Market Orientation and Innovativeness in Supply Chains: Supplier's Impact on Customer Satisfaction

As today's firms increasingly outsource their noncore activities, they not only have to manage their own resources and capabilities, but they are ever more dependent on the resources and capabilities of supplying firms to respond to customer needs. This paper explicitly examines whether and how firms and suppliers, who are both oriented to the same customer market, enable innovativeness in their supply chains and deliver value to their joint customer. We will call this customer of the focal firm the “end user.” The authors take a resource‐dependence perspective to hypothesize how suppliers' end‐user orientation and innovativeness influence downstream activities at the focal firm and end‐user satisfaction. The resource dependence theory looks typically beyond the boundaries of an individual firm for explaining firm success: firms need to satisfy customer demands to survive and depend on other parties such as their suppliers to achieve customer satisfaction. Accordingly, the research design focuses on three parties along a supply chain: the focal firm, a supplier, and a customer of the focal firm (end user). The results drawn from a survey of 88 matched chains suggest the following. First, customer satisfaction is driven by focal firms' innovativeness. A focal firm's innovativeness depends, on the one hand, on a focal firm's market orientation and, on the other hand, on its suppliers’ innovativeness. Second, no relationship could be established between a focal firm's market orientation and a supplier's end‐user orientation. Market orientation typically has within‐firm effects, while innovativeness has impact beyond the boundaries of the firm. These results suggest that firms create value for their customer through internal market orientation efforts and external suppliers' innovativeness.     

An empirically-based typology of product innovativeness for new financial services: Success and failure scenarios

During the last decade, an increasing number of studies have been concerned with the factors that lead to new service success. Quite a few studies, however, have examined the role of product innovativeness in new service development and performance. The present article aims to test empirically a widespread, yet under‐researched argument, according to which, different innovative types may be associated with different development patterns and performance outcomes. On the basis of a detailed literature review we designed the conceptual framework for the present study. More specifically, we propose that the performance outcome of a new service is the result of the development process followed, which, in turn, is influenced by the innovativeness of the new service. The development process is examined through three blocks of variables, namely new service development activities (i.e., the “what” component), process formality (i.e., the “how” component) and cross‐functional involvement (i.e., the “who” component). Performance is viewed in relation to both financial and non‐financial outcomes. The different dimensions of innovativeness form the basis of our classification scheme. To collect the data, we followed the “dropping off method. That is, we handed in self‐administered questionnaires to participants and, a picking‐up appointment was set. Respondents were NSD project leaders who were asked to select two financial services, one successful and one unsuccessful, that they had developed within the last three years and reply to all questions relating to the development and launching of these services. Overall, 84 financial companies participated in the study, providing data for 132 new financial services (80 successes and 52 failures) developed and marketed in Greece. Data analysis revealed that six distinct service innovativeness types exist. They can be represented in the form of a continuum depending on the degree of innovativeness that characterizes each type. At the most innovative extreme of the continuum we find the new‐to‐the‐market services followed by new‐to‐the‐company services, new delivery processes, service modifications, service line extensions, while at the least innovative end service repositionings are placed. These six types are found to be associated with different development patterns in terms of activities, formality and cross‐functional involvement as well as performance outcomes. Interestingly enough, our data suggest an almost inverted U‐shaped relationship between the degree of innovativeness of a new financial service and financial performance. On the other hand, the major service innovations make the strongest contribution on non‐financial performance, while “me‐too” offerings are the least successful ones. The study has a number of research contributions as well as implications for managers involved in new service development in the financial services industry. The conceptualization of the continuum of innovativeness helps disclosing the critical points of the NSD process and its structuring which, depending of the type of new service and the degree of innovativeness that characterizes it, ensures that the management's objectives regarding the performance of the new service are attained.     

Constraints of Internally and Externally Derived Knowledge and the Innovativeness of Technological Output: The Case of the United States

A major resource of technological innovativeness is knowledge, which can be either internally or externally derived, and constrained or abundant. We employ a longitudinal case study of U.S. industries to assess whether knowledge sources—internal or external to a country's domestic technology—affect an industry's technological innovativeness, and whether knowledge constraints affect technological innovativeness. We use more than 175,000 U.S. patents over 16 years. In contrast to the prevalent thinking that resource constraints inhibit innovation, we find trade‐related knowledge constraints are largely positively associated with the innovativeness of technological output. Moreover, although one may expect a negative relationship between internally derived knowledge based on prior technology and technological innovativeness, we find this relationship is curvilinear.     

