Market orientation and new-to-the-world products: Exploring the moderating effects of innovativeness, competitive strength, and environmental forces

Recently, there has been a keen research interest in exploring the relationship between market orientation and new product development. The empirical results, however, are mixed, and this means that we do not fully understand these linkages. Furthermore, research concerning the antecedents of new-to-the-world products has focused on the study of a single product. However, it is of obvious interest for organizations to understand what drives a firm's overall performance in the exercise of developing very innovative products. In this empirical study, the authors take a component-wise approach to investigate the effects of market orientation in new-to-the-world product innovation, and examine how other variables interplay with market orientation to affect product development. Firstly, the findings show that both customer and competitor orientations, together with interfunctional coordination, are important drivers of a firm's new-to-the-world product innovation. Secondly, the results indicate that the components of market orientation are differentially moderated by a firm's innovativeness, competitive strength, and also by environmental forces.     

Firm orientations, innovativeness, and business performance: Advancing a system dynamics view following a comment on Hult, Hurley, and Knight's 2004 study

Hult, Hurley, and Knight's [Ind. Mark. Manage. 33 (2004) 429.] study reports correlations for each of the three subfactors of market orientation (competitor orientation, customer orientation, and interfunctional coordination) and innovativenss. However, their report fails to discuss the nature of these relationships. Such findings are worthy of discussion because they support prior evidence demonstrating the centrality of customer orientation in linking competitor orientation and interfunctional coordination with both innovativeness and business performance. Also, the finding that interfunctional coordination relates strongly with innovativeness supports the paradigm shift toward relationship marketing. The point needs mentioning that several different (more than one) standardized effects, structural equation models explain similar amounts of variance of business performance besides the models that Hult et al. examine. Thus, the implication by Hult et al. (p. 436) that “…learning orientation has no significant direct effect on performance” is accurate only for the model tested (shown in their Fig. 2). Applying the “quick clustering” method helps to inform interpretation when nearly all relationships among variables are statistically significant. The present article includes a proposal for advancing from one-directional structural equation modeling of innovativeness and business performance to system dynamics modeling that includes real-world feedback loops.     

The curvilinear relationships between responsive and proactive market orientations and new product performance: A contingent link

Recent research has defined market orientation as two dimensions, responsive and proactive market orientations, and further argued that an inverted U-shaped relationship exists between each of these two market orientation dimensions and new product performance. However, empirical evidence has not confirmed such a nonlinear relationship. This study argues that the curvilinear relationship between the two dimensions of market orientation and new product performance may depend on external environmental characteristics. A total of 107 new product development programs in five high tech industries constitute the analytical sample. Hierarchical regression analysis reveals that under a high level of technological turbulence, responsive market orientation becomes detrimental to new product performance beyond a certain level; the relationship between proactive market orientation and new product performance is an inverted U-shaped under a low level of technological turbulence or competitive intensity. Results also indicate that responsive and proactive market orientations are important determinants of new product performance. These findings sharpen the understanding of the relationship between market orientation and new product performance.     

Innovativeness: Its antecedents and impact on business performance

In this study, we address three research questions: (1) Why are some industrial firms more innovative than others? (2) What effect does innovativeness has on business performance? (3) Does the linkage between innovativeness and business performance depend on the environmental context? Accordingly, we draw on various theoretical perspectives to develop hypotheses that propose market orientation, entrepreneurial orientation, and learning orientation as key antecedents to innovativeness, as well as a direct relationship between innovativeness and business performance. A model is devised and tested that examines these relationships in general and in the context of varying market turbulence. Findings confirm the validity of the model and afford various insights on the role of market turbulence in the proposed relationships. Lastly, implications are offered on the antecedents and consequences of organizational innovativeness.     

Investigating the influence of velocity performance on satisfaction with third party logistics service

The Third Party Logistics (3PL) service industry is characterized by customer relationships that can extend over several years, involving multiple instances of service delivery. When services are delivered on an ongoing basis, customers are able to not only evaluate positional (current) performance, but also velocity (rate at which the service changes) performance. This research presents findings from an empirical study utilizing an online survey of 3PL customers to examine the influence of these two types of performance on 3PL service satisfaction. Environmental moderators including market turbulence and competitive intensity are also examined, and results indicate that velocity performance is a more important driver of satisfaction when customers operate in industries characterized by high market turbulence. The findings suggest that 3PL service providers should implement velocity performance metrics, especially for customers operating in rapidly changing environments, and use velocity performance information during the sales process and customer negotiations.     

The performance effect of organizational learning and market orientation

In recent decades an important set of articles on management has focused upon the marketing concept and the related construct of market orientation. The next challenge is to understand how this organizational orientation can be achieved and maintained. Using data from 451 companies and through structural equation models, this study considers that organizational learning represents the capacity of a company to move from a given situation to another desired situation of market orientation and performance. The results suggest that the influence of market orientation on performance is only significant when it is mediated by organizational learning. The results also indicate that organizational learning has a positive effect on performance.     

