton, 1992) As
capabilities may be defined as the collections of routines (see Winter, 2000 and Winter, 2003),
inertial forces may derive from the stability-providing effect of routines and thus, limit the adaptive
intelligence of firms. Moreover, as the development of organizational routines is context and
organization specific, the path-dependency degree increases over time, resulting in capabilities that
are idiosyncratic to the firm in which they are developed. (Andreu & Ciborra, 1996) As a
consequence, these capabilities are less and less efficient if they are taken away from the context
where they originated, thus making them ineffective in a new environment. (Andreu & Ciborra, 1996;
Montgomery & Wernerfelt, 1988)

2.2.4. Cognition
Inertia is not only often a result of the lack of suitable capabilities, but also a consequence of
managers failing to connect these capabilities to upcoming opportunities. (Eggers & Kaplan, 2009)
Consequently, organizations exhibit inertia if top teams fail to recognize change. (Barr, Stimpert &
Huff, 1992; Cho & Hambrick, 2006; Kaplan et al., 2003) In an uncertain environment where actions
and responses require costly and risky investments, managerial attention is crucial in shaping
strategic decision making. (Barr, 1998; Cho & Hambrick, 2006; Ocasio, 1997) The importance of
managerial cognition is also highlighted by Tripsas & Gavetti (2000) in their seminal case study,
where they showcased the failure of a digital imaging company that did not lack the necessary
capabilities, but the cognitive frames of the management were still stuck in an old understanding of
the environment. In managerial decision-making, managers rely on simplified cognitive
representations of the world as they are boundedly rational, but these cognitive representations are
usually based on historical experience rather than current knowledge of the environment. (Kiesler &
Sproull, 1982; Simon, 1955) Due to this historically influenced understanding, managers often
struggle to adapt their mental models in rapidly changing environments, eventually resulting in poor
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organizational performance. (Barr, Stimpert & Huff, 1992; Brown & Eisenhardt, 1998) The majority of
research concerned with managerial cognition has focused on the manager’s interpretation of the
environment, mainly centered around the punchline that these interpretations will affect how
managers see their organization’s abilities to respond to it. (Milliken, 1987) If managers perceive
threat in the environment, their current understanding of internal capabilities is fostered whereas
perceived opportunities may relax the rigidity of routines. (Bateman & Zeithaml, 1989; Gilbert, 2005)
But not only the perception of the environment, also the perception of capabilities of an organization
may lead to inertia. Managers in the same organization can have quite a different understanding
about the currently present capabilities in an organization, and the process of recognizing what an
organization can do is complex, strikingly iterative and builds on feedback about usefulness and
efficacy of attempts that were using these capabilities. (Birkinshaw & Arvidsson, 2004; Eggers &
Kaplan, 2013) Another inertial driver may be the managerial focus towards existing technologies as
organizations may be webbed to old technologies that become obsolete or due to the constraints
imposed by local search resulting from existing organizational routines that prohibits organizations to
move to radically new technologies. (Christensen, Suárez & Utterback, 1998; Eggers & Kaplan, 2009)
Therefore, organizations react slowly to a changing environment if the CEO’s focus of attention is
directed towards the existing technology. (Eggers & Kaplan, 2009)

2.2.5. Commitments
A major antecedent to incumbent adaptation is the commitments that organizations and managers
made in the past. While firms are more likely to adopt a new technology if it is consistent with the
managerial commitments already made, incumbents are less capable of changing strategies to one
that better fits the new technology if they have strong commitments to the existing technology. (Sull,
Tedlow & Rosenbloom, 1997; Rosenbloom & Christensen, 1994) Thus, strong commitments to
existing technology lowers the incentive to adapt and eventually hinders the acquisition of
knowledge. (Eggers & Park, 2018) Commitments to the past may also include existing products and
the incumbents existing customer base, resulting in an unwillingness to cannibalize existing sales
which may serve as a barrier to adaptation. (Christensen & Rosenbloom, 1995; Eggers & Park, 2018)

2.3. Peculiarities of family-influenced businesses in times of adaptation

While family business research received increasingly scholarly interest, it is still unclear if in general
family influence is a benefit or burden for organizations, as equivocal results and arguments have
been presented. (O’Boyle, Pollack & Rutherford, 2012; Zahra, Hayton, Neubaum, Dibrell & Craig,
2008) However, it is widely acknowledged that family involvement influences the firm’s resources,
organizational structure and its goals. (Chrisman, Fang, Kotlar, & De Massis, 2015; Chua et al., 2012)

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The 4-C framework introduced by Miller and Le Breton-Miller (2005) is widely used to describe the
inherent characteristics of family-influenced businesses and how they diverge from non-family-
influenced businesses. The continuity variable argues that family-influenced organizations favor a
long-term orientation mainly because the owners want to hand over the business to the next
generation and keep the wealth in the family. (Gómez-Mejía, Takács Haynes, Núñez-Nickel, Jacobson,
& Moyano-Fuentes, 2007; Miller et al., 2010) The command variable stresses that the decision-
making authority and autonomy is greater as the result of the interconnection of ownership and
control as well as the relative independence from external stakeholders. (Carney, 2005; Miller & Le
Breton-Miller, 2005) Community is concerned with the number and intensity of relationships within
an organization. Research has shown that this variable is more developed within family-influenced
firms as they create a kind of family which attracts employees who value long-term social
relationships. (Tan & Fock, 2001; Lansberg, 1999) Moreover, decision makers care more about the
well-being of employees and show a heightened sense of responsibility towards them. (Miller & Le
Breton-Miller, 2005) Lastly, connections refer to the stronger and more stable relationships with
suppliers, complementors and other stakeholders. (Miller & Le Breton-Miller, 2005)

König, Kammerlander and Enders (2013) introduced a framework that describes the specificities of
family influenced companies in their adaptation processes, stressing that they have to deal with
fundamentally different barriers to adaptation than non-family businesses. The foundation of the
framework is based around the theorization of five variables. First, formalization, defined as the
extent to which organization have standardized the processes of screening, interpreting and reacting
to changes in the environment (Arrow, 1974; Thomas, Clark & Gioia, 1993), is lower in family-
influenced businesses. This is mainly due to the long-term orientation which allows freedom for
nonformalized screening and exploration and relieves organizations from short-term outcome
pressures and the consequent static focus on local refinements. (Farjoun, 2010; König,
Kammerlander & Enders, 2013) Moreover, the high level of community and the trust based external
relationships further decrease formalization. (Carney, 2005, Miller, Steier & Le Breton-Miller, 2003)
Second, the dependence on external capital providers decreases as the family influence increases.
(Arregle, Hitt, Sirmon, & Very, 2007) This can be attributed to the incongruence between prioritized
goals and valued criteria such as quick return and growth for external stakeholders while family firms
are interested in perpetuating the family’s identity, values and dynasty, the reluctance to dilute
ownerships and the desire to pass the business to future generations. (Berrone, Cruz, & Gomez-
Mejia, 2012; Carney, 2005; Gómez-Mejía et al., 2007; Sirmon & Hitt, 2003). Third, political resistance
within a family business is lower due to the extended power of decision makers resulting from family
ties with the owner or relational aspects in their contracts. (Gomez-Mejia et al., 2001) This is further
fostered by an increased acceptance and support of pursuing discontinuous technologies by middle
15
managers and employees resulting from the long-term orientation, the sense of responsibility of
decision-makers and social values embodied in family firms. (Bower & Gilbert, 2006; Gómez-Mejía et
al., 2001; Miller & Le Breton-Miller, 2005). In contrast, the last two variables hinder the adaptive
capacity of family-influenced businesses. The emotional ties to existing assets are higher due to
intense relationships within the organization and other stakeholders. (Miller & Le Breton-Miller,
2005) This rigidity is further enhanced by the social status and prestige that managers are unwilling
to risk, which potentially prohibits mandatory actions like laying off staff or engaging with other
actors in different environments that would harm social ties. (Berrone et al., 2010; Berrone, Cruz, &
Gómez-Mejía, 2012; Sirmon & Hitt, 2003) Lastly, mental models are more rigid as family influence
increases, mainly due to the top managements long tenure as a result of valuing continuity in family
businesses. (Berrone et al., 2010; Schulze, Lubatkin, Dino, & Buchholtz, 2001) This fosters a
commitment to the status quo and the development of a tunnel vision that exacerbates cognitive
inflexibility that is also related to the longer employee tenures in family-influenced organizations.
(Finkelstein & Hambrick, 1990; Gómez-Mejía et al., 2001; Haugh & McKee, 2003) The long employee
tenures and consequently, the low employee turnover, also stiffens mental models due to the lack of
diversity in cognitive frames and knowledge. (Cho & Hambrick, 2006) Moreover, family businesses
tend to become more homogenous within their top management, especially due to intra-family
succession in management positions, which increases the likelihood of fixed mental models and local
search that may be a source of inertia due to the lack of disruptive processes that usually are
connected with management succession. (Cho & Hambrick, 2006; Chua, Chrisman, & Sharma, 2003;
Grusky, 1960; Le Breton-Miller, Miller, & Steier, 2004; Sirmon & Hitt, 2003)

Based on these factors, König, Kammerlander and Enders (2013) argue that family influenced
businesses will later recognize a discontinuous technology as a relevant strategic issue while they are
faster in implementing such a technology after the decision to adopt has been made. Moreover, a
higher family influence results in a decreased aggressiveness to adoption and it lowers the firm’s
flexibility in discontinuous technology adoption routines while simultaneously, the stamina to adopt
a discontinuous technology is increased. (König, Kammerlander & Enders, 2013)

2.4. Problematization

As it is outlined in the previous sections, the scientific world has already accumulated tremendous
knowledge in the area of adaptation to technological change. The majority of studies emphasize the
role of corporate history, with most concepts arguing that a rich history promotes inertial forces. For
example, capabilities become institutionalized over time, path dependencies lead to increasingly
constrained perceptions of opportunities, rigid mental models develop over time, and effective
action requires reliable structures. In addition, it was emphasized that family firms are very different
16
from other incumbents, with some scholars arguing that family firms are particularly inert whereas
others argue that some peculiarities make them particularly adaptive. For example, commitments
and rigid mental models that are strongly influenced by history are more pronounced and lead to
inertia over time. Contrary, the formalization of processes and political resistance in family firms is
lower which may enhance an organization’s adaptability. Although scholars theorized about factors
and actions that influence an organization adaptability to technological change, there is a lack of
empirical evidence about success factors in a family firm setting. Therefore, the following case study
is conducted on a family business that, seemingly against the odds, managed to adapt for over 150
years. The guiding question of this research paper is “What factors allow Rosenbauer to overcome
inertial forces in a family-influenced business setting?”

17
3. Methods

This research work is part of a broader research project, mainly focusing on the topic of digitalization
at incumbent organizations in Upper Austria. Several case studies with leading companies were
conducted to get a holistic view on the topic of digital transformation. For the purpose of this master
thesis, a single instrumental case study with a focus on the company’s history and its development
was created. This method is an appropriate approach for conducting empirical research when the
phenomenon under investigation cannot be easily decoupled from the organizational context.
(Akkermans & van Helden, 2002)

3.1. Research Approach

The methodological approach of the thesis is of qualitative nature based on a historical case study.
Qualitative research is considered a suitable method for creating emerging theoretical constructs and
propositions of moderate scope from empirical, case-based evidence. (Eisenhardt & Graebner, 2007)
A case study approach is useful to take advantage of serendipitous findings throughout the research
process – as building theory from case study research is strikingly iterative, the initial research
question was formulated fairly broad to allow jumping back to a more focused redefinition of the
research question as more knowledge and findings of the case appeared. (Eisenhardt, 1989) Using a
single case study approach is advantageous when examining a phenomenon at a fine-grained level of
detail that cannot be achieved through multiple cases which is especially true in the case of this
thesis through the underlying time restriction. (Ozcan et al., 2017) The research follows a deductive
design, as existing theories as structural inertia, incumbent adaptation and the barrier model to
technological adaption in family-influenced firms serve as the theoretical framework that the case
study contributes nuances to.

The historic approach taken is especially suitable to analyze contexts and to identify how things
developed. (Argyres et al., 2020) By conducting a detailed empirical case study with a historical
perspective, the researcher is enabled to build a deeper conceptual understanding about the causal
processes driving a phenomenon. (Murmann, 2012) The thesis aims to include existing concepts with
a history in theory approach such as structural inertia as these concepts integrate the past as a
crucial part of the theoretical model itself. Thus, the past can be seen as a determinant or moderator
for current behavior of organizations. (Kipping & Üsdiken, 2014) Ultimately, historical research
methods aim to provide a contextualized explanation and interpretation of the phenomenon of
interest. (Argyres et al., 2020)

18
As the thesis is a process study, it follows the characteristics of process study research which is about
exploring change, emergence, adaptation and transformation by focusing on ongoing, dynamic and
shifting experiences – this process view is suitable for observing changes, flows and relationality.
(Bansal, Smith & Vaara, 2018) By tying the acquired process data and process theory together, the
case will be able to show how data supports theory and demonstrate the explanatory value of the
theory. (Berends & Deken, 2019) Moreover, the thesis aims to show how concepts are linked to
temporal units in the data, because linking data to concepts without their temporal position would
be insufficient for process studies. (Berends & Deken, 2019) Linking the temporally structured data
and emerging theory on process dynamics tightly together helps to explain how empirical
phenomena unfold and to legitimate findings. (Van de Ven, 2007) Moreover, the case study approach
helps the researcher to better understand the history of the company and its institutional and
organizational mechanisms. (Tellis, 1997)

3.2. Research Context

The case study was conducted with the company Rosenbauer International AG, the world’s leading
manufacturer of systems for firefighting and disaster protection. With its corporate history starting in
the 1860s, Rosenbauer offers a rich history where technological adaptation played a major role as
the organization re-defined itself several times over the past 150 years - a detailed account of the
company's history can be found in the next chapter of the thesis. As of the end of 2020, the company
employs around 4,000 employees, operates a sales and service network in over 120 countries and
achieved revenues of €1,044 million. (Rosenbauer, 2021a) Moreover, the listed company is led by the
founding family in its sixth generation and thus, serves as the ideal context to analyze the specific
circumstance of family-influenced businesses. By analyzing the specific circumstances and practices
to overcome inertial tendencies in a family-influenced incumbent enterprise, the thesis aims to
nurture existing theory with new practical insights.