It is not a panacea! The conditional effect of bricolage in SME opportunity exploitation

Previous literature has recommended that small and medium enterprises (SMEs) use bricolage to exploit opportunities. However, some authors have warned that the abuse of bricolage might extrude standardized resources from a firm's resource portfolio and lower firm performance. Basing itself on resource management, this article suggests that medium-sized firms benefit less from bricolage because they are more formalized and can afford standardized resources. If they rely too heavily on bricolage, they can fail to adopt the optimal solutions for the exploitation of recognizable opportunities. Data from 336 Chinese SMEs indicates that the moderating effect of bricolage on the relationship between opportunity recognition and SME performance is weaker in medium than in small-sized firms. This study contributes to the literature by elaborating how bricolage influences firms in distinct resource environments.     

Divergent thinking and market visioning competence: An early front-end radical innovation success typology

Achieving superior and longer-term rewards associated with the pursuit of radical innovation requires that firms have a market vision (MV), or a clear and specific image of a desired and important product-market for a new technology, and are able to attract human and investment capital (AAC) in order to carry out and finance these risky ventures. To achieve these outcomes, firms need to build a market visioning competence (MVC)—that is, an ability to link advanced technologies to market opportunities of the future. Developing an MVC entails the efforts of both the individuals who are part of the innovation process and the organization itself. Four components comprise the MVC equation: the individual-level capabilities of “networking” and “idea-driving,” and the organization-level capabilities of “market learning tools” and “proactive market orientation.” In this article, we focus on the conditions within the firm that need to be created and fostered to ensure an effective MVC. The antecedents of interest involve the capacity for divergent thinking—that is, the ability to go beyond the boundaries of established thought—and include four individual- and two organization-level constructs. Individual divergent thinking skills include (1) attitude of openness to new ideas; (2) ability to create, combine and help others to generate new ideas; (3) ability to move efficiently from divergent to convergent thinking; and (4) a passion for cognitive challenges. Two organization-level antecedents include: an innovation culture of (5) encouragement of idea freedom and (6) encouragement of diversity. Based on a survey of 198 high-tech firms in the North American nanotechnology sector, cluster analysis was used to develop a typology of scenarios that provides a holistic view of what distinguishes firms in terms of MVC, their ability to create and manage individual- and organization-level divergent thinking approaches, as well as the outcomes of MV and AAC. Three distinct profiles emerge. The “balanced MVC profile” rates high on all factors—components, antecedents and outcomes—and provides a “model” for managers concerned with developing an effective MVC. Cluster #2, labeled “need MVC system/culture,” while having the most important element in place—the individuals who think in dynamic ways and connect firms with totally new opportunities—require both market learning systems and a more proactive market orientation, and in particular, an organization culture where management encourages divergent thinking. Cluster #3 (“lack MVC basics”) firms have invested in MVC-related infrastructure, but this provides an anemic context when the key elements of individual innovativeness in terms of the ability to think in radically new ways and an organization culture that encourages this are lacking. Based on the MVC concepts, relationships discussed and the empirical evidence, this article offers insights for researchers in terms of theory and scale development, and for managers charged with radical innovation in terms of the actions needed to enhance MVC and, ultimately, NPD performance.     

Interaction Orientation and Product Development Performance for Taiwanese Electronics Firms: The Mediating Role of Market‐Relating Capabilities

