Exploring the Impact of Technological Competence Development on Speed and NPD Program Performance

With growing levels of competition across industries, technological competence is increasingly viewed as crucial for businesses to maintain their long-term competitive advantage. Although there are many theoretical arguments about how firms' competences can yield competitive advantage and performance improvement, we have a limited understanding of where the capabilities originate in the context of NPD or what kind of product portfolios, internal climate, and strategic alignment are required to build them. Moreover, empirical evidence for technological competence development is limited and comes primarily from case studies, anecdotal evidence, and management impressions. Accordingly, this research addresses these gaps by presenting and testing a conceptual model of technological competence development in NPD. This study makes advances in applying a dynamic capability approach to technological competence development in NPD, and investigates the impact of innovative climate, technological alignment, and project portfolio management on technological competence development as well as NPD speed. Moreover, the factors that might influence NPD program performance are also investigated. The analysis, based on data collected from 111 firms, shows that a firm's innovative climate, technological alignment, and portfolio management are positively associated with technological competence development. While technological alignment was found to be negatively related to NPD speed, portfolio management, and technological competence development were found to have positive effects on speed. However, innovative climate had no significant impact on speed. Moreover, technological competence development and portfolio management were found to be positively related to NPD program performance. Finally, no support was found for the relationship between speed and NPD program performance

[1]  G. Ekvall.  Organizational climate for creativity and innovation , 1996 .

[2]  Erik Jan Hultink,et al.  Determinants of IT Usage and New Product Performance , 2007 .

[3]  R. Grant.  Toward a Knowledge-Based Theory of the Firm,” Strategic Management Journal (17), pp. , 1996 .

[4]  Roger Calantone,et al.  An Integrative Model of the New Product Development Process: An Empirical Validation , 1988 .

[5]  Daniel A. Levinthal,et al.  Exploration and Exploitation in Organizational Learning , 2007 .

[6]  Glenn B. Voss,et al.  Strategic Orientation and Firm Performance in an Artistic Environment , 2000 .

[7]  Constance E. Helfat,et al.  Product Sequencing: Co-Evolution of Knowledge, Capabilities and Products. , 2000 .

[8]  David W. Gerbing,et al.  An Updated Paradigm for Scale Development Incorporating Unidimensionality and Its Assessment , 1988 .

[9]  Mark B. Houston,et al.  Barriers to Matching New Technologies and Market Opportunities in Established Firms , 2003 .

[10]  Isabel M. Prieto,et al.  Dynamic Capabilities and Knowledge Management: An Integrative Role for Learning? , 2008 .

[11]  S. Winter.  Understanding dynamic capabilities , 2003 .

[12]  G. Zaltman,et al.  Innovations and organizations , 2020, Organizational Innovation.

[13]  G. Day.  The Capabilities of Market-Driven Organizations , 1994 .

[14]  Gilbert A. Churchill.  A Paradigm for Developing Better Measures of Marketing Constructs , 1979 .

[15]  Kathleen M. Eisenhardt,et al.  Making Fast Strategic Decisions In High-Velocity Environments , 1989 .

[16]  C. Prahalad,et al.  The core competence of the corporation’, Harvard Business Review, Vol. pp. . , 1990 .

[17]  A. Griffin.  PDMA Research on New Product Development Practices: Updating Trends and Benchmarking Best Practices , 1997 .

[18]  Robert G. Cooper,et al.  Portfolio Management for New Product Development , 2007 .

[19]  P. Coughlan,et al.  Development of a technical innovation audit , 1996 .

[20]  G. Huber.  Organizational Learning: The Contributing Processes and the Literatures , 1991 .

[21]  B. Kogut,et al.  Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology , 1992 .

[22]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[23]  Peter M. Bentler,et al.  EQS : structural equations program manual , 1989 .

[24]  Robert G. Cooper,et al.  Portfolio Management for New Products (Управление портфелем новых продуктов) , 1998 .

[25]  Robert G. Cooper,et al.  How Companies are Reinventing Their Idea-to-Launch Methodologies , 2009 .

[26]  Richard C.M. Yam,et al.  An audit of technological innovation capabilities in chinese firms: some empirical findings in Beijing, China , 2004 .

[27]  G. Hult,et al.  Innovation, Market Orientation, and Organizational Learning: An Integration and Empirical Examination , 1998 .

[28]  Robert G. Cooper,et al.  Selecting Winning New Product Projects: Using the NewProd System , 1985 .

[29]  S. Winter,et al.  An Evolutionary Theory of Economic Change.by Richard R. Nelson; Sidney G. Winter , 1987 .

[30]  R. Grant.  The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation , 1991 .

[31]  C. A. Benavides-Velasco,et al.  Innovative competence, exploration and exploitation: The influence of technological diversification , 2008 .

[32]  Pilar Carbonell,et al.  The impact of market characteristics and innovation speed on perceptions of positional advantage and new product performance , 2006 .

[33]  Kathleen M. Eisenhardt,et al.  DYNAMIC CAPABILITIES, WHAT ARE THEY? , 2000 .

[34]  Rosanna Garcia,et al.  The Effects of Environmental Turbulence on New Product Development Strategy Planning , 2003 .

