Market Vision and the Front End of NPD for Radical Innovation: The Impact of Moderating Effects

“Market vision” is a mental model that helps focus the organization on a new market application for an advanced technology during the fuzzy front end of the new product development process. Previous research demonstrates that firms involved in the development of radically new, high‐tech products need to develop a market visioning competence (MVC) in order to develop an effective market vision (MV), and these capabilities, in turn, have been found to have a positive effect on key aspects of the early performance (EP) of these firms—specifically, the ability to attract capital and early success with customers. Based on a major empirical study of the nanotechnology sector, the research described in this paper takes an important step forward by focusing on factors in both the external and internal environment of the firm, and their moderating impact on the paths that link MVC, MV, and EP. External structural factors relevant to the firm's competitive environment as well as internal factors, including firm resources, size, incumbency, and technology, are shown to have significant moderating effects both on the way in which MV unfolds and on its capacity for affecting positive returns for the firm when undertaking radical innovation. Five of seven hypotheses were supported by the research. Both level of incumbency (the extent to which the firm has taken part in previous generations of a given technology) and resource availability are shown to positively impact the link between MVC and MV. Also, appropriability (i.e., protection for innovations) and reputation of the firm were found to positively impact the path to EP. Finally, a low level of industry concentration—that is, a large number of small firms—were found to have a positive effect on the path to EP. In sum, the findings support the structure of the model and the majority of the hypothesized moderating relationships, suggesting important implications for management.     

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.     

Using Exploratory and Exploitative Market Learning for New Product Development*

While the need for research on the market‐learning efforts of a firm in relation to its new product development is continuously emphasized, the empirical results on this issue reported so far have been mixed. The current study contends that the inconclusive nature of the empirical evidence is mostly due to the existence of different dimensions of organizational market learning—exploratory and exploitative—and to possible different routes by which these learning dimensions are linked to new product performance. More specifically, this study argues that exploratory market learning contributes to the differentiation of the new product because it involves the firm's learning about uncertain and new opportunities through the acquisition of knowledge distant from existing organizational skills and experiences. By contrast, this study posits that exploitative market learning enhances cost efficiency in developing new products as it aims to best use the currently available market information that is closely related to existing organizational experience. This study provides empirical support for this two‐dimensional scheme of organizational market learning and its consequent effects on two components of new product advantage: new product differentiation and cost efficiency. Further, given that the effectiveness of firms' strategic efforts is contingent upon the nature of the market environment, the current study examines the moderating effects of environmental dynamism and market competitiveness for this market learning—new product advantage relationship. This study is based on survey data from 157 manufacturing firms in China that encompass various industries. The empirical findings support the two‐dimensional market learning efforts that increase new product differentiation and cost efficiency, respectively. The study confirms that exploratory market learning becomes more effective under a turbulent market environment and that exploitative market learning is more contributive when competitive intensity is high. It also suggests that because of their differential direct and moderating effects on new product advantage either exploratory or exploitative market learning may not be used exclusively, but the two should be implemented in parallel. Such learning implementations will help to secure both the feature and cost‐based new product advantage components and will consequently lead to the new product success. The current study attempts to contribute to greater clarity and better understanding of how market learning influences new product success as it theoretically identifies and empirically validates the two forms of new product advantage as the conceptual mediator between market learning and new product performance.     

The Impact of Market Orientation, Product Advantage, and Launch Proficiency on New Product Performance and Organizational Performance

