Product innovativeness from the firm's perspective: Its dimensions and their relation with project selection and performance

There has recently been tremendous interest in product innovativeness. However, it seems that we need a better understanding of exactly what product innovativeness means. This article presents a conceptual framework to clarify its meaning. The framework first distinguishes customer and firm perspectives on product innovativeness. From the customer's perspective, innovation attributes, adoption risks, and levels of change in established behavior patterns are regarded as forms of product newness. Within the firm's perspective, environmental familiarity and project-firm fit, and technological and marketing aspects are proposed as dimensions of product innovativeness.
Next, the article offers a tentative empirical test of the proposed dimensions of product innovativeness from the firm's perspective. A well-known dataset of 262 industrial new product projects is used to: I) clarify the product innovativeness construct and examine its underlying dimensions, 2) examine the relation of product innovativeness with the decision to pursue or kill the project, and 3) examine the relationship between product innovativeness and product performance. Five dimensions of product innovativeness are found which have distinct relations with the Go/No Go decision and product performance: market familiarity, technological familiarity, marketing fit, technological fit, and new marketing activities. Most strikingly, measures of fit are related to product performance, whereas measures of familiarity are not.
The article concludes that researchers need to be careful about which definitions and measures of product innovativeness they employ, because depending on their choice they may arrive at different findings. New product practitioners are encouraged to evaluate new product opportunities primarily in terms of their fit with their firm's resources and skills rather than the extent to which they are "close to home".     

New product development in Asia: An introduction to the special issue

Given the increasing importance of Asia, the purpose of this special issue is to broaden the scope of our understanding of New Product Development (NPD) by going beyond the traditional Western research settings and looking at how new products are developed in Asia. This paper introduces the special issue on NPD in Asia and identifies key patterns of similarities and differences between Asian and Western NPD practices. The paper highlights key similarities and differences in the areas of organizational/top management support; technological proficiency; customer/market orientation; information sharing; cross-functional interface; entrepreneurship orientation; NPD strategies; innovation orientation; contingencies of innovation orientation; innovative marketing strategies; NPD process; appointment of project managers; rewarding team members; success rate; and cycle time.     

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.     

Knowledge Acquisition in University–Industry Alliances: An Empirical Investigation from a Learning Theory Perspective*

A firm's technological knowledge base is the foundation on which internal product and process innovations are generated. However, technological knowledge is not accumulated solely through internal learning processes. Increasingly, firms are turning to external sources in the technology supply chain to acquire the technological knowledge they need to introduce product and process innovations. Thus, the successful structuring and executing of partnerships with external “technology source” organizations is often critical to competitive success in technologically dynamic environments. This study uses situated learning theory as a basis for explaining how factors inherent to the knowledge acquisition context may affect the successful transference of technological knowledge from universities to their industry partners. Data collected via a survey instrument from 104 industry managers were used to explore the effects of various organizational knowledge interface factors on knowledge acquisition success in university–industry alliances. The organizational knowledge interface factors hypothesized to affect knowledge acquisition success in the current research include partner trust, partner familiarity, technology familiarity, alliance experience, formal collaboration teams, and technology experts' communications. Results indicate that partner trust predicts the successful acquisition of tacit knowledge but not explicit knowledge. Both forms of knowledge are predicted by partner familiarity and communications between the partners' technology experts. These findings suggest three principal managerial implications. First, although the development of a trusting relationship between the knowledge source and knowledge‐seeking parties is generally advisable, firms that seek to acquire explicit technological knowledge from their alliance partners may successfully do so without having made significant time and energy investments designed to assure themselves that they can trust those partners. The relative observability and verifiability of explicit knowledge relative to tacit knowledge may enable knowledge‐seeking parties to have greater confidence that knowledge has been acquired when partner trust is in question or has not been deliberately developed. A second implication is that, other things being equal, a knowledge‐seeking party's interests may be best served through repeated exposures to particular alliance partners, particularly if those exposures facilitate mutual understandings on relevant process‐related matters. A third managerial implication is that ongoing, broad‐based communications between the partners' technology experts should be used to effect technology transfer. A key quality of the organizational knowledge interface that promotes the successful acquisition of technological knowledge, both tacit and explicit, is multipoint, real‐time contact between the technology experts of the partner organizations. Such communications potentially enable the knowledge‐seeking party to directly access desired information through the most knowledgeable individuals on an as‐needed basis.     

A Typified, Culture-Based, Interpretation of Management of SMEs in Southeast Asia

Our knowledge of managing small and medium-sized enterprises (SMEs) is predominantly based on Western world, in particular U.S., thinking. This article presents the results from a survey of the overseas Chinese SME business world, i.e. SMEs in seven Southeast Asian countries, where Chinese dominate business (Indonesia, Singapore, Malaysia, Thailand, Hong Kong, Taiwan and the Philippines). A typified picture of overseas Chinese SME management (i.e. a picture of management behavior, when and if participants are true to their culture and general economic environment) is provided. Management is seen in its general organizational role as well as in its role in the financial and marketing business functions. Some similarities as well as differences with the Western view of management of SMEs are noted.     

