Antecedents and consequences of the strategic orientations in new product development: The case of Chinese manufacturers
Introduction
Innovation has long been identified as the raison d'être of modern business organizations (Abernathy & Clark, 1985). With a growing level of competition across industries, new products are increasingly viewed as crucial for businesses in maintaining their competitive edge in the long run. In this context, recent years have witnessed a growing interest across disciplines in exploring product innovation as the focus of extensive scholarly research. Within the substantive stream of new product research, researchers have focused on identifying various determinants of organizational performance. As recent reviews of the literature indicate, the majority of the research to date belongs to this sub-stream (Calantone and Di Benedetto, 1990, Krishnan and Ulrich, 2001). The primary objective of these studies lies in identifying the correlates of innovation performance. Building upon the earlier work of Project SAPPHO (Rothwell et al., 1974), the Stanford Project (Maidique & Zirger, 1984), Booz, Allen, and Hamilton (1982), Project NewProd (Cooper, 1979) and others, recent research has identified various firm-internal and -external variables that can enhance new product performance. Among the various types of performance determinants, past research has shown that the strategic orientations of the firm can play a critical role in effectively managing new product development.
While there have been many attempts to address strategic issues in new product development (NPD), most research has focused on addressing project-level strategies. However, Montoya-Weiss and Calantone (1994) point out the potential danger associated with project-level studies: “project-specific characteristics may be atypical and widely variable from firm to firm, thus limiting the validity of indiscriminately combining results across projects and across firms in a single study” (Menon, Bharadwaj, Adidam, & Edison, 1999, p. 414). Following Gatignon and Xuereb's (1997) recent call for further research on program-level NPD strategy, this study investigates the role of customer and technological orientations in successful new product development. Furthermore, in developing and commercializing new products, firms have to deal with various types of organizational contingencies that can affect the effectiveness of product innovation efforts. Given that innovation performance can be measured in various ways, recent research suggests that a firm's emphasis on a particular strategic orientation rather than on other orientations will likely enhance certain, though not necessarily all, aspects of performance. That is, depending on the relative emphasis placed on various strategic orientations, firms may or may not be able to achieve their innovation objectives. The utility of a strategic orientation will likely have a varying degree of influence on different performance dimensions.
To address these issues, a conceptual framework of NPD was developed to integrate key organizational antecedents, strategic orientation variables and consequences in the specific context of new product development. The objective of the present study is to answer the following research questions. First, to what extent do internal and external organizational contextual variables influence NPD strategies? This study focuses on internal (organizational support on NPD) and external variables (market and technological turbulences) that can facilitate or impede the effective implementation of NPD strategy. The second goal is related to the performance implications of NPD strategy. That is, to what extent do the customer- and technology-oriented NPD strategies emphasized by a firm influence its organizational performance? To explore this issue, it examines performance from three different perspectives. Put differently, does the utility of certain strategies vary along various performance dimensions? This study investigates these issues with empirical evidence collected through a survey of Chinese manufacturing firms.
Most NPD studies have been conducted in the context of developed countries (North America, Japan, etc.). While recent research has increasingly dealt with NPD practices in newly industrialized countries such as Korea and Taiwan (Song, Montoya-Weiss, & Schmidt, 1997), few studies have investigated NPD in emerging economies such as China (Di Benedetto and Song, 2003, Jeong, 2003, Liu, 2000, Peng et al., 2001). Given the country's growing importance in the world economy over the coming decades, there is an urgent, practical need to shed further lights on NPD practices in this major, emerging market.
In the following sections, first, a brief review of the relevant NPD literature will be provided to highlight the importance of strategic orientation in product innovation. A conceptual framework is then introduced, incorporating crucial firm-internal and -external antecedents to and consequences of strategic orientation. Following the prescriptive tradition prevalent in the NPD literature, it also examines the influence of strategic orientation on performance. Next, a detailed description of the methodology, for testing a set of hypotheses derived from the framework, is provided. The paper concludes with a summary of the findings, followed by a discussion of the research implications.
Section snippets
Conceptual background and hypotheses
As noted previously, this study explores the antecedents and consequences of strategic orientations in new product development in the context of Chinese manufacturing firms. To this end, it developed the conceptual framework depicted in Fig. 1. Following the environment–strategy–performance paradigm, it proposes a set of hypotheses to be examined empirically. Firm-internal and -external antecedents are posited to have a direct influence on each of the strategic orientation variables, which in
Methodology
The overall design of the study includes a multi-stage procedure combining both qualitative and quantitative studies. To gain insight into the focal phenomenon, i.e., product innovation in Chinese firms, a series of field interviews were carried out before conducting surveys for data collection.
Results
The first hypotheses ((a), (b)) posit organizational support for NPD will have a positive influence on the strategic orientation of the firm. As shown in Fig. 2, the results support the hypothesis that organizational support facilitates customer orientation (β = 0.38, p < 0.01) and technology orientation (β = 0.44, p < 0.01). In general, an effective implementation of the customer orientation requires a significant amount of organizational support such as top management support and resource commitment.
Discussion and conclusion
This study examines organizational processes that contribute to new product performance, with survey data collected from Chinese manufacturing firms. In general, it provides empirical evidence that organizational antecedents will have a significant impact on the strategic orientation of the firm, which in turn influences new product performance. While the results may not necessarily be generalizable to firms outside the defined populations (i.e., sample limited to firms in the Shanghai area),
Acknowledgment
This research was partially supported by a Korea University Grant, Hong Kong Polytechnic University Research Fund and a Strategic Research Grant of the City University of Hong Kong.
Insik Jeong is an Associate Professor of International Business at the Korea University in Korea. His research focuses on international marketing strategy and new product development.
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Insik Jeong is an Associate Professor of International Business at the Korea University in Korea. His research focuses on international marketing strategy and new product development.
Jae H. Pae is an Associate Professor of Marketing at the Hong Kong Polytechnic University. His current research interests include new product development and innovation/technology management.
Dongsheng Zhou is Professor of Marketing at CEIBS in China. His research focuses on marketing strategies, marketing modeling, MNE strategies in China and China's private enterprises.