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.     

Technology transfer as technological learning: a source of competitive advantage for firms with limited R&D resources

The objective of this article is to answer why and how firms in developing countries with limited R&D resources can gain sustainable competitive advantage through technology transfer (TT). Successful firms are those that can accumulate competence through internal technological learning after transferring technologies from external technology sources. Organizational intelligence, firm specificity of technology, and causal ambiguity are identified as three mediators between technological learning performance and several antecedents previously discussed in the literature. A survey of Taiwanese manufacturers is conducted to explore the technological learning phenomenon as an integral part of TT, which is important but often neglected. This article also provides an interesting research setting for the evaluation of technological learning theories.     

Solving the innovation problem in state-owned firms: The role of entrepreneurial orientation and high-commitment HR practices

Due to the inefficiency in utilizing the rich resources they have, state-owned firms in China are generally not competitive as private firms in developing innovation-related organizational capabilities. This study contributes to the existing literature by identifying an alternative mechanism that can potentially explain the negative association between state ownership and innovation capability. Specifically, this study suggests that state-owned firms have less competitive advantage in innovation because they lack entrepreneurial orientation. To provide a potential solution for this problem, this study examines an important but understudied firm strategy, high-commitment HR practices (HCHR), and investigates the roles it plays on enhancing innovation capability by promoting an entrepreneurial orientation in state-owned firms. More importantly, by studying the contingent effect of firm business nature, this study identifies the boundaries of the positive effect of HCHR.     

Marketing capabilities and innovation-based strategies for environmental sustainability: An exploratory investigation of B2B firms

While emerging literature on sustainability shows that environmentally responsible strategies can contribute to competitive advantage and enhanced financial performance, little is known about specific marketing capabilities that lead to sustainable consumption behavior, and whether implementing such strategies leads to firm competitive advantage. Using the case method approach, this study explores marketing-related strategies and practices pertaining to sustainable consumption as reported by leading sustainable firms in the B2B context. We examine case studies of forty seven B2B firms and identify key marketing capabilities that tie to innovation-based sustainability strategies, sustainable consumption behavior and firm performance. We use our findings to develop a conceptual framework linking marketing capabilities to innovation strategies for firm sustainability, sustainable consumption behavior and firm competitive advantage, and put forward propositions for future research.     

因果模糊与持续竞争优势的形成

因果模糊是持续竞争优势的来源。本文从企业资源和企业能力的角度。通过阐释企业持续竞争优势与因果模糊之间的关系，认为正是由于独特性资源、核心竞争力、默认知识、决策过程和企业社会资本所具有的因果模糊，使成功的企业难以被模仿。进而构筑了牢固的隔离机制，使企业的竞争优势得以保持。     

Defining and developing competence: A strategic process paradigm

In this paper, competence is defined in operational terms as the degree to which the firm or its subunits can reliably meet or exceed objectives. Two antecedents to competence (and thus competitive advantage) are then developed and defined. These are the ‘comprehension’ of the management team working on developing competence and the ‘deftness’ of their task execution. Empirical results from a study of 160 new initiatives in 40 organizations from 16 countries suggest that: (1) it is feasible to operationalize and measure these constructs; (2) comprehension and deftness are important correlates of an organization's degree of competence as defined; and (3) a process-centered paradigm for understanding competence development shows promise.     

Is doing more doing better? The relationship between responsible supply chain management and corporate reputation

Responsible supply chain management (RSCM) can help protect a firm's corporate reputation by shielding it from negative media attention and consumer boycotts. RSCM can also enhance a firm's corporate reputation, which allows firms to secure business contracts and penetrate new market segments successfully. This study empirically examines: (i) the extent to which responsible supply chain management practices is driven by a desire to protect corporate reputation; and (ii) whether responsible supply chain management can enhance corporate reputation and thereby generate competitive advantage to the firm. We draw on primary and secondary datasets across seven firms, spanning the publishing, technology, beverage, tobacco, finance and home improvement sectors. We find compelling evidence to suggest that firms often engage in RSCM due to a desire to protect corporate reputation. Similarly, we find empirical evidence to suggest that responsible supply chain practices can enhance reputation and thereby create competitive benefits, although this link is not as profound as the relationship between RSCM and reputation protection and there are significant variations across industries. These findings have significant implications for marketing theory and, in particular, industrial marketers, who are increasingly expected to implement responsible supply chain practices.     