3.3. Data Collection

The data mainly was mainly acquired by accessing archival data from the company archive at the
Rosenbauer headquarters in Leonding, which included unpublished internal documents, jubilee
publications and a variety of books about competitors and the development of firefighting services.
Furthermore, digital documents provided by the company via a cloud, information presented on the
company website and press articles from the past were used. This allowed the researcher to draw a
clear history of the company which is particularly useful to familiarize the researcher with the case,
but also to gain additional insights. (Ozcan et. al, 2017)

19
Moreover, as this research work is embedded in a larger project, insights from 18 semi-structured
interviews have been used. The interviews followed a semi-structured format and were mainly
focused on a company project centered around the development of a new concept fire truck. The
interviews were mainly conducted with employees in executive positions and members of the
project team. Albeit the focus was on a specific project in recent years, valuable insights about the
company’s values, leadership and organizational structure could be abstracted to the use of this
paper.

3.4. Data Analysis

In order to gain initial insight into the company, the interviews already held and transcribed in the
course of the larger research project were worked through and notes that could fit the topic of this
thesis were created. This was followed by a visit to the company archives, where the company
history was verbally gone through and discussed with the help of a long-time employee.
Subsequently, company documents, initially mostly on the earlier history of the company, were
made available and worked through. With this analogue material, it was possible to create a
chronologically arranged tracing of the history, in which company milestones from the founding to
the present were factually recounted. With the digital information provided in the second step, as
well as information from the company's website, it was possible to add subtleties to the already
existing history and, above all, to trace the later history of the company in greater detail. In the next
step, the history, which until then had been very focused on the company, was supplemented with
macroeconomic developments and information about the competition of the time. This enabled a
more accurate assessment of the company's performance as well as the special features that
characterized the company in the respective periods. A next important step was the division of the
company's history into distinctive periods, with the last section of each period already summarizing
the most important findings and indicating the required, quite different, competencies of each
phase. In a final step, the findings were related to existing theory in order to contribute new insights
to the existing literature.

20
4. Company History
4.1. The foundations – Rosenbauer as a trading company (1851 – 1906)
In 1851, the Upper Austrian city of Linz was going through profound changes - it experienced a fast
population growth and the middle class found sense of emancipation and responsibility in the
aftermath of the 1848 revolution. (Carrington & Reiter, 2011). In the same year, Johann Rosenbauer
jun. received his patents as an independent ornamental metalworker and soon, he became an
inventive man coming from an entrepreneurial family background. The given circumstances in Linz
led to an open call by the mayor of Linz, Mr. Körner, to establish a voluntary firefighting unit.
(Rosenbauer, 1966a) The town councilor and bookseller Vinzenz Fink decided to take action and
created a fire service with 22 volunteers joining, whereas Johann Rosenbauer jun. was one of the
first volunteers that signed-up to join the brigade. (Rosenbauer, 1966a, Carrington & Reiter, 2011)
However, the brigade did poorly and struggled to get both, attention and support from the general
public, and even faced serious hostility which seems incomprehensible in today’s perspective. This
led to discouragement amongst the members and the service shrunk to twelve men in 1861 before it
eventually stopped its operations. However, despite the initially failed attempt, the reorganization of
the Linz Volunteer Fire Service was launched in 1866 on a more solid basis and quickly gained
support from the town’s inhabitants. (Carrington & Reiter, 2011) The main driver of the
reorganization was the Linz Gymnastics Association which was founded in 1862 and consisted of
many members from the initial firefighting service amongst others. The Linz Volunteer Fire Service
was thus set up on the model of the gymnast fire services which started to emerge in Germany and
especially the successful organizations set up in Passau and Krems served as a role model to the new
initiative. (Carrington & Reiter, 2011, Rosenbauer, 1966a) Johann Rosenbauer got elected as the
deputy-chairman of the new organization and his membership number 1/1866 symbolically
showcased his early commitment to the cause. In 1874, he became the chairman of the organization
before withdrawing from the position in 1887 due to health issues. (Rosenbauer, 1966a) Soon after
joining the brigade, he committed his life to the fire service duty and passed on his ornamental
metalwork workshop to his stepfather. (Carrington & Reiter, 2011) In 1866, not only did Linz form a
firefighting service, but also other regional cities like Braunau, Ried, Gmunden, Steyr and Wels
followed the same procedure which sparked the entrepreneurial instinct of Johann Rosenbauer to
make a business out of the trend and thus, he founded a trading company for fire service equipment.
(Carrington & Reiter, 2011) The assortment at that time included buckets, hoses, pumps, helmets
and ladders amongst other technical requisites. He was inspired by his various travels around Europe
and especially his encounters with Carl Metz, with whom Johann Rosenbauer developed a close
relationship, and Conrad Dietrich Magirus, who were successful pioneers in the field, showed Johann

21
Rosenbauer that trading with fire service equipment was a promising avenue for the future. By
absorbing everything that the fire services in other countries had to offer as well as by gaining his
own practical experience, Johann acquired tremendous knowledge about the industry, especially
about the shortcomings of existing products. (Carrington & Reiter, 2011)

Driven by the motivation of providing the best for his fire brigade and enabled by his technical
knowledge and innovative thinking, he aimed to overcome these shortcomings and drew
construction plans to upgrade existing equipment with his own ideas. (Carrington & Reiter, 2011) His
first invention, a sliding ladder with several sections that could be run out by means of a rope, was a
huge success as the existing models were rather immobile and hard to transport. Around 100 units of
the product, which was manufactured by befriended craftsman in the greater Linz area, were sold
until 1886 and allowed Rosenbauer to win awards at exhibitions as well as gaining reputation and
acknowledgement within the industry and the monarchy. (Carrington & Reiter, 2011, Rosenbauer,
1966a) At that time, the company was also known for the dealership with high quality pumps as
Rosenbauer was the exclusive representative of the E.C. Flader pump factory in Saxony, Germany.
Rosenbauer not only sold the products but was also capable of handling any repair orders quickly
which contributed to the reputation as an excellent supplier of quality pumps. (Carrington & Reiter,
2011) Due to the solid growth of the business, the company moved from its founding place
Spittelwiese 3 to a larger place close-by, at Spittelwiese 11. In 1888, after successfully leading the
company for more than twenty years, Johann Rosenbauer passed the existing company called
“Firefighting Equipment and Technical Rubber and Asbestos Goods” on to his son, Konrad.
(Carrington & Reiter, 2011, Rosenbauer, 1966a)

Figure 1: One of the first Rosenbauer ladders (Rosenbauer Archive)

Originally not planned as his father’s successor, Konrad joined the company in 1880 after his elder
brother passed away at the age of 24. He followed his father’s footsteps by joining the fire service in
1876 before becoming the deputy chairman two years after his father resigned from any official

22
position at the brigade. Eventually, he also became the chairman of the organization in 1896. Under
his leadership, the organization experienced a steep rise and huge success. He had huge impact on
the organization and also the city of Linz - to name one of his achievements he was responsible for
the establishment of a permanent fire watch in 1899, a forerunner of today’s professional fire
service. (Carrington & Reiter, 2011, Rosenbauer, 1966a) Moreover, he supported the establishment
of a rescue service in Linz, initiated a sufficient hydrant network and was also responsible for the
building of tidal barriers after a catastrophic flooding that hit Linz in 1899. (Carrington & Reiter, 2011)
Additionally, Konrad was politically active and created a foundation that took care of the poor and
firefighters in need. (Carrington & Reiter, 2011, Rosenbauer, 1966a) Back to the company, at the
time of Konrad’s takeover Rosenbauer offered a range of products that could not have been more
comprehensive and included all the required equipment of fire services at the time, from buckets to
asbestos sealing boards, and from fire service insignia to climbers’ lanterns – the offering was so
diverse that even some products were also used by the police. (Carrington & Reiter, 2011) The
product portfolio got even more extended to the dealership of fittings and sports equipment, as
Konrad was a passionate gymnast and sports man. (Rosenbauer, 1966a)

This first phase of the company's history already reveals some of the aspects of its success that run
through its entire history. The family business was always driven by providing the best for ‘their’ fire
service and supporting the ones in need. The emotional commitment to the cause encouraged the
family members and employees to deliver and maintain high quality products. Moreover,
tremendous efforts to access and extend intra-domain knowledge and a sort of tinker mentality
characterized the family members, even though until the early 1900’s, no actual manufacturing
processes were happening.

4.2. Rosenbauer becomes a manufacturer (1906 – 1929)

With the start of the 20th century, Konrad developed the vision and desire of creating his own
products instead of just dealing with existing equipment. As he was trained as a businessman and
office clerk at the Bank for Upper Austria and Salzburg, he lacked the technical finesse of his father
and was reliant on a knowledgeable partner which he found in Heinrich Kneitschel. Kneitschel was
responsible for the production at Rosenbauer’s partner E.C. Flader which was about to get taken over
by an investor resulting in frustration within their staff. (Carrington & Reiter, 2011) Konrad used the
opportunity and encouraged Kneitschel to become independent and partner up with Rosenbauer –
the start of a volatile, intense and successful relationship. The “Konrad Rosenbauer and Kneitschel
Factory of Extinguishing and Fire Service Equipment and Metal Goods” was founded in 1906 and
together, they financed a production facility at the Raimundstraße 5 in Linz, a location that served as
the company base for several decades. The existing workshop got quickly adjusted to the needs of
23
the company and soon after, they were able to enter the fierce and intense competition that
characterized the market at the time. (Rosenbauer, 1966a, Carrington & Reiter, 2011) Many of
Rosenbauer’s friends expressed their anxiety at the foundation of the production facility as the
market seemed to be oversaturated by around twenty fire service suppliers in Upper Austria alone
whereas the market for pump production was dominated by two renowned pump producers located
in Vienna, namely Wilhelm Knaust and Franz Kernreuther. And indeed, the situation almost set up
the company for failure only a few months after its opening and coupled with interpersonal issues
between the partners, it led to serious considerations about selling the workshop in November 1906.
(Carrington & Reiter, 2011) After overcoming these personal tensions and by lacking financial
resources to create their own inventions, the company took a clever strategic move by providing a
niche product in the Austro-Hungarian market, the portable limbered pumps called ‘Triumph’. The
product was produced exclusively by Rosenbauer for the domestic market as the patent was licensed
by the German fire service technology pioneer Hermann Koebe, whose factory was located in
Luckenwalde near Berlin and enjoyed an excellent reputation in the pump sector. (Carrington &
Reiter, 2011) The ‘Triumph’ soon became the main product accounting for 81 out of 125 pumps
totally produced between 1906 and 1909. (Rosenbauer, 1966a) However, relying on the portable
limbered pumps seemed to be not enough in the long run and Konrad, despite his declining health,
spared no effort to make Rosenbauer popular both in the domestic market and abroad. He attended
various trade fairs, congresses and traveled throughout Europe to convince customers of the quality
of the Rosenbauer products and eventually, his efforts allowed the company to open up the
attractive market at the Balkans. (Carrington & Reiter, 2011) During this time, Rosenbauer did not
only conquer new markets, but they also decided to take a huge technological step by manufacturing
Austria-Hungary’s first pump with a gasoline engine. Again, Rosenbauer presented itself as an
innovative company and overcame the obstacles of the time as the idea of using gasoline in
connection with a piece of firefighting equipment appeared to be of high risk which firefighting
experts and experienced colleagues initially refused to take. Moreover, the market was dominated
by steam pumps which had been field-tested and proven to be reliable, an important characteristic
which was not associated with gasoline engines yet. (Carrington & Reiter, 2011) The resources for the
development of the pump were not only financed by the success of the ‘Triumph’, but also various
manually operated pressure pumps that were exported all over the empire and were either carried
or mounted on two- or four-wheel wagons. Due to Konrad Rosenbauer’s commercial skills and the
superb technical quality of the product, sales were rising rapidly from modest 13 in the first year to
43 in 1909. (Carrington & Reiter, 2011, Rosenbauer, 1966a) Unfortunately, in the midst of expanding
his company, Konrad passed away in 1909 at the age of 53 and his wife, Luise Rosenbauer, took over
the agenda. (Carrington & Reiter, 2011)

24
After raising six kids and taking care of the home, Luise already got more involved in the company
agenda, represented her husband during his various travels and received power of attorney in 1908.
(Rosenbauer, 1966a) The uprising business continued its success and especially with the
development of the ‘Linz Brand’, the masterpiece of the Linz pump production with its engine and
pump united to form an organic unit within a rigid housing, Rosenbauer achieved record sales. In
1913, the first motorized limber pump was produced and supplied to a Hungarian fire service.
(Carrington & Reiter, 2011) However, the rise of the company was abruptly interrupted in 1914 as
the World War I. started. The war led to the subordination of all industrial companies to the war
economy and furthermore, workers were gradually drafted into the armed forces. (Carrington &
Reiter, 2011) Rosenbauer managed to raise its production of pumps to 64 in 1914, whereas in the
following year the production dropped to only 19 as the production was dictated from outside, and
artillery components as well as military equipment received high priority whereas the demand for
fire service equipment slumped. (Rosenbauer, 1966a, Carrington & Reiter, 2011) Despite the
circumstances, Luise managed to lead the company relatively stable throughout the war times and
secured the job for thirty employees. (Carrington & Reiter, 2011) In the meantime, the business
partner Kneitschel tried to find new sales markets in Eastern Europe, but eventually got arrested at
the boarder of Herzegovina as he got caught without official travel documents. This led to him being
arrested and held in an internment camp where he suffered from anxiety and health problems.
Shortly after his release, he left the company and was bought out by Luise Rosenbauer in 1915.
(Carrington & Reiter, 2011) In the same year, Konrad Rosenbauer jun. joined the family business after
graduating with an engineering degree at universities in Prague and Munich. He immediately
received power of attorney, served the military on the Italian front from 1916 to 1918 before
returning to Linz shortly after the end of World War I. In 1920, he got promoted to the managing
shareholder alongside his mother. He served as the head of the company ever since then, whereas
his mother focused more on charity work and stepped back from company duties at the end of 1923.
(Carrington & Reiter, 2011, Rosenbauer, 1966a) In his youth, he learnt Italian and Serbo-Croatian and
during his summer holidays, he wrote letters about their local firefighting system and how
Rosenbauer could export to those destinations. And indeed, his commercial skills and export interest
helped Rosenbauer to break through the difficult times in the interwar period as not only the general
public suffered from the aftermath of the war, but also the traditional market of Rosenbauer shrunk
to only one eighth as the monarchy collapsed. (Rosenbauer, 1966a, Carrington & Reiter, 2011) The
figures speak for themselves as between 1920 and 1924, a total of 318 pumps left the factory of
which 65 percent were fitted with an engine while also the company’s retail branch began to
flourish. (Carrington & Reiter, 2011) The company profited from many employees actively
participating in the fire service brigades, for example not only the Rosenbauer family members but

25
also the influential master craftsman Lothar Liebisch had been a long serving firefighter.
(Rosenbauer, 1966a)

