Diagnosing Unforeseeable Uncertainty in a New Venture*

New ventures often do not correctly foresee real market opportunities or the best way to address them. How to cope with unforeseen, unpredictable factors, also referred to as unknown unknowns, is critical for new ventures. Findings in the fields of innovation and project management have shown that dealing with the unpredictable requires management approaches different from those used for classical plan‐and‐achieve‐the‐target projects. Management approaches for novel initiatives include a combination of trial‐and‐error learning (i.e., flexible redefinition of the new venture business model as new information emerges) and selectionism (i.e., running multiple parallel trials and choosing the best performing approach ex post). The management approach must be chosen when the venture is set up. This requires a venture management team to diagnose at the outset whether unknown unknowns are present (or possible), although unknown unknowns cannot be identified initially by definition because they emerge over time. Anecdotal testimony from experienced venture managers and project managers suggests they have a feeling for where their knowledge is limited. However, such a claim is controversial. Some researchers think the concept of diagnosing unforeseeable influence factors is an oxymoron. Thus, the research question in this article is this: How can unforeseeable influence factors in a new venture be diagnosed at the outset? Research to date has insufficiently addressed the a priori identification of the type of uncertainty faced by a new venture. Based on models from decision theory, this article suggests dividing the overall problem of structuring the venture into subproblems for which the management team can identify knowledge gaps. Using a case study, the article describes how knowledge gaps were identified for the subareas of a new venture in a real situation and how this diagnosis was used to correctly identify the areas where unknown unknowns lurk. These areas were managed in a different way (i.e., with learning and experimentation) than the other subproblems (i.e., with targets and deadlines). As a result, the venture could successfully respond to unforeseeable events. The results of this study suggest that a decomposition of the overall venture management problem into subproblems is feasible and natural to managers, that a qualitative assessment of knowledge gaps and vulnerability to unknown unknowns is possible, and that a structured, process‐like approach can be used to identify subproblems, to determine their uncertainty profiles, and to update the uncertainty profiles. These results are immediately useful to venture management and venture capitalists in setting up the venture's structure for effective response to uncertainty. The results advance research about uncertainty management by offering a systematic set of questions for the diagnosis of unknown unknowns before they can be formally described. The usefulness of this process can be tested further in more formal empirical research.     

Employing New Business Divisions to Exploit Disruptive Innovations: The Interplay between Characteristics of the Corporation and Those of the Venture Management Team

Established firms often create new business divisions in response to new ways of competing, such as those based on disruptive innovations. Using a sample of daily newspapers and their Internet divisions, this study examines the corporate characteristics of orientation, attention, and control and venture management team characteristics of vision, experience, and collective efficacy and their interactive effects on the overall performance of the new division. Findings demonstrate that vision and collective efficacy are related to venture outcomes, orientation affects the experience and vision to venture performance relationships, attention enhances the vision and collective efficacy to performance relationships, and decision autonomy influences the experience and collective efficacy to venture performance relationships. Overall, the results of this study imply that specific venture management team characteristics and corporate characteristics may be tailored to improve chances of meeting specific performance targets and achieving overall venture success.     

Managing channels of distribution in the age of electronic commerce

The emergence of electronic commerce (e-commerce) has created a new business paradigm, one that presents marketers with noteworthy opportunities and challenges. Perhaps the greatest impact is in the area of channel management. The top issue for many business-to-business (B2B) firms today is channel conflict. In this paper, we investigate the effect of introducing the Internet channel into an already complex, multichannel distribution system from the perspective of the supplier firm. We describe strategies for proactively managing conflict, both externally with channel partners and internally among the subunits responsible for managing the channels. Twelve propositions for research are developed; eight relate directly to the marketing mix and four focus on channel communication and coordination. All of the research propositions offered are mechanisms by which suppliers can influence the level of channel conflict they experience. Dedicated channel management groups, documentation of channel strategies, and superordinate goals are identified as strategies for minimizing unwanted conflict.     

The contingent effects of top management teams on venture performance: Aligning founding team composition with innovation strategy and commercialization environment

How does the relationship between founding team composition and venture performance depend on the venture's strategy and business environment? Using data from a novel survey of 2,067 firms, we show that while diverse founding teams tend to exhibit higher performance, this is not universally true. We find that founding teams that are diverse are likely to achieve high performance in a competitive commercialization environment. On the other hand, technically focused founding teams are aligned with a cooperative commercialization environment and when the enterprise pursues an innovation strategy. These results are robust to corrections for endogenous team formation concerns. The findings suggest that ventures cannot ignore founding team composition and expect to later professionalize their top management teams to align with their strategy and environment. Copyright © 2013 John Wiley & Sons, Ltd.     