While academics and practitioners are increasingly aware of the value of including the customer in new product development (NPD), processes for doing so effectively remain unclear. Therefore, this study explores the process through which a firm's interaction orientation (the ability to effectively interact with customers) influences product development performance. Drawing on the resource‐based view, this study develops a research model in which two market‐relating capabilities—market‐linking and marketing capabilities—mediate the effect of interaction orientation on product development performance. The validity of this model is examined by analyzing primary data gathered from 167 Taiwanese electronics companies. The model results provide support for a process link between interaction orientation, market‐relating capabilities, and product development performance, such that a firm's capabilities enable the conversion of customer‐based resources into productive new product outcomes. More specifically, the interaction orientation–product development speed relationship is mediated by both marketing and market‐linking capabilities, while the interaction orientation–product innovativeness relationship is partially mediated by marketing capability. That is, interaction orientation has indirect effects on product innovativeness and product development speed by strengthening both marketing and market‐linking capabilities that in turn improve product development performance. In addition, the results suggest that a firm's interactive rationality moderates the relationship between interaction orientation and marketing capability. Overall, this study enhances our understanding of how firms achieve superior product development performance by developing effective customer interaction. The findings of this study provide important strategic insights into NPD.     

What Makes a Family Firm Innovative? CEO Risk‐Taking Propensity and the Organizational Context of Family Firms

Investigating the new product portfolio innovativeness of family firms connects two important topics that have recently received considerable attention in innovation and family firm research. First, new product portfolio innovativeness has been identified as a critical determinant of firm performance. Second, research on family firms has focused on the questions of if and why family firms are more or less innovative than other organizational forms. Research investigating the innovativeness of family firms has often applied a risk‐oriented perspective by identifying socioemotional wealth (SEW) as the main reference that determines firm behavior. Thus, prior research has mainly focused on the organizational context to predict innovation‐related family firm behavior and neglected the impact of preferences and the behavior of the chief executive officer (CEO), which have both been shown to affect firm outcomes. Hence, this study aims to extend the previous research by introducing the CEO's disposition to organizational context variables to explain the new product portfolio innovativeness of small and medium‐sized family firms. Specifically, this study explores how the organizational context (i.e., ownership by top management team [TMT] family members and generation in charge of the family firm) of family firms interacts with CEO risk‐taking propensity to affect new product portfolio innovativeness. Using a sample of 114 German CEOs of small and medium‐sized family firms operating in manufacturing industries, the results show that CEO risk‐taking propensity has a positive effect on new product portfolio innovativeness. Moreover, the analyses show that the organizational context of family firms impacts the relationship between CEO risk‐taking propensity and new product portfolio innovativeness. Specifically, the relationship between CEO risk‐taking propensity and new product portfolio innovativeness is weaker if levels of ownership by TMT family members are high (high SEW). Additionally, the effect of CEO risk‐taking propensity on new product portfolio innovativeness is stronger in family firms at earlier generational stages (high SEW). This result suggests that if SEW is a strong reference, family firm‐specific characteristics can affect individual dispositions and, in turn, the behaviors of executives. Therefore, this study helps extend the knowledge on the determinants of new product portfolio innovativeness of family firms by considering an individual CEO preference and the organizational context variables of family firms simultaneously.     

It Won't Fit! For Innovative Products,Sometimes That's for the Best

The degree of overlap (i.e., fit) between product development organizations' resources and the product development projects pursued has powerful performance implications. Drawing on organizational learning theory and the resource‐based view, this research conceptualizes and empirically tests the interrelationships between the levels of fit, innovativeness, speed to market, and financial new product performance. After reviewing the research literature relevant to resource fit and new product performance, the level of innovativeness is posited to be an important moderating and mediating factor, which is validated by analysis of data gathered from 279 product developing firms. Technological fit has a negative direct effect on both technological and market innovativeness, while the use of existing marketing resources (i.e., a high degree of marketing fit) positively impacts technological innovativeness. This suggests, consistent with findings from market orientation research, that a deep, long‐held customer understanding can promote technological innovativeness. The moderating hypotheses proposed are also well supported: First, a high degree of marketing fit has a more positive impact on performance for market innovative products (e.g., products which address a new target market or use a nontraditional channel for the firm). Drawing on a deep customer understanding is more critical to performance for market innovative products. Conversely, the benefits of marketing fit are limited where market innovativeness is lacking. Interestingly, the counterpart moderating role of technological innovativeness on technological fit's performance effect is not significant; the level of technological innovativeness does not significantly impact the performance impact of technological fit. There are also significant moderating effects across dimensions. Our results show that the financial benefit of using existing marketing resources is lessened for technologically innovative products. Technological innovations necessitate drastic adaptation of marketing resources (i.e., channel and brand); firms drawing only on existing marketing resources for a technologically innovative new product will incur reduced profit. Similarly, the positive implications of using existing technological resources are limited for products which are highly market innovative. Generally, resource fit is seen to have an (oft‐overlooked) dark side in product development, though several of our findings suggest that marketing resources are more flexible than are technological resources.     