In general, the postwar period was a start to a new era as the metal industry took huge steps in their
development, especially driven by extensive research of the armaments industry and the ongoing
motorization. (Carrington & Reiter, 2011) In professional city fire brigades, horse-drawn fire engines
were replaced by fire trucks on a large scale. However, the motorization of the first firefighting
services started already in the late 19th century, mainly with vehicles powered by steam or
electrically. As early as 1903, the German manufacturer Magirus produced the world’s first fire
engine with a carburetor engine, yet this technology was unreliable and had not been fully
developed back then. (Oberösterreichischer Landes-Feuerwehrverband, 2020) The advancements of
the technology, especially for military vehicles, during the war and the now proven reliability enabled
Rosenbauer to take a milestone in its history. In 1919, the company installed a pump on a vehicle for
the first time, accounting for the birth of the Rosenbauer fire truck. Of course, it also helped that
many military vehicles remained after the war, which could now be fitted with firefighting
superstructures. (Rosenbauer, 2007a) The engineers’ and designers’ imagination and capabilities
were virtually limitless at the time, and in 1923 they came up with the idea of placing the pump in
front of the engine, which is beneficial in various ways. It eradicated the power losses between the
vehicle engine and the pump drive as well as it saved the need to turn around at the water supply
point. (Carrington & Reiter, 2011) This system soon became the standard and the first pumper trucks
followed shortly, allowing the fire services to carry remarkable payloads of 2000 to 3000 liters of
water – this huge quantity made the trucks not only attractive for firefighting, but also municipal
services bought the trucks. (Carrington & Reiter, 2011) The 1920s also fostered a development that is
typical for Rosenbauer ever since then - a strong focus on individualization. To name an example, in
Austria, a new fire extinguishing technique got introduced that used less water while applying more
pressure. Contrary, huge, motorized pumps with large water quantities were in demand in Sweden.
Thus, the company developed various technical fineness and put a focus on individualizable units as
well as on smaller and lightweight models in this fruitful and creative phase. (Rosenbauer, 1966a)
The company experienced a remarkable growth between 1925 and 1929 and increased its output of
94 pumps in 1924 to 660 in 1929, with an increasing share of lightweight and motorized portable
pumps. (Rosenbauer, 1966a) Even though the factory in Linz got expanded in the years between
1925 and 1928, which allowed Rosenbauer to climb the top of the domestic manufacturers in the
field and also to gain ground on the international market, capacity limitations were still omnipresent.
(Rosenbauer, 1966a)

26
Figure 2: First Rosenbauer Fire Trucks (Rosenbauer Archive)

Therefore, Rosenbauer was preemptively in search of a partner as the factory in Linz –

Raimundstraße was not close to being big enough for the uprising production of fire trucks. With the
Viennese vehicle factory Lohner, a perfect fit was soon to be found – the pumps from Linz were
mounted on the chassis produced in Vienna. The “Lohner-Rosenbauer Gesellschaft m.b.H.” was
founded in the 9th district of Vienna in 1922. (Carrington & Reiter, 2011, Rosenbauer, 1966a)
Although the cooperation between Lohner and Rosenbauer was short-lived due to the passing away
of Ludwig Lohner only four years after signing the cooperation contract, it was a huge step in opening
the East Austrian market for Rosenbauer. In 1927, Rosenbauer set up a cartel with their fierce
competitors Knaust and the smaller pump producer Kernreuther, which tied the sales of equipment
to strict regulations. Rosenbauer left the cartel in 1929 by paying a substantial fine which led to an
even more intense competition, resulting in the insolvency of the formerly powerful Knaust
cooperation. (Rosenbauer, 1976)

Konrad jun. did not only aim to attract customers in the Eastern Austrian market but geared the
company towards exporting all around the world early on. In 1925, the company exported to
Yugoslavia, Hungary, Poland, Scandinavia and the Baltic states. As soon as 1926, the company
managed to hit prestigious sales to the Far East, and now could account Chinese and Japanese fire
services as a part of the company’s international clientele. (Carrington & Reiter, 2011) The expansion
was enabled by an aggressive sales structure – the first sales offices set up in 1922 were located in
Vienna, Graz and Klagenfurt before establishing the company’s first international branch in Teplice,
Czechoslovakia. (Carrington & Reiter, 2011) Moreover, the company cooperated with a trading
company in Hamburg to service the market in Japan, China and Siam. (Rosenbauer, 1966a) In 1930, a
new office was launched in Cilli, Slovenia. Eventually, this strategy resulted in the “golden twenties”
and allowed the company to survive the 1929 economic crisis whereas competitors had to shut down
their business. (Carrington & Reiter, 2011)

During this phase of growth, Rosenbauer tried to pick up on trends at an early stage and aimed to be
at the forefront of technology, but without developing any major revolutionary innovations for fire
services itself yet. The family members recognized their lack of technological finesse and responded
by acquiring respectively partnering up with skilled experts in the field of pump production and

27
vehicle construction. The enormous travel activities to both, promote the products but also learn
about the market, helped to company find suitable products and partners, and opened up export
markets at an early stage – a focus that became more and more important due to the niche product
nature of firefighting vehicles. The products at the time were characterized by a strong focus on
quality, and the company took the risk to also introduce products that had not been established yet.

4.3. Political and economic instability and the search for alternative business fields
(1930-1949)
The new decade began in the aftermath of the Great Depression. Unemployment rose in most
countries, exports, which were becoming increasingly important for Rosenbauer, slumped, and signs
of recession were also noticeable at the domestic market. The trend towards independence in many
countries hit Rosenbauer dramatically, as on the one hand the export markets collapsed and on the
other hand, some main suppliers were lost.

Rosenbauer suffered by the rapid decline of demand and had organizational slack as the company
employed 122 people in Linz and 14 in Vienna at that time. To stay competitive and to safeguard
jobs, Rosenbauer changed its strategy from mainly assembling externally sourced parts to the final
product to an in-house production of most parts in the 1930s. From 1933 on, the company produced
its own complete motorized fire engine, which was able to outperform the competition in terms of
performance, durability and operational reliability. The highly renowned employee Hans
Weinmeister, the mastermind behind the development of a two-stroke engine, which was specially
trimmed to the needs of the pumps, led the independent engine manufacture to profitability during
its existence from 1932 to 1954. (Carrington & Reiter, 2011) However, all the efforts could not stop
the downwards trend of the company. At this volatile stage, Rosenbauer also missed out on an
upcoming trend. In the course of advancing industrialization and an increased volume of traffic since
the end of the 1920s, fire departments had to provide more technical assistance, and special rescue
vehicles were in need. In 1936, for example, Metz built the first rescue truck with crane equipment -
a trend that Rosenbauer, for its part, had not yet picked up on. (Paulitz, 1999) The production of
pumps dropped from 620 in 1928 to 400 in 1930 and 200 in 1934 and 1936. Eventually, Rosenbauer
had to lay off most of their employees and introduced short time working with a 40-hour week in
1935. Another attempt to battle the crisis was the production of the ‘Trio’, a legendary three-
wheeler based on a license from the Ostner company in Dresden. The ‘Trio’ van disposed a huge net
load capacity that led to an enormous payload carrying capability and with its economic single
cylinder engine, cost-efficiency which was in line with the spirit of the times could be achieved. The
vehicle was especially popular among tradespeople in Vienna and Linz and Rosenbauer sold some
100 vehicles between spring 1936 and 1938. (Carrington & Reiter, 2011) However, due to the

28
Anschluss in 1938, the production of the ‘Trio’ was stopped as other manufacturers made the same
product in far greater number and thus, could produce more efficiently. (Rosenbauer, 2007a)

Production year 1928/29 1930/31 1932/33 1934/35 1936/37 1938/39

Pumps sold 620 400 300 200 200 400
Workshop employees 115 105 82 68 68 100
Figure 3: Company Development in the late 1920's and 30's (Rosenbauer Archive)

The business in Vienna, however, created some rare positive news. Initially only operating a sales
office in the Viennese Garnisonsstraße, Rosenbauer used the insolvency of Knaust to acquire the
Vienna Professional Fire Service as a customer which bought only from local producers at the time.
Thus, Rosenbauer took the next logical step and built a production facility in Vienna-Brigittenau,
which provided maintenance and repairments for the fire service as well as it manufactured motor
pumps until 1933 before moving to a bigger facility in the 17th district of Vienna, Hernals.
(Rosenbauer, 1966a, Carrington & Reiter, 2011, Rosenbauer, 1976) Knaust tried a comeback
including a partnership with Austro-Fiat, but eventually shut down in 1938 and Rosenbauer acquired
some of their drawings, designs and models. (Rosenbauer, 1976) The third cartel partner,
Kornreuther, had to shut down its operations in 1944 as a result of the devasting situation during
World War II. (Rosenbauer, 1976) In the aftermath of World War II., the Viennese factory initially
struggled to reach their pre-war production as only 17 trucks have been manufactured in 1947, but
from 1948, where more than 50 vehicles left the company, the Vienna branch recovered and
positively contributed to the company’s bottom line. (Rosenbauer, 1976)

Even before the Anschluss, Austria started with comprehensive preparations for its defense where
air raid precautions received high priority and many of the related competences were handed over to
fire services which led to a product portfolio adjustment of Rosenbauer. In 1934, the company
supplied 15,000 leather gas masks followed by 6,000 more in the following year. Additionally, the
company organized the training of the air raid defense personnel in its own “Gas Protection School”.
(Carrington & Reiter, 2011) The entire industry was subordinated to the objectives of the war and
Rosenbauer got categorized as essential to the war effort as part of the armaments industry, even
though no weapons ever left the factory. Albeit Rosenbauer had to take some minor adjustments to
conform with the new norms, the products basically stayed the same which allowed Rosenbauer to
still produce at an excellent level and in quality terms, the company was even outperforming their
German based competitors. However, the necessity of working according to external directives was a
major break with the existing company culture, as for the first time it was not the company’s own
ideas that were required, but the fulfillment of predefined directives. (Carrington & Reiter, 2011) In
1939, the company developed the R80 portable pump which exceeded the performance demanded

29
in Germany and soon became the standard equipment for air raid protection. In 1940, it represented
40% of all devices sold and 3,100 of these pumps left the works in the years to 1943. It was therefore
not surprising that within the association of German fire service equipment suppliers, Konrad
Rosenbauer headed the portable pump group. (Carrington & Reiter, 2011) The company also played
a major role in the development of the TS8 in 1943, a standard portable fire pump produced by all
German manufacturers which was required due to the scarcity of raw materials. During the war
years, the output and volume of orders rose immensely from 441 in 1940 to 1,658 in 1943, which not
only required a plant enlargement but also the use of foreign labor. (Carrington & Reiter, 2011) The
staff mainly contained of obligated military services and prisoners of war from Ukraine, Belgium and
France. (Rosenbauer, 1966a) The company experienced a strong rise in production output even
during the years of war, however it was strongly due to the production of a single product.
(Rosenbauer, 1966b) As the war progressed, all essential manufacturing companies had to relocate
to relative safety of the countryside, resulting in the movement of the engine production from Linz to
the halls of the Eternit factory in Vöcklabruck. Initially, Rosenbauer managed the transfer without a
loss of production before everything came to a complete standstill shortly before the end of war as
the works in Linz and Vienna-Hernals, as well as a huge supplier in Stuttgart, were destroyed by air
attacks which cut the supply of vital parts. (Carrington & Reiter, 2011, Rosenbauer, 1966a)

Production year 1940 1941 1942 1943

Number of orders 441 841 1213 1658
Figure 4: Order Development during WW II. (Rosenbauer Archive)

The first days after the war were chaotic, but Konrad Rosenbauer and his employees showed
tremendous effort to rebuild the factory and claimed the permission to produce again in July 1945 –
however, the company remained under public administration until 1948 due to its involvement in the
armaments business. (Carrington & Reiter, 2011) The complete relocation of the outsourced areas
from Vöcklabruck to Linz could be carried out in 1948 - in the process, the plant was re-divided and
significant extensions were completed. Until 1947, there was no engine production of its own, as
important suppliers had failed and the company therefore relied on engines from the Rotax
company. Then, in 1947, the company produced its own water-cooled two-stroke engine.
(Rosenbauer, 2007b)

Poverty, emergency manufacturing and improvisation were the order of the day after the war, and
the firefighting market was virtually non-existent. Therefore, commodities were produced, for
example, pans were made from shrapnel ammunition and helmets were converted into cooking pots.
In addition, non-ferrous scrap metal was collected to make fittings - this developed into
Rosenbauer’s own sanitary department, which was to remain in existence until 1988. Moreover, the

30
situation forced Rosenbauer to further adjust the company’s scope to remain in business. An
impending disaster became a new challenge - the Colorado potato beetle plague was striking Austria
and endangering society's food base. At the suggestion of the Ministry of Agriculture, Rosenbauer
began researching and designing crop protection sprayers - the previously gained expertise in sprayer
constructions and Konrad Rosenbauer's sense of social responsibility enabled Rosenbauer to quickly
present a solution that benefited both the business and society. (Carrington & Reiter, 2011) This
related, but still distinct business area was the main income generator in the aftermath of World War
II and contributed to both, the company’s survival and its reputation. (Oberösterreichische
Nachrichten, 1967)

The family’s entrepreneurial spirit allowed Rosenbauer to overcome this difficult period by creatively
bringing its technological competencies to alternative fields of business. In addition, the outstanding
quality of the products was essential in order to stand up to the German competition.

4.4. Post-war boom, new headquarters, and the push towards market leadership
(1950-1980)
In 1950, the immediate post-war period came to an end, the shackles of occupation were loosened,
and a palpable spirit of optimism replaced the depression of war. During the early and mid-1950s,
Austria’s economy received a tremendous boost, partly because of the financial aid from the USA in
the course of the Marshall Plan, which allowed Rosenbauer to return to its previous innovative
strengths as a fire service equipment manufacturer. Moreover, the years of the economic miracle
brought some circumstances that fostered Rosenbauer’s development. For example, a strong
increase in demand for special vehicles like crane trucks as well as special fire-fighting vehicles was
observable and also the increasing air traffic changed the market. (Paulitz, 1999) Moreover, the
reestablishment of the Austrian Federal Fire Brigade Association brought great advantages, since
from now on pumps and equipment were standardized again and binding construction guidelines for
vehicles were created.

