Product Quality as a Formative Index: Evaluating an Alternative Measurement Approach*

Product quality is a critical competitive issue when launching new products. However, the product quality construct has been measured inconsistently in prior research, with researchers often not considering multiple components of quality. Thus, results may not be comparable across studies, and when dimensions of quality are excluded, relationships found between quality and other constructs may be spurious. As a response, we develop a formative measurement approach to product quality. The components of product quality are not interchangeable in measurement as typical reflective approaches assume. These dimensions make up the quality construct, necessitating a formative measurement approach. Here, this approach is developed and tested, compared with the traditional reflective approach, and its relationships with other constructs evaluated in a model of new product performance. Overall, this formative approach is shown both to be theoretically appropriate and to possess strong measurement properties. This approach has clear implications for research concerning product quality and improving its measurement in the future.     

Speed to Market for Innovative Products: Blessing or Curse?

The relationships among speed to market, quality, and costs are important to managers as they attempt to best establish incentives and set goals for new product development teams, allocate resources for new product development, or create positional advantage in the market. The existing literature suggests that the economic consequences of being late to the market are significant, including higher development and manufacturing costs, lower profit margins, and lessening of the firm's market value. Therefore, traditional logic has held that new product development managers need to manage the trade‐offs among speed to market, quality, and costs. While both scholars and managers have often acquiesced to performance trade‐offs among “faster, better, and cheaper,” this research attempts to improve understanding of the interrelationships between these objectives, and ultimately profit. Based on a survey of 197 managers, faster speed to market is shown to be related to better quality and lower costs; it is not necessary to sacrifice one of these outcomes. Further, the moderating roles of two dimensions of innovativeness (innovativeness to the firm and to the market) are examined on the relationships between speed and quality, as well as speed and profit. Both dimensions of innovativeness positively moderate the relationship between speed to market and quality. For more innovative products (both to the firm and the market), there is a stronger positive relationship between speed and quality than for less innovative products. Further, innovativeness to the firm negatively moderates the relationship between speed and profit. Thus, speed has a less positive impact on profit for highly innovative‐to‐the‐firm products compared with less innovative‐to‐the‐firm products. By being conscious of the projects’ levels of innovativeness (along with prioritizing various performance measures), managers can more rationally decide when to emphasize speed to market based on this study's findings.     

Motivations of educational tourists in non-English-speaking countries: the role of languages

ABSTRACT

Learning a language or improving one’s foreign language skills may be a key motivator for students to decide to participate in an exchange program as well as choose the destination for their studies. Nevertheless, studies on educational tourism are limited, and there is no research on the motivations of students visiting non-English-speaking countries. To fill this gap, this paper aims to examine the motivations of university students in non-English-speaking destinations by using the push-and-pull framework. Primary data were collected through an online survey from 190 and 205 students who participated in mobility programs in a Spanish university and in a German university respectively. Empirical findings reveal that languages are a key motivating factor for either growing personally through cultural enrichment, or growing professionally. Furthermore, these data allow generic recommendations so that the destinations can attract a larger number of international students.     

Information Spillovers and the Choice of Export Destination: A Multinomial Logit Analysis of Spanish Young SMEs

Does having more firms around exporting to a particular destination improve the chances of exporting to that destination (e.g. through information spillovers)? We answer this question implementing a multinomial logit model of whether a firm exports to a particular country. To identify the source of information spillovers, we construct indicators of geographical concentration of exporters selling to a specific destination: within industry, multinationals and across industries. In our application with data for Spanish new small sized firms, only within-industry agglomeration of exporting domestic firms significantly affects the probability of small sized firms exporting to the same destination. The significance of localisation economies is robust to a barrage of controls including destination specific characteristics, gravitational factors (distance and level of development), firm heterogeneity (size) and regional differences.     

It Won't Fit! For Innovative Products,Sometimes That's for the Best

The degree of overlap (i.e., fit) between product development organizations' resources and the product development projects pursued has powerful performance implications. Drawing on organizational learning theory and the resource‐based view, this research conceptualizes and empirically tests the interrelationships between the levels of fit, innovativeness, speed to market, and financial new product performance. After reviewing the research literature relevant to resource fit and new product performance, the level of innovativeness is posited to be an important moderating and mediating factor, which is validated by analysis of data gathered from 279 product developing firms. Technological fit has a negative direct effect on both technological and market innovativeness, while the use of existing marketing resources (i.e., a high degree of marketing fit) positively impacts technological innovativeness. This suggests, consistent with findings from market orientation research, that a deep, long‐held customer understanding can promote technological innovativeness. The moderating hypotheses proposed are also well supported: First, a high degree of marketing fit has a more positive impact on performance for market innovative products (e.g., products which address a new target market or use a nontraditional channel for the firm). Drawing on a deep customer understanding is more critical to performance for market innovative products. Conversely, the benefits of marketing fit are limited where market innovativeness is lacking. Interestingly, the counterpart moderating role of technological innovativeness on technological fit's performance effect is not significant; the level of technological innovativeness does not significantly impact the performance impact of technological fit. There are also significant moderating effects across dimensions. Our results show that the financial benefit of using existing marketing resources is lessened for technologically innovative products. Technological innovations necessitate drastic adaptation of marketing resources (i.e., channel and brand); firms drawing only on existing marketing resources for a technologically innovative new product will incur reduced profit. Similarly, the positive implications of using existing technological resources are limited for products which are highly market innovative. Generally, resource fit is seen to have an (oft‐overlooked) dark side in product development, though several of our findings suggest that marketing resources are more flexible than are technological resources.     