[35]  Michael Song,et al.  Marketing and technology resource complementarity : An analysis of their Interaction Effect in two environmental contexts , 2005 .

[36]  Kenneth B. Kahn,et al.  PERSPECTIVE: Trends and Drivers of Success in NPD Practices: Results of the 2003 PDMA Best Practices Study* , 2009 .

[37]  Erwin Danneels.  The dynamics of product innovation and firm competences , 2002 .

[38]  Richard R. Reilly,et al.  The impacts of speed-to-market on new product success: the moderating effects of uncertainty , 2005, IEEE Transactions on Engineering Management.

[39]  S. Vickery,et al.  The effects of internal versus external integration practices on time-based performance and overall firm performance , 2004 .

[40]  C. Fornell,et al.  Evaluating structural equation models with unobservable variables and measurement error. , 1981 .

[41]  Morgan Swink,et al.  EFFECTS OF MARKETING-MANUFACTURING INTEGRATION ON NEW PRODUCT DEVELOPMENT TIME AND COMPETITIVE ADVANTAGE , 2007 .

[42]  Larry C. Giunipero,et al.  Organizational Learning in Global Purchasing: A Model and Test of Internal Users and Corporate Buyers , 2000, Decis. Sci..

[43]  P. Ahmed,et al.  Relationships between Innovation Stimulus, Innovation Capacity, and Innovation Performance , 2006 .

[44]  Petronella C. de Weerd-Nederhof,et al.  The Impact of NPD Strategy, Product Strategy, and NPD Processes on Perceived Cycle Time , 2009 .

[45]  G. Lantos,et al.  Resolving the Capability–Rigidity Paradox in New Product Innovation , 2006 .

[46]  Maurizio Zollo,et al.  Deliberate Learning and the Evolution of Dynamic Capabilities , 2002 .

[47]  M. Gordon,et al.  PUBLICATION RECORDS AND TENURE DECISIONS IN THE FIELD OF STRATEGIC MANAGEMENT , 1996 .

[48]  Anne S. Miner,et al.  Organizational Improvisation and Learning: A Field Study , 2001 .

[49]  John E. Prescott,et al.  THE GLOBAL ACQUISITION, LEVERAGE, AND PROTECTION OF TECHNOLOGICAL COMPETENCIES , 2004 .

[50]  Michael Hobday,et al.  Upgrading the technological capabilities of foreign transnational subsidiaries in developing countries: The case of electronics in Thailand , 2007 .

[51]  Ron Sanchez,et al.  Managing for an Uncertain Future A Systems View of Strategic Organizational Change , 1997 .

[52]  Erwin Danneels,et al.  THE PROCESS OF TECHNOLOGICAL COMPETENCE LEVERAGING , 2007 .

[53]  Araújo,et al.  An Evolutionary theory of economic change , 1983 .

[54]  M. Parry,et al.  The Determinants of Japanese New Product Successes , 1997 .

[55]  D. Gotteland,et al.  The market orientation - new product performance relationship: redefining the moderating role of environmental condition , 2006 .

[56]  P. Cardona,et al.  Modularity, strategic flexibility, and firm performance: A study of the home appliance industry , 2002 .

[57]  R. Calantone,et al.  Determinants of New Product Performance: A Review and Meta-Analysis , 1994 .

[58]  R E Miles,et al.  Organizational strategy, structure, and process. , 1978, Academy of management review. Academy of Management.

[59]  Vernon W. Ruttan,et al.  INDUCED INNOVATION, EVOLUTIONARY THEORY AND PATH DEPENDENCE: SOURCES OF TECHNICAL CHANGE* , 1997 .

[60]  K. Eisenhardt,et al.  PRODUCT DEVELOPMENT: PAST RESEARCH, PRESENT FINDINGS, AND FUTURE DIRECTIONS , 1995 .

[61]  K. Zhou,et al.  The Effects of Strategic Orientations on Technology- and Market-Based Breakthrough Innovations , 2005 .

[62]  Robert G. Cooper,et al.  Performance typologies of new product projects , 1995 .

[63]  Clayton M. Christensen.  The Innovator's Dilemma , 1997 .

[64]  Teresa M. Amabile,et al.  Motivating Creativity in Organizations: On Doing What You Love and Loving What You Do , 1997 .

[65]  Michael Song,et al.  The Effect of Perceived Technological Uncertainty on Japanese New Product Development , 2001 .

[66]  R. Calantone,et al.  The Impact of Market Knowledge Competence on New Product Advantage: Conceptualization and Empirical Examination , 1998 .

[67]  H. Gatignon,et al.  Strategic Orientation of the Firm and New Product Performance , 1997 .

[68]  R. Calantone,et al.  Controllable Factors of New Product Success: A Cross-National Comparison , 1996 .

[69]  P. Bentler,et al.  Cutoff criteria for fit indexes in covariance structure analysis : Conventional criteria versus new alternatives , 1999 .

[70]  Rajiv K. Sinha,et al.  Market Orientation and Alternative Strategic Orientations: A Longitudinal Assessment of Performance Implications , 2002 .