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.     

Pioneering Advantage in New Service Development: A Multi-Country Study of Managerial Perceptions

Pioneering advantage in manufacturing firms has received much attention in the management and marketing literature. Few research studies, however, have been conducted to investigate the pioneering advantages and disadvantages involved in new service development, especially across several geographic regions. We build a theoretical framework of pioneering advantage in service industries based on the distinguishing characteristics of services. From this framework, we develop a set of testable propositions about the importance of several types of pioneering advantage (economic, preemptive, technological, and behavioral advantages) to service managers. Specifically, we propose that all of these types of pioneering advantages are important to service managers, and that these managers perceive that pioneering results in improved firm performance. We also propose that, due to the distinguishing characteristics of services such as intangibility and heterogeneity, service managers will not perceive the risks of pioneering in a service industry to be severe. In addition, we propose that certain types of pioneering advantage will be more important to service managers in Western countries than in Asian Pacific countries due to cultural and business environmental differences. In particular, we propose that service managers from Western firms perceive preemptive advantages of pioneering to be more important than do their Asian Pacific counterparts, and service managers from Asian Pacific firms perceive behavioral advantages of pioneering to be more important than do their Western counterparts. To test our propositions empirically, we develop a set of pioneering principles from the literature. We then collect and analyze data from a sample of 982 senior managers in service industries from nine countries: the United States, the United Kingdom, Germany, Japan, China, Taiwan, Hong Kong,1 South Korea, and Singapore. We find evidence of several significant cross‐cultural differences consistent with our propositions. In fact, seven of the eight propositions are strongly or partially supported. The only nonsupported proposition concerned the importance of technological advantage. We find that technological advantages of pioneering are much less important to service managers than are other pioneering advantages. We conclude with strategic recommendations for managers involved in new service development and international or global competition, and provide directions for future research. We note that the insights from this study can help managers from both the West and the Asian Pacific region to better understand their global competitors who pursue a new service pioneering strategy, and can potentially help them select entry deterrence strategies more effectively.     

Social Capital as a Microlevel Origin of Organizational Capabilities

The microlevel concept of social capital has received significant attention in management and sociological research but has not yet been empirically associated with the development of organizational capabilities. The major purpose of this paper is to investigate the relationship of social capital with marketing and research and development (R&D) capability and to explore how the environmental context moderates the social capital–organizational capability link. It is suggested that top management's social capital provides a firm with important information and control benefits that facilitate effective access to the knowledge and resources necessary for building superior organizational capabilities. In addition, we identify the role of two important environmental factors influencing the social capital–organizational capability link: technological turbulence and competitive intensity. The strength of the relationship between social capital and organizational capabilities is proposed to vary depending on the level of these two environmental characteristics. This study conceptualizes and operationalizes social capital as a multidimensional construct reflected by the structural dimension of tie strength, the relational dimension of trust, and the cognitive dimension of solidarity. Survey and archival data on 280 firms from various industries are analyzed using structural equation modeling. Empirical support for the proposed three‐dimensional structure of social capital is found. Results further indicate that social capital is a significant antecedent to both marketing and R&D capability, which in turn significantly affect firm performance. While a positive relationship between social capital and organizational capabilities is supported in general, the strength of this relationship depends on the environmental context the firm is embedded in. The positive effect of social capital on marketing capability increases in environments with high technological turbulence and competitive intensity; the opposite holds for R&D capability. This research contributes to the resource‐based view by introducing social capital as an important microlevel factor promoting the development of organizational capabilities. By identifying and evaluating two important environmental contingencies, our study also decreases some of the ambiguity surrounding the effectiveness of antecedents to organizational capabilities. The findings further help practitioners decide under what circumstances investing in top‐managers' social capital provides an effective means for achieving superior performance through enhanced organizational capabilities. This should have an important bearing on issues such as management training and incentives as well as on hiring policies.     

New Product Development Performance and the Interaction of Cross-Functional Integration and Knowledge Management

Previous research on cross-functional integration between research and development (R&D) and marketing has focused on the development of appropriate structural modes and levels of integration and cooperation across the R&D–marketing interface. A gap in the previous research in this area has been the failure to investigate the integration of information from past related product development projects (i.e., knowledge management). In this investigation of R&D–marketing integration, variables from the emerging research literature on organizational learning and knowledge management are examined. By simultaneously investigating the effects of knowledge management variables and R&D–marketing integration, this gap in the literature is addressed. The results demonstrate that the combined effects of R&D–marketing integration and knowledge management in the form of recording, retrieving, and reviewing information from past projects results in interaction effects. In 8 of 18 tests interactions were found. In 6 of 18 tests these resulted in the form of amplification effects with dependent variables such as product prototype development proficiency, product launch proficiency, technological core competency fit, and design change frequency.     