Run length analysis of Shewhart charts applied to drifting processes under an integrative SPC/EPC model

Engineering Process Controllers (EPC) are frequently based on parametrized models. If process conditions change, the parameter estimates used by the controllers may become biased, and the quality characteristics will be affected. To detect such changes it is adequate to use Statistical Process Control (SPC) methods. The run length statistic is commonly used to describe the performance of an SPC chart. This paper develops approximations for the first two moments of the run length distribution of a one-sided Shewhart chart used to detect two types of process changes in a system that is regulated by a given EPC scheme: i) changes in the level parameter; ii) changes in the drift parameter. If the drift parameter shifts, it is further assumed that the form of the drift process changes from a linear trend under white noise (the in-control drift model) into a random walk with drift model. Two different approximations for the run length moments are presented and their accuracy is numerically analyzed. Received: August 1998     

Human resources audit

Human resource management (HRM) has experienced a strong evolution. In order to provide useful information to managers, it is necessary to evaluate the results generated by the design and implementation of personnel policies. This is the goal of the HR audit that includes two different analyses and valuations: the HR policies and their level of fit with the strategy of the firm, and the characteristics of human capital. Several criteria have been used to assess different HR policies. Nevertheless, the measurement of the value that human capital brings to the firm is a very complex topic. Consequently, different models are being presented that aim to properly solve this challenge. This paper will analyze the HR function from two perspectives: the evaluation of the implemented policies and the quality of human capital in relation to real competencies, and the capability to learn and develop new skills.     

Dollarization persistence and individual heterogeneity

A salient feature of financial dollarization, arguably the one that causes most concern to policymakers, is its persistence: even after successful macroeconomic stabilizations, dollarization ratios often remain high. In this paper we argue that this persistence is connected to the fact that the participants in the dollar deposit market are fairly heterogenous, and so is the way they form their optimal currency portfolio. We develop a simple model when agents differ in their ability to process information, which turns out to be enough to generate persistence upon aggregation. We provide empirical evidence that is consistent with this claim.     

A Comparison of χ2, RFA and IRT Based Procedures in the Detection of DIF

Bias research began at the end of the 1960s anddeveloped rapidly in the following decades for obvioussocial and political reasons, and due to the importantimpact that this issue has on the field ofpsychological and educational measurement. Since then,several methods have been proposed for the study anddetection of item bias or differential itemfunctioning (DIF). This paper presents a simulationstudy comparing the potential of some of these methodsfor detecting DIF: two IRT-based techniques (area measures), three ²-based procedures (MantelHaenszel, Logit Model and Logistic Regression) and theRestricted Factor Analysis method. The results showthat the technique that appears to do the best job isthe Mantel Haenszel statistic. Moreover, all detectiontechniques tend to overidentify DIF items, that is,some of the items labeled with DIF may in fact bewithout DIF. This tendency is slightly reversed in theLogistic Regression procedure.     

The impact of trust and local learning on the innovative performance of MNE subsidiaries in China

We investigate innovative performance of subsidiaries in multinational enterprises (MNEs) in China from an external local embeddedness perspective. We draw from prior research on subsidiary embeddedness and use social exchange theory (SET) to develop hypotheses relating to how trust with local partners and learning from local partners will impact innovative performance of MNE subsidiaries in China. Given the nature of the Chinese context, we argue that innovative performance will be positively influenced by trusting relationships with local external partners regardless of the location of the subsidiary in China. On the other hand, we argue that the role that learning from local partners plays on subsidiary innovative performance is location-specific, being dependent on the degree to which the location supports an innovative, knowledge economy. In addition, we hypothesize a location-specific interaction effect between trust and local learning. Using data from a survey of 306 MNE subsidiary managers in three tier-1 locations in China (Beijing, Shanghai, and Guangzhou) we find strong support for our hypotheses, and identify the strongest interaction effect between trust and local learning in Beijing.