1950 also marked the beginning of the high-pressure extinguishing process, which for the first time
made it possible to fight dangerous fires by means of a finely atomized jet in a highly effective and
water-saving manner. This extinguishing method was developed by the American Navy and
introduced to the European market by Rosenbauer. The company developed Europe’s very first high-
pressure fog extinguishing system, the ‘Nepiro’. By connecting the system to a vehicle-integrated
tank, the innovation was hailed as a firefighting revolution and boosted Rosenbauer’s reputation
tremendously. (Carrington & Reiter, 2011) This design of a high-pressure pump in conjunction with a
fog tanker, which was probably the most modern fire-fighting equipment of the time, also made it
possible to re-open old export countries in which the economic situation had also stabilized.
31
The know-how gained from this economical spraying method was subsequently also adapted for the
crop and plant protection area, which also experienced a major boom during that time. At the
beginning of the 1950s, the tractor began its triumphal march and Rosenbauer responds with tractor-
mountable sprayers - several thousand units of the ‘Konzentrator’ were sold. The division remained
very successful until the 1960s, but due to competitive pressure the company abandoned this field of
business again in 1975. (Rosenbauer, 2007b)

Figure 5: The Rosenbauer 'Konzentrator II' (Rosenbauer Archive)

In 1954, Rosenbauer said goodbye to its own engine production and switched to a powerful 4-stroke
engine from VW. This engine, which had proven itself in hundreds of thousands of vehicles, also
became established as the drive for fire pumps. The mass production of the engine, which in
principle was intended for the VW Beetle, enabled production at low prices with high quality, which
made Rosenbauer's own small and laborious production obsolete. Furthermore, in 1958, Rosenbauer
presented a well-received innovation and launched the first portable fire pump with an automatically
controlled piston priming pump - the new priming system guaranteed a fast and safe supply of water,
even at greater suction heights. This avoids longer interruptions in operation and thus massively
facilitated the work of the fire department. In the late 50s, the company also began to build chassis
again, since until then chassis from abandoned military stocks had mostly been used and
superstructures had been placed on them. (Rosenbauer, 2007b) The new developments and the
ongoing automobilization of fire departments which increased progressively from 1958 onwards
allowed Rosenbauer to reach financial stability and strengthened the company’s reputation.

32
In the 1960’s, both the domestic but also the export business flourished and Rosenbauer was able to
capitalize on its excellent reputation, especially as a manufacturer of special vehicles. The sales of
vehicles with special requirements started for Rosenbauer back in 1956, when several special
vehicles were delivered to the Austrian Armed Forces, followed in 1959 by a fire-fighting vehicle to
the Vienna Airport. However, Rosenbauer joined that market rather late as the German
manufacturer Magirus presented its first special airfield fire truck as early as 1932, yet the steep rise
of the airport industry in the 1960’s and 70’s allowed a stronger focus on this market.
(Oberösterreichischer Landes-Feuerwehrverband, 2020) In the mid 1960’s, Rosenbauer was the
undisputed number one in Austria but was not yet a leading player in the concert of major European
manufacturers. It quickly became clear that further expansion could only be achieved through
exports, and thus, in 1965 the first employee was hired solely for export. Soon afterwards, the
Middle East and North Africa became important markets, while the whole of Europe was served.
There was no systematic approach to opening up new markets; it was rather random which countries
were newly added. (Rosenbauer, 2007b) In the same year, the first huge airport fire truck was
delivered to Tunis and soon after, orders for large pumper trucks that proved popular throughout the
refineries and the oil industry in the entire Middle East were fulfilled. Also, the South-East Asian
market was served successfully, e.g. an order by the state of Thailand of 171 portable pumps and 60
two-wheel trailers was satisfied in 1960/61. (Carrington & Reiter, 2011)

As Konrad Rosenbauer’s health declined during this phase, the next generation of the family took
over to continue the successful situation of the company. (Carrington & Reiter, 2011) In 1960, he
allocated power of attorney to Hansjörg Fischer, Fritz Heiserer jun. and Bruno Weinmeister which all
belonged to the greater family and already gained experience in leading positions of the family
business. Bruno Weinmeister had to withdraw from his position in 1964 due to health issues and
thus, the responsibility for the relocation to Leonding in 1968 was on the managing partners Fischer
and Heiserer jun. (Carrington & Reiter, 2011) The relocation to Leonding, a western suburb of Linz,
took place in 1968 and marked another milestone within the company’s history. The construction
process took about two years, from 1966 to 1968, and was initially not supported by everyone, both
inside and outside of the company as the company and its employees were strongly tied to the city of
Linz. (Rosenbauer, 1968) Moreover, the economic climate cooled down during the initial building
phase and an economic slowdown in various countries was still observable in 1967. However,
Rosenbauer managed to finish the project in time and overcame the economic slowdown and the
saturation in the domestic market due to new product developments and an increasing export
activity. (Fischer, 1968) The restricted space in the city center did not allow the company to further
grow, and Rosenbauer even struggled to fulfill their ordinary orders in time. And especially as the
company’s focus shifted more towards large and special purpose vehicles which needed space for
33
their respective assembly line, Rosenbauer had no other option then relocating to reach its full
potential. The owners, who again showed entrepreneurial spirit and risk-taking mentality as the new
facility required a significant investment during economically challenging times, as well as the
employees committed to the project and were not shy to help out during the construction phase as
they did not only envision the company’s future, but also their personal time ahead. (Rosenbauer,
1968) Rosenbauer as a progressive and historically socially responsible company also put an
emphasis on better working conditions, employee-friendly workplaces with enough light and air and
the new facility also included social facilities. The new company base allowed a quicker and more
rational production, increased the storage and transporting efficiency and additionally, the larger
facility created the required space to present the company’s products and equipment to customers
accordingly. (Fischer, 1968) Moreover, the inspiration for new developments and innovations at the
time were often drawn from observations and developments in foreign markets. (Rosenbauer,
1966b) Thus, with the new company headquarters, Rosenbauer also aimed to enhance the
experience exchange with experts both from Austria, but also internationally. (Fischer, 1968)

The two managing directors, Fischer and Heiserer, also initiated a further phase of
internationalization which included new branches in both, Europe and other parts of the world. In
1969, for example, the first manufacturing subsidiary was founded in Belgium in order to be able to
adapt optimally to the regional climatic conditions and regulations. This earned Rosenbauer a
reputation as a very flexible organization and special vehicle specialist. In the early 1970s,
subsidiaries followed in South Africa, South Tyrol, Iran and the Netherlands, as this was often the
only way to participate in the local market. As a result, in the time span from 1967 to 1971, the
export market grew about ten times faster as the total turnover, thus the export share on total
revenue grew from about a quarter to about 40% in the named timeframe. (Oberösterreichische
Nachrichten, 1971, Oberösterreichische Nachrichten, 1972) The export market changed in the 70’s as
Eastern Europe got more and more to a relevant market for the company and led the sales for special
vehicles. (Neues Volksblatt, 1976) At the same time, the domestic market in Austria was saturated
and a fierce price war dominated the market – in the fiscal year 1975/76, the sales in Austria
slumped by about 10% and also the sales in Germany, Swiss and the Benelux countries slowed down.
However, the Eastern Europe market positively impacted the company and the total exports
accounted for more than half of the total revenue with 57% for the first time in the company’s
history. (Oberösterreichische Nachrichten, 1976)

The 1970s and 80s were marked by a growing number of very specialized special vehicles. (Paulitz,
1999) The fire department's operational picture was shifting more and more from firefighting to
technical operations, and Rosenbauer was taking all this into account. The company presented the

34
first containerized rescue vehicle RFC in 1974. A container with special additional equipment was
placed in the middle of the rescue vehicle, which could be unloaded to any location by the crane
system at the rear, but also by an external helicopter, for example. Containers with flood protection,
radiation protection or respiratory protection equipment were created, which allowed the
transformation from a normal rescue vehicle into a hazardous goods vehicle within a short time.

But it was not just the vehicles that were changing, the fire-extinguishing technology was, too. In
1974, development work was completed on the ‘Foamatic’ foam proportioning system, a system
especially designed for airport fire trucks which made it possible to achieve previously unknown
proportioning accuracy in the preselected range. The system received further development for
industrial fire fighting vehicles and with the newly introduced pressure proportioning system
'Mixmatic’, the simultaneous application of a foam attack and a conventional extinguishing attack
with water was applicable. This allowed simultaneous extinguishing of a fire with a water-foam
mixture while cooling surrounding objects with pure water, which resulted in optimal extinguishing
performance while minimizing fire damage. Such proportioning systems were not a world first and
had previously been purchased externally, but the new systems represented a significant step
forward in firefighting at Rosenbauer. (Rosenbauer, 2007b)

In 1976, Hansjörg Fischer passed away as a result of a tragic mountain accident and Fritz Heiserer,
who had already considered retirement, was forced to take over the managing position once again.
He co-shared the duty with Julian Wagner from 1981 on before passing the sole responsibility to
Wagner in 1985. Wagner, who was a member of the Weinmeister branch of the family served in
several positions in the company before getting promoted as the managing director. (Carrington &
Reiter, 2011)

35
Figure 6: The Rosenbauer Family Tree – managing directors are highlighted with their period of leading the
company (own depiction)

Rosenbauer recognized the trend of the times and focused more on special vehicles such as airport
fire fighting vehicles and special vehicles for technical operations, manifesting Rosenbauer's
reputation as a manufacturer of individualized special vehicles. Subsidiaries in various countries
opened up further markets and export became more and more important. The development of
innovative extinguishing systems and rescue vehicles manifested the reputation as a progressive
company.

4.5. Rosenbauer becoming the industry’s innovation and technology leader (1980-
2010)
In the 1980s, the trend of the previous decades continued and Rosenbauer succeeded in continuing
the previous upswing, which ultimately led to becoming the market leader in terms of technology,
innovation and quality. In 1980, the Interschutz which is the world’s leading trade fair for fire and
rescue services, safety and security hosted in Germany once every five years, allowed Rosenbauer to
establish its reputation as the technology- and innovation leader of its industry. The presentation of
the ‘Simba’, Rosenbauer’s new airport fire truck, stole the show and led to a tremendous sales
increase in the upcoming years. The background to this is the emerging need for large firefighting
vehicles for commercial airports around the world due to growing air traffic and rapidly increasing

36
new airport construction. The story of the ‘Simba’ started in 1978 where the company aimed to
increase its sales in the airport fire service market which at that time was dominated by English and
American producers. Rosenbauer struggled especially with the chassis which was not suited for that
special type of vehicle, and stopgap solutions with suppliers like Faun or Perlini did not really stand a
chance against the competition from overseas. (Rosenbauer, 2007c) The company chose an
unorthodox approach and reached out to all important airports around the globe, and through a
questionnaire Rosenbauer aimed to find out what their ideal fire truck must look like. Another
positive side effect was that the company managed to collect the contact details of the decision
makers of the airport, which had been an issue of the sales team previously. The award-winning final
prototype of the Simba included an engine by Mercedes, the chassis from the British manufacturer
Reynolds Boughton, and the design was created by the art university in Linz. After Reynolds
Boughton struggled to fulfill its supplier duties, Rosenbauer sourced the chassis from the German-
based manufacturer Titan from 1983 on. (Rosenbauer, 2007c) During the 1970s, Rosenbauer
intensified its activities in the Middle East region, and with the new products Rosenbauer was able to
attract record deals in the area. This market was incredibly important as the technology aspect was
valued a lot there and the price for the relatively expensive Simba did not hold their buying desire
back, whereas the domestic market struggled due to a saturation as well as financial problems of
municipalities. (Kronen Zeitung, 1981) In 1982, the Saudi-Arabian government ordered various
vehicles including the new Simba and only a year later, an order from Egypt surpassed the record
sales mainly with vehicles for their army and air force. The order accounted for 766 million Austrian
Schilling and led to Rosenbauer’s record revenue of 1,9 billion Austrian Schilling in the fiscal year
1983/84 – about twice as much as two years before. (Rosenbauer, 2007c) With this 54,7% increase,
Rosenbauer achieved the biggest jump in revenues of the 100 largest Austrian industrial companies
in 1983/84. (Neues Volksblatt, 1984) The new capacity requirements posed an organizational
challenge and led to the hiring of about one hundred new employees in Leonding, and Rosenbauer
also profited from the anticipatory thoughts that took place during the construction of the company
headquarters in Leonding, which allowed the relatively uncomplicated expansion of the factory.
(Rosenbauer 2007c, Rosenbauer 1968)

In 1984, the company attempted to transfer the successful development concept of the Simba to the
field of municipal vehicles. The ‘Falcon’ was a fire truck with a number of innovations that followed
the same development approach as the Simba project by using questionnaires and attempting to
incorporate all wishes into the vehicle. After two years, Rosenbauer was able to present the final
product: a technically very high-quality vehicle with a powerful engine, futuristic design and state-of-
the-art comfort. However, the final product was about 40-50% more expensive compared to
conventional vehicles which no municipality was willing to pay. Moreover, the timing was not the
37
best as the municipal fire services were yet still relatively conservative and relied on proven vehicle
concepts. After only selling 22 units, the production stopped and another lesson was learnt: even
though the technology is outstanding, it still must be affordable and the market must be ready for
the innovation. (Rosenbauer, 2007c)

Shortly after reaching the company’s peak in 1984, Rosenbauer experienced the worst crisis since
existing. The oil price collapsed, and the U.S. dollar lost its strength which led to extreme budget
restriction in the Middle East and eventually this important market came to a complete standstill.
(Rosenbauer, 2007c) The crisis revealed the organizational deficits that Rosenbauer certainly had at
the time: there was no controlling unit and no employee evaluation about the contribution to the
company goals. The lack of a controlling unit led to a misinformed management that only about a
year later realized the dramatic situation, and the costs of the grown organizational structure did not
fit with the capacity utilization anymore. Within a year, Rosenbauer’s turnover slumped by 700
million and the expensive cost structure led to a record loss, which required the lay-off of initially 50
staff members, and 250 employees within two years. (Österreischisches Tagblatt, 1986, Neues
Volksblatt, 1986, Rosenbauer, 2007c) However, Rosenbauer was able to bounce back and learned
from this devasting, yet crucial period: a controlling and budgeting unit got introduced and a change
of culture was observable. The information policy within the company was previously
underdeveloped, whereas after this crisis, the employees received a regular update about the state
of the company. Moreover, Rosenbauer realized its strong dependency on a few key markets and
aimed to extend both, the product portfolio and the markets for the future. (Rosenbauer, 2007c)

