Teamwork Barriers in Japanese High-Technology Firms: The Sociocultural Differences Between R&D and Marketing Managers

Building and maintaining internal harmony is a fundamental concern for managers in many Japanese firms. Discussions of Japanese management practices often point to the intense socialization of new recruits, the rotation of employees through different functions, and the significant role of seniority in determining salary levels and promotions. Considering this emphasis on harmony, can we reasonably assume that the orientations of Japanese R&D and marketing managers do not differ in any ways that may pose significant barriers to teamwork between their departments? X. Michael Song and Mark E. Parry test this assumption by examining the sociocultural differences between R&D and marketing managers in Japanese high-technology firms. Using responses from both R&D and marketing managers in 223 firms, their study groups the respondents’ employers as either low- or high-integration firms. They examine the sociocultural differences between the R&D and marketing managers in the study along five dimensions: time orientation, bureaucratic orientation, professional orientation, tolerance for ambiguity, and preferences for high-risk, high-return projects. Contrary to expectations, the responses reveal several significant differences between the R&D and marketing managers in this study. Compared to their colleagues in marketing, the Japanese R&D managers in this study generally have a stronger preference for high-risk, high-return investments. The R&D managers in the study also have a longer time orientation than the Japanese marketing managers. However, marketing managers from the high-integration firms in the study have a longer time orientation than their counterparts in low-integration firms. Compared to the R&D managers, Japanese marketing managers in the high-integration firms studied have a greater tolerance for ambiguity. And relative to managers in low-integration firms, marketing and R&D managers in the high-integration firms in this study typically have a more bureaucratic organization. Perhaps most important, a significant number of R&D managers in this study perceive the marketing managers in their firms to have higher organizational status. Specifically, responses from R&D managers indicate that they perceive their marketing colleagues to have higher salaries, more power, and brighter career prospects. Such perceptions may foster morale problems among R&D professionals in these Japanese firms, and thus require management intervention to ensure that R&D performance does not suffer.     

Product innovation charters: Mission statements for new products

This article presents findings from an exploratory study into the content and impact of product innovation charters (PICs) in 86 North American corporations. The findings demonstrate that managers have some distinct preferences in terms of the items that they choose to include in a PIC and that certain components seem to be more important to mention than others. The findings also make evident the relationship that PICs have with selected performance measures. The results suggest that product innovation charters, like their mission statement 'cousins', may be of more value than most managers realize.     

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.     

Effort rewarding incentive mechanisms for public enterprise managers

Management incentive schemes leading to welfare optimal pricing and efficient production of public enterprises have so far been mainly concerned with the information advantages that public enterprise managers hold over their supervising government or central planning agency. Managers under these schemes are induced to improve their firm's performance in adjustment processes which in the limit lead to optimal firm decisions. Such managers are supposed to be income maximizers disregarding any personal effort which could influence their performance and utility. In this paper I show that two incentive schemes recently proposed by Tam (1981) and Finsinger and Vogelsang (1982) can also help to induce managers to provide an optimal level of effort. Here effort is assumed to reduce managers' utility and the firm's costs. The result depends crucially on myopic managerial utility maximization. Once managers maximize the discounted value of future utility levels they will deviate from the optimal behavior. Under Tam's scheme, this can hold independent of the optimal effort level. Under the Finsinger-Vogelsang performance index managers will always show suboptimal effort levels in a steady state equilibrium, because the index only rewards welfare improvements.Effort, however, has to be rewarded even with no improvement in behavior. An improved performance index, which provides cumulative rewards is shown to be strategy proof and lead to a welfare optimum. This reward structure basically treats managers as if they were private entrepreneurs. It looks extremely generous in that it gives managers the fruits of all costs reductions due to increases in effort. Suggestions are made to mitigate this income distributional impact.     

Partial monitoring,adverse selection,and the internal efficiency of the firm

The paper investigates an adverse selection model with monitoring of managerial effort. In contrast to the literature, we assume that the manager can be punished only if his effort is below a certain level that is monitored by the principal. Surprisingly, the optimal labor contract may induce an equilibrium effort which is lower than in the standard model without monitoring. This result holds for any discrete distribution of managerial types. In the continuous type case, the optimal contracts for high-quality (low-quality) managers are purely output-dependent (effort-dependent).     

A positive theory of give-away privatization

We make a first step towards a positive theory of privatization, in a framework similar to the one of Shleifer and Vishny's “Politicians and Firms” (QJE, 1994). In our model, a government may want to privatize because privatization can provide managers with stronger incentives to exert effort and more managerial effort may help to maintain jobs that otherwise would be destroyed. However, the government trades off better managerial incentives with the costs of losing control, here, over funds that the government provides for the restructuring of firms. We also show that if managers care for the size of their firm, privatization may weaken, not strengthen incentives.     