The Importance of Social Capital to the Management of Multinational Enterprises: Relational Networks Among Asian and Western Firms

Social capital is an important concept for multinational firms. Firms operating in global markets rarely have adequate resources to compete effectively in global markets; they access the needed resources through formal and informal relationships with other firms. The cultures in Asian countries have emphasized relationships much more strongly than Western firms. Thus, relational capital, based on guanxi (China), kankei (Japan) and inmak (Korea), provides the framework for business dealings in many Asian countries. As a result, the social capital of many Asian firms gives them a potential competitive advantage in global markets. Western firms must develop social capital and learn to manage relational networks to gain and sustain a competitive advantage in global markets. Western firms can learn how to develop and manage social capital from Asian firms. Alternatively, social capital has some disadvantages. Firms are limited by their networks and thus experience opportunity costs and path dependence. Additionally, while Asian firms often have strong network ties in their domestic markets, they have to develop many more ties globally to operate effectively in global markets. As a result, the development and management of social capital has become of critical importance for competitive advantage in global markets.     

How entrepreneurial orientation can leverage innovation project portfolio management

Innovation project portfolio management (IPPM) is a key task in R&D management because this decision‐making process determines which R&D projects should be undertaken and how R&D resources are allocated. Previous research has developed a good understanding of the role of IPPM in R&D strategy implementation and of successful IPPM practices. But the fundamental orientations that drive the strategy formation and implementation process have never been investigated in the context of IPPM, and it is unclear whether successful practices are equally valid for different strategic orientations. This study, therefore, investigates the moderating impact of a firm’s entrepreneurial orientation on the relationship between strategic portfolio management practices and portfolio success. An empirical analysis of 257 firms shows that both innovativeness and risk taking as entrepreneurial orientation’s dimensions positively moderate the relationship between managerial practices and performance. Specifically, we find that firms high in innovativeness profit more from stakeholder engagement compared to firms low in innovativeness. Firms high in risk‐taking profit more from a clearly formulated strategy. With increasing innovativeness and risk‐taking propensity, firms also profit more from business case monitoring and agility in portfolio steering. The results suggest that a firm’s entrepreneurial orientation can leverage the effect of IPPM practices. Vice versa, a lacking entrepreneurial orientation can render these practices ineffective. Strategic orientation and IPPM practices should, therefore, be aligned with each other to enable firms to better implement their strategy and generate competitive advantage.     

Market frictions and the competitive advantage of internal labor markets

Research summary : We show that frictions in labor and capital markets can be a source of competitive advantage for affiliates of corporate groups over stand‐alone firms in environments where benefits from internal markets' flexibility are high. We argue that the advantage of flexibility in changing labor inputs is related to how difficult it is to change capital inputs. We predict that if substituting labor with capital is difficult, the group advantage of flexibly changing labor would be stronger in countries with high levels of financial development. Consistent with this prediction, we find a stronger competitive advantage for group affiliates in countries with rigid labor markets but flexible capital markets. In these environments, group affiliates are more prevalent and outperform stand‐alone firms in terms of growth and profitability. Managerial summary : This research shows that the capacity to redeploy workers across internal units of the firm can be a source of competitive advantage in countries that impose strict employment protection laws. We show that the strategic advantage of labor flexibility is affected by how difficult it is to change capital inputs and that labor flexibility is a stronger source of competitive advantage in countries where developed financial markets allow for more flexible capital adjustment. In these settings, strategies designed to lower costs of internal mobility (e.g., locations of greater geographic concentration between units and in regions with less competitive external markets), development of corporate culture supportive of frequent change, and personnel development through internal rotation can result in substantial financial payoffs. Copyright © 2015 John Wiley & Sons, Ltd.     

Knowledge complexity and the performance of inter‐unit knowledge replication structures

Research Summary: Intra‐firm replication of complex knowledge is difficult yet critical to firm growth and the exploitation of competitive advantage. Inter‐unit organizational structures can facilitate the replication of complex knowledge between a source unit and a recipient unit. This study examines how inter‐unit organizational structures perform at different levels of knowledge complexity. We dimensionalize the patterns of information‐processing interactions according to three specific factors: the degree of inter‐unit connectivity, the extent of mirroring between the structure and the knowledge configuration, and coordination mechanisms. Simulation analyses offer a set of novel findings on how the information‐processing and bounded‐rationality concerns of organizational design impact the replication performance of the structures. We derive optimal structures for different levels of knowledge complexity, and articulate their theoretical and practical implications. Managerial Summary: The growth of firms often involves redeployment of their complex knowledge to new subunits or markets, in the context of acquisitions, alliances, or the creation of multinational subsidiaries. Complex knowledge is difficult to imitate, and thus, serves as a source of competitive advantage. However, it is also challenging to replicate within a firm, which limits firms’ ability to redeploy their capabilities in pursuit of new opportunities. A proper design of inter‐unit structures can facilitate the replication of complex knowledge between intra‐firm units. This study examines how the design of inter‐unit structures affects the outcome of this replication. Our results suggest that managers in charge of redeployment efforts should be mindful of the connectivity among units, coordination mechanisms, information overload, and the level of knowledge complexity.     

