Product innovation through coopetition in alliances: Singular or plural governance?

This study researches how firms can improve their product innovation in coopetition alliances through alliance governance. Our survey-based study of 372 vertical alliances in the medical device industry contributes to a clarification of prior studies' contrasting findings on product innovation when coopetition is present in alliances. Our results show that the singular use of relational governance improves product innovativeness in vertical alliances that experience growing levels of coopetition. In contrast, the singular use of transactional governance reduces product innovativeness with growing coopetition. When firms apply both relational and transactional governance as plural governance, vertical coopetition alliances get access to new ways to improve their product innovativeness.     

New Product Development Speed: Too Much of a Good Thing?

New product development (NPD) speed has become increasingly important for managing innovation in fast‐changing business environments due to continuous reduction in the product life cycle time and increase in competition from technological advancements and globalization. While the existing literature has not produced consistent results regarding the relationship between speed and success for NPD projects, many scholars and practitioners assert that increasing NPD speed is virtually always important to NPD success. The purpose of this paper is to examine the implicit assumption that faster is better as it relates to new product success (NPS). From the perspectives of time‐compression diseconomies and absorptive capacity, the authors question the assumption that speed has a linear relationship with success. The authors further argue that time‐compression diseconomies depend on levels of uncertainty involved in NPD projects. Using survey data of 471 NPD projects, the hypotheses were tested by hierarchical regression analysis and subgroup polynomial regression. The results of this study indicate that NPD speed has a curvilinear relationship with NPS, and the nature of the speed–success relationship varies, depending on type and level of uncertainty. When turbulence or technological newness is high, the relationship is curvilinear, but when uncertainties are low, the relationship is linear. In contrast, the results of this study suggest a curvilinear relationship under conditions of low market newness but not when market newness is high. The present paper asserts that time‐compression diseconomies and absorptive capacity are important theoretical constructs in understanding speed in NPD. The different impact of market newness and market turbulence on NPD speed supports the distinction of newness and turbulence as two different sources of uncertainty. Discussion focuses on the implications of NPD speed under the different conditions of uncertainty. NPD teams need to pursue NPD speed as a critical strategy, but it is necessary to analyze the source and degree of uncertainty about projects before a time‐based strategy is selected. In order to address the challenges of high uncertainty, a firm needs to probe, learn, and iterate fast. In particular, NPD teams need to distinguish between the different requirements for new products in emerging and new markets, and those in fast‐changing markets. Moreover, NPD teams need to balance how fast they need to go with how fast they can go by considering team absorptive capacity and customer absorptive capacity.     

Does transformational leadership facilitate technological innovation? The moderating roles of innovative culture and incentive compensation

The present research investigates the relationships between SBU-level transformational leadership and technological innovation, as well as the moderating effects of innovative culture and incentive compensation. Paired data were gathered from 102 senior managers and 258 employees in 102 Taiwanese strategic business units (SBUs). The results indicate that transformational leadership behaviors promote technological innovation at the SBU level. Interestingly, a stronger innovative culture is a substitute for transformational leadership behavior for facilitating technological innovation. In addition, financial-incentive adoption neutralizes the relationship between transformational leadership and technological innovation.     

Innovation strategy and sanctioned conflict: a new edge in innovation?

Teamwork and harmony are worthy objectives, but a healthy dose of conflict also plays an important role in fostering innovation. In their pursuit of teamwork and harmony, companies run the risk of suppressing the creative tension that brings vitality to new-product development (NPD) efforts. Furthermore, a firm's choice of innovation strategy may have a significant effect on the organization's capability for managing conflict. Using results from a survey of 290 marketing and R&D managers from U.S. firms in the electronics industries, Barbara Dyer and X. Michael Song explore the link between strategy and conflict, and the effect this link has on NPD success. Their study examines the following issues: the influence of business strategy on specific conflict-handling behaviors; the relationship between those conflict-handling behaviors and positive conflict outcomes; and the relationship between constructive conflict and new-product success. The study classifies firms predominantly pursuing a more aggressive NPD strategy as prospectors and less aggressive firms as defenders. Three conflict-handling mechanisms are identified: integrating behaviors, forcing behaviors, and avoiding behaviors. Compared to the prospector firms, the defender firms in this study perceived significantly higher levels of conflict in their organizations. In handling conflict, the prospector firms perceived a higher level of integrative behavior than the defender firms. The defenders perceived higher levels of forcing and avoiding conflict behaviors. The study identifies a strong, positive relationship between integrative behaviors and constructive conflict. Positive relationships are also identified between constructive conflict and the success of cross-functional relationships, as well as between constructive conflict and NPD business success. For the firms in this study, the results indicate that strategy is associated with the conflict-handling mechanisms the firm uses. For example, the results suggest that an NPD manager in a prospector firm will encounter high use of integrative behaviors, a high number of complex conflicts, a relatively low level of perceived conflict, a high level of formalization, and frequent exchanges of written and verbal communication among the firm's personnel. The results suggest that managers may help to create an environment conducive to NPD success by assessing their firms' strategies, emphasizing integrative conflict-handling behaviors, and employing formalization of organizational procedures.     