Some scholars have suggested recently that a market‐oriented culture leads to superior performance, at least in part, because of the new products that are developed and are brought to market. Others have reinforced this wisdom by revealing that a market‐oriented culture enhances organizational innovativeness and new product success, both of which in turn improve organizational performance. These scholars do not reveal, however, through which new product development (NPD) activities a market‐oriented culture is converted into superior performance. To determine how critical NPD activities are for a market‐oriented firm to achieve superior performance, our study uses data from 126 firms in The Netherlands to investigate the structural relationships among market orientation, new product advantage, the proficiency in new product launch activities, new product performance, and organizational performance. We focus on product advantage—because product benefits typically form the compelling reasons for customers to buy the new product—and on the launch proficiency—as the launch stage represents the most costly and risky part of the NPD process. Focusing on the launch stage also is relevant because it is only during the launch that it will become evident whether a market orientation has crystallized into a superior product in the eyes of the customer. The results provide evidence that a market orientation is related positively to product advantage and to the proficiency in market testing, launch budgeting, launch strategy, and launch tactics. Product advantage and the proficiency in launch tactics are related positively to new product performance, which itself is related positively to organizational performance. Market orientation has no direct relationship to new product performance and to organizational performance. An important implication of our study is that the impact of a market orientation on organizational performance is channeled through the effects of a market orientation on product advantage and launch proficiency; subsequently through the effects of product advantage and the proficiency in launch tactics on new product performance; and finally through the effect of new product performance on organizational performance. These channeling effects are much more subtle and complex than the direct relationship of market orientation on organizational performance previously assumed. Another implication of our study is that the impact of a market orientation on performance occurs through the launch activities rather than being pervasive to all organizational processes and activities. A reason for this finding may be that NPD is the one element of the marketing mix that predominantly is the responsibility of the firm, whereas promotion and distribution often are in control of organizations outside the firm (e.g., advertising agencies, major retailers) and whereas the channel or the market often dictates the price. Both implications provide ample opportunities for further research on market orientation and NPD.     

The strategic dilemmas of innovative enterprises: proposals for high‐technology sectors

High levels of research and development (R&D) expenditure, pressure for innovation and the creation of new knowledge are features that distinguish high‐technology (high‐tech) enterprises from other, less technologically advanced, firms. Confronted with multiple contemporary approaches to strategy and turbulence in their environment, these enterprises make strategic choices continuously and dynamically. This paper proposes a model and matrix for the classification of high‐tech enterprises’ development strategies (with regard to their specific features), which are then verified. Qualitative research was conducted in 61 medium and large high‐tech companies based in Poland that operate either in Poland or in the global marketplace. The results show that high‐tech firms have the fundamental goal of developing R&D activity as a resource (and its redundancy) rather than product/market goals. The studied firms strive above all for leadership in innovation, creating new technologies based on their own R&D resources, while also using outside sources and mostly applying the personalisation approach in knowledge management. However, they choose different paths for product and market development, depending on the opportunities presented by the environment, and the firm's ability to identify and take advantage of these.     

Supportiveness of Organizational Climate, Market Orientation, and New Product Performance in Chinese Firms

Most knowledge development efforts in new product development have focused on Western economies and companies. However, due to its size, rapid growth rate, and market reforms, China has emerged as an important new context for new product development. Unfortunately, current understanding of the factors associated with new product success in China remains limited. We address this knowledge gap using mixed methods. First, we conducted 19 in‐depth interviews with managers involved in new product development in 11 different Chinese firms. The qualitative fieldwork indicated that firm behaviors and employee perceptions consistent with the phenomena of market orientation and the supportiveness of organizational climate both are viewed as important drivers of the new product performance of Chinese firms. Drawing on the marketing, management, and new product development literature this study develops a hypothetical model linking market orientation, supportiveness of organizational climate, and firms' new product performance. Direct relationships are hypothesized between both market orientation and supportiveness of organizational climate and firms' new product performance, as well as a relationship between supportiveness of organizational climate and market orientation. Data to test the hypothetical model were collected via an on‐site administered questionnaire from 110 manufacturing firms in China. The hypothesized relationships are tested using structural equation modeling. Results indicate a positive direct relationship of market orientation on firms' new product performance, with an indirect positive effect of supportiveness of organizational climate via its impact on market orientation. However, no support is found for a direct relationship between the supportiveness of a firm's organizational climate and its new product performance. These findings are consistent with resource‐based view theory propositions in the marketing literature indicating that market orientation is a valuable, nonsubstitutable, and inimitable resource and with similar propositions in the management literature concerning organizational culture. However, this study's findings also indicate that in contrast to a number of organizational culture theory propositions and empirical findings in some consumer service industries, the impact of organizational climate on firm performance in a new product context is indirect via the firm's generation, dissemination, and responsiveness to market intelligence. These results suggest that an effort to improve firms' new product performance by enhancing the flow and utilization of market intelligence is an appropriate allocation of resources. Further, this study's findings indicate that managers should direct at least some of their efforts to enhance a firm's market orientation at improving employee perceptions of the supportiveness of the firm's management and of their peers. This study indicates a need for further research concerning the role of different dimensions of organizational climate in firms' new product processes.     