B2B SME management of antecedents to the application of social media

This paper elucidates how business-to-business (B2B) small and medium-sized enterprises (SMEs) can manage antecedents to the application of social media for potential contributions to their business. This in-depth qualitative research study was conducted at four plastic-producing SMEs from October 2013 to October 2014, with follow-up interviews in October 2015.The findings reveal two important antecedents to the application of social media that overcome the gap between acknowledging the usefulness of social media and its actual limited application in practical B2B contexts. First, open collaborative business model innovation is needed to apply social media in local business processes. Second, central and distributed leadership must be integrated to create ownership and responsibility across the SME organisation and beyond to customers and partners. These findings differ from the social media application stages and the gaps between them identified in the previous literature. The developed model makes a contribution to the B2B SME field and to academia by recognising the importance of integrating critical antecedents before social media application can enhance business in B2B SMEs. This understanding is beneficial for the B2B SMEs and for society.     

New Product Team Decision Making: Regulatory Focus Effects on Number,Type, and Timing Decisions*

Company executives rely on new product development teams to carry out their directives and make decisions according to management's goals. However, team members bring their own motivational perspectives to strategic decisions. This research examines how individual and leadership motivations influence a dyadic team's new product decisions. Specifically, this article investigates how matching vs. mismatched motivations between team members affect new product number, type, and timing decisions. In addition, this study asks how effective leadership‐provided motivations are in guiding teams' new product decisions. A set of hypotheses is developed using regulatory focus theory, which identifies basic motivational differences in individuals (i.e., promotion vs. prevention focus) and their effects on decision making. The hypotheses examine the effects of regulatory focus match vs. mismatch within teams on the likelihood to introduce new products, the timing of new product introductions, and the types of new products introduced. To test the hypotheses, a controlled, yet realistic product management simulation is employed. A total of 124 undergraduate seniors (83 women and 41 men) at a large public university enrolled in a marketing management capstone course participated in this study for partial course credit. Utilizing two‐person teams engaged in a business simulation ensured an appropriate level of controlled complexity in the decision making task, while allowing the phenomena of interest to be isolated and tested. Results show that when dyads share the same motivational approach (regulatory focus match), leadership‐prescribed goal pursuit strategies are largely ineffective. Only dyads that do not share the same motivational approach to decision making (regulatory focus mismatch) make new product decisions consistent with leadership‐prescribed goal pursuit strategies. For regulatory focus match dyads, the results demonstrate that a promotion focus (when compared to a prevention focus) leads to greater numbers of new products introduced, faster new product introductions, and more novel new product introductions. For new product managers, these results carry important implications. Which new product opportunities to invest in and which to forgo is presumably determined by the strategic direction given to teams by top management. Results suggest that when team members share the same motivational approach, this not only influences new product decisions, but also diminishes or eliminates the influence top management can exert on new product decisions. Such “isolation” from leadership influences does not have to be detrimental. For example, companies that seek to insulate new product development teams from influences from the top, such as is the case in many new venture incubations, would be well served to staff those teams ensuring a promotion focus match.     

Effects of team inputs and intrateam processes on perceptions of team viability and member satisfaction in nascent ventures

A new venture team is a particular type of top management team neglected by the literature. This study investigated the effects of team inputs and processes on team members' perceptions of team viability and satisfaction in nascent ventures. These outcomes are important as they may be antecedents of team perseverance. The study of 51 new venture teams showed that the presence of a distinct leader was positively related to team satisfaction, while member diversity in educational backgrounds was positively related to perceived team viability. Intrateam processes of social integration and open communication were positively related to both perceived team viability and member satisfaction. Copyright © 2006 John Wiley & Sons, Ltd.     

The role of B2B marketers in increasing cyber security awareness and influencing behavioural change

Although cyberspace is providing business opportunities, it is evident that B2B marketers need to pay attention to how to reduce the vulnerabilities associated with the use of computer technology. To reduce the possibility of a data breach, senior management need to increase threat awareness through the development of a behavioural awareness programme. We address how B2B marketers can contribute to increasing cyber security awareness by relating to an individual's knowledge and attitude that influences their behaviour. By drawing on the information systems management, marketing, communication and motivational research (social psychology) literature, we explain how persuasive communication theory in conjunction with motivation theory can be used to create an awareness programme to influence behavioural change. A qualitative research strategy was deployed and the critical friendship group and the group interview method were utilized. Fourteen highly experienced security experts participated in the study. The findings indicate that the process of knowledge creation can be enhanced by deploying functional theories of attitudes as this provides a basis to categorize staff according to their level of motivation and knowledge. This means that B2B marketers can play the role of co-ordinator when devising and implementing an appropriate cyber security awareness programme to help staff counteract the actions of cyber attackers. By reducing the gap between self-efficacy and perceived expectation, the confidence level of staff will be increased and attitudinal behavioural change will occur throughout the organization.     