Perceptions of Industrial Design: The “Means” and the “Ends”

It is widely accepted that industrial design can play an important role in the development of innovative products, but integrating design‐thinking into new product development (NPD) is a challenge. This is because industrial designers have very different perspectives and goals than the other members of the NPD team, and this can lead to tensions. It has been postulated that the communications between NPD managers and industrial designers are made more difficult because each group uses very different language. This research made the first empirical investigation of the language used by designers and managers in describing “good” and “poor” industrial design. In‐depth interviews were conducted with a sample of 19 managers and industrial designers at five leading companies. Multiple sources of data were utilized, including the repertory grid technique to elicit the key attributes of design, from the perspective of managers and designers. Using a robust, systematic coding approach to maximize the validity and reliability of qualitative data analysis, it was established that managers and industrial designers do not use a completely different vocabulary as previously supposed. Rather, it was found that managers and industrial designers use some common terms augmented by additional terms that are specific to each group: managers are commercially orientated in the “ends” they want to achieve and designers perceive more antecedents (“means”) necessary to achieve their “ends”—iconic design. This research led to a grounded conceptual model of the role of design, as perceived by managers and industrial designers. The implications of the results achieved are wide: they indicate how managers and designers can interact more productively during NPD; they highlight the need for more research on the language of designers and managers; and they point to issues that need to be covered in the education of industrial designers. Finally, this work suggests how managers and designers can engage in a more fruitful dialogue that will help to make NPD more productive.     

The components of risk in new product development: Project New Prod

Although new product development is one of the riskiest activities of a modern corporation, relatively little account is taken of risk measurement in the R & D project selection literature. The existing consensus is that risk is measured by some combination of the total amounts at stake and the uncertainties of the situation. The paper describes a project aimed at more exactly identifying and defining the components of risk as perceived by a decision-maker within a firm undertaking new product ventures. The project is based on data from a study of the behaviour of 103 firms and 197 ventures.
The results show broadly that managers perceive risk to be highest when the product shows least synergy with the firm's current business. In contrast, the possibility of reducing uncertainty components of risk through information-seeking seems to be of little account in risk perception. The author concludes from this that decision-makers are much more influenced by factors that control the amounts at stake (in general, the less the synergy the greater the resources needed to back a new product entry) than by uncertainty as to the outcome. The latter must constitute an important element of risk in reality. Its neglect may be because managers find they can deal conceptually more easily with concrete matters like the amount at stake than with the intangibles of uncertainty reduction. This may explain why many firms fail to integrate information into their new product development process.     

A path to value creation for foreign entrepreneurs

Research summary : Firms founded by foreign entrepreneurs constitute an influential and growing part of the world economy. Yet, the existing research has given little consideration to the strategies of foreign entrepreneurs beyond their decisions to start a firm. In this article, we address this gap by examining how foreign entrepreneurs may bring value to their firms as firm managers. We argue that foreign owner‐managers may benefit their firms by having access to home‐country resources. We demonstrate that, compared to hired local managers, foreign owner‐managers reduce firms' operating costs by disproportionately hiring home‐country labor when this labor is more cost‐efficient. This effect is larger for labor‐intensive industries and for entrepreneurs from less wealthy countries. Managerial summary : Foreign entrepreneurs represent an important part of the world economy. Yet, we know little of how foreign entrepreneurs manage their firms. In this article, we examine whether foreign entrepreneurs and domestic managers hire different employees. We find that when foreign entrepreneurs manage their firms personally, they hire a larger number of foreign workers, and such workers are cheaper and more productive than the local labor. Conversely, domestic managers tend to hire local employees, despite their higher relative wages. Foreign owner‐managers are particularly valuable in labor‐intensive industries and when their home‐country labor is inexpensive. Copyright © 2015 John Wiley & Sons, Ltd.     

