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.     

Effect of service-related resources on employee and customer outcomes in trade shows

Despite widespread recognition of trade shows as a vehicle to provide services to visitors by exhibitors, there is a paucity of research in this area of special interest. Drawing on the resource-based view, we develop a research framework to examine the effects of service-related resources on exhibitor's personnel attitudes and visitor responses. We collected on-site data from 151 exhibitor's personnel and 366 visitors during a trade show. These responses were matched at the exhibitor level to test the research framework. We found a positive effect of service leadership and service technology in developing a customer-oriented service strategy with satisfied employees. Additionally, we demonstrate that service leadership positively moderates the effect of service technology on customer orientation. In contrast, service leadership negatively moderates the effect of empowerment on customer orientation. This suggests that similar firm resources do not complement each other perhaps because they are substitutable. Finally, we show that service-related resources not only affect customer orientation but also influence job satisfaction of exhibitor personnel and visitors responses such as interaction quality, satisfaction, and word-of-mouth intentions.     

Incorporating human resource management initiatives into customer services: Empirical evidence from Chinese manufacturing firms

The existing operations management literature has extensively investigated the associations between customer satisfaction and firm performance. However, how to improve customer satisfaction through employee empowerment, service reward, and service training has rarely been investigated. In this research, we tied human resource and service operations management to each other and examined the relationships among employee empowerment, service reward, service training, employee satisfaction, customer service and customer satisfaction based on empirical study of 214 Chinese manufacturing companies. Using structural equation modeling, we found that both employee empowerment and service training have significant impacts on employee satisfaction and customer service, while service reward only has significant impact on customer service. We also found that both employee satisfaction and customer service have significant impact on customer satisfaction. However, the impact of employee satisfaction on customer service is insignificant. The findings suggest that employee empowerment, service reward and service training are important considerations for operations managers to boost employee satisfaction and customer service, which in turn improve customer satisfaction. We provide empirical evidence that employee empowerment, service reward and service training play significant roles in increasing customer satisfaction in the context of manufacturing businesses.     

Market orientation,job satisfaction,product quality,and firm performance: evidence from China

This article examines the processes by which market orientation (MO) affects performance using a cross‐level approach. The results of a survey of 2,754 employees from 180 firms in China show that organization‐level MO culture leads to unit‐level MO behavior, which improves employee‐level job satisfaction and then product quality, which in turn fosters organizational performance. In particular, MO behavior fully mediates the effects of MO culture on employee satisfaction, product quality, and organizational performance. Leadership quality strengthens the effect of MO culture on unit‐level MO behavior. Moreover, MO behavior enhances firm performance indirectly through employee job satisfaction and product quality. Copyright © 2008 John Wiley & Sons, Ltd.     

The relationships among leadership,goal orientation,and service quality in high-contact service industries: An empirical study

High-contact service industries are characterized by close interaction between service employees and customers, and diverse customer needs. Such characteristics pose a great challenge to the delivery of services of superior quality. In this research we conceptually explore and empirically examine several attitudinal and motivational factors of customer-contact employees, and the management style of managers as antecedents to service quality in high-contact service sectors. Based on dyadic data collected from 230 service firms in Hong Kong, we examine the relationships among transformational leadership, transactional leadership, affective organizational commitment, learning goal orientation, performance goal orientation, and service quality. We find that learning goal orientation is more effective than performance goal orientation in fostering service quality in the high-contact service context. We also observe that transformational leadership tends to be more effective than transactional leadership in influencing employee attitude in high-contact service firms. This research pioneers theory-driven examination of service quality in high-contact service firms using data collected from service employees and shop managers for hypothesis testing.     

Strategic orientations,marketing proactivity and firm market performance

Guided by strategic orientations, firms must continuously deliver superior value in order to maintain a strong position in the market over the long-term. This study explores how two prominent strategic orientations (i.e., market and technological orientations) influence a firm's marketing proactivity and performance, with marketing proactivity being the key to delivering continuously superior value. Specifically, we examine how the cultural (i.e., a proactive market orientation) and the behavioral (i.e., market pioneering) dimensions of marketing proactivity, and the interaction between them, affects a firm's market performance. A structural equation modeling analysis of survey data from 109 firms shows that a proactive market orientation and market pioneering have a significant positive impact on the sales per employee and the growth rate of a firm. Our findings suggest that market pioneering strengthens the positive relationship between proactive market orientation and sales per employee and growth rate. A firm's technological orientation is positively related to both its proactive market orientation and market pioneering. However, the responsive market orientation of a firm only has a significant positive effect on proactive market orientation, and not on market pioneering. We discuss the theoretical and managerial implications of these findings.     