Growth and survival: The moderating effects of local agglomeration and local market structure

One of the central explanations of the high failure rates of de novo entrants is the liability of smallness. As a corollary, most prior literature has suggested that firms should experience survival benefits from growth. In this paper, we argue that survival benefits need to be balanced against the potential cost of rapid growth, and they are contingent upon the structure of the environment. We predict a curvilinear relationship between an entrant's growth rate and failure, and argue that the relationship is contingent upon the local agglomeration of economic activity and the local structure of competition. We test and find support for our predictions using firm‐level longitudinal data of all de novo entrants into the Canadian manufacturing sector between 1984 and 1998. Copyright © 2014 John Wiley & Sons, Ltd     

The moderating effects of market orientation and launch proficiency on the product advantage-performance relationship

The relationship between product advantage and new product performance has been identified in prior research and cannot be overlooked. However, the moderators between the two constructs have received little attention. This study examines how market orientation and launch proficiency exert contingent influences on the product advantage-performance relationship. Prior research indicates that new product performance is a multi-dimensional concept constituted by different types of performance, yet the way product advantage and its moderators influence certain types of product performance has not been investigated. This study examines the same issues under different dimensions of new product performance. A total of 112 Taiwanese biotechnology firms form the analytical sample. Two interesting findings are revealed. First, product advantage is significantly and positively related to market performance, but has no significant influence on financial performance. Second, market orientation and launch proficiency in tactics indeed moderate the relationship between product advantage and new product performance, either as a whole or in respect to different types of product performance. Obviously, these findings contribute detailed evidence to the theoretical nexus between product advantage and new product performance.     

The use of information technology tools in new product development phases: Analysis of effects on new product innovativeness, quality, and market performance

Extant research has largely ignored empirically examining how information technology (IT) affects new product effectiveness. Using the knowledge-based theory as a foundation, this study examines if, and how, particular IT tools used in the discovery, development, and commercialization phases of the new product development (NPD) process influence NPD effectiveness dimensions, namely, market performance, innovativeness, and quality of a new product. Based on data collected from NPD managers in the US and Canada, the findings indicate that specific IT tools contribute to various measures of new product effectiveness differently. Moreover, the results show the positive effect of these IT tools in different phases of the NPD process. This suggests that with regard to NPD, a decompositional approach that examines the role of IT within each phase of the NPD process is best. Based on these findings, the authors discuss theoretical and managerial implications of the study and suggest paths for future research. Managerially, some interesting results of our study are that decision support systems, file transfer protocols, and concept testing tools would significantly improve NPD effectiveness regardless of the phase they are used.     

Organizational learning and market orientation: interface and effects on performance

This paper discusses the relationship between market orientation and organizational learning and, in particular, the former's contribution to the generation of double-loop learning. Although prior contributions on this topic have been controversial, the authors, departing from the principles of RBV, consider market orientation a resource capable of generating higher order organizational learning and, in this way, capable of additionally reinforcing firms' sustainable competitive advantage. The empirical study provides evidence on the existing relationship between a firm's learning and market orientation degree and the organization's economic and non-economic results. Findings indicate that learning orientation stimulates the market-oriented behavior and that it also positively affects the establishment of long-term relationships with strategic clients. Contrary to prior research a significant and positive effect on business performance is only contrasted in the case of market orientation.     

The effects of market orientation on relationship learning and relationship performance in industrial marketing: The dyadic perspectives

From dyadic perspectives, this study explores the effect of market orientation on relationship learning and relationship performance and the moderating effect of relationship quality in Taiwan manufacturing industry. The results reveal that: (1) both customer market orientation and supplier market orientation are positively related to relationship learning; (2) relationship learning is positively related to relationship performance; (3) both customer and supplier market orientation has positively interaction effect on shared information and negatively interaction effect on sense-making activities; and (4) trust of relationship quality has moderating effect on the relationship between customer market orientation and relationship learning.     

Making sense of a market information system for superior performance: The roles of organizational responsiveness and innovation strategy

This article conceptualizes the relationships among strategic resources, strategic actions, and consequent performance by incorporating the strategic sense-making perspective into the resource-based view. Specifically, the study suggests that the firm can use both market-driven strategic actions such as organizational responsiveness and market-driving strategic actions such as innovation strategy to make sense of strategic resources such as a market information system. The firm can then translate the strategic resources into a competitive marketing advantage, which leads in turn to superior financial performance. The study tests this framework by surveying 180 manufacturing firms in China. The empirical results support the theoretical framework.     

SBU strategy and performance: The moderating effects of the corporate-SBU relationship

This study suggests that the link between an SBU strategy and performance is moderated by the SBU's relationship with corporate management. Information processing arguments suggest that this relationship, typically characterized by general measures of centralization, has been inappropriately conceptualized in prior research. An alternative view, one that considers which decisions and activities should be controlled by the individual SBU, is proposed and tested. The results of a study of 496 SBUs indicate that SBU performance is enhanced when: (1) SBUs with an external strategic orientation control environmental monitoring activities and strategic decision analysis, and (2) SBUs with an intraorganizational orientation control those activities relating to operations. Weaker SBU performance is associated with SBU control over those functions and activities not central to the SBU's business strategy. Therefore, it is suggested that the corporate-SBU relationship can either facilitate or inhibit the implementation of the SBU's intended strategy.     