Does experience help or hinder top managers? Working with different types of resources in Hollywood

Research summary: Research on the resource‐based view has begun to place more emphasis on the ability of managers to extract better performance from the resources that are available to them. In this paper, we show that prior experience can both help and hinder their ability to generate performance from various categories of resources. Further, we argue that the fungibility of each resource influences the opportunities managers have to use their experiences in order to find the best method to deploy them. We test our hypotheses by examining the ability of Hollywood film producers to generate results from financial, brand, and human resources. Our findings show that experienced producers can generate better performance from more fungible resources, but they actually achieve weaker results with less fungible resources. Managerial summary: Do more experienced top managers get better results from their resources? We examine this question for Hollywood film producers. Our results show that experience can really help when producers work with resources such as cash (budgets) and brand resources (such as film sequels). However, such experiences actually reduce performance when they work with some human resources, such as highly talented directors. We argue that experience can be most helpful when managers work with more fungible resources, which can be used in a variety of different ways but can actually hurt when they work with resources that are more constrained in how they can be deployed. Under ideal circumstances, we find that experienced producers can generate nearly 40 percent more revenue with the right mix of resources. Copyright © 2015 John Wiley & Sons, Ltd.     

Geographical cluster and performance: The case of Iberian ham

This research examined whether firms that concentrate geographically perform better or worse than their more dispersed counterparts. While belonging to a cluster may have positive externalities for proximate firms, there can also be congestion economies that counterbalance these advantages. Having identified existing ham-producing establishments in the Iberian ham cluster, a sample of 265 firms was selected and it was confirmed that as the number of neighbouring firms increases performance increases. Also, the proximity to larger firms in the same province benefit smaller firms. This positive effect that geographical concentration has on performance is explained by access to valuable natural resources, workers, higher demand, knowledge spillovers, and lower transaction costs, which may help managers and policy-makers in their investment decisions, as well as contributing to the dearth of existing research and its contradictory nature.     

The more,the merrier? Women in top‐management teams and entrepreneurship in established firms

Research summary: We study the association between firms' entrepreneurial outcomes and their gender composition. Though highly topical, there is little solid empirical knowledge of this issue, which calls for an inductive approach. We match a paired‐respondent questionnaire survey with population‐wide employer‐employee data, and find evidence that the presence of female top managers is positively related to entrepreneurial outcomes in established firms. Yet, this relation is conditional on the proportion between male and female top managers. Another finding is that the overall proportion of women in the firm's workforce negatively moderates the relation between female top managers and entrepreneurial outcomes. We discuss various mechanisms that can explain these findings, and argue that they are best understood in terms of the dynamics of social categorization. Managerial summary : We investigate how companies benefit from having more women on the top‐management team. We show that beyond a threshold level of female top managers, more women are associated with more entrepreneurial outcomes (more products and services profitably launched). However, this positive effect is weakened in firms that have many women in the workforce. These effects may be explained in terms of the ways employees mentally categorize managers and how this influences their work motivation. We find evidence for such an explanation. Copyright © 2016 John Wiley & Sons, Ltd.     

Is all communication created equal?: an investigation into the effects of communication mode on perceived information quality

Enhancing communication between functions is crucial to successful product development and management. Previous work in the product innovation management literature has made two implicit assumptions. First, that increasing the frequency of information dissemination from one function to the other always improves the perceived quality of the information received. The second assumption is that all types of interfunctional communication carry equal weight in the decision‐making process of the target of that communication. The current study develops a typology of communication modes, which suggests a rationale for why these assumptions may not be true. The empirical findings of the study, based on a survey of 504 nonmarketing managers indicate that the relationship between total communication frequency and perceived information quality (PIQ) is nonlinear. Specifically, the study finds that marketing managers can either communicate too little or too much with nonmarketing managers. If they interact too infrequently, they run the risk of not understanding the way to most effectively communicate market information. If they communicate too much, they may overload the manager with too much information and erode the overall quality of the information sent. In addition, some modes of communication are more effective in improving perceptions of the quality of market information. For instance, regular e‐mail sent by marketing managers seems to have no effect on perceived information quality. On the other hand, e‐mail sent with supporting documentation can have a strong positive effect on perceived information quality. Impromptu phone calls by marketing have less positive effects than scheduled phone calls. Interestingly, too much of the wrong types of communication actually seem to reduce perceptions of perceived information quality, and consequently the likelihood that market information will be used. The study also suggests that certain kinds of communication are better for manufacturing managers and others more effective in sharing information with R&D managers. For instance, disseminating information through written reports seems to reduce perceived information quality. This is particularly true for R&D managers. On the other hand too many meetings can reduce perceptions of PIQ, particularly on the part of manufacturing managers. Implications for theory and practice are discussed.     

Do New Product Development Managers in Large or High-Market-Share Firms Perceive Marketing-R&D Interface Principles Differently?