Strategic orientations and new product commercialization: mediator,moderator, and interplay

Why are some firms more successful at commercializing new products than others in emerging economies? It is possible that the strategic orientations, which firms adopt as a type of business strategy, lead at least partially to the superior performance of the new products they introduce to the market. Strategic orientations facilitate a match between firm strategy and resource endowment, on the one hand, and the adaptation to market conditions, on the other. In this paper, we empirically test whether four major types of strategic orientations (market orientation, technology orientation, entrepreneurial orientation, and networking orientation) are simultaneously related to new product commercialization performance using data collected from China. We find that strategic orientations are positively related to three aspects of new product commercialization, namely new product advantage, new product newness, and number of new products introduced to the market. Interestingly, we find that pairs of strategic orientations support each other in exerting their impacts on new product commercialization performance. In addition, we find that organizational learning mediates the effects of strategic orientations on new product commercialization and that environmental dynamism moderates the effect of strategic orientations on new product commercialization. We obtain the valuable insight that a firm's successful commercialization of new products hinges upon the development of critical yet complementary sets of strategic orientations, especially in a dynamic business environment.     

Strategic supply chain management: Improving performance through a culture of competitiveness and knowledge development

For many firms, using their supply chains as competitive weapons has become a central element of the strategic management process in recent years. Drawing on the resource‐based view and theory from the organizational learning and information‐processing literatures, this study uses a sample of 201 firms to examine the influence of a culture of competitiveness and knowledge development on supply chain performance in varied market turbulence conditions. We found that synergies exist between a culture of competitiveness and knowledge development: their interaction has a positive association with performance. In addition, based on behavioral and contingency theories, we found that market turbulence moderates these relationships, having a positive influence on the knowledge development–performance link and a negative influence on the culture of competitiveness–performance link. Managers who are confident about the level of market turbulence they will face can use this sense to decide whether to emphasize developing either a culture of competitiveness or knowledge development in their supply chains. For those firms whose managers are unlikely to be able to predict the degree of turbulence they will face over time, a focus on both a culture of competitiveness and knowledge development is critical to ensuring success. Copyright © 2007 John Wiley & Sons, Ltd.     

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.     

A process-oriented perspective on customer relationship management and organizational performance: An empirical investigation

Research on the CRM-performance link has been fragmented due to various perspectives on CRM. This study, considering different concepts of CRM, proposes a process-oriented framework for examining the relationship among CRM resources, CRM process capabilities, and organizational performance. Based on the resource-based view (RBV) of the firm, CRM resources are classified as “technological CRM resources” and “infrastructural CRM resources”. Data from 77 Iranian Internet service provider firms were gathered in a field survey. The empirical work indicates that the measured constructs demonstrate key psychometric properties including reliability and validity. The results reveal that CRM processes are more affected by infrastructural CRM resources rather than technological CRM resources. Moreover, the findings indicate that firms with improved CRM process capabilities enjoy better organizational 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.     

Using supply chain management to leverage a firm's market orientation

Building supplier relationships and becoming more market oriented have similar building blocks and have similar effects. Strong supplier relationships tend to impact the firm's performance, in part, because the firm can respond to customer needs in a more timely fashion. Supplier relationships tend to be stronger in firms where there is cross-functional sharing of supplier and customer information. Market orientation is an organizational culture that focuses the company on generating market information, cross-functionally sharing that market information, and rapidly responding to that market information to positively impact the performance of the firm. This study explored whether the positive effects of strong supplier relationships are enhanced in market-oriented firms. Results support the notion that supplier relationships are one way of leveraging a firm's market orientation through improved customer responsiveness. Cross-functional sharing of information appears to be the link that ties market orientation and stronger supplier relationships together.     

Service innovation in times of economic crisis: the strategic adaptation activities of the top E.U. service firms

This article examines the long-term strategic adaptation activities top service firms use to respond to economic crisis. Based on a longitudinal dataset of 97 leading European service firms, it empirically conceptualizes three clusters or strategic types of organizational response to overcome long-term financial strain experienced during 2008–2011, it tests the survivability of their strategic orientation and it assesses their relationship with organizational performance during the crisis (2008–2011) and in the post-crisis period (2014–2016). Leading E.U. service firms that attempt to maximize adaptation by ‘Commitment-to-expansion’ (i.e., increase in R&D investment, strategic M&A and recruitment) ensure the long-term survivability of their strategic orientation and generate growth in their operating profits, sales and market capitalization in contrast to service firms that implement cost-oriented actions (layoffs and cutting back on R&D investment). These results extend the limited knowledge available on strategic adaptation in top E.U. service firms and provide insight into the role that different responses play in fostering recovery from ongoing economic and financial crisis, which have thus far remained empirically under-researched.     