The stalemate of cable digital switchover: A study of competition effects and deregulation

This paper addresses the phenomenon of delayed cable digitization in Taiwan and reports the results of a longitudinal analysis, determining that (1) inter-platform competition, primarily from internet protocol television (IPTV), generates a strong and positive impact on the digitization of cable service after it acquires numerous customers; (2) the installed cable base induces economies of scale that increase its digital penetration; (3) the overbuild of the equivalent-size rivalry can increase digital adoption, whereas unequal-sized competition might reversely decrease it; and (4) the monthly flat fee charged to customers does not influence digital adoption. In addition, this paper presents a discussion on the policy instruments derived from econometric results. Although repealing the horizontal integration cap in the cable TV industry could generate economies of scale, doing so may encourage monopolization over several franchises. The efficacy of intra-platform competition is reserved only for certain cases. Combining the results of these analyses reveals that inter-platform competition most effectively stimulates cable operators’ digital conversion. Hence, regulators should create a level playing field among various TV platforms, such as equal programming access and open standards, to ensure a high degree of cable digitization     

Firm survival through a crisis: The influence of market orientation,marketing innovation and business strategy

As an outcome of the economic crisis, the global manufacturing sector is collapsing. Focusing on Chinese manufacturing small and medium enterprises (SMEs), this study investigates whether marketing innovation, defined as improvements in the marketing mix, can assist in withstanding the challenges of operating under the current economic conditions. A conceptual model linking market orientation, marketing innovation, competitive advantage and firm survival is tested using structural equation modelling. Three key findings are derived. First, the examined Chinese manufacturing SMEs had a greater perceived likelihood of survival had they developed and sustained a competitive advantage. Second, marketing innovation assisted in developing and sustaining competitive advantages based on differentiation and cost leadership strategies. Third, marketing innovation capabilities improved when the examined manufacturing SMEs were competitor oriented and had good inter-functional capabilities.     

The impact of internationalization on performance and innovation: The moderating effects of ownership concentration

Researchers in international business have long been interested in understanding the impact of internationalization on performance and innovation. However, prior studies of this research stream offer mixed results. This study contributes to this research stream by employing agency theory to investigate how ownership concentration affects the performance and innovation implications of internationalization. Specifically, we examine two primary effects of ownership concentration: the incentive alignment effect, proxied by the controlling shareholder??s cash flow rights, and the entrenchment effect, proxied by the divergence between control rights and cash flow rights of the controlling shareholder. Based on a sample of Taiwan??s publicly listed firms, we find that the incentive alignment effect moderates the relation between internationalization and performance and innovation positively and the entrenchment effect moderates the relation negatively. These findings shed light on the mixed results of the literature. In addition, most countries outside the United States and the United Kingdom have high ownership concentration; therefore, our results may be generalizable to other settings, providing insight into the role of corporate governance in internationalization.     

The mediating effects of interfirm business process integration and joint teamwork on firm performance in supply chains

This paper empirically examines the influences of strategic interdependence and resource complementarity on operational performance and relational performance of Chinese suppliers based on the resource-based view and resource dependence theory. In particular, it analyses the mediating effects of interfirm business process integration and joint teamwork. We apply structural equation modeling to analyze the survey data collected from logistics and supply chain managers, and derive the best model with theoretical foundation and statistical significance. As a result, our work has identified the mediating effects of interfirm business process integration and joint teamwork, and validated the assertion that strategic interdependence and resource complementarity as supply chain resources are fundamental to firm performance. It is stressed that resource capitalization requires interfirm business process integration and joint teamwork to realize the value of supply chain resources. The findings not only contribute to research on interfirm resources and performance, but also have practical implications for operations and supply chain management.     

Pay dispersion and workforce performance: moderating effects of incentives and interdependence

The compensation literature is replete with arguments, but lacking in empirical tests, regarding the effects of pay dispersion on organizational outcomes. Pay dispersion may increase effort and provide incentives for high workforce performance levels, but may also inhibit cooperation and goal orientation among employees. Drawing on several theoretical perspectives (individual motivation, institutional theory, organizational justice, and neoclassical economics), this study predicts that pay dispersion will be associated with higher levels of workforce performance when accompanied by formal individual incentive systems and independent work, while pay compression is desirable in the absence of individual incentive systems and when work is interdependent. Survey research studies in two industrial sectors (the motor carrier and concrete pipe industries) were conducted to address these issues. Interactive regression results were generally supportive of the predictions across several measures of workforce performance (accident rates, safety violations, and productivity). Implications of these studies for strategy implementation in terms of compensation theory and practice are addressed. Copyright © 2002 John Wiley & Sons, Ltd.     

New industrial product performance: The effects of market characteristics and strategy

There's no need to state again the complexity of the problem of achieving high performance in the new product process. What we do need is a framework to help sort out the complexity, and that is what Eunsang Yoon and Gary Lilien provide in this article. They first differentiate between original and reformulated new products. Then they examine how patterns of R&D and marketing activities determine short and long-run success.