In the quest for successful innovation, the importance of the R&Dlmarketing interface is virtually unquestioned. For many organizations, however, effective integration of technical and marketing functions is difficult, if not impossible. Despite seemingly widespread understanding of fundamental new product principles, some companies still manage to gain a larger share of the market than their competitors. This raises the question of whether managers in more successful companies have special insights into R&D'/'marketing interface principles that give them an edge over their competitors. To gain a better understanding of managers' perceptions of new product principles defined in the academic literature, Ted Haggblom, Roger J. Calantone, and C. Anthony Di Benedetto conducted a survey of 687 nonacademic members of the Product Development and Management Association. The basis for the survey was a set of 78 product management principles compiled from a search of more than 500 books and articles from various disciplines. From this survey, 14 of the 78 principles were selected as relevant to the study reported in this article. The principles discussed in this article involve such issues as resistance to change, short-term orientation, communication and trust between marketing and technical people, the effect of centralized decision-making on innovation, the importance of open communication flows, senior management's role in the R&D I marketing interface, and the necessity of a product champion. The primary quesstion addressed in this study is whether managers from successful companies perceive these principles differently from managers of less successful firms. The study provides partial support for the proposition that managers' perceptions of these new product principles depend on their company's success. In other words, the survey results suggest that managers in companies with higher market shares tend to agree more strongly with these principles than their counterparts in less successful firms. The study also explores the relationship between firm size and agreement with these principles of new product success. Specifically, the study assesses whether the perceptions of managers from smaller, more entrepreneurial companies differ from those of managers in larger companies. Although managers from small and large firms may view these principles from different perspectives, there were no statistically significant differences in the perceptions of managers from small and large firms.     

The effect of managerial distribution of scientific and technical information on company performance

272 scientific and technical personnel working in the R&D departments of 25 firms in the electronics/instrumentation field noted how often their managers engaged in different forms of influencing them to use scientific and technical information originating outside the firm (STI). The firms were classified as either 'high performers' or as 'low performers' on the basis of their sales growth and return on assets. Managers in the high performing firms were perceived to make significantly more use of the following forms of influence than those in low performing firms; supporting professional visits and continuing education, routing literature and references to scientific and technical staff, directing their staff to use STI and purchasing STI services. There was no difference between the two groups of managers in their perceived use of organizational efforts to increase use of STI, such as changing work and personnel and altering hiring and promotional policies. These findings suggest that company performance can be improved if managers take specific steps to encourage their staff to use STI.     

Market orientation, interdepartmental integration, and product development performance

Various research studies have shown that a market orientation and interdepartmental integration can positively influence product development performance. Addressed in this article is whether market orientation and interdepartmental integration both equally influence product development performance, whether one of these constructs is more influential than the other, and whether such influence is dependent on the type of department being examined? Analyzing survey data from 156 marketing, manufacturing, and R&D managers, the tentative results suggest that a market orientation and interdepartmental integration correlate to improved product development and product management performance in varying degrees across these three manager sets. It appears that a positive relationship between market orientation and product development petformance is likely to be reflected by the marketing department, while marketing and manufacturing departments are likely to reflect a positive relationship between the general construct of market orientation and product management performance. Manufacturing managers also reflect a positive relationship between interdepartmental integration and product development and product management performance. Further analyses involving the elements of a market orientation and interdepartmental integration find that a customer orientation appears important to performance in the case of marketing managers, and that collaboration is important to performance in the case of manufacturing managers. R&D managers did not reflect any statistically significant relationships between market orientation, interdepartmental integration, their constructs, and performance. These results should not be taken as refuting the claim of an important relationship between market orientation and product development performance, however. The present results refine our understanding of market orientation to consider department‐specific effects, as well as temper the claims that implementing a market orientation will readily lead to improved product development performance across all departments in an organization. This may or may not be the case, depending on the focal department.     

Big splash,no waves? Cognitive mechanisms driving incumbent firms’ responses to low‐price market entry strategies

Research Summary: Low‐price market entries, aiming for rapid sales growth, tend to prompt strong competitive reactions. This research explores whether and how firms using low‐price entry strategies can mitigate retaliatory incumbent reactions. An experiment with 656 managers shows that entrants can attenuate the strength of incumbents’ responses by fostering perceptions of high aggressiveness or low commitment. Entrants may be able to accomplish this by adjusting their entry strategy to embed (subtle) cues of aggressiveness and (lack of) commitment. A replication experiment with university students reinforces our overall theoretical argument. However, the results also indicate that the interpretation of cues embedded in the entry strategy may be affected by the experience of incumbent firm managers. Overall, these results clarify the cognitive foundations of competitive responses to market entry. Managerial Summary: What drives incumbents to respond strongly to market entries, and what can the entrant, if anything, do to mitigate those responses? This research offers empirical evidence and theoretical insights for managers faced with these questions by shedding light on the thinking processes preceding competitive responses. The study shows that while managers are motivated to respond strongly to market entries that appear to be highly consequential to their business, these responses may be mitigated if the entrant manages to foster perceptions of high aggressiveness or low commitment to the market. Managers form these perceptions in part on the basis of the entrant’s behavior, creating an opportunity for entrants to adjust their entry strategies in a manner that demotivates strong competitive responses.     