To finance this expansion, fresh capital was in demand. But not only the capital requirements, but
also the company size made the corporate form of a limited partnership impractical. Moreover, the
need for external experts in management positions and the desired decoupling of the corporation
and the owner family led to a conversion into a limited liability company in July 1988. As one of its
first strategic decisions, the now-named ‘Rosenbauer International Gesellschaft m.b.H.’ established
an own sales company for the Austrian market which was not managed by a family member for the
first time in the history of the company. (Rosenbauer, 2007c) In the same year, Rosenbauer also sold
its technical wholesale business after more than 100 years of trading technical products. The
business unit did not fit the core business and was an unrelated line of business, with an increasing
competition from specialist and shrinking margins that made the effort not worth continuing the
business anymore. (Rosenbauer, 2007c) In October 1990, the M-U-T corporation reached out to
Rosenbauer to sell its fire service subsidiary in Neidling, Lower Austria. Initially, the offer was not
appealing but both, the location and the relatively low salary level, convinced Rosenbauer to take

38
over the branch and ever since then, the site has served as the specialist for small vehicles within the
Rosenbauer group. (Rosenbauer, 2007c)

In the course of the company’s 125th anniversary in 1991, Rosenbauer presented its new airport fire
truck, the ‘Panther’ which seamlessly maintained the outstanding successes of the ‘Simba’. During a
trade fair in 1988, the company realized that the competitors closed the technological gap that the
‘Simba’ created for them, and the strong dependency on the chassis supplier Titan posed an issue the
company aimed to overcome with the new model. The first drafts of the model started in the same
year whereas the concrete development process started in 1889. The company partnered up with a
renown and trustful supplier, MAN, as they already produced a chassis for special vehicles that only
required small adjustments. The model turned out to be a huge success at the jubilee celebration
which hosted experts, partners and customers from all around the globe and allowed Rosenbauer to
once again establish its position as a technology and innovation leader. The ‘Panther’ was a
forerunner in terms of speed, acceleration, comfort and technological assets and also its design was
award-winning. (Rosenbauer, 2007c) As the dependency on external suppliers for the chassis for
both, the Simba and Panther, always posed a risk, Rosenbauer entered into a cooperation with
Freightliner, a subsidiary of Daimler-Benz based in Portland, which developed an exclusive chassis for
Rosenbauer. After Freightliner cancelled the cooperation as economically unattractive in 2003,
Rosenbauer bought the documentation and drawings and from then on started to build the chassis
itself at the General Safety site in the U.S. (Rosenbauer, 2007c)

Figure 7: The first delivered 'Panther' (Rosenbauer Homepage)

The jubilee year 1991 was quite a busy one, as Rosenbauer also developed a protective helmet called
‘Heros’ in close cooperation with the Austrian Federal Fire Brigade Association, which was a huge
success as over 50,000 units of the helmet were sold within the first four years. (Rosenbauer, 2007c)
39
In the following year, Rosenbauer abandoned its factory in Vienna-Hernals which produced
Rosenbauer products since 1934 due to the limited capacities that were impossible to expand as the
factory was located in the middle of a residential area. Moreover, the site never reached the
productivity of the branch in Leonding. After releasing about half of the employees in 1987, the final
part of the staff was laid off in October 1992. (Rosenbauer, 2007c)

A huge step from an owner’s perspective was the conversion into a stock company in 1994. Ever
since Rosenbauer transformed to a limited liability company, the next step of going public was in
everyone’s minds and the company head Wagner openly spoke about the likelihood of this step in
the press, thus making this step easier than the initial transformation to a corporation with which the
owner family struggled quite a bit. (Rosenbauer, 2007c, derStandard, 1991) The IPO of the
‘Rosenbauer International AG’ contained the issue of 1,7 million shares with an issue price of 765
Austrian Schilling per share which resulted in a capital increase of 41%. The transformation had three
main drivers: first to generate new growth capital, second to make the family fortune more mobile,
and third to attract external and renowned people for the management and the supervisory board.
Before the IPO, Rosenbauer had to work on its transparency as the figures and data of the company
have been kept a secret for the last decades but from there on, a transparent communication to
external shareholders was required. Excellent investor meetings and a successful road show allowed
the IPO to be oversubscribed seven times, which underlined the excellent reputation Rosenbauer
had earned over the past years. 45% of the shares were acquired by employees, which was a record
for Austrian companies and speaks for the commitment, identification and connection of the
employees with the company. (Rosenbauer, 2007c)

The early 90s also constituted another milestone in the development of municipal fire trucks. In their
leisure time, two employees that both were active at their regional fire service brigades, discussed
the downsides of the existing fire trucks. One of them drew a draft of a high-tech municipal truck
where all steel parts were replaced with aluminum. Moreover, a revolutionary approach was used:
instead of screwing the parts together, the vehicle based on its aluminum plates must be sticked
together without using a single screw, which led to a significant shortening of the manufacturing
time and cost savings. The new vehicle named the ‘AT’, standing for aluminum technology, also was
the first vehicle where 3D modelling was introduced in the design phase. The aluminum construction
was trendsetting for the vehicle development at Rosenbauer and within a few years, the setup
concepts for all types of vehicles followed this construction. At the end of 1993, the prototype was
finished and after passing the final tests in 1994, the product was a massive blockbuster at the
Interschutz. The serial production started in the summer of 1995 and the vehicle was a top seller for
years. The successor ‘AT II’, which got presented in 2002, managed to tie in with the earlier success

40
and scored with further innovative advancements in the fields of lighting, the vehicle’s ergonomics
and also the logic control system got introduced for the first time. Rosenbauer reacted here early to
future developments in the firefighting sector. For example, ever more complex fire operations, ever
more extensive tasks such as environmental protection or recovery operations have to be handled
within the shortest possible time with fewer and sometimes untrained personnel. The system
replaced many switches and levers with a display and keypad, thus allowing simple operation and the
avoidance of errors. (Rosenbauer, 2007c)

The growth of the company with its production network and the growing diversity of products led to
an organization that lacked efficiency in its internal processes. Thus, Rosenbauer cooperated with the
Austrian consulting company ROI to restructure its processes in 1994. The company aimed to
increase the value-added share of the own work, a reduction of the production costs and thus
achieve an increased competitiveness of the manufacturing sites. Firstly, the assembly lines got
approached: instead of doing one work step at several pumps, an employee accompanies a pump
from station to station, where he finds everything necessary, leading to the reduction of assembly
times by 60%. Afterwards, the concept was also applied to the AT – the vehicle moves in the flow
principle from station to station. Moreover, the prefabrication with welding and sheet metal
processing got modernized and redesigned, which reduced the process costs by 30%. Within the next
five years, several projects followed so that all production areas in Leonding were aligned according
to the ROI approach. Later, also the factory in Neidling and subsequently international production
sites followed. As a result, Rosenbauer accomplished the transformation from a commercially
organized craft business to a process-oriented industrial manufacturer. (Rosenbauer, 2007c) In 1997,
Rosenbauer also introduced the modular construction and achieved efficiency and cost benefits that
allowed the company to offer customizable models almost at the price of mass production.
(Rosenbauer, 2007c) Moreover, the company started a reorganization process in 1996 as the classical
functional approach turned out to be slow and ineffective. The change from a functional structure
including departments such as technology and sales to business units that are viewed and managed
as a self-contained unit allowed easier management, control of results and transparency. In the fall
of 1997, the first preparations began and with January 1, 1998, the new order came into force which
included the divisions vehicles Europe, fire extinguishing systems, equipment, international sales,
and USA. After some events and changes in the following year, the structure changed to the divisions
of municipal vehicles, special vehicles, aerials, fire extinguishing systems, equipment and USA.
(Rosenbauer, 2007c)

The recent century started with devastating findings. Rosenbauer BV in the Netherlands had falsified
balance sheets for years and bankruptcy was unavoidable as soon as the management recognized

41
the situation. Moreover, Metz was also under heavy pressure just two years after its purchase which
required a comprehensive restructuring, cost reduction and a considerable staff reduction. These
two things put enormous financial strain on the company, the share price fell to an absolute low and
the equity ratio dropped considerably. However, the group as a whole still remained relatively stable,
even after posting a net loss of 12 million Euros in 2000. (Rosenbauer, 2007c) Within one year,
Rosenbauer returned to positive figures in 2001, yet the share price recovered only slowly which
represented an undervaluation for some experts. The Cross Holding recognized the company’s
potential and started to buy shares on a massive scale in 2003, obtaining 28% of the company within
two years and aiming to take over a majority stake. Rosenbauer took countermeasures as the family
members contributed all shares to the newly founded ‘Rosenbauer Beteiligungsverwaltungs
G.m.b.H’, which manages 51% of the share capital and thus Rosenbauer remains a family business. In
2006, after failing to take over Rosenbauer, the Cross Holding sold its entire share package again.
(Rosenbauer, 2007c)

Figure 8: Stock price development of Rosenbauer International AG (via onvista.de)

Returning to positive news, Rosenbauer unveiled a new municipal vehicle in March 2003, the
Rosenbauer ES. The ES was a low-cost alternative to the tried-and-tested AT and focused on the
German market and all other markets that followed the DIN standards, such as the Benelux countries
and Slovakia. The model was produced in Luckenwalde, but profited from the Radgona, Leonding and
Luckenwalde production network. The strength of this model was its modular design, which offered
the desired standardization with sufficient flexibility. (Rosenbauer, 2007c) In the same year, a new
concept for special vehicles was developed - the Customized Body System CBS. With the CBS, it was
42
possible to modularize production to a large extent despite high complexity and diversity. The body
modules were now made of laser-cut, folded and bonded sheet metal instead of steel or aluminum
profiles, which were welded and bolted together. The modules are made up of a tank, pump room
and equipment and can be modified as desired by the customer. This has made it possible to
streamline the clear variety of products and types, meet individual requirements and reduce
production costs through increased industrial production. This was shortly followed by the
introduction of the semi-knocked down (SKD) or completely knocked down (CKD) design. Here, the
parts are prefabricated at Rosenbauer and assembled on site by system partners. Either individual
parts or small modules are supplied with instructions, which also allow Rosenbauer to supply only
partial elements, as public-sector orders often focus on local value creation and therefore no longer
import entire vehicles. (Rosenbauer, 2007c)

At the Interschutz 2005, the new Panther 2005 was presented. Competitors had caught up again and
imitated the previous model, therefore Rosenbauer lost its technical superiority and faced an
unwinnable price war. The development began in 2003 and the desire to be the technology and
innovation leader again led to a huge motivation within the workforce. Especially design-wise
Rosenbauer aimed to create a wow-experience that indeed was achieved by cooperating with the
Viennese design specialist Spirit Design. The focus of this model was on technical innovations and
ergonomics for the crew. Moreover, a smaller version of the Panther was developed at the same
time, which put enormous pressure on the engineers but led to a stunning success at the trade fair.
The smaller version of the Panther opened up new markets in England and Ireland that so far could
not be properly served. (Rosenbauer, 2007c)

As of 2003, the utilization level significantly increased, resulting in space and capacity problems at
the site in Leonding. A new logistics center was built while some areas got redesigned and relocated
– this project was the largest construction project in more than 25 years. The project was approved
in May 2005, started its construction process in September and was completed in April 2006. The
project allowed the optimization of the space concept, especially in the assembly areas. The whole
reconstruction was about 10 million Euros of which 6.5 million could be attributed to the new
logistics center. Moreover, during this project the company set a focus on investments in the social
area such as improved sanitary facilities, a new media center, an office for the works council and an
apprentice room. (Rosenbauer, 2007c) The dominant position Rosenbauer now acquired in the fire
service area allowed to put the focus solely on this area. Thus, in 2005, Rosenbauer sold one of its
oldest business branches. In 1880, Johann Rosenbauer, an avid sportsman, first sold gymnastics and
fencing equipment. The product portfolio got widely expanded over the decades and even included
skiing equipment from 1935 on. Over the span of time, the sports retail more and more turned into a

43
fashion boutique and got an own shop in 1963. Even though the business unit always operated
profitably, Rosenbauer abandoned the branch after more than 120 years of existence as it did not fit
the core business. (Carrington & Reiter, 2011, Rosenbauer, 2007c)

Figure 9: Technological Milestones in Rosenbauer's History (own depiction)

During this phase, Rosenbauer managed not only to identify trends, but to create them. The
electrification of vehicles was initiated with the Logical Control System, a new construction method
for aluminum structures was developed, and new paths were also taken in the approach to new
designs. In addition, the company realized that design was enormously important and cleverly used
the presentation at trade fairs to trigger a wow effect that impressed the present experts - thus it
was possible to sell the most advanced and highest quality vehicles on the market without facing a
price war. What particularly distinguishes Rosenbauer in this phase is the way it deals with and learns
from mistakes: the dependence on individual products and markets was reduced and, especially in
the case of municipal vehicles, it was learned that price is very much an important factor in the
purchasing decision. But there was also a lot happening in the organization - the company did not shy
away from making major changes with external help in order to make up for organizational deficits.
In addition, the family set a strong signal by creating a family holding to make it clear that they would
never lose control of the company, a mistake that had already brought down some former
competitors.

