Radical Product Innovation Capability: Literature Review,Synthesis, and Illustrative Research Propositions

Product innovation is a key to organizational renewal and success. Relative to other forms of innovation, radical product innovations offer unprecedented customer benefits, substantial cost reductions, or the ability to create new businesses, any of which should lead to superior organizational performance. In other words, a radical product innovation capability is a dynamic capability, one that enables the organization to maintain alignment with rapidly evolving customer needs in high‐velocity environments. Extensive research has been conducted on the antecedents to an incremental/general product innovation capability, and meta‐analyses have been conducted to integrate the results from the various studies. However, whether and how a radical product innovation capability differs from an incremental product innovation capability is also critical. The purpose of this work is to develop a testable model of the antecedents to radical product innovation success. Based on an extensive literature review, a comprehensive set of organizational components that comprise a firm's radical product innovation capability is identified. These organizational components include senior leadership, organizational culture, organizational architecture, the radical product innovation development process, and the product launch strategy. Of course, each of these components has subcomponents that provide even more texture. This review highlights how the components of a radical innovation capability function differently from those for an incremental capability. In addition, this review strongly suggests that the direct effects models that dominate this literature underestimate the complexity of the interplay of components that comprise a radical product innovation capability. Thus, a model to demonstrate this interplay of these organizational components is provided. Illustrative research propositions are offered to provide guidance to researchers. Suggestions for executives and managers who are involved in the product development process and for scholars who seek to advance the state of knowledge in this area are offered in the conclusion.     

Accumulation of reserves and keeping up with the Joneses: The case of LATAM economies

In this paper we explore the ‘Mrs. Machlup's Wardrobe’ hypothesis to understand the growing trend of Latin American economies amassing large stocks of international reserves. Using annual data from 1980 to 2007, we examine the relevance of the argument that economies continue to add to their existing reserves stock in order to keep up with the Joneses. We find strong evidence of presence of the Joneses effect. The effect is robust to the inclusion of traditional determinants of reserve accumulation as well as region specific factors including commodity exports that set the Latin American economies apart from other emerging economies.     

Human resources roles: ideal versus practiced: a cross-country comparison among organizations in Asia

Human capital and its associated principles of talent management are sound platforms on which to leverage a company's fundamental resources to attain corporate goals. Unfortunately, the importance of human resource management (HRM) within organizations is often overlooked. The fundamental problem observed by many researchers in the HRM field is the discrepancy between what are considered ideal HRM roles and what is actually practiced by HRM managers. To understand the current human resource (HR) philosophy and the specific roles practiced by HR professionals among Asian companies, a survey was conducted with 377 HR managers in four Asian countries – India, Indonesia, Malaysia, and the Philippines. Our research has shown and, hence, reiterated the sense that there are considerable differences between the current HR functions as practiced and the ideal HR functions, as indicated by the survey respondents. In addition, the survey results have identified significant differences among countries, especially in areas such as strategic practices and the roles of HR managers. Differences between practice and ideal in HR administration are also observed at different levels of management. It was also observed that differences among countries exist depending on the type of organization, the size of the organization, and whether the HR managers work for HR departments or for other functional departments.     

Financial Trilemma in China and a Comparative Analysis with India

A key challenge facing most emerging market economies today is how to simultaneously maintain monetary independence, exchange rate stability and financial integration subject to the constraints imposed by the trilemma, in an era of widespread globalization. In this paper we review and contrast the trilemma policy choices and trade‐offs faced by the two key drivers of global economic growth: China and India. China's trilemma configurations are unique relative to other emerging markets in terms of the predominance of exchange rate stability, and in the failure of the trilemma regression to capture a consistently significant role for financial integration. In contrast, the trilemma configurations of India are in line with choices made by other emerging countries. Over time, India, like other emerging economies, has converged towards a middle ground among the three policy objectives, and has achieved comparable levels of exchange rate stability and financial integration buffered by sizeable international reserves.     

Estimating technical change by nonparametric methods

A nonparametric method using dynamic data envelopment analysis is developed here to specify and estimate a dynamic production frontier. By this technique technological progress measured by the time shift of the production frontier and the scale economies measured by increasing returns to scale are estimated from the observed input output data, which may sometimes be nonstationary. An application to US computer industry exhibits substantial technological progress and scale economies over the period 1987–1998.     

Asymmetric Information, Bargaining, and International Mergers

The formation of international mergers is examined in the presence of two kinds of asymmetric information, one when a local firm has private information on market size and the other when a foreign firm has private information on its technology. In each situation, parametric configurations are identified under which a merger offer may or may not be made. It also examines the kind of offer and the probability of its acceptance. The likelihood of a merger beingformed is also related to the basic market size, demand uncertainty, and cost uncertainty. Welfare effects of tax/subsidy policies by the host country are also analyzed.     

Foreign entry and bank competition

Foreign entry and bank competition are modeled as the interaction between asymmetrically informed principals: The entrant uses collateral as a screening device to contest the incumbent's informational advantage. Both better information ex ante and stronger legal protection ex post are shown to facilitate the entry of low-cost outside competitors into credit markets. The entrant's success in gaining borrowers of higher quality by offering cheaper loans increases with its efficiency (cost) advantage. This paper accounts for evidence suggesting that foreign banks tend to lend more to large firms thereby neglecting small and medium enterprises. The results also explain why this observed bias is stronger in emerging markets.     

Recent rural growth in China: the performance of the rural small-scale enterprises, 1980–86

This article focuses on the evaluation of the process of growth in rural China since the 1978 rural economic reforms. By dividing the rural economy into two sectors: the agricultural sector and the RSE (rural small scale enterprises) sector, it analyses the relative contributions of labour, capital and other factors. Two major findings are that the RSE sector has its marginal labour productivity double that of the agricultural sector over 1980–86 and the high-income regions (mainly the coastal provinces open to world exports) exhibited a positive role of increasing returns to scale. This trend lends strong support to the market-based incentives offered by the openness in free trade which influenced the coastal provinces of the RSE sector.     

Projection pursuit regression and disaggregate productivity effects: the case of the Indian blast furnaces

Productivity of blast furnaces in India is studied by disaggregating the production process and the utilization process. A dimension‐reducing nonparametric approach—projection pursuit regression—is used. We find that productivity can be increased significantly by improving the quality of coal. There is no evidence that executives have a positive marginal product. The production workers have a negative marginal product for the production process and a positive one for the utilization process. But the training of executives has a positive effect whereas that of the production workers has a negative effect on productivity. Copyright © 2004 John Wiley & Sons, Ltd.