Leaders’ social ties, knowledge acquisition capability and firm competitive advantage

Drawing on the relational and knowledge-based views of competitive advantage, this study links leaders?? social ties and knowledge acquisition capability to competitive advantage of a firm. Specifically, it posits that leaders?? business ties and government ties have differential effects on firm competitive advantage. It further posits that the effect of leaders?? business ties on firm competitive advantage will be positively moderated by knowledge acquisition capability, and the effect of leaders?? government ties on firm competitive advantage will be negatively moderated by knowledge acquisition capability. The hypotheses are tested based on a survey of 386 firms in China. The results provide support for the hypotheses.     

Playing dirty or building capability? Corruption and HR training as competitive actions to threats from informal and foreign firm rivals

Research summary : We examine why a firm takes specific competitive action in nonmarket and resource‐market spaces, particularly when it perceives threats from informal and foreign competitor groups, respectively. We address this question by combining insights from competitive rivalry, strategic groups, and nonmarket strategy literatures in an emerging economy context. Specifically, we theorize how threats from informal and foreign rival firms in an emerging market influence a firm's engagement in corruption activities and its investments in HR training, respectively. We also argue that the likelihoods of such focal firm actions against competitor group threats differ, contingent on the focal firm's market and resource profiles. Results from the empirical analyses, with survey data from the Indian IT industry, provide broad support to our hypotheses. Managerial summary : Based on a World Bank dataset on the Indian IT industry, this study finds that corruption and HR training are pursued by firms in emerging economies as mindful strategies against specific types of rivals—informal and foreign firm rivals, respectively, and are not pursued simply as culturally‐based practices. Multinational companies may need to understand that domestic firms in emerging countries will engage in corruption strategically to reduce their costs and time to market of their products/services. Therefore, multinational firms may need to devise suitable strategies other than corruption to reduce their costs and time to market if they wish to compete with firms in emerging economies for customers who don't care about ethical issues and will buy a cheaper product/service that is delivered quickly. Copyright © 2015 John Wiley & Sons, Ltd.     

Are pricing policies an impediment to the success of customer solutions?

In an era of declining pricing power and increased global competition, customized solutions appear to be an effective way to build competitive advantages without the debilitating effects of price competition. Solutions involve provision of an integrated combination of goods and services that are designed to meet a business customer's specific needs. Premium prices and higher margins can be extracted by solution providers, who now have considerable incentives to design and market innovative solutions for their customers. We examine the applicability of various pricing frameworks and pricing practices in the context of two industries — business process outsourcing and power generation equipments. Our interviews suggest that firms predominantly use traditional pricing strategies; new strategies for solution pricing are only emerging; and, successful firms are currently using hybrid pricing models. We find that the solutions that we observed among practitioners are not what theory would suggest as true solutions but what would be described by theory as bundled products. We also find that solutions are in the eye of the beholder, i.e., if customers can de-bundle offerings, they are not true solutions. We extend our findings to academic theory and to the practice of developing and pricing solutions.     

Towards a model of dynamic capabilities in innovation-based competitive strategy: Insights from project-oriented service firms

With the growing significance of services in most developed economies, there is an increased interest in the role of service innovation in service firm competitive strategy. Despite growing literature on service innovation, it remains fragmented reflecting the need for a model that captures key antecedents driving the service innovation-based competitive advantage process. Building on extant literature and using thirteen in-depth interviews with CEOs of project-oriented service firms, this paper presents a model of innovation-based competitive advantage. The emergent model suggests that entrepreneurial service firms pursuing innovation carefully select and use dynamic capabilities that enable them to achieve greater innovation and sustained competitive advantage. Our findings indicate that firms purposefully use create, extend and modify processes to build and nurture key dynamic capabilities. The paper presents a set of theoretical propositions to guide future research. Implications for theory and practice are discussed. Finally, directions for future research are outlined.     

The impact of supplier development on buyer competitive advantage: A path analytic model

As manufacturing firms increasingly realize that supplier performance is crucial to their establishing and maintaining competitive advantage, supplier development has been a subject of considerable research in supply chain management. We develop and test a path model to explore how supplier development practices affect buyer-supplier performance from the buying firm's perspective in the context of Hong Kong's electronics industry. The results show that top management, supplier evaluation, and supplier strategic objectives are significant determinants of transaction-specific supplier development, and that buyers that have closer collaborative relationships with suppliers may strengthen their competitive advantage.     