44
4.6. Excursion: Rosenbauer’s international growth through joint-ventures and M&A
The international market for fire trucks in the late 80s and 90s was pretty unique as the demand was
primarily served locally. Out of 15600 newly acquired fire trucks in 1991, 14400 were locally sourced.
Thus, Rosenbauer had to change its strategy from exporting to entering the markets directly, either
via a production facility or more so via joint ventures. (Oberösterreichische Nachrichten, 1991,
Kronen Zeitung, 1991)

In 1991, Rosenbauer acquired the Dutch Kronenburg group, a traditional and known manufacturer of
fire trucks with branches in Spain and Singapore. The company was a strategic fit as they were
especially present in the market for airport fire trucks and industrial fire trucks which Rosenbauer
aimed to increase its market share. Kronenburg was the second investment in the Netherlands, as
Rosenbauer already held a share in the Doeschot corporation, which had a focus on municipal fire
trucks. Thus, after taking over Doeschot completely, Rosenbauer merged their complementary
businesses with the aim of stabilizing the strongly fluctuating demand for special vehicles with the
stable demand for municipal fire trucks. However, the company cultures clashed and never really
worked out as well as financial problems occurred, resulting in a withdrawal from the Dutch market
in 2000 which has been served through external sales and service partners ever since. (Rosenbauer,
2007c)

The freshly acquired capital from the IPO in 1994 allowed Rosenbauer to enter the U.S. market, the
world’s largest single market which was until then a large white spot due to the completely own
world of standards, application philosophy and extinguishing technology. The market did not only
offer a huge potential in itself but also opened up an additional market potential globally as half of
the world complies with U.S. standards. (Rosenbauer, 2007c) Before the market entry, the
differences in requirements quickly became clear as the market was in demand for bigger cars, the
function and practicality are in the foreground, a different design is required, and the distribution is
almost exclusively via dealerships. Due to the well occupied and very price-sensitive market, setting
up an own production facility seemed to be too risky, thus Rosenbauer set up a joint venture in the
form of a shareholding in a smaller, regionally established manufacturer with a similar philosophy in
terms of quality and price. Rosenbauer found a partner in General Safety Equipment based in
Wyoming, Minnesota which was a regional company with an excellent reputation, that offered
quality vehicles in the high-price segment in manageable quantities. The negotiations started at the
end of 1994, and in May 1995 a joint venture with 50% shareholding by Rosenbauer was agreed on.
The management of General Safety remained with the old owner, Kevin Kirvida, as he was the figure
of identification for both, customers as well as employees. Rosenbauer also soon realized that the
vehicles must not get a European stamp and remain American to find acceptance on the market.
45
(Rosenbauer, 2007c) To achieve the set goal of 10% market share in 10 years, the product range and
the cooperation with General Safety was not sufficient - especially in the middle and lower price
segment, the product offering was missing and therefore, it was difficult to build up a good dealer
network exclusively. A partner for the middle and low prices segment was found in Central States,
another regionally successful company from Lyons, South Dakota which was also taken over to 50%
in April 1998. Initially, combining the existing dealer network of Central States and General Safety
posed some issues, however Rosenbauer managed to solve them timely. The two locations in the
U.S. were operating relatively independently in the market but under the common holding
Rosenbauer America, which is 50% owned by Rosenbauer whereas the owners of Central States and
General Safety hold a 25% share respectively. In February 2000, Rosenbauer acquired 50% of RK
Aerials based in Fremont, Nebraska, a specialist in aerial ladders and lifts, which, like Central States,
offered solid products with a favorable cost structure. (Rosenbauer, 2007c) The U.S. involvement
benefited the company worldwide, for example in 2001 the Interior Minister of Saudi Arabia signed
one of the largest orders in history: 500 fire trucks and equipment such as breathing apparatus,
jackets and helmets were ordered. The vehicles complied to U.S. standards and allowed the company
to receive the order that would otherwise never have been received. The entire order was produced
at Central States in the U.S. and processed over several years. Moreover, orders from countries in
South and Central America as well as from the Near and Middle East preferred fire trucks that
complied to U.S. standards, thus the expansion allowed Rosenbauer to open up markets that were
previously closed off. (Rosenbauer, 2007c) Until 2004, General Safety, Central States and RK Aerials
appeared as independent brands on the US market before everything was brought under one roof
referred to as Rosenbauer in America. In 2007c, the company held a 12% market share, had 400
employees and produced more than 750 cars annually. (Rosenbauer, 2007c)

Rosenbauer did not only aim to expand its business overseas, but also in Europe by the acquisition of
Metz, the second largest turntable ladder manufacturer in the world. Metz experienced various
changes of ownership during its long existence – to recall, the founder Carl Metz was a fire service
pioneer and inspired Rosenbauer’s founder Johann during the early phases of the company.
Although Metz was under observation for a long time, the acquisition was perceived as too risky
during the previous changes of ownership – however, the new financial potency allowed Rosenbauer
to take the risk. In April 1998, the purchasing agreement was signed and included the production
facilities in Karlsruhe and Luckenwalde. To close the circle, the plant in Luckenwalde was originally
owned by Hermann Koebe, who in 1906 sold the patent for the ‘Triumph’ pump to Konrad
Rosenbauer. The purchase was primarily motivated by the turntable ladders, at the same time the
company also became a major supplier of fire fighting vehicles complying to German standards.
Previously, Rosenbauer only sold special vehicles to German airports and professional fire
46
departments, but now also grabbed a significant share of the market for municipal vehicles in
Germany, the largest European market. (Rosenbauer, 2007c) With the purchase of Metz, Rosenbauer
also acquired a 50% share in the Slovenian manufacturer Mettis International based in Radgona
which enabled an international production network. The factory in Karlsruhe concentrated
exclusively on the production of ladders, Luckenwalde focused on fire fighting vehicles, and Mettis
only produced components for the factory in Luckenwalde. Even though the ownership of Mettis was
dissolved after a few years, a customer-supplier relationship maintained until 2012, when
Rosenbauer acquired a 90% stake in the company. (Rosenbauer, 2007c, Rosenbauer, 2021) Initially,
Rosenbauer kept both locations clearly separated organizationally, as Rosenbauer and Metz had very
different corporate cultures and the divisions were to find independent success. The integration into
the Rosenbauer brand took several years and was accompanied by economic difficulties and
restructuring programs. (Rosenbauer, 2007c)

In China, the second largest market in the world, Rosenbauer had a long tradition of exporting. The
first pumps and vehicles were delivered as early as the 1920s, and the opening of the market in the
1980s was used for the export of industrial and airport fire-fighting vehicles. Especially the Panther in
the 90s was a huge success in the market. Similar to the approach used in the U.S., Rosenbauer
planned an entry via joint venture, but finding a suitable partner turned out to be more difficult.
YongQiang, a vehicle manufacturer for the petrochemical industry was on its way to diversifying and
held one of only 24 licenses to build fire trucks in China. In early 2003, Rosenbauer and YongQiang
signed a cooperation agreement, exchanged personnel to learn from each other before signing the
contract of a joint venture in November 2004. The joint venture set up a fire truck production facility
at YongQiang’s site in Dongguan which was solely focusing on municipal fire trucks and rescue
vehicles for city fire departments and started its operations in May 2005. (Rosenbauer, 2007c)
However, due to disappointing results and a problematic cultural clash, Rosenbauer withdrew from
the joint-venture and left China as a producing company.

A more promising project started in 2009, when Rosenbauer founded a joint venture in Russia. Again,
the market was dominated by local manufacturers off whom Rosenbauer took a significant market
share since joining the nation. One of the most recent additions to the company’s portfolio was the
acquisition of the G&S Group in 2016 which focuses on stationary fire protection. In the same year,
Rosenbauer found the Rosenbauer Rovereto joint venture in Italy for hydraulic firefighting and
rescue platforms, which showcases the ongoing specialization and importance of highly sophisticated
solutions to defend the company’s position as the innovation and technological leader in the fire
service sector. (Rosenbauer, 2021b)

47
With its joint ventures and acquisitions, Rosenbauer takes account of the peculiarities of the
firefighting market and tries to offer as much as possible locally. In addition, the company is always
interested in incorporating outstanding technological developments and capabilities into the
organization, thus external knowledge acquisition plays a crucial role.

4.7. Digitalization takes over (2010-now)

The beginning of the last decade was marked by the financial and economic crisis in the wake of the
Lehman bankruptcy. However, Rosenbauer was able to cope well with this global crisis, and apart
from a moderate drop in revenues in 2011 the steady upward trend could be continued. The trend
toward digitization was and still is at the forefront of the ongoing development, which opens up
many opportunities but also calls for creative solutions in new fields. The last change at the top of
the company took place in 2011. After more than 30 successful years at the top of the company,
Julian Wagner handed over the baton to his nephew Dieter Siegel. Wagner's declining health played
the main role, but it is also possible that an antitrust affair in Germany hastened the departure, in
which Rosenbauer was ordered to pay a fine of 10.5 million euros in spring 2011. (Kurier, 2011)

The research project for the new EMEREC information system was completed and launched onto the
market in 2009. The EMEREC is a new information system to provide the emergency services with
mobile operational management, thus it is Rosenbauer's information system for the fire department
at the scene. All relevant information, such as the fire protection plan, data on dangerous goods and
hazardous substances, or rescue routes, can be accessed by all emergency services at any time and
any place via this software. This means that the operations center, the emergency forces in the
vehicle or directly at the scene via smartphone can access the same data. The benefit is that all
emergency forces have exactly the same information, which can be distributed quickly and kept up-
to-date easily. Over the course of the decade, this system has gained several other special functions,
for example, the Crash Recovery System. The CRS was developed in cooperation with Moditech and
provides emergency responders on site with all relevant information about the vehicles involved in
the accident. The growing number of vehicles and vehicle components pose an active danger to
emergency services, as, for example, incorrect handling of electric vehicles can lead to electric
shocks. Hence, the system provides the most important information in real time, such as rescue-
relevant components, additional safety and disabling instructions as well as photos to allow an easier
visualization. In addition, the driver enhanced vision system DEVS was developed to support the
driver of the emergency vehicle in poor visibility conditions. A tablet placed directly in the driver's
cab provides the driver with support in the areas of navigation, tracking, and vision enhancement.
(Rosenbauer, 2021b, Rosenbauer, 2021c)

48
Of course, further progress was made not only in the electronic area. In 2010, for example, two new
pressurized foam proportioning systems were presented, which support optimum extinguishing
performance. Moreover, new advances in the ladders technology sector were developed, for
example in 2013 the innovative L32A-XS aerial ladder with a new operational radius from Metz
Aerials was presented. The new articulated boom opens up new dimensions of maneuverability and
flexibility, allowing firefighters to work even more efficiently in high-altitude rescue operations. In
addition, the innovative rotating mechanism makes it possible to avoid blind spots and reach
previously inaccessible locations. (Rosenbauer, 2021d) In addition, there are also constant further
developments in equipment such as the HEROS emergency helmet, for which new, improved series
were presented in each of the years 2010, 2015, and 2017.

The development of a concept fire truck CFT represented a milestone for Rosenbauer, but also for
the fire truck market in general. Originally planned as a semi-finished vehicle prototype to facilitate
customer presentations, it evolved into the first electronically powered fire truck in the world. The
development stage started back in 2013 and initially, the project had to overcome strong internal
resistance, as some patterns Rosenbauer struggled with at the development stage of the Falcon and
Panther got repeated. Especially experienced employees raised the concern that the path from a
creative development stage to a saleable, finished vehicle is a very long journey. On the way to series
production, a lot of things had to be designed twice again, proper documentation was lacking, and
starting from scratch for some parts was very costly and time-consuming. The development unit for
the CFT was organizationally separated to a newly set up subsidiary that has strongly focused on
building one working prototype without initially taking series production requirements into
consideration much. Moreover, when the idea of making an electronically powered vehicle popped
up, the firefighting market was still foreign to electromobility, and the technology was considered
relatively unreliable still. As Rosenbauer learned from the failure of the Falcon that the market had to
be ready for new vehicle innovations, which in the case of electromobility was heavily doubted
internally, the management board and project leaders had to heavily commit to the project and
created structural separation to give the project the necessary room for development. During the
project, Rosenbauer made use of their newly introduced trend mapping and thus, with the
development of the CFT Rosenbauer picked up on future trends such as the silver society, gender
shift, and individualization, which will greatly change the work of fire departments in the future. As a
result, the company succeeded in producing tomorrow's firefighting vehicle today. The topics of
mobility, new ecology and urbanization are important when it comes to environmental protection
and traffic. The Concept Fire Truck is currently the world’s first and only electrically powered fire
truck and is therefore environmentally friendly, maneuverable and safe. The CFT was spectacularly

49
unveiled in 2020 and the vehicle series, which has since been renamed RT, revolutionary technology,
entered series development in 2021. (Rosenbauer, 2021e)

Figure 10: The new CFT truck (Rosenbauer Homepage)

As a final remark, it can be stated that Rosenbauer’s history has been closely linked with that of the
fire services for the past 155 years. The economic and technological development of the company
was strongly influenced by global economic trends such as the post-war periods after both World
Wars, the global economic crisis in 1929 and other macroeconomic developments like the
motorization in the early 20th century, the increasing air traffic starting in the 1960’s and a shift
towards digitalization and e-mobility in recent years.

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5. Findings

Based on the reconstruction of the organization’s history and insights from the interviews, the
following model comprises the success factors that Rosenbauer applied to thrive throughout the
company’s existence. The model is designed case specifically and each factor is explained in detail
based on the case, yet the findings are also discussed on a more abstract level in the following
section to allow some degree of generalizability. At the core of the model, three distinct domains
serve as the basis, however the interconnection between these domains must be emphasized.

Figure 11: Success Factors throughout Rosenbauer's History (own depiction)

5.1. Key factors to stay competitive on the market

Market: This domain contains of factors that are required to survive and thrive on the competitive
market in a changing environment

Customer Proximity: Customer proximity has several facets and includes both physical proximity to
the customer via sales offices, local production facilities or partnerships, as well as cognitive
proximity that enables an assessment of future customer needs. Since many of the company's
employees are active in the fire department themselves and are therefore virtually their own
51
customers, it was possible to understand the needs of fire departments and the inadequacies of
existing equipment and vehicles. In addition, this also made it easier to reach decision-makers among
customers, and the brand was able to benefit more easily from word of mouth. Moreover, since the
company was founded, it has also endeavored to meet all individual customer requirements, thus
earning a reputation as a custom tailor for fire departments. The wide range of products, which was
offered as a wholesaler early on and has been expanded again and again in the recent past mainly
through in-house production, makes the company a full-range supplier and the first point of contact
for customers in many areas, which is especially crucial in a niche market like the fire service market.

Trend Recognition and Timing: Recognizing trends early on is important in order to achieve first
mover advantages and to be perceived as an innovative company in the long term, which promotes
both reputation and the attractiveness for innovative personnel. Rosenbauer focused on motorized
sprayers relatively early on, increased its focus on airport vehicles as soon as the trend toward
increased air traffic became apparent, and was the first fire truck manufacturer to embrace the trend
towards electromobility in the last decade. Additionally, timing is a key success factor. In the 'Falcon'
project, Rosenbauer had to recognize that the market must also be ready for innovation, even if the
new products are clearly superior. In addition, especially in the sector under review, it is very
important to present new products at certain times, in this particular case at the largest trade fairs.

Global Focus: In order to successfully manage technological change, it was important to be strongly
export-oriented from an early stage. As early as the 1920s, the company exported to Asia, and over
the decades the local market became less and less important, while exports became increasingly
important. This is essential especially in a niche market, otherwise scaling would not be possible.
There was also no need for a structured market development, but every opportunity was used. It was
crucial to pay attention to local conditions and to meet special requirements such as different
standards. This orientation is of course generally important for the development of the company, but
especially in times of change as it allows local trends to be identified and innovations to be tested
and established in different markets.

5.2. Gaining and accessing knowledge as a prerequisite to adapt

Knowledge: This domain contains of knowledge sources that enable the successful application of
market factors and support the organizational factors

External Acquisition: From an early stage in the company's history, it was important to get external
knowledge into the organization. Early members of the family were often traveling, meeting industry
pioneers and borrowing patents from established companies to learn from. The company has always
been strong in scanning competitors, learning from them and assimilating existing external
knowledge. More recently, the acquisition of external know-how, such as the specialized ladder-
52
building expertise of Metz, has become increasingly important, and the acquisition of external board
members and top executives has also helped to gain external and broad knowledge.