Antecedents and consequence of organizational unlearning: Evidence from China

Radical innovation has significant impact on organizations. To develop radical innovation, firms need to change or discard their obsolete routines, beliefs, and knowledge, since radical innovation represents a clear departure from existing practices. Based on the organizational unlearning literature and contingency theory, the authors explore three issues: (1) the relationship between organizational unlearning and radical innovation; (2) two antecedents to organizational unlearning (environmental turbulence and entrepreneurial orientation); and (3) how firm size moderates the relationships between the antecedents and organizational unlearning. Survey data from 238 manufacturing firms in China indicated that both environmental turbulence and entrepreneurial orientation (EO) are positively related to organizational unlearning. Firm size plays a dual role, weakening the positive environmental turbulence−organizational unlearning relationship while strengthening the positive EO − organizational unlearning relationship. Further, organizational unlearning is found to be a critical driver of radical innovation.     

Cultural vs. operational market orientation and objective vs. subjective performance: Perspective of production and operations

The relationship between market orientation and organizational performance has been the focus of many studies for the last few years. The conclusions reported are very diverse and even contradictory. This ambiguity is reinforced to some extent by the high degree of methodological heterogeneity in the definition and measure of market orientation and organizational performance and the empirical formalization of the relationship between both concepts. This study tackles this question by comparing different methodological approaches. Three key aspects are considered: (1) cultural and operational approaches for measuring market orientation; (2) objective and subjective measures of performance; and (3) the source of information in the organization, specifically the perspective of production and operations. The results obtained from a sample of Spanish industrial firms show a stronger positive relationship for operational market orientation and subjective performance. Moreover, the adoption of ‘operational recipes’ of market orientation by the production and operations function seems to improve organizational performance regardless of the existence of any cultural support for market orientation.     

The Formation of Managerial Networks of Foreign Firms in China: The Effects of Strategic Orientations

This study investigates how firms' strategic orientations (i.e., market, technology, and entrepreneurship orientations) influence the formation of two types of managerial networks (top managers' ties with the business community and with government officials), as well as the impact of managerial networking on firm performance. On the basis of a survey of 181 foreign-invested enterprises (FIEs) operating in China, we find that a market orientation fosters both types of network building. Technology-oriented firms are more likely to cultivate managerial ties with top managers at other firms but less likely to establish networks with government officials. In contrast, entrepreneurial firms tend to develop vertical networks with government officials but have no intention to deepen their horizontal networks with other firms. Competitive intensity moderates the relationships between strategic orientations and managerial ties. Finally, managerial networking has a positive impact on FIE performance.     

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.     

Incubation matters: Measuring the effect of business incubators on the innovation performance of start‐ups

This article explores the role of business incubators on the innovation performance of start‐ups; in addition, we also investigate how the incubation effect moderates other important factors driving their innovation performance. The empirical evidence comes from a sample of firms located in Northern Italy belonging to the manufacturing (mechanical engineering firms) and service sectors (knowledge‐intensive business services). The results suggest that the incubation effect is very important in shaping the innovation performance of new ventures (measured as a percentage of sales of new‐to‐market innovations). Moreover, it positively moderates the impact of (1) the internal technical capabilities and (2) the adoption of a limited portfolio of collaborations for innovation.     

Managing service quality in high customer contact B2B services across domestic and international markets

This research aims to examine the nature of the moderating influence of empowerment on the effect of service training and internal marketing on service quality in a high customer contact B2B setting, and to investigate the differential effects of internal marketing, service training, and empowerment on service quality across domestic and international operations. Data from 880 customer-contact employees show several direct and interaction effects. Our analysis shows that the three focal variables, internal marketing, service training and empowerment positively relate to service quality. Our results support a positive moderating influence of empowerment on the relationship between internal marketing and service quality, and between service training and service quality. Finally, our hypotheses for the moderating influence of type of service operations (domestic/international) on the effect of internal marketing and service training on service quality were also supported. Our results suggest that offering service employees the skills, ability and power to do their job is essential in both domestic and international operations, and also helps maximize the effects of a firm's internal marketing efforts and service training. Overall, the findings inform managers as to how their employee focused strategies for service quality can be managed effectively across domestic and international markets.     

Market orientation and performance: an integration of disparate approaches

A series of five Strategic Management Journal articles has debated several issues concerning the role of market orientation in shaping firm performance. This debate has defined market orientation as a cultural emphasis. Yet, a large body of research in the marketing field views market orientation as an emphasis on certain market information‐processing activities. Using data from 217 firms, we test a model that includes both cultural and information‐processing elements. The findings suggest that both approaches to market orientation help explain performance, but their effects are mediated by organizational responsiveness. Thus, researchers should not only account for both definitions of market orientation, but they should also investigate market orientation in combination with other important performance antecedents. Copyright © 2005 John Wiley & Sons, Ltd.