Emerging Asian MNEs and Their Internationalization Strategies—Case Study Evidence on Taiwanese and Singaporean Firms

There is as yet limited empirical research on the internationalization processes, strategies and operations of Asian MNEs. Drawing on primary data from 12 case studies of emerging Taiwanese and Singaporean MNEs in the textile and electronics industries, this paper examines and analyses their internationalization characteristics and strategies, including motivations, patterns and sources of competitive advantage. The findings indicate that the emerging Taiwanese and Singaporean MNEs, while exhibiting characteristics such as that described in extant theories also suggest some differences. The empirical findings, limitations and areas for further research are discussed.     

Factors that reduce rigid product adaptation decisions: The case of exporting firms in China

As a distinct stream of research, export marketing strategy examines management's reaction to environmental threats in the forms of export adaptation strategies. Review studies repeatedly found that product adaptation was correlated with superior export performance. Despite the insights gained from strategic export marketing research, there remains very limited knowledge concerning organizational factors that may reduce rigid product adaptation decisions. Based on the threat-rigidity theory, this study identified two critical factors that reduce rigid product adaptation decisions: export coordination and process control mechanisms. The empirical evidence showed that export venture performance was adversely affected by rigid product adaptation decisions, and such adverse effect was particularly strong when operating under technological uncertainty. Exporting firms are advised to reduce likelihood of rigid product adaptation decisions by expanding export coordination when integrating business functions within the firm and adopting process control when monitoring exchanges with foreign agents.     

Spawned with a silver spoon? Entrepreneurial performance and innovation in the medical device industry

Entrepreneurs in high‐technology industries often have prior experience at incumbent firms, but we know little about how knowledge obtained at the prior employer impacts entrepreneurial performance. Drawing on previous work from strategy, economics, and organizational sociology, I assess the impact of industry experience on entrepreneurial performance and innovation in medical device start‐ups. I find that spawns (ventures started by former employees of incumbent firms) perform better than other new entrants. Interestingly, my findings suggest that this superior performance is not driven by technological spillovers from parent to spawn, but rather by nontechnical knowledge related to regulatory strategy and marketing. Copyright © 2008 John Wiley & Sons, Ltd.     

Product newness and product performance in new ventures: Contingent roles of market knowledge breadth and tacitness

Although knowledge has been built around how product newness affects product performance in the context of established firms, such an effect in new ventures remains to be explored. Building on the knowledge-based view, the open innovation literature, and observations of the liability of newness, this study examines the differential effects of technological and market newness on product performance and tests how market knowledge breadth and tacitness moderate these effects in distinctive ways. Results obtained using data from new high-tech ventures in China show that market newness has a stronger positive effect on product performance than technological newness. Market knowledge breadth enhances the effect of technological newness on product performance, whereas market knowledge tacitness appears to be a double-edged sword: it weakens the effect of technological newness but enhances the effect of market newness on new product performance. These findings provide novel insights into how distinct dimensions of product newness have differential effects on product performance and a more nuanced view of how market knowledge characteristics function as boundaries in the product newness–performance link in new ventures.     

Regional Clusters, Location Tournaments and Incentives: An Empirical Analysis of Factors Attracting Japanese Investment to Singapore

This paper develops a new model for testing the role of incentives in FDI location choice by integrating the theory of the MNE with new approaches to location theory. From the theory our paper derives four testable hypotheses related to the role of policy variables in the location choice of Japanese MNEs in Singapore. Specifically we test for the existence of regional investment clusters and national tournaments as key elements in the FDI location decision. We also test for differences in the incentive preferences of export-oriented versus market-oriented investors and for first investments compared to reinvestments. Using survey data from 134 Japanese MNEs our study confirmed the existence of a Southeast Asian regional investment cluster and a location tournament between regional states. Our study also found that different incentives attracted export-oriented and market-oriented investors, but there were no significant differences in the incentive preferences of first investors compared to re-investors. The policy implications of these findings are discussed.     

Understanding the trade-off between familiarity and newness in product innovation

Studying the trade-off between developing new products that exploit a focal firm's familiar current knowledge resources and developing new products that explore knowledge resources that are new to the firm, we show that new products perform better when the new products are neither too familiar nor new to the firm, in contrast to the findings reported in prior research indicating that both types of new products are positively related to new product performance. The results were consistent for the familiarity and newness of both technological and market knowledge. In addition, the study revealed that while focal firms' inter-organizational network ties involving their supplier firms attenuated the potential negative impacts of technological familiarity and newness, their inter-organizational network ties involving their buyer firms lessened the potential negative impacts of the familiarity and newness of market knowledge that their new products required.     