The Impact of Product Portfolio Strategy on Financial Performance: The Roles of Product Development and Market Entry Decisions

Innovation is one of the most important issues facing business today. The major difficulty in managing innovation is that managers must do so against a constantly shifting backdrop as technologies, competitors, and markets constantly evolve. Managers determine the product portfolio through key decisions about product development and market entry. Key strategic questions are what portfolio strategies provide the greatest reward. The purpose of this study is to understand the relative financial values of each component of a product portfolio. Specifically, the paper examines the short‐term and long‐term financial impacts of product development strategy and market entry strategy. These strategies reflect two critical tensions that must be balanced in product portfolio decision making and essentially determine a firm's product portfolio. In doing so, the paper also investigates how a firm's capabilities drive each component of a product portfolio. From the empirical analyses in the context of the biomedical device industry, the paper found important insights regarding product portfolio strategies. First, a large product portfolio helps a firm's financial performance. In particular, the pioneering new products have strongest impacts on short‐term performances, and nonpioneering mature products do not provide significant contribution. Second, the results indicate a persistent first‐mover advantage. The first‐to‐market new products yield not only an immediate effect, but also persistent long‐term effects, suggesting that it is important to be first in the market even though there may be short‐term losses. Third, the results suggest the need to balance between “mature” and “new” products. Also, firms need to balance “first‐to‐market” and “late‐entered” products. Because a new or pioneering product requires more resource, it may hurt other products in the portfolio. Thus, without support from mature or follower products, new products and pioneering products alone may not increase firm sales or profit. Fourth, from a long‐term perspective, the paper found that the financial market only rewards a firm's overall capability to deliver new products first in the marketplace. Thus, short‐term performance is mainly driven by product‐level innovativeness, whereas firm‐level innovativeness enhances forward‐looking long‐term performance. Fifth, the paper also found that pioneering new products are driven by integrating both primary and complementary technological capabilities. And nonpioneering new products are mainly driven by the capabilities in primary technology domain. These results provide important insight into the relative value and timing of return on investment in radical versus incremental innovation and alternative market entry strategies. By understanding the performance trade‐offs of these different factors in the short and long term, one can develop better guidelines for optimizing innovation strategies, and their dependence on both external and internal environmental conditions.     

Emerging Market Firms' Internationalization: How Do Firms' Inward Activities Affect Their Outward Activities?

Research summary : In this study we examine how an emerging market firm's inward international activities (“inward activities”) are related to its outward international activities (“outward activities”) by focusing on the role of the firm's gain from its inward activities. On the one hand, drawing upon the organizational learning perspective, we propose that a firm's gain from inward activities may facilitate its outward activities through improving its resource fungibility. On the other hand, we draw upon the prospect theory to propose that a firm's gain from inward activities may hinder its outward activities by discouraging the firm's top managers from taking risks that are inherent in outward activities. With detailed data from a sample of manufacturing firms in China, we find empirical support for both lines of arguments . Managerial summary : Are emerging market firms with higher inward gain more likely to engage in outward internationalization activities? We argue that it depends upon how a firm uses its gain from inward activities. If the firm can improve its resource fungibility (particularly organizational resource fungibility) from its inward gain, it is more likely to engage in outward activities. If the firm cannot improve its resource fungiblity, the answer is no. Our findings suggest that for emerging market firms, internationalization is not just a path toward new markets; instead, it reflects how these firms exploit and explore what they have learned from their interactions with foreign firms at home in foreign markets. Therefore, managers must think more strategically on developing (organizational) resource fungibility from their inward activities . Copyright © 2017 John Wiley & Sons, Ltd.     