Antecedents and Contingent Effects of Organizational Adaptive Capability on Firm Product Innovativeness

Organizational adaptive capability is a broad term and was studied from different perspectives, such as market, technology, and management system, in the management literature. However, the simultaneous effects of these different perspectives and their related adaptive capability constructs on a firm's product innovativeness have yet to be addressed. Additionally, an empirical study of the influence of informal structural dimensions, such as loose coupling, multiplexity, and redundancy, on the organizational adaptive capability, as antecedents, is also missing in the technology and innovation management (TIM) literature. By studying 153 firms, we found that (1) market‐, technology‐, and management system‐related adaptive capability constructs simultaneously and positively impact firm product innovativeness; (2) under the loose coupling construct, autonomous behaviors of departments positively impact technology and management system adaptive capability, loose management style influences market and management system adaptive capability, and uneven/slow information travel in organizations negatively affects technology and management system adaptive capability; (3) multiplexity positively influences all organizational adaptive capability constructs; and (4) under the redundancy construct, information distribution redundancy has an “∩” shape relationship with technology adaptive capability. We also demonstrated that the impact of informal structural constructs on adaptive capability is contingent upon environmental turbulence, e.g., rapid or unanticipated changes in market and technology. We found that the influence of loose management style on technology adaptive capability decreases with increased rate of market turbulence, and the effect of resource slack, as a part of the redundancy construct, on technology adaptive capability changes quadratically, an “∩” shaped curve, with an increased rate of market turbulence. We further found that the effect of the autonomous behaviors of departments on market adaptive capability increases with an increased level of technology turbulence. The role of resource slack on the market adaptive capability was also found to change quadratically, an “∩” shaped curve, with an increased rate of technology turbulence. Interestingly, the impact of the information distribution redundancy on market adaptive capability changes nonlinearly, a “U” shaped curve, with an increased rate of technology turbulence. Further, we showed that the influence of organizational technology adaptive capability on product innovativeness increases with increased level of technology turbulence. This study concludes with several theoretical and managerial implications.     

Exploring the Nonlinear Impact of Organizational Integration on New Product Market Success

This article explores the nonlinear relationship between organizational integration and new product market success (NPMS). The concept of organizational integration was measured by assessing the degree of integration among various groups of people involved in the development of new products including new product development (NPD) teams that are typically the focal points of NPD efforts. New product market success was measured by examining four often‐used measures of NPD success. The mail survey research approach was used to gather empirical data from NPD managers in three major industries. The data gathered from this survey process were used as the basis from which to extract information to address this study's major research questions, which include: (1) How is the degree of new product market success related to the nonlinear degree to which groups of people (including NPD teams) integrate during NPD processes? and (2) How is the degree of new product market success related to the nonlinear degree to which separate groups of people (e.g., customers, suppliers, and functional departments) integrate during NPD processes? This study found that high levels of organizational integration (overall organizational integration and supplier organizational integration) during NPD processes are associated with high levels of new product market success. Additionally, this study found that the relationship between new product market success and organizational integration (customer organizational integration and functional organization integration) during NPD processes exhibit nonlinear, U‐shaped relationships. Therefore, the first important finding of this study confirms that various forms of organizational integration impact in a positive way the market success of new products. This suggests that management responsible for all NPD projects should consciously integrate important groups of people to support such developments. This study's findings also confirm and imply that new product developers in the studied industries should integrate marketing and research and development (R&D) over the duration of the NPD process. This suggests that new product managers must be proactive to assure that members of NPD teams are actively engaged with groups of supporting people within and outside new‐product–producing organizations. Unlike prior research, a major finding of this study suggests that the association between organizational integration and new product market success does not form inverted U‐shaped relationships. Data from this research imply that new product market success is linearly influenced by overall and supplier organizational integration. However, this study's data suggest that new product market success is nonlinearly influenced by customer and functional organizational integration. This study's data suggest that when customer organizational integration and/or functional organizational integration is increased, new product market success can be increased at a rate which is greater than a linear rate.     