Mapping managers' market orientations regarding new product success

Research shows that managers' cognitive structures influence their decisions and firm outcomes, and that managers' shared understanding is critical to new product success. Yet, little is known about the content and structure of managers' knowledge regarding their business's market orientation (MO) and how such orientation relates to new product development. By drawing from research on managerial cognition, we suggest that an examination of managers' cognitive maps of their business's MO can provide valuable insights. First, cognitive maps provide information regarding the relative ranking of concepts that managers consider important to new product success. Second, they offer insights about the relationship among concepts by illustrating the causal logic flow, centrality, and strength of the association between concepts. Finally, cognitive maps reveal a gestalt or pattern of managers' understandings. This pattern provides an overall view of their perceptions of their firms' MO. Accordingly, the purpose of this article is to begin developing theory to explain the nature and extent of the sharing of managers' understanding of their business's MO across a company within the context of new product development. We develop several theoretical propositions using established research on market orientation and an exploratory investigation of the cognitive maps of a stratified sample of thirty managers of a highly successful frozen food division of a multinational company. We argue that managers of innovative companies with a history of successful new products in moderately dynamic industries will have established market orientations, as reflected in cognitive maps, which emphasize customer orientations more than competitor or technological orientations. Moreover, we suggest that managers will consistently recognize the importance of interfunctional coordination because it influences the firm's orientations towards customers, competitors, and technology by facilitating sharing of important market information necessary for successful new product development. Furthermore, we propose that the division of labor and functional specialization in a company will result in predictable differences across cognitive maps of managers in different functions and levels of the organization. For example, senior managers are likely to have a more balanced and integrated MO than junior managers, due to their knowledge of organization wide issues. The article also proposes an agenda for scholars interested in investigating the relationship between managers' cognitive maps of their company's market orientation and new product success. We note the importance of studying managers' cognitive structures in different types of industries over time, and how managers' cognitive structures may relate to their company's ability to learn. Managers could use cognitive mapping to recognize and evaluate beliefs that inhibit the sharing and interpretation of information between managers, departments, and levels and could design appropriate interventions.     

On the effects of authority on peer motivation: Learning from Wikipedia

Research Summary: We investigate the conditions under which authority can be deployed without reducing subordinate motivation. We show that lateral authority, the legitimacy to resolve task‐specific problems, is welcomed by members of an organization in the resolution of coordination conflicts, the more so (a) the fiercer the conflict to be resolved, (b) the higher the competence‐based status of the authority, (c) the lower the tenure of, and (d) the more focused the organizational members are. Analyzing the discussion behavior of members of Wikipedia between 2002 and 2014, we corroborate our allegations empirically by analyzing 642,916 article–discussion pages. Our findings, obtained for a modern collective production community, provide learning opportunities for how traditional organizations may want to govern activities of their idiosyncratically motivated staff. Managerial Summary: When managers use their (legitimate) power to take decisions on behalf of their staff, they risk setting back employees and making them detach from the firm. This danger is particularly salient whenever highly motivated teams of staff autonomously work on corporate problems and are used to governing themselves. Examples range from skunkwork initiatives within traditional firms to entire team‐based organizations, such as Valve or Zappos. When and how managers can add value by resolving conflicts within and across these teams once their self‐organization fails is what we study in this article. Inspired by data from Wikipedia, we suggest that managers should not intervene prematurely, benefit from visible competence, and are respected most for their actions by specialized peers who recently joined the organization.     

Factors influencing the relative importance of marketing strategy creativity and marketing strategy implementation effectiveness

It seems logical that performance is maximized when a business produces a creative marketing strategy and achieves marketing strategy implementation effectiveness. However, cultural tensions and resource competition may make it difficult, or impossible, to achieve both. Contingency theory suggests that market and/or firm level influences may exist that make one or the other more important. Thus, it is important for researchers to investigate those conditions so that we can provide managers with guidance regarding where to allocate their resources. The study reported in this article assesses the impact that environmental conditions and business unit strategy have on the relative importance of marketing strategy creativity and marketing strategy implementation effectiveness. We discuss implications for managers and scholars.