An examination of salesperson bricolage during a critical sales disruption: Selling during the Covid-19 pandemic

COVID-19 has proven to be a disruptive and world-altering event often forcing professional salespeople to rapidly change the manner in which they do business. Thereby, this pandemic illuminates the importance of understanding salesperson characteristics and behaviors that enable sales success in disruptive environments. This study identifies COVID-19 as a Critical Sales Event and introduces the concept of “bricolage” to the larger body of sales literature. Bricolage is a combination of “making do” under environmental conditions of resource constraint. Bricolage characterizes a salesperson's ability to utilize available resources effectively by assessing available resources and working to reconfigure them in order to meet new challenges and create opportunities. Drawing on qualitative and quantitative research from professional salespeople, this study identifies a salesperson's creativity, learning-orientation, and grit as three important antecedents to salesperson bricolage. Moreover, this study shows that salesperson bricolage relates positively to sales performance under conditions shaped by the COVID-19 disruption; with salesperson bricolage becoming more strongly related to sales performance when sales environments are more highly disrupted by the pandemic.     

Benefiting from network position: firm capabilities,structural holes,and performance

While strategy scholars primarily focus on internal firm capabilities and network scholars typically examine network structure, we posit that firms with superior network structures may be better able to exploit their internal capabilities and thus enhance their performance. We examine how innovative capabilities—both those of focal firms and those they access through their networks—influence the performance of Canadian mutual fund companies. We find that a firm's innovative capabilities and its network structure both enhance firm performance, while the innovativeness of its contacts does not do so directly. Innovative firms that also bridge structural holes get a further performance boost, suggesting that firms need to develop network‐enabled capabilities—capabilities accruing to innovative firms that bridge structural holes. Copyright © 2005 John Wiley & Sons, Ltd.     

Innovative versus incremental new business services: Different keys for achieving success

In companies where new product development plays an important strategic role, managers necessarily contend with a portfolio of projects that range from high technology, new‐to‐the‐world, innovations to relatively simple improvements, adaptations, line extensions, or imitations of competitive offerings. Recent studies indicate that achieving successful outcomes for projects that differ radically in terms of innovativeness requires that firms adjust their NPD practices in line with the type of new product project they are developing. Based on a large‐scale survey of managers knowledgeable about new product development in their firm, this study focuses on new business‐to‐business service projects in an attempt to gain insights about the influence of product innovativeness on the factors that are linked to new service success and failure. The research results indicate that there are a small number of “global” success factors which appear to govern the outcome of new service ventures, regardless of their degree of newness. These include: ensuring an excellent customer/need fit, involving expert front line personnel in creating the new service and in helping customers appreciate its distinctiveness and benefits, and implementing a formal and planned launch program for the new service offering. Several other factors, however, were found to play a more distinctive role in the outcome of new service ventures, depending on how really new or innovative the new service was. For low innovativeness new business services, the results suggest that managers can enhance performance by: leveraging the firm's unique competencies, experiences and reputation through the introduction of new services that have a strong corporate fit; installing a formal “stage‐gate” new service development system, particularly at the front‐end and during the design stage of the development process; and ensuring that efforts to differentiate services from competitive or past offerings do not lead to high cost or unnecessarily complex service offerings. For new‐to‐the‐world business services, the primary distinguishing feature impacting performance is the corporate culture of the firm: one that encourages entrepreneurship and creativity, and that actively involves senior managers in the role of visionary and mentor for new service development. In addition, good market potential and marketing tactics that offset the intangibility of “really new” service concepts appear to have a positive performance effect.     

Leveraging External Sources of Innovation: A Review of Research on Open Innovation