Market Orientation and R&D Effectiveness in High‐Technology Firms: An Empirical Investigation in the Biotechnology Industry*

There seems to be lack of consensus among informed scholars about the importance a of market orientation for high‐technology firms. This paper gives a comprehensive review of existing empirical studies on the relationship between market orientation and innovation performance and pinpoints two limitations in this research stream that might be at the origin of such controversy. First, extant research often overlooked key innovation outcomes for high‐technology firms, such as those related to research and development (R&D) performance. Second, organizational conditions that can ensure an optimal integration of market knowledge in the innovation process have been less analyzed in the case of these firms. Against this background, the present study contributes to the literature by providing a test of the effect of market orientation on R&D effectiveness and the moderating role of knowledge integration in this relationship, using a sample of Italian biotechnology firms. The study's objectives are addressed in two steps. The first one consists of an in‐depth qualitative study based on semistructured interviews in five biotechnology firms. The second step consists of a follow‐up survey of 50 biotechnology firms. Results from hierarchical multiple regression analysis show that the different dimensions of a market orientation have diverse effects on R&D effectiveness of high‐technology firms: whereas interfunctional coordination has a positive main effect, the effect of customer orientation is moderated by knowledge integration, and competitor orientation has no effect on R&D effectiveness. Post hoc analyses also show two additional results involving a broader set of dependent variables. First, R&D effectiveness mediates the effects of customer orientation and interfunctional coordination on organizational performance. Second, market orientation does not appear to significantly affect R&D efficiency. The present study contributes to current literature in two main respects. First, it adds to previous work on market orientation and innovation by proposing a new dependent variable—R&D effectiveness—which offers a better perspective to understand the impact of market orientation on innovation performance in high‐technology contexts. Second, while part of the current debate on the role of market orientation in high‐tech markets seems to be polarized by positions that sustain its potential drawbacks or, on the contrary, its advantages, this study's findings on the moderating role of knowledge integration shed light on important contingency factors, such as organizational capabilities. The authors discuss the study's limitations and provide directions for future research.     

The Contingent Value of Responsive and Proactive Market Orientations for New Product Program Performance*

While the benefits of being market oriented are largely accepted, a group of scholars and managers remain skeptical. Marketing scholars have sought to counter the criticisms leveled against market orientation (MO) by arguing that it has both responsive and proactive dimensions. However, few studies have empirically examined the complexity of the effects of these dimensions on firm performance. Drawing on theories of resource‐based advantage and organizational search behavior, this article advances understanding by arguing that responsive and proactive market orientations have curvilinear effects on product development performance, that their interaction may be positively related to product development performance, and that their effects on new product program performance are moderated differentially by the organizational implementation conditions and marketing function power. Survey results of 175 U.S. firms indicate support for most of the hypotheses. Specifically, whereas responsive MO has a U‐shaped relationship with new product program performance, proactive MO has an inverted U‐shaped relationship with new product program performance. Contrary to the arguments presented here, the interaction of both orientations is negatively related to new product program performance. This study finds that both orientations are needed; however, new product program performance is enhanced when one is at higher level and the other is at lower level. Finally, responsive MO is only positively related to new product program performance under specific conditions such as when strategic consensus among managers is high. On the other hand, the positive effect of proactive MO on new product program performance is further strengthened when learning orientation and marketing power are high. Overall, this study suggests that the effects of responsive and proactive MO on new product program performance are more complex than previously theoretically argued and empirically examined.     