Inconclusive Innovation “Returns”: A Meta‐Analysis of Research on Innovation in New Product Development*

This research on studies that have empirically examined the construct innovation provides a meta‐analysis of the marketing, management, and new product literatures. The study extends previous meta‐analytic works by drawing on 70 independent samples from 64 studies (published from 1970 to 2006) with a total sample size of 12,921. The overall objective is to propose a synthesized model that includes technological turbulence, market turbulence, customer orientation, competitor orientation, organizational structure, innovation, and new product performance. Six baseline hypotheses were developed and tested. The goal is not only to derive empirical generalizations from these literatures but also to investigate sources of inconsistencies in the findings. Four substantive and two methodological artifacts were tested to determine whether they moderate model relationships (i.e., whether the effect sizes differ for any of the six baseline hypotheses). The potential moderators were project versus program level of analysis, the nature of change required by the innovation, service versus product, country of the data's origin, continuous versus categorical measurement, and the number of scales used. From a theoretical perspective, the results corroborated the resource‐based view framework regarding the determinants and the performance outcome of innovation. New product performance (the performance outcome) is a direct consequence of innovation, and this effect is stronger when the data are collected from Western countries. This relationship holds regardless of whether the level of analysis is the new product program versus project or whether the innovation is a product or a service, a robust result relevant to researchers and managers alike. As for the determinants of innovation, the results were as follows. While market turbulence is overall not a direct antecedent to innovation, technological turbulence is overall positively related (especially when market discontinuities are considered or when the data are collected from Asian countries). Customer orientation encourages new product innovation overall, but especially at the program (as opposed to project) level in Western countries. The effect of competitor orientation is also positive. The results for either orientation construct or either turbulence construct held whether the level of analysis was project versus program or whether services versus products were examined. However, the relationship of mechanistic organizational structures to innovation, although positive in the overall sample, did vary by product (positive) versus service (negative).     

基于技术形成机理的自主创新决策模型研究

技术的形成是企业在特定时期将最新的创新思想和前沿知识相结合,并实现产业化的过程,它受到企业内部和外部多种因素的影响和制约。根据技术的形成机理,技术自主创新包括知识技术化、技术产品化和产品市场化等三个决策维度,并在每个决策维度运用相应的寻优原则进行评价与选择,形成了知识技术化决策模式、技术产品化决策模式和产品市场化决策模式,从而构建基于技术形成机理的企业技术自主创新的决策模型。     

Technological and non-technological innovations,performance and propensity to innovate across industries: The case of an emerging economy

Innovation in a firm may be non-technological, such as organizational and marketing innovation, and technological, such as product and process innovation. The aim of this article is to explore how different types of innovation affect the innovation development of the firm across industries. We chose Chile as an emerging market context. Our results show that only product innovations affect significantly innovation performance across industries. However, different types of propensities to innovate are affected differently by technological and non-technological innovations. We discuss implications for managers and policy makers in emerging economies, in which data tends to be scarce to develop new policy models and increase the effect of non-technological innovation on innovative performance.     

The Effects of Supplier Involvement and Knowledge Protection on Product Innovation in Customer–Supplier Relationships: A Study of Global Automotive Suppliers in China

Globalization drives firms to develop product innovation through their global supply chains. While innovations generated by supply channel members, as opposed to individual partners, are playing an increasingly important role in the success of all supply chain partners, there has been limited research on how supply chain relationships cultivate the process of such innovation generation, particularly in emerging markets. Correspondingly, this study explores how multinational suppliers can develop adaptive product innovation to create competitive advantage in emerging markets. Drawing on the knowledge‐based view and transaction cost economics, this study investigates the influence of supplier involvement and other factors on supplier innovation and performance. The results of a survey of 170 multinational automobile suppliers in China provide support for most of the hypotheses. Specifically, supplier involvement in codesign has an inverted U‐shaped relationship with product innovation. Furthermore, knowledge protection, trust, and technological uncertainty are all found to drive greater product innovation. In addition, the institutional environment moderates the effect of product innovation on performance. Overall, this study enhances our understanding of how MNEs can acquire local knowledge and develop adaptive products in emerging markets.     

On and off the beaten path: The evolution of four technological systems in Sweden

This paper examines four Swedish case studies of technological systems from the perspective of path dependence: what are the similarities and differences in this regard between factory automation, electronics and computers, biotechnology, and powder technology? What are the distinctive features in each system which set it apart from similar systems elsewhere, and what role does path dependence play in explaining these features? The essential function of technological systems is to capture, diffuse, and magnify spillovers of technical and organizational knowledge: therefore, the nature of knowledge (i.e., the characteristics of knowledge and how it can be transmitted) in each system determines what types of spillovers are likely to occur, as well as the mechanisms through which they occur. Other important influences are the initial conditions and the institutions (including both organizations and rules of the game).