This paper reviews research on open innovation that considers how and why firms commercialize external sources of innovations. It examines both the “outside‐in” and “coupled” modes of open innovation. From an analysis of prior research on how firms leverage external sources of innovation, it suggests a four‐phase model in which a linear process—(1) obtaining, (2) integrating, and (3) commercializing external innovations—is combined with (4) interaction between the firm and its collaborators. This model is used to classify papers taken from the top 25 innovation journals, complemented by highly cited work beyond those journals. A review of 291 open innovation‐related publications from these sources shows that the majority of these articles indeed address elements of this inbound open innovation process model. Specifically, it finds that researchers have front‐loaded their examination of the leveraging process, with an emphasis on obtaining innovations from external sources. However, there is a relative dearth of research related to integrating and commercializing these innovations. Research on obtaining innovations includes searching, enabling, filtering, and acquiring—each category with its own specific set of mechanisms and conditions. Integrating innovations has been mostly studied from an absorptive capacity perspective, with less attention given to the impact of competencies and culture (including “not invented here”). Commercializing innovations puts the most emphasis on how external innovations create value rather than how firms capture value from those innovations. Finally, the interaction phase considers both feedback for the linear process and reciprocal innovation processes such as cocreation, network collaboration, and community innovation. This review and synthesis suggests several gaps in prior research. One is a tendency to ignore the importance of business models, despite their central role in distinguishing open innovation from earlier research on interorganizational collaboration in innovation. Another gap is a tendency in open innovation to use “innovation” in a way inconsistent with earlier definitions in innovation management. The paper concludes with recommendations for future research that include examining the end‐to‐end innovation commercialization process, and studying the moderators and limits of leveraging external sources of innovation.     

Supporting product innovativeness and customer value at the bottom of the pyramid through context-specific capabilities and social ties

Local firms operating in bottom of the pyramid (BoP) markets face significant challenges in managing their innovation practices and creating value for customers. Operating in resource-constrained environments, local BoP firms need to behave as bricoleurs, deploy capabilities that help creatively combine and leverage their limited available resources to innovate and create value for customers. Employing the capability-based view (CBV) of the firm and social capital theory (SCT), we develop a research model to explain the extent that local BoP manufacturers use bricolage to develop innovative products that create value for BoP customers. Analysis of data obtained from 150 local BoP manufacturing firms (three managers in each firm) and two of their major customer firms shows that the relationship between bricolage and product innovativeness is more complex than previously understood. Results show that the curvilinear relationship is attenuated differently by social ties with government versus ties with civil society organizations. Furthermore, findings also support the contingency role of BoP firms' marketing capabilities in translating product innovativeness into customer value in BoP markets. These findings present specific implications for scholars and practitioners interested in BoP markets.     

Looking Innovative: Exploring the Role of Impression Management in High‐Tech Product Adoption and Use

Although consumer adoption of high‐tech innovations is certainly influenced by the product's functional benefits, can the use of a new product confer social benefits as well? Specifically, can the mere use of an innovative product convey the impression that the user is an innovative person? Impression management (IM) is a well‐established phenomenon in social psychology that refers to the human tendency to monitor, consciously or unconsciously, the efficacy of his or her communication of self to others. This research explores the role that IM motivations, or “looking innovative,” play in consumers' use of new high‐tech products, especially in the workplace—an environment in which innovativeness is clearly valued by employers and, thus, individuals have strong motivations to convey innovativeness as a personal characteristic. Data from both ethnographic and experimental methods demonstrate that (1) the use of new high‐tech products can be a surprisingly effective social signal of one's “tech savvy” and personal innovativeness; (2) this impression even significantly increases positive evaluations of secondary traits such as leadership and professional success; and (3) this effect differs by gender. Intriguingly, stronger benefits accrue for women than for men—a finding that runs counter to the backlash effect typically found in IM research in business settings (i.e., female job evaluations typically suffer after engaging in the same self‐promoting IM strategies that benefit their male counterparts). Further, the data show that, even for professional recruiters, a momentary observation of a job candidate using a new high‐tech product versus a low‐tech equivalent significantly increases the candidate's evaluation and likelihood of being hired.     

Knowledge,firm boundaries,and innovation: Mitigating the incumbent's curse during radical technological change

We explore the relationship between a firm's organization and its ability to face a radical technological change. We suggest that, during such a change, the presence of both in‐house upstream knowledge and downstream market linkages, within a firm's boundary, has its advantages. We test our predictions in the context of the robotics industry where manufacturers of mechanically controlled “brawny” robots, which were valued mainly for their payload capacity, faced the advent of electrically controlled “brainy” robots that emphasized accuracy and repeatability. We find that “preadapted” firms—the ones with prior relevant technological knowledge and with access to internal users of “brainy” robots—were the innovation leaders in the emerging new technology but were laggards in the old technology. Copyright © 2014 John Wiley & Sons, Ltd.     