Backer Motivation in Crowdfunding New Product Ideas: Is It about You or Is It about Me?

Entrepreneurs are using crowdfunding to reach out to the general public to obtain financial support for their new product development. Those who offer project creators financial support are called backers. In this research, the authors examine two types of backer motivation, other‐orientation and self‐orientation, and their respective effects on a backer’s funding decision on new product ideas at the reward‐based crowdfunding platform. Other‐orientation is defined as a backer’s altruistic motivation to help others when making a funding decision; and self‐orientation is defined as a backer’s egoistic motivation to pursue internal feeling, such as personal satisfaction and power to control the project. They find that self‐orientation has a stronger positive effect than other‐orientation on the backer’s funding decision. Furthermore, the authors examine the difference between men and women, and find that the relationship between other‐orientation and funding decision is stronger for women than men, but the relationship for self‐orientation is stronger for men than women. The authors conduct three empirical studies to test the hypotheses in both the backer’s and the project creator’s contexts. In Study 1, they adopt a survey method to investigate effects of the backer’s motivation on his or her funding decision in the film category. In Study 2, they use data of 600 film projects from kickstarter.com to examine linguistic cues used by project creators that stimulate backer motivation. In Study 3, they conduct an experiment to further validate results of the difference between men and women. Although some research suggests that extrinsic reward is a reason for backers’ funding behavior, the authors emphasize that their psychological need also plays an influential role. In addition, findings of the difference between men and women enrich the crowdfunding literature by discovering distinct backer subgroups.     

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.     

Physician Assistants: Is There a Return to Training?

The major finding of this study is that the private rate of return to training physician assistants, employing the most conservative projections, is approximately 20 per cent, a rate comparable to that found for physicians. This result would seem to suggest that PA training is a good investment for the individual and that future demand for training will be high. The validity of this result, however, depends on the accuracy of the earnings projections that were utilized. Although they appear reasonable, only future observations can confirm their accuracy.
The multiple regression model used to test the significance of various independent variables indicated that for the ten-year period analyzed race, sex, and years of education prior to training did not explain differences in net present values of PA training, whereas age, years of health-related experience before training, training in a specialty, and the type of medical practice employing the PA were found to be important.
Although this study's findings should be considered tentative, the major policy implication evident from this research is that increases in government support to physician assistant trainees does not appear warranted at this point.     

Determinants of technological innovation success and failure: Does marketing innovation matter?

Innovation is attracting increasing attention from public authorities, enterprises, and academics. Although emerging evidence has indicated that marketing innovation should be regarded as critical as technological innovations for enhancing companies' competitiveness, few studies have considered this topic.This study aims to address this gap by examining the role of marketing innovation in the relationship between technological innovation and innovation success and failure. This study analyses the 2010–2012 Community Innovation Survey sample of German enterprises by using a double hurdle model and a probit model with sample selection. The results show that when enterprises undertake a technological innovation, introducing a marketing innovation is observed not to play a significant role regarding innovation success and failure. Notably, when the four types of marketing innovations are disentangled in the analysis, new findings emerge. Innovation in product packaging and design is positively related to innovation success. Innovation in product promotion is negatively related to innovation success and positively related to probability of innovation failure. Academics are called to study the role of marketing innovation, regarding innovation success and failure, by devoting their attention to the level of each marketing innovation. Enterprises should then carefully consider which marketing innovation should be introduced.     

Legal separation of BT: A necessary incentive for investment?