Achieving Fit between Learning and Market Orientation: Implications for New Product Performance

Drawing on the learning and market orientation literature, this study examines how responsive and proactive market orientations interact with exploitative and exploratory learning to affect new product performance. Despite advancements in understanding the distinctions between the different types of learning and market orientations, little evidence exists regarding which types of market orientation work best with exploitative or exploratory learning to improve new product performance. Using a sample of 216 high‐tech Canadian firms, the authors find that new product performance is elevated only when exploratory learning is bundled with proactive market orientation. New product performance suffered when exploratory learning was complemented with responsive market orientation and when exploitative learning was complemented with proactive market orientation. Implications for marketing theory and practice are discussed.     

Commercializing Technological Innovation: Learning from Failures in High‐Tech Markets*

Commercialization is known to be a critical stage of the technological innovation process, mainly because of the high risks and costs that it entails. Despite this, many scholars consider it to be often the least well managed phase of the entire innovation process, and there is ample empirical evidence corroborating this belief. In high‐tech markets, the difficulties encountered by firms in commercializing technological innovation are exacerbated by the volatility, interconnectedness, and proliferation of new technologies that characterize such markets. This is clearly evinced by the abundance of new high‐tech products that fail on the market chiefly due to poor commercialization. Yet there is no clear understanding, in management theory and practice, of how commercialization decisions influence the market failure of new high‐tech products. Drawing on research in innovation management, diffusion of innovation, and marketing, this article shows how commercialization decisions can influence consumer acceptance of a new high‐tech product in two major ways: (i) by affecting the extent to which the players in the innovation's adoption network support the new product; (ii) by affecting the post‐purchase attitude early adopters develop toward the innovation, and hence the type of word‐of‐mouth (positive or negative) they disseminate among later adopters. Lack of support from the adoption network is found to be an especially critical cause of failure for systemic innovations, while a negative post‐purchase attitude of early adopters is a more significant determinant of market failure for radical innovations. There follows a historical analysis of eight innovations launched on consumer high‐tech markets (Apple Newton, IBM PC‐Junior, Tom Tom GO, Sony Walkman, 3DO Interactive Multiplayer, Sony MiniDisc, Palm Pilot, and Nintendo NES), which illustrates how commercialization decisions (i.e., timing, targeting and positioning, inter‐firm relationships, product configuration, distribution, advertising, and pricing) can determine lack of support from the innovation's adoption network and a negative post‐purchase attitude of early adopters. The results of this work provide useful insights for improving the commercialization decisions of product and marketing managers operating in high‐technology markets, helping them avoid errors that are precursors of market failure. It is also hoped the article will inform further research aimed at identifying, theoretically and empirically, other possible causes of poor customer acceptance in high‐tech markets.     