[71]  Sören Salomo,et al.  Innovation Field Orientation and Its Effect on Innovativeness and Firm Performance , 2008 .

[72]  D. Teece,et al.  The Dynamic Capabilities of Firms: an Introduction , 1994 .

[73]  Constance E. Helfat,et al.  Know-how and asset complementarity and dynamic capability accumulation : The case of R&D , 1997 .

[74]  Joseph E. Coombs,et al.  Measuring Technological Capability and Performance , 2006 .

[75]  Kate D. Abel,et al.  Practices that Support Team Learning and Their Impact on Speed to Market and New Product Success , 1999 .

[76]  M. Tushman,et al.  Resource recombinations in the firm: knowledge structures and the potential for schumpeterian innovation , 1998 .

[77]  Robert G. Cooper,et al.  Benchmarking Best NPD Practices-II: Strategy, Resource Allocation and Portfolio Management Are the Focus of This Second in a Three-Part Series , 2004 .

[78]  L. Kim.  The Dynamics of Samsung's Technological Learning in Semiconductors , 1997 .

[79]  Robert G. Cooper,et al.  The relative importance of new product success determinants—perception versus reality , 1995 .

[80]  T. Kappel,et al.  Roadmapping in the corporation , 2003, IEEE Engineering Management Review.

[81]  Melissa A. Schilling.  Technological Lockout: An Integrative Model of the Economic and Strategic Factors Driving Technology Success and Failure , 1998 .

[82]  Georg Schreyögg,et al.  How dynamic can organizational capabilities be? Towards a dual-process model of capability dynamization , 2007 .

[83]  Ulrike de Brentani,et al.  Corporate Culture and Commitment: Impact on Performance of International New Product Development Programs , 2004 .

[84]  D. Wilemon,et al.  Accelerating the Development of Technology-Based New Products , 1990 .

[85]  A. Chakrabarti,et al.  Speeding Up the Pace of New Product Development , 1999 .

[86]  D. Dillman.  Mail and telephone surveys : the total design method , 1979 .

[87]  K. Atuahene–Gima,et al.  The Effects of Centrifugal and Centripetal Forces on Product Development Speed and Quality: How Does Problem Solving Matter? , 2003 .

[88]  George M. Scott,et al.  Strategic planning for technology products , 2001 .

[89]  Shaker A. Zahra,et al.  Technology strategy and new venture performance: A study of corporate-sponsored and independent biotechnology ventures , 1996 .

[90]  Eric H. Kessler,et al.  Is faster really better? An empirical test of the implications of innovation speed , 2002, IEEE Trans. Engineering Management.

[91]  Eric H. Kessler,et al.  Internal Vs. External Learning In New Product Development: Effects On Speed, Costs And Competitive Advantage , 2000 .

[92]  Roger Calantone,et al.  The Role of Knowledge in Resource Allocation to Exploration versus Exploitation in Technologically Oriented Organizations , 2003, Decis. Sci..

[93]  Kenneth B. Kahn,et al.  An Exploratory Investigation of NPD Practices in Nonprofit Organizations , 2006 .

[94]  C. Prahalad,et al.  The Core Competence of the Corporation , 1990 .

[95]  Marc H. Meyer,et al.  Product development cycle time and commercial success , 1995 .

[96]  G. Pisano.  Knowledge Integration and the Locus of Learning: An Empirical Analysis , 1994 .

[97]  Richard P. Bagozzi,et al.  Assessing Construct Validity in Organizational Research , 1991 .

[98]  Shankar Ganesan,et al.  Does Distance Still Matter? Geographic Proximity and New Product Development , 2005 .

[99]  R. Cooper,et al.  Benchmarking Best NPD Practices—II , 2004 .

[100]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[101]  Judy A. Siguaw,et al.  Conceptualizing Innovation Orientation: A Framework for Study and Integration of Innovation Research* , 2006 .

[102]  Richard E. Albright,et al.  Roadmapping in the Corporation: Product-Technology Roadmaps Define and Communicate Product and Technology Strategy along with a Longer, Smarter View of the Future , 2003 .

[103]  William H. Glick,et al.  Conceptualizing and Measuring Organizational and Psychological Climate: Pitfalls in Multilevel Research , 1985 .

[104]  G. Hult,et al.  Strategic supply chain management: Improving performance through a culture of competitiveness and knowledge development , 2007 .

[105]  R. Nelson.  Why do firms differ, and how does it matter? , 1991 .

[106]  Ulrike de Brentani,et al.  Performance of Global New Product Development Programs: A Resource‐Based View , 2007 .

[107]  B. Wernerfelt,et al.  A Resource-Based View of the Firm , 1984 .

[108]  K. Atuahene–Gima,et al.  An Empirical Investigation of the Effect of Market Orientation and Entrepreneurship Orientation Alignment on Product Innovation , 2001 .

[109]  Kenneth B. Kahn,et al.  PERSPECTIVE: Establishing an NPD Best Practices Framework , 2006 .

[110]  Abdul Ali,et al.  Product innovativeness and entry strategy: Impact on cycle time and break-even time , 1995 .