Partnerships: Another source of external know-how has always been a strong commitment to
partnerships. This began early on with the long-standing partnership with Kneitschel, which made
independent production possible in the first place. Immediately thereafter, a partnership was formed
with Lohner, whose expertise in vehicle construction made it possible to build Rosenbauer vehicles.
In addition, a joint venture network developed including local partners who specifically brought
knowledge of domestic markets into the organization. More recently, the partnership with Moditech
can also be mentioned, which led to the improved application of the EMEREC information system.

Intra-Domain Knowledge: Especially in a niche market, specific intra-domain knowledge is incredibly

important. The fact that the employees themselves often come from the fire service sector meant
that there was always an enormous amount of knowledge about the operational conditions. This
factor also runs through the history, as the founder and his successors were all actively involved in
the fire department, mostly also in a managerial capacity. This is accompanied by a certain tinkerer's
mentality and specific technological knowledge that enabled high-quality, innovative and reliable
products.

5.3. Organizational processes and structures as the foundation to flexibility

Organization: This domain contains of organizational factors that both, are fostered by knowledge
factors and build the foundation for market factors

Commitments: The company has committed itself in many ways. To the fire services, to the
employees, to society. Since its founding, the company has always focused on providing the best for
"their" fire department and the community. In doing so, a strong bond was always built with the
employees and their welfare was taken care of early on, which in turn brought a strong emotional
connection to the company and the products. The strong commitment to a specific customer group
such as municipal firefighting services also never ensured that other target groups were ignored but
rather helped to establish the brand and profit from it. Beyond that, however, there was never a
particularly strong commitment to a specific technology that could then block further change.

Strategic Decision Making: It was enormously important, especially in difficult times, to make the
right strategic decisions. This began with a focus on in-house production as soon as it became
profitable, a strong and early focus was placed on motorized pumps and vehicles, and new trends
were also picked up rapidly, sometimes even against internal resistance. In addition, the company
developed a good feeling for when it makes sense to diversify the portfolio, when alternative
business areas should be developed, but also when concentrating on the core business is the right
53
step. The last point to be mentioned here is the predominantly correct decisions when it comes to
outsourcing vs. in-house production.

Identity: The corporate identity has always been kept very flexible, and when you talk to current
employees you always hear different opinions of what Rosenbauer actually is, from being a fire truck
manufacturer to a systems provider for fire services. Although a strong organizational identity may
be helpful for organizations in many phases, it has helped Rosenbauer to quickly and easily adapt to
technological changes.

Structure: This factor derives from the problems that Rosenbauer has undoubtedly also had to
overcome in its history. The organization and structure of the company has not grown to the same
extent as sales, which led to major problems and near insolvency. Therefore, it is essential to adapt
the internal structures and processes simultaneously to growth, otherwise avoidable disadvantages
can occur, especially in times of technological change. Structural separation, as successfully used in
the CFT project, also helped the company to drive forward technological innovations without
burdening the core business.

Finally, it should be emphasized again that these domains, market, knowledge and organization,
exhibit interdependencies. For example, successful trend detection is only feasible with appropriate
intra-domain knowledge, while customer proximity naturally influences knowledge considerably. The
acquisition of external knowledge has a significant impact on strategic decision making, and
commitments are closely related to partnerships in the knowledge domain. The global focus of
course influences how a corresponding structure in the company has to look like and the identity of
the company, may it be relatively strictly defined or fluid, is of course also relevant for the
appearance in the market. This was not a complete list of all interdependencies, but it should clearly
show that these areas are not responsible for success in isolation, but strongly depend on each other.

54
6. Discussion

In this section, the case study findings are discussed against the theoretical background provided
earlier in this paper. Before describing practical implications and outlining limitations and avenues for
future research, a discussion of the theoretical implications is provided.

6.1. Theoretical Implications

6.1.1. Overcoming Inertial Forces

Theory suggests that existing commitments may be a source of inertia, as ties to existing customers
or products may dampen the interest of an organization to pursue new technologies. (Christensen &
Rosenbloom, 1995; Eggers & Park, 2018) In family firms, these commitments are especially prevalent
when it comes to employees and other stakeholders which may impede mandatory changes. (Miller
& Le Breton-Miller, 2005) However, the case showcases those strong commitments helped to
overcome inertial forces and were a major enabler to successful adaptation. The strong
commitments to the customers, the industry and consequently also the social cause of fire services
motivated and inspired the company to provide the best for them throughout the company’s history.
These commitments to customers and other stakeholders like the employees, who were supported
by social facilities early on, allowed the company to achieve customer proximity and intimacy that
served as a major foundation of innovation needs and future demands. Thus, contrary to most of the
existing research, strong commitments did not prohibit change, they rather enabled the company
and its employees to adapt. On another note, the case also demonstrates that the weak
commitments the company made to existing technologies further enhanced the adaptability to
change as there were rarely any significant barriers and managerial resistances to overcome.
However, the interviews indicated that there may be internal conflicts arising due to the
commitments of established divisions to their technology and consequently, the fear of
cannibalization may result in a defensive mindset against new technologies and tensions between
departments.

When it comes to overcoming inertial forces, the underlying case of this study has shown the crucial
role of the top management. Prior research has shown that executives play an important role when it
comes to strategic renewal, may it be organizational reorientation (Tushman & Rosenkopf, 1996),
new product launches (Ciborra, 1996; Song & Montoya-Weiss; 1998) or changes in R&D investment
strategies. (Kor, 2006) Throughout the organization’s history, most of the significant changes were
initiated by executives, and even if new trends evolved due to competitor efforts or new ideas from
stakeholders and employees popped up, the top management quickly adjusted its attention to such
trends. If such an attention is present, it implies that barriers such as local and ineffective search

55
routines (Katila and Ahuja, 2002) have already been overcome and thus, subsequent investments in
pursuing new trends and technologies that are associated with the attention to new technologies
(Kaplan et al., 2003) are likely to happen. The organization was only able to react as quickly to
changing environments as it did because executives increased their knowledge through extensive
travelling efforts in early years and more recently, created a separate trend recognition unit that
allows the top managers to be informed rapidly about upcoming trends and eventually, executives
are able to adjust the company’s strategic attention towards these trends. In the findings section, the
importance of strategic decision-making including outsourcing or diversification decisions was
stressed which also underlines the importance of the top management. A last notion that can be
added to the understanding of top management positions is the emphasis on continuity in such roles.
On a similar note as Dunbar, Garud and Raghuram (1996), who found that in changing environments,
a high rate of turnover in top management positions is likely to become impractical, and the ability to
question current strategic beliefs continuously, as which they refer to as ‘deframing skills’, becomes
more important, the case stresses the importance of continuity in leadership positions. Although
earlier work suggested that management succession is a disruptive event (Grusky, 1960) that by
nature helps to overcome inertia, the case showcased that continuity enabled successful and
continuous adaptation while it is also highlighted that continuity is not necessarily an antecedent to
inertia. The key in the case was the strong commitment to the customers that motivated the top
management, in particular the family members leading the company, to be at the forefront of
technological change.

Existing theory suggests that managers with an extra-domain expertise are more likely to undertake
technological changes whereas managers with a functional background close to the existing
technology and thus with the possession of intra-domain expertise trend towards inertia. (Furr,
Cavarretta, & Garg, 2012) Although it seems quite logical that outsiders can bring new ideas and
complementary knowledge that certainly benefit the organization in times of change, this paper
argues that the assumption that extra-domain knowledge is more important in times of change is not
necessarily true. The argumentation here is that if there is a strong commitment to the customer
base and the social cause, intra-domain knowledge might be even more valuable to better predict
future customer wants and needs. The case highlights that intra-domain knowledge about
operational conditions and existing equipment sparked new ideas that the organization was able to
capitalize on. This finding is in line with Mitchell (1989) who found that industry-specific capabilities
make the exploitation of a new technology within the existing industry more likely.

The foundation of overcoming inertial forces is knowledge, may it be about opportunities and trends
but also about required capabilities. This knowledge can be either externally accessed through

56
partnerships or the hiring of external employees, or internally developed through organizational
learning. A firm's prior history constrains its future behavior in that learning is usually based on local
search processes. (March & Simon, 1958; Levitt & March, 1988; Teece, 1988) However, in times of
change, new solutions require distant search processes to avoid active inertia. (Sull, 1999)
Rosenbauer realized the criticality of knowledge that is not within their existing proximity and
engaged strongly in partnerships and cooperation’s to impede the inertial forces of local search.
Consequently, the acquisition of external knowledge played a crucial role of Rosenbauer’s success in
transforming the company in the face of technological discontinuities. Therefore, the absorptive
capacity (Zahra & George, 2002) of the organization is proven to be strikingly important. The
company under review developed such a capacity throughout its history and the evolutionary nature
of it is also reflected in the organizational structure. Whereas at the beginning of time this knowledge
was brought into the company primarily through trips by the founding family and was strongly
person-related, the processes and the associated routines became increasingly institutionalized. Over
time, more and more partnerships were entered into and processes were introduced in order to then
assimilate this knowledge into the company. The collaboration with Kneitschel to produce the first
motorized pumps, the alliance with vehicle manufacturer Lohner that led to the development of fire
trucks or the recent partnership with Moditech can be named as examples that brought external
knowledge into the organization. But also internally, Rosenbauer took action to avoid a narrow focus
and introduced the trend recognition department which freed the organization from cognitive
rigidities whereas the patent department has competitor patents exactly on its radar and thus brings
this foreign knowledge into the company. The fast throughput time from acquisition to exploitation
of this knowledge is an important prerequisite for being the first mover in the face of technological
change.

As outlined in the findings, the corporate identity played a significant role in the organization’s
success story. Following the separation of external and internal identity introduced by Tripsas (2009),
this paper argues that these two distinct concepts need to be separated and treated differently in
times of change. The external identity of Rosenbauer seems to be clear to the firm’s stakeholders
whereas the internal identity is relatively fluid and interpreted differently by employees. The well-
defined external identity helped Rosenbauer to maintain legitimacy in the market and to strengthen
its reputation, especially in times of change. The fluid, or broad internal identity helped the
employees to be open to new opportunities and increased the adaptability within the company.
Moreover, having a broader internal identity can provide employees with some flexibility that makes
adaptation efforts easier as sometimes, no direct change of the perceived identity is required in the
face of change. (Gioia et al., 2000) It is also easier to avoid the negative consequences of a potential
identity misalignment of the employees. (Ravasi, Tripsas & Langley, 2020) As the company started a
57
focused corporate identity program about a decade ago, this development can be seen as
unintentional, however this paper argues that maintaining a clear external identity while being
internally fluid increases the chances that trends and potential business opportunities are not
blinded out while still being perceived as a reliable partner from an external perspective.

6.1.2. The role of the family

In line with König, Kammerlander and Enders (2013), this paper argues that family-influenced
businesses are in part very distinct in their adaptation processes. The resource dependency on
external capital providers and consequently, their influence and pressure on strategic decision
making is far less present than in other organizations. (Arregle, Hitt, Sirmon & Very, 2007) Due to this
relatively low external pressure, Rosenbauer found its success in the commitment to
individualization, which by nature shrinks the margins but allowed the company to strengthen its
external identity and reputation. As the focus is not mainly targeted towards economic efficiency,
but rather objectives like sustainable growth and long-term stability are favored by the family, the
complete strategic orientation and business model is distinct to other non-family influenced
businesses in the industry. Consequently, one of Rosenbauer’s core assets, its reputation, has
profited from offerings of equipment with almost close to zero net margin, however the reduced
financial pressure did enable the company to develop such products as they benefit the overall
perception of the organization as a partner for almost everything firefighting related. This finding is
can also be related to the command variable of the 4-C framework of Miller and Le Breton-Miller
(2005) – as the decision-making authority was completely within the hands of the family in the early
history of the organization, political resistance against strategic decisions or mandatory adaptation
actions were virtually non-existent. As the family influence is undoubtedly lower nowadays, political
resistances occasionally occur, specifically by the middle management.

When it comes to values, beliefs and the external identity of Rosenbauer, the family undoubtedly
had and still has an enormous influence. Throughout the entire history of Rosenbauer, a strong
commitment to supporting the general public, may it be in political functions or as a provider of
social institutions, has been observable. As a result, the external legitimacy of the firm increased and
helped the company to be competitive, especially in a market where public authorities have a strong
influence on purchasing decisions. Thus, the case contributes to a positive notion of organizational
imprinting (see Baron, Hannan & Burton, 1999) when it comes to being adaptive. The values that the
firm founders established fostered the reputation of the organization which served as an anchor
even during challenging and changing times. The commitments by the family to not only the general
public, but also the well-being of employees derived from a heightened sense of responsibility
towards them (Miller & Le Breton-Miller, 2005) has been a major strength of the organization. It

58
allowed Rosenbauer to build a “family-like” environment, where employees feel a strong connection
with the company and consequently, feel valued by the family. As a result, the political resistance is
relatively low, the top management acceptance is high, and the resulting positive perception of the
working environment serves as a motivator to contribute to the long-term survival of the firm.
Although such long employee tenures and the relatively low employee turnover rate is associated
with stiffened mental models and a lack of diversity in knowledge and cognitive frames (Cho &
Hambrick, 2006), the case demonstrates that the positive effects of a family business are
outweighing the inertial forces that result from long employee tenures.

Various scholars argue that family firms increase their risk appetitive and alter their innovation
strategies when the organization’s performance is declining. (Chrisman & Patel, 2012; Gómez-Mejía
et al., 2010; Patel & Chrisman, 2014) Earlier events in Rosenbauer’s history like the threat of
insolvency before and in the aftermath of WW II. confirm this finding, however, seemingly this does
not hold true once market leadership and an increased financial potency is in place. The most recent
development around electronically driven vehicles demonstrates both, a change in innovation
strategy and huge risk taking as the new technology is facing uncertainties like the perceived
unreliability of the newly introduced technology in a conservative industry. Thus, the argument here
is that the link between family firms and their inclination towards risk taking must be contextualized
around the competitive position of the firm and the financial potency that may allow the
organization to cope with financial setbacks.