In March 2017 Ofcom and BT agreed that Openreach would be established as a legally separate subsidiary of BT Group with some behavioural requirements built into its Articles of Association. Ofcom pushed for this arrangement with the twin objectives of deterring what it termed “strategic discrimination” by BT and increasing investment in fibre to the premises. This paper argues that strategic discrimination is an unhelpful concept as a firm under an Equivalence of Input obligation, as BT was, can gain no strategic advantage for its retail business through an investment in an access product it has to make available to all wholesale customers on the same terms. Further, it argues that legal separation does not change fundamental cost and demand conditions and so has no direct effect on incentives to invest. This paper opens the possibility for further research regarding the incentives and behaviour of vertically integrated firms more generally.     

In a Network Industry,Does Product Quality Matter?

The role of product quality in industries influenced by network effects has been the subject of significant debate among management theorists. Some have suggested that network effects can result in inferior products, as consumers value a large cohort of fellow adopters over the technical quality of a given product. Others argue that cases of market domination by inferior products are quite rare and that product quality is an important aspect of network‐based competition. Thus, a fundamental question has arisen from this debate: in industries influenced by network effects, does product quality matter? This research uses a sample of product releases in the application software industry from 1986 to 1998 to test the impact of product quality on installed base growth for a given product line. Using software quality measures from archival trade publication reviews, quality is found to have a positive and significant impact on growth, even after controlling for installed base size and other product, firm, and segment characteristics. This finding suggests that the first‐mover advantages often ascribed to network industries may be more complex than previously thought. Rather, effective strategy in network competition appears to center on the trade‐off between early product releases, with the intent of establishing an early installed base, and later product releases, with the intent of improving the quality of the focal product. Several potential extensions of this work are offered, with a specific focus on (1) the impact of variation in the strength of network effects across industries, and (2) the dueling incentives faced by incumbents in network industries, who may possess greater capabilities to produce high‐quality products but limited incentive to do so. Other potential contributions for theory and practice are offered and discussed.     

Training and Labour Market Flexibility: Is There a Trade-off?

This paper explores the nexus between work-related training and labour market 'flexibility' (which we proxy by contract type, part-time employment and lack of union coverage), using the first five waves of the British Household Panel Survey (BHPS) conducted over the period 1991–5. Our results show that workers on short-term employment contracts, who are working part-time or are not covered by a union collective agreement, are significantly less likely to be involved in any work-related training to improve or increase their skills. These findings suggest that there is a trade-off between expanding the more marginal forms of employment and expanding the proportion of the work-force getting work-related training.     

Is there a virtuous circle relationship between innovation activities and exports? A comparison of food and agricultural firms

This study examines the existence of an interrelationship between innovation decisions and exports for food and agricultural firms as such a relationship could be the source of competitive advantages. Thus, taking as a theoretical basis the focus provided by the Resource-Based-View, the innovation and export decisions taken from 2006 to 2011 by 165 agricultural firms and 783 food companies operating in Spain (Europe) are examined here. The results of the bivariate probit and matching models used indicate a bi-directional nature of these decisions in the case of food companies and a positive though not bidirectional one in the case of the agricultural firms. Furthermore, a certain persistence is seen in the use of these decisions in both types of firms. For food companies, capital intensity and size are also determinants of innovation and exports. From the viewpoint of the decisions taken by individual firms, the bidirectional relationship could involve significant pressure in terms of the larger volume of both technological and human resources required. Agricultural and food policy decisions should incentivize these decisions given that in order to operate successfully in the global market it is necessary to acquire these competitive advantages, which also favor the growth of the agriculture and food trades.     

Does an extrinsic reward for R&D employees enhance innovation outcomes? Evidence from a Japanese innovation survey

This paper examines the effects of extrinsic rewards for R&D employees on innovation outcomes based on evidence from a Japanese innovation survey. Theoretical and empirical studies present conflicting findings regarding the relationship between extrinsic rewards and innovation outcomes. This article seeks to shed light on the relationship between rewards and outcomes, as represented by the development of new products and services and their technological superiority and profitability. The analysis produced the following findings. First, companies that have introduced an evaluation system based on R&D performance are more likely to develop new products and services. The introduction of the evaluation system brings about success in product innovation with greater technological superiority. Second, monetary compensation has a negative impact on the development of new products and services and technological superiority. Third, these effects vary with the company size. Small- and medium-sized companies achieve higher technological superiority with performance-based evaluations. Large companies tend to adversely impact the development of new products and services and their technological superiority with monetary compensation.     

The Value of Crowdsourcing: Can Users Really Compete with Professionals in Generating New Product Ideas?