Decomposing Pioneer Survival: Implications for the Order‐of‐Entry Effect

In contrast to previous studies of pioneer survival that directly compare the survival of market pioneers with later entrants, this paper proposes that a market pioneer, as the first entrant, operates under two distinctly different survival processes, one during the initial monopoly period and another during the later competition period. The two processes of market pioneers need to be separately estimated and compared with the survival process of later entrants. This paper demonstrates a method for decomposing the pioneer's survival and empirically shows how researchers can compare the pioneer survival in two periods with that of later entrants and identify period‐specific advantages of pioneering. Our empirical analysis using data collected from two different types of industries—a low‐tech (i.e., newspaper) industry and several high‐tech industries—reveals several interesting new findings that illustrate the advantages of decomposing pioneer survival. For example, this paper shows that when treating first‐mover survival as a single process, one can only find an oversimplified pattern showing that first movers have a survival chance equal to that of second movers in the newspaper industry, but a lower one than the second movers in high‐tech industries. However, when analyzing the first‐mover's survival as a sequence of monopoly and competition processes, new insights emerge. In the newspaper industry, the pioneers can have survival advantages in both the monopoly and the competition periods relative to the second movers, and there is a significant survival advantage for those second entrants who delay market entry until the first entrant exits. In contrast, the overall pioneer survival disadvantage identified in the high‐tech industries when treating the survival as a single process comes from the survival disadvantage in the competition period but not in the monopoly period. Furthermore, our empirical analyses using data from two types of industries reveal completely different patterns with regard to the pioneer survival advantage, which suggests that being first can benefit pioneers in both two‐market periods in low‐tech industries but can be extremely risky for pioneers to gain any survival advantages in both two‐market periods in high‐tech industries because the former markets have relatively low market and technology uncertainties, and organizational change is less important; whereas the latter industries have significantly high market and technology uncertainties, technological advances emerge frequently, and firms are required to adapt themselves quickly to a fast‐changing environment.     

Project visioning: Its components and impact on new product success

The concept of corporate vision has been receiving considerable attention in the strategy scholarship. A clear and lofty organizational vision can provide direction to a company and can positively impact its ability to succeed. Yet research on vision at the project level has been curiously lacking. The purpose of this research is to define project vision, discuss its components and explore its impact on successful new product development. After studying the vision on a series of 13 innovations at three companies (Apple, IBM and HP), we identified several components of an effective project vision that include vision clarity, vision agreement/support and vision stability and assessed their impact on new product success. To confirm the validity and generalizability of our observations, we then tested these insights on 509 new product teams from a wide variety of firms. We found that an effective vision varies depending on the innovation type - incremental, evolutionary and radical. Our results demonstrate that vision clarity is positively associated with success in evolutionary (market or technical), and radical innovations, but not for incremental projects. Vision stability is positively associated with success in incremental and evolutionary market innovations; and vision support is positively associated with success in incremental, and evolutionary technical innovations.     

Is Integration Enough for Fast Product Development? An Empirical Investigation of the Contextual Effects of Product Vision*

Research into development time performance has suggested that integration—both internal, adopting cross‐functional organizational structures for development, and external, involving customers and suppliers in the process—can be a powerful driver when it comes to compressing cycle times and enhancing development punctuality. Some recent studies have also highlighted the compelling role of product vision to obtain high performances with product development. What these studies seem to suggest is that product vision guarantees the right goals and clarity of direction that integration mechanisms need to quickly develop new products and to stay on the development schedule. However, past studies have rarely considered or measured product vision as a construct and explicitly tested whether or not product vision acts as a contingent factor in determining the relationships between the aforementioned organizational drivers and development time. This research study maintains that product vision is crucial to pushing organizational drivers toward increased development efficiency. To find theoretical support for this position and to define a reference framework for the study, previous literature was analyzed. In the framework, both internal and external development integration are assumed to be positively related to time performance; however, these relationships are moderated by product vision. The model was then tested empirically on an international sample of 157 firms to verify and to obtain empirical support for the hypothesized relationships. The results confirm the importance of external integration in achieving better time performance. However, the influence of this driver on cycle time can also be increased by the presence of a very well‐defined product vision. The relationship between internal integration and time performance is more complex. Though it seems to slow down the process as a single factor, its interaction effect with product vision is in fact positive. These results have several managerial implications. First, externally integrated development can greatly improve time performance; however, the best results in terms of acceleration can be obtained when there is a well‐defined product vision. Furthermore, product vision is essential in the case of internal integration: A cross‐functional process alone would not be enough for development acceleration in the absence of product vision. Hence, managers interested in obtaining high time performances should accompany the adoption of integration mechanisms with increased attention to sharing clear objectives and directions with all those—both inside the firm (i.e., team members and functional representatives) and outside the firm (i.e., customers and suppliers)—involved in development and as well as throughout the firm.     