König, Kammerlander and Enders (2013) presented two factors that are especially prevalent in family
firms and hinder their adaptability: the emotional ties to existing assets and rigid mental models. The
general assumption that a strong emotional commitment to existing assets is by nature a source of
inertia does not hold true in this case, it may rather serve as a motivator to adapt – this
argumentation has been outlined in more detail in the first subsection of the discussion part of this
thesis. Thus, emotional ties might even be a strength for family firms rather than an inertial force if
they are not directly concerned with technology, but employees and other stakeholders. When it
comes to rigid mental models, existing theory suggests that family firms are especially prone to
having a decreased adaptive capacity due to a too homogenous mindset resulting from intra-family
succession in management positions, and longer employee and management tenures. (Cho &
Hambrick, 2006; Chua, Chrisman, & Sharma, 2003; Sirmon & Hitt, 2003) The organization’s history
shows that with a new executive, new impulses were set again and again as for example, the most
recent change at the top of the company resulted in a shift towards e-mobility, and when looking
further back it is observable that the first truck was produced shortly after Konrad jun. entered the
business in a leading position. Therefore, the claim that people from the same family think alike is an

59
overgeneralization that does not reflect the findings of this case study. However, when it comes to
values, strategic goals and the dedication to the company, it can be stated that the family members
share the same understanding how the organization should work which made the company reliable
even in times of change.

6.1.3. Further contributions to organizational inertia theory

While the concept of organizational inertia argues that a reliable organizational structure is a
precondition for competitiveness and by nature leads to inertia, this paper adds to the theory by
arguing that an absence of a suitable structure also leads to inertia, as the focus and management
respectively financial resources are targeted towards reorganization and bureaucratic processes that
limit both, the resources available for technological advances and the reaction speed to respond to
environmental changes. The case showed that the organizational structure did not grow accordingly
to the sales growth which caused the worst crisis in the company’s history. Moreover, on a similar
note to the argumentation of Rosenbloom (2000), structural inertia may result from outdated and
expensive structures and processes from the past that are hard to dismantle – the underlying case
highlights that a main driver behind the difficulties to dismantle slack resources from the past is the
strong commitment to the employees, even though their competencies might not suit the changing
environment anymore. (for a similar argumentation, see Sull, Tedlow & Rosenbloom, 1997)

Existing empirical and conceptual work suggests that setting up an organizationally separate unit led
to success as internal resistance and a restricting culture can be easier avoided. (Christensen &
Bower, 1996; O’Reilly & Tushman, 2008) Although not initially applied by the company under
investigation, in the latest phase the organization followed this approach for their first electrically
powered fire truck. In line with the existing literature, the development of the new technology
worked out. However, success cannot be defined only by the successful development of the new
technology in the separated unit. Existing studies usually assess the success of this strategy relatively
soon after it was applied. This paper argues that the structural separation brings a number of known
problems with it, be it reintegration into the regular organization, the struggle for legitimacy, and the
political conflict over resources. While these problems occur relatively immediate after setting up the
unit, some other issues may arise quite some time after the initial separation but are hazardous in
the long run. The interviews showed that the development of a more modern culture that is
potentially far from the culture in the core organization may lead to a potentially frustrated
workforce, and parallel structures may be developed that can be expensive in the long run. To
summarize this point, the case supports the existing literature that structural separation leads to
success in the face of technological change, however it may be too soon to fully assess this success.

60
To pick on the idea of separating resource and routine rigidity as proposed by Gilbert (2005), this
paper can add a notion to routine rigidity by emphasizing a contextual notion to it as routine rigidity
is strongly influenced by size, organizational structure and legal form. During the founding times and
the earlier history of the company, processes were formed and dictated by the family members and
thus, the whole organization and its processes reflected the essentials of the upper echelon theory.
(see Hambrick & Mason, 1984) In more recent years, due to the increased size, a change in structure
including the hiring of external executives and a change in the legal form, processes are less rigid due
to the diverse ideas and points of view introduced in the organization. Furthermore, the
distinguishment between resource and routine rigidity shed light into the contradictory literature on
the effect of threat and inertia. (Gilbert, 2005; Staw, Sandelands & Dutton, 1981) This paper
challenges the concluding findings that threat amplifies routine rigidity while it helps to overcome
resource rigidity, as such a generalization would be too simplistic. The case has shown that in some
cases resource rigidity is certainly lower, as, for example, investments were made in distant business
areas such as crop protection in the difficult period after the Second World War, but the crisis in the
1980s also led in exactly the opposite way to a focus on the core business and existing technologies
and few investments in alternative technologies were taken.

Based on the idea of structural inertia, the theory of organizational ecology evolved which seeks to
explain how political, economic and social conditions affect the diversity and relative abundance of
organizations over time. (Baum & Shipilov, 2006) The basic assumption underlying this theory is that
organizations adopt very early in their lives and become relatively inert due to a web of
dependencies and commitments whereas the nature of context is the main determinant of which
form of organization may thrive. (Hannan & Freeman, 1977) The theory argues that the adaptation of
organizational structures principally happens at the population level containing of a set of
organizations which share a like form rather than the individual level whereas organizational forms
are removed through an environmental selection process. (Hannan & Freeman, 1977; Hannan &
Freeman, 1984; Baum & Shipilov, 2006) In this theory, the populations inhabit resource niches which
are competing with other niches; thus, organization are likely to be replaced by new firms that are
born through entrepreneurial behavior or spin-offs rather than an evolution of the niche. (Hannan &
Freeman, 1984; Baum & Shipilov, 2006) This paper argues that these basic assumptions underlying
the population ecology do not hold true in niche markets. While the theory argues that new
technologies are brought into the market by new forces that stem from new niches rather than the
evolvement of an existing niche, the case showed the evolutionary nature of niche markets. Existing
firms did not get replaced by new entrants, rather the relatively low financial attractiveness of the
industry did foster the existing positions of competing firms, thus the incumbent organizations are
responsible for the creation of trends and ultimately are also the innovation leaders in the industry.
61
6.1.4. The importance of ambidexterity and the development of technological competences
The case supports the importance of organizational ambidexterity. To recall, this concept refers to
the exploration of new opportunities while simultaneously leverage existing capabilities. (O’Reilly &
Tushman, 2004) Throughout its history, one of Rosenbauer's strengths has always been to streamline
processes, partly due to the help of external consultants that influenced the process
reconfigurations. Moreover, even despite the company’s focus on customization, efficient
production including a production network and various partnerships was achieved. The resources,
especially of financial nature, that were developed were then consistently reinvested in new business
fields and technological ideas. At the same time, Rosenbauer has always managed not to step into
competency traps and concentrate only on mastering a particular matter; instead, both cognitively
and structurally, a culture of entrepreneurial risk-taking and innovative thinking has been exemplified
throughout the company, especially by the owner family and its representatives in top management.

Although experience enables organizational learning and learning by doing is considered a critical
source of knowledge (see Cyert & March, 1963; Argote, 1999), experience can serve as a barrier to
adaptation. As outlined in the theory section of this thesis, the concept of path dependency leads to
inefficient lock-ins if patterns of actions are repeated again and again due to positive feedback
processes. (Sydow et al., 2009) This paper adds to that understanding by arguing that negative
feedback loops following a negative strategic decision can also lead to such a lock in. Based on an
interview conducted with a long-time employee, it showed that the negative experience with the
‘Falcon’ project led to a defense stance in new product development decisions. The cognitive
capacity to recognize opportunities was influenced by earlier mistakes and the negative feedback
following such decisions resulted in preferences towards projects that follow a proven structure
while building resistance towards new ideas that seemingly have a similar approach than the one
that failed.

To develop new technological competences, Danneels et al. (2018) showed that companies must
apply three mechanisms of technological change, and Rosenbauer applied all of them. The
organizational separation has been discussed earlier in this section, but also co-optation has been
used throughout the company history, may it be the ‘Nepiro’ system to support the pumps or the
newly introduced aluminum technology that supported the vehicle construction for all models.
Lastly, the diversion of resources towards the new technology has been a steady process that
continually withdraws funds from old technologies and channeled it towards the emerging
technology. However, while the diversion of resources is a mandatory prerequisite for developing a
new technological competence, the other two mechanism may be a support factor but not a
necessity, as throughout the history there were new technological advances without a structural

62
separation or a co-optation mechanism. When it comes to competences, the thesis may also
contribute to the argument that competence-destroying discontinuities are more likely to be
introduced by new firms. (Tushman & Anderson, 1986, Abernathy & Clark, 1985) In the case,
competence-destroying may for example be the introduction of motorized pumps or the newly
introduced electrically powered vehicle. Such innovations have always been introduced by leading
companies in the industry, but mainly through partnerships. Thus, the niche market nature with a
relatively low financial net return is not attractive enough for new entrants, they rather compete
through partnerships with established companies and therefore, competence-destroying
discontinuities are more likely to be initiated by large existing organizations that have the financial
potency to either develop them in-house or partner up with knowledgeable partners.

6.2. Practical Implications

The thesis mainly provides two implications that practicing managers may find helpful to successfully
guide their organization through the challenges of technological change. First, the structural
separation of a unit that focuses on the development of the new technology is a promising strategic
approach to deal with internal resistances and bureaucracy. However, this process must be clearly
defined and institutionalized, thus a long-term perspective what happens with the separated unit
must be clearly communicated beforehand to avoid tensions and grudge between the unit and the
core organization, to minimize uncertainties when it comes to resource allocation and the
employee’s future as well as political games and the battle for power.
Second, the trend of establishing a strong corporate identity might be a rigidity towards change that
is underestimated at the moment but may become crucial in an increasingly fast-paced environment.
There are undoubtedly advantages to having a relatively well-defined, focused corporate identity, yet
in times of change it is advantageous to have a relatively broad and fluid identity. However, this is
limited to the internal identity, whereas an organization must be very careful not to do this with the
externally communicated and perceived identity, as an organization could lose legitimacy and
reliability by doing so.

6.3. Limitations
It should be noted that this study has several limitations. While this case study paper aims to avoid
the single change, single context limitation that most empirical work on adaptation processes to
technological change is subject to, the study is still bounded by a single industry and company
context. (Egger & Park, 2018) Moreover, due to the long period of observation, the definition of
technological change is fairly broad and does not account for the contextual nuances and
circumstances that every technological change certainly is subject to. Moreover, the setting of a
family-influenced business in a niche market is very specific and further limits the generalizability of
63
the findings. By capturing the experience as accurately as possible, the internal validity of the case
study was promoted, but this leads by nature to a tradeoff harming the external validity, thus the
findings are hardly generalizable. (Chesbrough, 2001) However, aiming for a comprehensive
framework to cope with all contextual information would be incomprehensible and barely of any
practical use, thus a simple answer how to manage technological change is unlikely to be sufficient
for such a complex topic.

The historical case study approach also poses some limitations. As the history is quite extensive, the
reconstruction of the early phase was especially difficult due to a scarcity of sources. The available
work was mainly based on an external view as interviews with people that experienced the majority
of the organization’s history were simply not possible. These circumstances make it hard to fully
understand internal processes, politics and decision-making procedures. Another limitation is
imposed by the nature of the interviews. While the conducted interviews in the course of the greater
research project undeniably helped to understand the company, their focus was not targeted
towards this research paper. Thus, the work would have certainly profited from interviewing former
employees and long-term employees that are aware of historically important phases.

6.4. Need for Future Research

Prior work on adaptation to technological change has highlighted the benefit of setting up a separate
organizational which has been supported by empirical evidence. (Christensen & Bower, 1996;
O’Reilly & Tushman, 2008) However, there is still a lack of empirical research on how to proceed with
the separate unit after fully developing the new technology – highlighting contextual and
organizational factors that are affecting this strategic decision might be an interesting avenue for
further research. Another interesting area is the subject of organizational identity and its connection
to organizational responses to technological change. Further research could examine how an
intentional internal identity fluidity could be achieved while maintaining a well-defined external
identity and what consequences such a misalignment between internal and external identity might
bring. Additionally, longitudinal data in cross-industry settings would contribute to a deeper
understanding on dynamic capabilities and their evolution.

64
7. Conclusion

The aim of this research paper was to identify how Rosenbauer managed to overcome inertial forces
and managed to adapt over and over again in the face of technological change. Contrary to most of
the existing literature (Christensen & Rosenbloom, 1995; Eggers & Park, 2018), existing commitments
to customers, employees and other stakeholders did not lead to inertia, they were rather a source of
change for the company. As such commitments increased the motivation of employees and inspired
them to provide the best for their customers, they were actively searching for innovative solutions.
The case also demonstrated the importance of the top management to focus the organization’s
attention to new technologies early on. Despite the common belief that continuity makes
organizations inert, it served as a key success factor whereas the ‘deframing’ skills (Garud &
Raghuram, 1996) of top management members were critical. This thesis also challenges the notion
that extra-domain knowledge drives change and is generally more important to face changing
environments than intra-domain knowledge. The paper argues that intra-domain knowledge is at
least equally if not more important to change because understanding the industry and customers can
spark new ideas and makes it easier to sell new technologies. Throughout the organization’s history,
accessing external knowledge remained a critical success factor that enabled the ability to change
continuously. Especially partnerships with knowledgeable firms in the targeted field, but also the
internally developed patent screening and trend recognition department, assured the constant
inflow of external knowledge into the organization. The key here is to minimize the time between the
acquisition and exploitation of this knowledge. Another interesting finding of this paper concerns the
role of organizational identity. The internal identity was defined relatively fluid and vague which
allowed employees to be open to different perspectives and consequently, reduces the chances of
overlooking opportunities. The external identity, however, was clearly defined and thus provided
legitimacy to the firm.

The case also contributes to understanding the peculiarities of family firms. As the goals of family-
influenced business are centered around long-term survival and non-economical objectives in
comparison to non-family firms who usually set their goals around short-term financial objectives,
the company was able to apply a completely unique business model with a focus on individualization
that by nature reduces margins but allowed the company to establish its outstanding reputation. The
family values like the social commitment to the general public served as a source of competitive
advantage and an important anchor in times of change. The founder’s footprints are still observable
as of today and thus, the rich history of the company does not necessarily make it more rigid, it
rather allowed the company to act in character which makes it more reliable while the
entrepreneurial risk-taking mentality is still preserved. Moreover, the assumption that a homogenous
65
mindset resulting from an intra-family succession leads to a limited cognitive frame is an
overgeneralization that does not hold true in the observed case.

Furthermore, the case also provides further contributions to organizational inertia theory. Contrary
to the findings of Gilbert (2005), threat does not automatically help to overcome resource rigidity, it
is more complex and calls for contextualization. Additionally, the absence of a suitable structure that
evolves in a similar speed to the growth of an organization is a source of inertia and failure as a lot of
time and resources must be invested to overcome structural shortfalls. The paper also challenges the
main assumption of the population ecology theory that usually new entrants replace existing firms.
The argument in this research work is that this does not hold true in low margin niche markets where
innovations are almost exclusively brought into the industry by market leaders. On a similar note,
competence-destroying innovations were also introduced by incumbents which challenges existing
theory mainly arguing that such innovations are usually introduced by new firms. (Tushman &
Anderson, 1986, Abernathy & Clark, 1985) Lastly, the case stresses the importance of ambidexterity
as the exploiting of existing assets freed the resources for exploration activities.

66
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