Industrial marketing management digital media optimization for B2B marketing

The role of digital media in B2B marketing has gained traction with academics and practitioners in recent years. However, a comprehensive framework about the use and value of these media has not been developed, leaving B2B experts uncertain about their effectiveness. In fact, whether or not digital media can impact the business development and marketing processes to achieve higher performance remains vague. Additionally, there is a paucity of research related to the impact of different media towards the enhancement of processes and outcome of marketing to generate opportunities. To provide guidance for practitioners, we consider marketing processes in the global software industry by researching practitioner experiences. We develop an assessment tool to identify and align marketing processes and digital media. This research attempts to explore and explain how digital media impacts the B2B business development process cycle at the conjunction of marketing and sales. The research tests a conceptual model by means of a cross-sectional survey of more than 530 practitioners. Our novel framework provides several contributions to knowledge and practice, defining marketing-related processes, and determining a set of digital platforms. By acknowledging the perspectives of vendors, third-parties, and buyers in a simultaneous study, we ensure optimal alignment.     

Top Management Support and Initial Strategic Assets: A Dependency Model for Internal Corporate Venture Performance

Internal corporate venturing is frequently used by established companies desiring to innovate and grow. These ventures, however, often fail, and previous research has revealed surprisingly little about the antecedents to performance for this strategically important phenomenon. Using resource dependence theory and the resource‐based view, a model is developed wherein the positive relationship between top management support and the internal corporate venture's (ICV) initial strategic asset endowment is moderated by the amount of the venture's operations autonomy. We then argue how top management support, the venture's initial strategic asset endowment, and parent‐venture product similarity are related to ICV performance. Primary data were collected from 72 firms which furnished data on 145 ICVs. The results suggest that increases in the level of support provided by top management leads to higher levels of initial strategic assets endowed in the corporate venture. This relationship, however, is weakened the more corporate parents give their ICVs operations autonomy. Further, top management's support of the corporate venture, as well as the level of initial strategic assets endowed to the venture, increases the subsequent performance of the ICV. The performance benefit of these initial strategic assets, however, is lower the more there is an overlap between the parent's and the venture's products.     

基于人力资本的高层管理团队认知特征对战略一致性理论模型构建研究

近来高层管理团队认知成为学者们研究的热点,但关于认知与战略一致性的研究甚少。要打开高层管理团队认知的黑盒子,探讨高层管理团队认知特征与战略一致性的作用机制,必须结合当今多变环境的时代特征与中国的具体实践,进行重点、具体的分析。而这一研究的突破点就是基于人力资本的视角,来探讨高层管理团队认知特征与战略一致性之间的作用机制。通过文献研究,构建理论模型,为进一步的实证研究打下基础。     

International research teams as analysts of industrial business networks

This paper analyzes case studies in the context of industrial business networks, and in particular from the IMP (Industrial Marketing and Purchasing Group) perspective. Two features have been prominent in this research tradition: collaboration in international research teams and interest in business between international customers and their suppliers. Still, researchers seldom discuss the challenges with the international aspects of the research team (as the subject of study) or of the business relations (as the object of study). This paper shows the complications of analyzing international business relations, namely, relations that cross national boundaries, and investigates how an international research team can tackle the challenges of international business network studies. The key contributions are, firstly, to indicate the lack of attention on the methodological requirements and opportunities that the international features create for the analysis of business networks and, secondly, to investigate how collaboration in an international research team may advance the analysis of both international industrial marketing relations and broader business networks.     