Generating ideas for new products used to be the exclusive domain of marketers, engineers, and/or designers. Users have only recently been recognized as an alternative source of new product ideas. Whereas some have attributed great potential to outsourcing idea generation to the “crowd” of users (“crowdsourcing”), others have clearly been more skeptical. The authors join this debate by presenting a real‐world comparison of ideas actually generated by a firm's professionals with those generated by users in the course of an idea generation contest. Both professionals and users provided ideas to solve an effective and relevant problem in the consumer goods market for baby products. Executives from the underlying company evaluated all ideas (blind to their source) in terms of key quality dimensions including novelty, customer benefit, and feasibility. The study reveals that the crowdsourcing process generated user ideas that score significantly higher in terms of novelty and customer benefit, and somewhat lower in terms of feasibility. However, the average values for feasibility—in sharp contrast to novelty and customer benefit—tended to be relatively high overall, meaning that feasibility did not constitute a narrow bottleneck in this study. Even more interestingly, it is found that user ideas are placed more frequently than expected among the very best in terms of novelty and customer benefit. These findings, which are quite counterintuitive from the perspective of classic new product development (NPD) literature, suggest that, at least under certain conditions, crowdsourcing might constitute a promising method to gather user ideas that can complement those of a firm's professionals at the idea generation stage in NPD.     

Pre‐commercial procurement: a demand or supply policy instrument in relation to innovation?

In 2006, the European Commission introduced the concept of ‘pre‐commercial procurement’ (PCP) as an instrument to promote innovation and to mitigate grand challenges. One of the main motives for the support of PCP schemes was to use public needs as a driver for innovation. This concept was also introduced as a response to the need to reinforce the innovation capabilities of the European Union while improving the quality and efficiency of public services. But what is meant by PCP? Is it a demand‐ or a supply‐side instrument in relation to innovation? This is the research question addressed in this paper, the goal being motivated by the lack of academic discussion in this direction. The paper is based on three cases, one from the Netherlands, one from the United Kingdom and one from Australia. These cases provide evidence that PCP is a matter of research and development (R&D) funding of a targeted kind, geared toward very specific goals and in a focused way. This leads the authors to conclude that PCP is a supply‐side policy instrument in relation to innovation. In this sense, they would like to raise a flag for going back to the origins of the PCP program and calling it a ‘precompetitive R&D program’, rather than labeling it as an innovation procurement instrument.     

Worker Directors: A German Product that Did Not Export?

Despite its seeming lack of attractiveness to other countries, the German system of quasi‐parity codetermination at company level has held up fairly well. We recount the theoretical arguments for and against this form of codetermination, and survey the evolving empirical evidence on its economic impact. On both counts, employee representation on company boards might form part of the apparatus of good corporate governance, even if the extent of representation and the composition of the worker side are unsettled issues. Whatever the particular past merits of the case, however, the bottom line is that the recent availability of alternative forms of corporate governance will increasingly shape the German institution.     

Managerial Ties and Firm Innovation: Is Knowledge Creation a Missing Link?

Managerial ties, the personal networks of senior managers, have been found to be facilitators of firm performance because of their network benefits. However, social network theory suggests that managerial ties only play a “conduit” role by providing possibilities and opportunities to approach external resources. How can firms turn these possibilities and opportunities into internal knowledge assets and further transform them into firm innovation? Extant research constructs a direct mechanism for the managerial ties–firm innovation link. The research reported here, however, provides and investigates an indirect ties‐innovation argument where organizational knowledge creation processes, including knowledge exchange and knowledge combination, are mediators. And managerial ties are examined through two traditional dimensions, business ties and political ties. This study employs empirical data from 270 firms in China and uses structural equation modeling techniques to reveal interesting findings. First, the results support the key argument that the influence of managerial ties on firm innovation is indirect. Second, knowledge exchange and knowledge combination are different constructs and the former positively influences the latter. More interestingly, business ties can exert a significant direct impact on both knowledge exchange and knowledge combination, while political ties can only influence knowledge exchange directly. Although both knowledge exchange and knowledge combination impact product innovation directly, only knowledge combination can directly influence process innovation. These findings indicate that the role of political ties is declining, but business ties still have substantial influence on firm innovation in transitional China. Different processes of organizational knowledge creation, such as knowledge exchange and knowledge combination, make distinct contributions to firm innovation. Product innovation, as opposed to process innovation, is more externally oriented and needs more organizational level knowledge creation activities. This article extends the understanding of the ties–innovation link, organizational knowledge creation theory, and firm innovation in a transitional economy by providing a more complete understanding of how firms can access and internalize external resources and then transform them into product innovation and process innovation.