The Vital Role of Problem‐Solving Competence in New Product Success*

Problem solving, a process of seeking, defining, evaluating, and implementing the solutions, is considered a converter that can translate organizational inputs into valuable product and service outputs. A key challenge for the product innovation community is to answer questions about how knowledge competence and problem‐solving competence develop and sustain competitive advantage. The objective of this study is to theoretically examine and empirically test an existing assumption that problem‐solving competence is an important variable connecting market knowledge competence with new product performance. New product projects from 396 firms in the high‐technology zones in China were used to test the study's theoretical model. The results first indicate that problem‐solving speed and creativity matter in new product innovation performance by playing mediator roles between market knowledge competence and positional advantage, which in turn sustains superior performance. This new insight suggest that mere generation of market knowledge and having a marketing–research and development (R&D) interface will not affect new product performance unless project members have the ability to use the information and to interact to identify and solve complex problems speedily and creatively. Second, these results suggest that different market knowledge competences (customers, competitors, and interactions between marketing and R&D) have distinct impacts on problem‐solving speed and creativity (positive, negative, or none), which underscore the need to embrace a more fine‐grained notion of market knowledge competence. The results also reveal that the relative importance of some of these relationships depends on the perceived level of turbulence in the environment. First, competitor knowledge competence decreases problem‐solving speed when perceived environmental turbulence is low but enhances problem‐solving speed when perceived turbulence is high. Second, competitor knowledge competence has a positive relationship with new product performance when the environmental turbulence is high but no relationship when the environmental turbulence is low. Third, the positive relationship between problem‐solving speed and product advantage is stronger when the perceived environmental turbulence is high than when it is low, which implies that problem solving is more important for creating product advantage when environmental turbulence is high and change is fast and unpredictable. Fourth, the negative relationship between problem‐solving speed and new product performance is stronger when the perceived environmental turbulence is high than when it is low, which means that problem‐solving speed is more harmful for new product performance when change is fast and unpredictable. And fifth, the positive relationship between product quality and new product performance is stronger when perceived environmental turbulence is low than when it is high, which implies that product quality may more likely lead to new product performance when the environment is stable and changes are easy to predict, analyze, and comprehend.     

Exploring the characteristics of the market-driven firms and antecedents to sustained competitive advantage

During the last few decades, identifying and examining the characteristics of market-driven firms have been a dominant theme in strategic marketing research. It has been argued that market-driven firms are superior in their market sensing and customer linking capabilities, enabling market-driven firms to outperform their competitors. This paper reports the findings of a study that examines the role market-focused learning capability and marketing capability in innovation-based competitive strategy on sustainable competitive advantage. The findings indicate that entrepreneurship is an important factor in sustained competitive advantage (SCA) and while market-focused learning capability leads to higher degrees of innovation, marketing capability enables SCA.     

Prospects for developing absorptive capacity through internal information provision

Theories of absorptive capacity propose that knowledge gained from prior experience facilitates the identification, selection, and implementation of related profitable practices. Researchers have investigated how managers may develop absorptive capacity by building internal knowledge stocks, but few have focused on the distribution of this knowledge within the firm and the role managers play in administering information to organizational subunits. In this paper, we explore the degree to which managers can develop absorptive capacity by directly providing information to agents in the organization that might potentially adopt a new practice. We find that the effectiveness of managerial information provision depends on the degree to which potential adopters have information from other sources. We find that information from previous adopters and past events reduces the effect of information provision, while experience with related practices amplifies it. Our research helps clarify when absorptive capacity may provide a sustained competitive advantage. Copyright © 2004 John Wiley & Sons, Ltd.     

The effects of complementarity of knowledge and capabilities on joint innovation capabilities and service innovation: The role of competitive intensity and demand uncertainty

Service innovation has become increasingly important for the growth of developed and developing countries. Despite an extensive body of literature on the role of joint innovation capabilities in improving a firm's innovativeness, the multivariate influences of operant resources and joint innovation capabilities, as well as the interplay among these in the prediction of service innovation have not been scrutinized in the context of B2B SMEs in a developing country. This study aims to fill this gap by testing a model that shows the relationships among complementarity of knowledge and capabilities as operant resources, joint innovation capabilities, and service innovation. We derive hypotheses about these relationships and test them using data from a sample of 302 respondents from 151 firms operating in the UAE. The results show that the relationships between complementarity of knowledge and joint innovation capabilities, and between joint innovation capabilities and service innovation, are significant and positive. They also show that the mediation effect of joint innovation capabilities on the relationship between complementarity of knowledge and service innovation is positive and full. This study also tests the moderating roles of competitive intensity and demand uncertainty in the relationship between joint innovative capabilities and service innovation and finds that their connection is stronger when competitive intensity is high.