Joining hands for the greater good: Examining social innovation launch strategies in B2B settings

The practice of forming brand alliances is common among companies in business-to-business (B2B) settings that seek to launch social innovations. Research evidence on the efficacy of such practice is, however, scarce. Based on the perspective of organizational buyers, we examine how social innovations should be launched by companies in B2B settings, whether through alliances with nonprofits or for-profits, or via independent ventures, across two experimental studies. Underpinned by the stereotype content model, we find that alliance launch strategies with nonprofits or for-profits result in greater purchase intentions, along with perceptions of warmth and competence, when compared to independent ventures. Further, we demonstrate that communicating societal benefits accruing from a social innovation favors an alliance launch strategy over an independent venture. Alliance strategies show comparable advantage to independent ventures when both societal and company-focused benefits are communicated. Our research advances knowledge on organizational buyers' evaluations of alliances and social innovations, the psychological mechanism underlying organizational buyers' evaluations of social innovations launch strategies, and in communication management. Our findings provide insights for companies seeking to launch social innovations, and guidelines on partner selection.     

Performance of Global New Product Development Programs: A Resource-Based View

Gaining a competitive edge in today's turbulent business environment calls for a commitment by firms to two highly interrelated strategies: globalization and new product development (NPD). Although much research has focused on how companies achieve NPD success, little of this deals with NPD in the global setting. The authors use resource‐based theory (RBT)—a model emphasizing the resources and capabilities of the firm as primary determinants of competitive advantage—to explain how companies involved in international NPD realize superior performance. The capabilities RBT model is used to test how firms achieve superior performance by deploying organizational capabilities to take advantage of key organizational resources relevant for developing new products for global markets. Specifically, the study evaluates (1) organizational NPD resources (i.e., the firm's global innovation culture, attitude to resource commitment, top‐management involvement, and NPD process formality); (2) NPD process capabilities or routines for identifying and exploiting new product opportunities (i.e., global knowledge integration, NPD homework activities, and launch preparation); and (3) global NPD program performance. Based on data from 387 global NPD programs (North America and Europe, business‐to‐business), a structural model testing for the hypothesized mediation effects of NPD process capabilities on organizational NPD resources was largely supported. The findings indicate that all four resources considered relevant for effective deployment of global NPD process capabilities play a significant role. Specifically, a positive attitude toward resource commitment as well as NPD process formality is essential for the effective deployment of the three NPD process routines linked to achieving superior global NPD program performance; a strong global innovation culture is needed for ensuring effective global knowledge integration; and top‐management involvement plays a key role in deploying both knowledge integration and launch preparation. Of the three NPD process capabilities, global knowledge integration is the most important, whereas homework and launch preparation also play a significant role in bringing about global NPD program success. Tests for partial mediation suggest that too much process formality may be negative and that top‐management involvement requires careful focus.     

Board structure and firm capability: An environment-embedded relationship between board diversity and marketing capability

The role of the firm’s top governance team, the board, is largely missing in the capability literature. This paper takes the first step to link board diversity, one of the most critical traits of the board, to marketing capability. Further, this relationship is embedded into a contingency-based model involving a set of environmental factors, munificence, turbulence, and competition intensity. This model illustrates how the internal top governance traits and external factors may jointly and dynamically affect firm competency. The empirical results show that board diversity significantly increases marketing capability. This effect is stronger when a firm faces unfriendly market situations characterized by low munificence, high turbulence, and intensified competition. This study generates meaningful theoretical implications for marketing capability-building of business firms, especially in the business-to-business (B2B) settings in which reciprocal organizational engagements are more emphasized. It also advances firm governance theories and business environment studies, and provides useful guidelines for managerial practices.     

Managing New Product Development Teams in a Globally Dispersed NPD Program

Globalization is a major market trend today, one characterized by both increased international competition as well as extensive opportunities for firms to expand their operations beyond current boundaries. Effectively dealing with this important change, however, makes the management of global new product development (NPD) a major concern. To ensure success in this complex and competitive endeavor, companies must rely on global NPD teams that make use of the talents and knowledge available in different parts of the global organization. Thus, cohesive and well‐functioning global NPD teams become a critical capability by which firms can effectively leverage this much more diverse set of perspectives, experiences, and cultural sensitivities for the global NPD effort. The present research addresses the global NPD team and its impact on performance from both an antecedent and a contingency perspective. Using the resource‐based view (RBV) as a theoretical framework, the study clarifies how the internal, or behavioral, environment of the firm—specifically, resource commitment and senior management involvement—and the global NPD team are interrelated and contribute to global NPD program performance. In addition, the proposed performance relationships are viewed as being contingent on certain explicit, or strategic, factors. In particular, the degree of global dispersion of the firm's NPD effort is seen as influencing the management approach and thus altering the relationships among company background resources, team, and performance. For the empirical analysis, data are collected through a survey of 467 corporate global new product programs (North America and Europe, business‐to‐business). A structural model testing for the hypothesized effects was substantially supported. The results show that creating and effectively managing global NPD teams offers opportunities for leveraging a diverse but unique combination of talents and knowledge‐based resources, thereby enhancing the firm's ability to achieve a sustained competitive advantage in international markets. To function effectively, the global NPD team must be nested in a corporate environment in which there is a commitment of sufficient resources and where senior management plays an active role in leading, championing, and coordinating the global NPD effort. This need for commitment and global team integration becomes even more important for success as the NPD effort becomes more globally dispersed.     