The Roles of Sustainability Orientation and Market Knowledge Competence in New Product Development Success

Firms’ sustainability orientation (SO) is widely understood as a strategic resource, which can lead to competitive advantage and superior (financial) performance. While recent empirical evidence suggests a moderate and positive relationship between SO and financial performance on a corporate level, little is understood about the influence of SO on new product development (NPD) success. Building on the natural‐resource‐based view (NRBV) of the firm, we hypothesize that firms’ SO positively influences NPD success, because of efficiency gains and differentiation advantages. However, scholars have also argued that the win–win paradigm postulated by NRBV might not always hold because NPD managers might find it difficult to balance sustainability objectives with the needs of their customer and the competitive dynamics in their markets. It is, therefore, proposed that market knowledge competence (MKC) is an important capability, which helps firms to balance social and ecological objectives with economic goals such as profitability and market share. Using data from 343 international firms from 24 countries that was collected by the Product Development and Management Association, structural equation modeling results suggest that (1) SO positively influences NPD and that (2) this relationship is partially mediated by firms’ market knowledge capabilities. The findings suggest that strategic‐level SO and MKC are complementary in that they help in balancing trade‐offs between sustainaility objectives and profitability goals. In this way, the study contributes to a better understanding of how critical NPD practices can help managers to translate firms’ SO into NPD success. The article concludes by highlighting implications for product innovation managers.     

The role of predevelopment activities in the relationship between market orientation and performance

To determine how critical predevelopment activities are for a market-oriented firm to achieve superior performance, our study uses data from 126 firms in The Netherlands to investigate the structural relationships among market orientation, the proficiency in predevelopment activities, new product performance, and organizational performance. The results provide evidence that market orientation is positively related to the proficiency in strategic planning, idea generation and idea screening. Strategic planning and idea generation are positively related to new product performance, which in itself is positively related to organizational performance. Market orientation has no direct relationship with new product performance and organizational performance. Another interesting finding is that the links between market orientation and new product performance, and between market orientation and organizational performance are not moderated by the characteristics of the market environment.     

Proactive/Responsive Market Orientation and Marketing—Research and Development Integration

The level of integration between the marketing and research and development (R&D) functions may be gauged by degree of communication, information sharing, and collaboration between the functions during the new product development process. This article examines how a firm's strategic choice regarding market orientation may influence the relationship between marketing and R&D personnel, and how this relationship may affect organizational success. Under examination are both the responsive form of market orientation, in which a firm focuses on immediate customer needs and tends to be market driven, and the proactive form, in which the firm focuses on future market needs and tends to be invention driven. It is theorized that responsive market orientation will be more positively related to marketing‐R&D integration due to the market‐driven nature of the orientation. Conversely, it is theorized proactive market orientation will be more positively related to organizational success than responsive market orientation due to the innovation‐driven nature of the orientation. The study was implemented via a Web‐based survey and data analysis was performed using structural equation modeling techniques. The results of this study provide empirical evidence that both proactive and responsive market orientation exhibit a positive relationship with marketing–R&D integration, indicating that both forms of market orientation may lead to closer collaboration between the marketing and R&D functions. Despite the assumption that a proactive orientation is driven by innovation and technology in which R&D may play a more significant role, there is evidence that a high degree of synergy is developed between the groups when the focus is on future market needs. A market‐driven responsive orientation by necessity requires high integration between departments to commercialize products in a timely manner to meet current market needs. Proactive market orientation exhibits a positive relationship with market performance, whereas responsive market orientation does not. The result may show evidence of the “new product paradox," whereby developing products to address immediate market needs may result in lower market performance because the new products may be replacements for obsolete offerings or are actually cannibalizing sales of existing products.     

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.