Measuring New Product Portfolio Innovativeness: How Differences in Scale Width and Evaluator Perspectives Affect its Relationship with Performance

Portfolio innovativeness is a central variable in innovation management. However, the impact of portfolio innovativeness on new product development (NPD) performance is unclear, which may partly be due to the construct's multifaceted nature. Different facets may reflect different degrees of innovativeness and may have different relationships with performance. In addition, firm members with different functional backgrounds may perceive and thus assess these facets differently, which again may influence the performance effect of portfolio innovativeness. Based on a sample of 746 CEOs and marketing as well as technology professionals from 117 firms and using Item Response Theory (IRT), a multifaceted scale of portfolio innovativeness, whose facets are able to cover the entire innovativeness spectrum, is developed. In addition, it is shown that the performance impact of portfolio innovativeness is dependent on the facets included in the scale, and on the specialization of the professional assessing the facets. Inverted U‐shaped performance effects are found when the scale covers the entire spectrum of innovativeness, and linear positive or zero effects with different types of more narrowly modeled scales. Inverted U‐shaped performance effects are also found when technology professionals assess the facets, while the assessments by marketing professionals lead to linear positive effects.     

Pricing process as a capability: a resource‐based perspective

Strategists following the resource‐based view argue that firms can generate rents through value creation. To create value, firms develop and use resources and capabilities that other firms cannot imitate, trade for, or substitute other assets for. Even a firm that has created value, however, may not capture the potential rents associated with that value. To capture rents, a firm must set the right prices for what it sells. Most views of pricing assume that a firm can readily set appropriate prices. In contrast, we argue that pricing is a capability. To develop the ability to set the right prices, a firm must invest in resources and routines. We base our argument on a study of the pricing process of a large Midwestern manufacturing firm. We show that pricing resources, routines, and skills may help or inhibit a firm in setting the right price—and hence in appropriating value created. Our view of pricing as a capability contributes to the resource‐based view because it suggests that strategists should consider the portfolio of value creation and value appropriation capabilities a firm uses to create competitive advantage. Our view also contributes to economics because it suggests that strategic decisions about pricing capabilities have important implications for a fundamental economic action, determining prices. Managers in firms without effective pricing processes may be unable to set prices that reflect the wishes of its customers, so the customers may misuse their resources. As a result, resources may be used ineffectively. Our view of pricing as a capability therefore takes the resource‐based‐view straight to the heart of what is perhaps the central economic question: the best use of resources. Copyright © 2003 John Wiley & Sons, Ltd.     

Do‐no‐harm versus do‐good social responsibility: Attributional thinking and the liability of foreignness

Research summary: The efforts of multinational corporations to be socially responsible do not always engender positive evaluations from overseas stakeholders. Drawing on attribution theory, we argue that two heuristics guide stakeholders in evaluating firms' social performance: foreignness and the valence of firms' social responsibility. We provide evidence from a field study of secondary stakeholders and an experimental study involving 129 non‐governmental organizations. Consistent with attribution theory, the liability of foreignness is minimized when firms engage in “do‐good” social responsibility (focused on proactive engagement creating positive externalities) but is substantial when firms engage in “do‐no‐harm” social responsibility (focused on attenuating negative externalities). In online supporting information, Appendix S1, we demonstrate that these evaluations have consequences for whether stakeholders subsequently cooperate, or sow conflict, with firms. Managerial summary: There is no guarantee that efforts to be socially responsible will improve multinational corporations' relations with overseas stakeholders, such as customers, governments, and activists. In a field study and an experiment, we unpack when foreign firms suffer from harsh stakeholder evaluations. Foreign firms especially suffer from harsh evaluations when they conduct “do‐no‐harm” CSR rather than “do‐good” CSR. Stakeholders attribute the motive for foreign firms' do‐no‐harm CSR to managerial interests and shareholder pressures, perceiving a wedge between managers and owners (who may be unmotivated to reduce the negative impacts of their business activities) and local stakeholders (who bear the social costs). A practical implication is that foreign firms gain more from highlighting do‐good rather than do‐(no)‐harm CSR initiatives. Copyright © 2015 John Wiley & Sons, Ltd.