The implications of strategy and social context for the relationship between top management team heterogeneity and firm performance

This research reexamines the link between top management team (TMT) heterogeneity and firm performance. Specifically, I theorize that the effects of education, work experience, and tenure on performance will depend upon the top management team's strategic and social context. In a test of such theorizing, I find that (1) the positive relationships between TMT educational, functional, and tenure heterogeneity and performance are contingent on complexity, as indicated by a firm's international strategy and, (2) such relationships are clearly stronger in short‐tenured top management teams. The theory and results presented here provide impetus for future studies, as well as suggest to upper echelon researchers that they think more critically about the conditions under which demographic characteristics are most likely to influence organizational outcomes like performance. Copyright © 2002 John Wiley & Sons, Ltd.     

Strengthening B2B brands by signalling environmental sustainability and managing customer relationships

Resource depletion and environmental pollution concerns are forcing manufacturers to pay greater attention to environmental sustainability. This is especially so for business-to-business (B2B) manufacturing firms who intensively use natural resources in their operations and are blamed for observable impacts on the environment. Despite investments in environmental sustainability practices by B2B manufacturers, studies provide little explanation about the extent B2B manufacturers obtain a positive brand image and superior market performance through environmental sustainability. Furthermore, research has not identified organisational practices that strengthen the path from environmental sustainability to market performance. Drawing on signalling theory, the customer relationship management (CRM) literature, attitude theory, and data collected from B2B manufacturers and their customers, we show that environmental sustainability practices provide positive benefits to B2B manufacturers' brand image, which, in turn, impacts market performance. Further, effective CRM and working with business customers with positive environmental attitudes are essential boundary conditions that strengthen the path from environmental sustainability practices to market performance.     

Evolution of B2B relationship stages in China: A study of confucianism philosophy

This study aims to explore the development of business relationships from an interactional perspective, which challenges the conventional time-based view in Western contexts. Twenty in-depth interviews with Chinese SME managers reveal the uniqueness and importance of the operationalization of Confucian virtues, the guiding principles, and mechanisms for social interactions and trading practice, in developing Chinese business to business (B2B) relationship stages (i.e., discernment, authentication, stabilization, and decoupling). Given the role of Confucian virtues and their dynamics for the development of business relationships, we further argue that the evolution of a relationship depends on the shifts in concerns of transactional and relational governances among business partners. Our propositions advance the literature by showing that distinct constructions of Confucian virtues mark a vantage point for business operators and practitioners in formulating effective B2B relationship strategies in China, and raising future research questions of the impacts from sub-evolutions in Confucian virtues on B2B relationships.     

A service design perspective on the stakeholder engagement journey during B2B innovation: Challenges and future research agenda

Innovation in business-to-business (B2B) contexts deals with highly dynamic, complex, and heterogeneous constellations of stakeholders with a diversity of goals, motives, and capabilities that further challenge successful management of B2B innovation processes and outcomes. Complex challenges, such as sustainability and digitization trends, push these B2B firms to embrace new innovation methods that help them manage disruptive change. Service design thinking has emerged as an innovation management practice emphasizing a human-centered innovation process of user interactions, creativity, and learning mindsets. In this article, we aim to evaluate the challenges and develop a research agenda on how service design can effectively enable stakeholders' engagement during the B2B innovation process. We argue that to advance service design opportunities for stakeholder engagement, we need to address the unique complexities and challenges of stakeholder engagement during innovation from a systemic and dynamic process perspective. From a systemic perspective, we zoom in on the building blocks of stakeholder engagement and address multi-level stakeholder engagement platforms (i.e., innovation networks). From a dynamic process perspective, we treat stakeholder engagement as an emerging process and zoom in on the temporal and relational connections and hybrid orchestration to allow for both structural and emerging stakeholder engagement during innovation. We develop a stakeholder engagement journey in which we integrate service and innovation stages and propose how service design activities can support and facilitate the aforementioned challenges and complexities. Finally, we identify concrete research questions and, accordingly, develop a research agenda for future research on stakeholder engagement in B2B innovation trajectories.