When Does Customer Orientation Hinder (Help) Radical Product Innovation? The Role of Organizational Rewards

Prior marketing literature offers a compelling theoretical rationale in support of two contradictory propositions, namely, that customer orientation is negatively related to (i.e., hinders) radical product innovation and that customer orientation is positively related to (i.e., helps) radical product innovation. In this research, the contextual conditions that determine the validity of these contradictory propositions are identified. Drawing from the literature on organizational rewards, two types of organizational rewards—outcome based and strategy based—are identified as being the key contextual conditions. It is hypothesized that when outcome‐based rewards are in effect, customer orientation is negatively related to radical positive innovation and, that when strategy‐based rewards are in effect, customer orientation is positively related to radical product innovation. Results from a survey of 156 manufacturing firms, and from a survey of 97 of their customers, provide support for these hypotheses. While prior research has attempted to explain the contradictory nature of the relationship between customer orientation and radical product innovation using typology‐based and mediator‐based approaches, the contextual condition‐based approach has not been well developed. This gap is addressed by the present research. From a practitioner perspective, the research is important because it identifies a concrete mechanism that new product development managers can deploy, in tandem with customer orientation, if they intend to generate radical product innovations. Given the potential gains that flow from radical product innovation, the research findings are expected to be of considerable interest to managers of new product development projects.     

Perceptions of accounting professionals in the adoption and implementation of a single set of global accounting standards: Evidence from Bahrain

In the quest for a single set of global accounting standards, the International Accounting Standard Board (IASB) continues to work with regulators in other countries toward adoption of IFRS. This study reports on an exploratory study of Bahrain's accounting and auditing professionals' perceptions about important issues relevant to developing and implementing global accounting standards. Bahrain is a financial hub of the Middle East with distinct features that could provide some insights to harmonization issues. The respondents' views portray optimism by auditors and non-auditors that harmonization of accounting standards is a worthwhile objective that can be fairly, but gradually accomplished. However, the survey data indicate expected challenges in applying the IFRS principles-based accounting standards. The survey findings suggest that there will be a growing demand for detailed application guidance for IFRS. Also, it appears that nationalism may well continue to be a major impediment to global adoption of IFRS.     

When do strategic alliances inhibit innovation by firms? Evidence from patent pools in the global optical disc industry

Research and development (R&D) consortia are specialized strategic alliances that shape the direction and scope of firm innovation activities. Little research exists on the performance consequences of participating in R&D consortia. We study the effect of patent pools, a unique form of R&D consortia, on firm performance in innovation. While prior research on alliances generally implies that patent pools enhance firm innovation, our study finds the opposite. Analyzing data on systemic innovation in the global optical disc industry, we find that patent pool formation substantially and significantly decreases both the quantity and quality of patents subsequently generated by licensors and licensees relative to the patenting activity of nonparticipants. Our empirical findings suggest that patent pools actually inhibit, rather than enhance, systemic innovation by participating firms. Copyright © 2011 John Wiley & Sons, Ltd.