Resolving the capability-rigidity paradox in new product innovation

• Atuahene-Gima, Kwaku 

Indexed by

SSCI Scopus FT ABDC-A*

Abstract

Managers　face　an　important　strategic　dilemma　in　product　innovation:　how　to　exploit　existing　product　innovation　competencies　(competence　exploitation)　while　avoiding　their　dysfunctional　rigidity　effects　by　renewing　and　replacing　them　with　entirely　new　competencies　(competence　exploration).　Although　the　resolution　of　what　is　termed　the　＂capability-rigidity　paradox＂　is　considered　a　fundamental　managerial　task　in　enhancing　product　innovation　outcomes　and　the　firm＇s　competitive　advantage,　it　has　received　little　research　attention.　The　author　argues　and　finds　support　that　market　orientation　provides　a　key　to　this　paradox.　Specifically,　customer　and　competitor　orientations　ensure　simultaneous　investments　in　exploiting　existing　product　innovation　competencies　and　exploring　new　ones.　The　author　also　finds　that　the　effects　of　these　orientations　on　competence　exploitation　and　exploration　are　differentially　moderated　by　interfunctional　coordination　and　perceived　market　opportunity.　Regarding　outcomes,　competence　exploitation　and　exploration　have　opposing　relationships　with　incremental　and　radical　innovation　performance.　However,　the　relationship　between　competence　exploration　and　radical　innovation　performance　is　positively　moderated　by　interfunctional　coordination.　Overall,　the　results　of　this　study　suggest　that　market　orientation　can　prevent　a　firm　from　becoming　operationally　efficient　but　strategically　inefficient　by　simultaneously　engendering　competence　exploitation　and　exploration,　which　are　differentially　related　to　incremental　and　radical　product　innovation　outcomes.

Keyword

• COMPETITIVE ADVANTAGE
• FIRM
• KNOWLEDGE
• MARKET ORIENTATION
• ORGANIZATIONAL PERFORMANCE
• OVERLOOKED ROLE
• RADICAL INNOVATION
• RESOURCE-BASED VIEW
• STRATEGY
• TECHNOLOGY VENTURES

Author Community

[Atuahene-Gima, Kwaku] China Europe Int Business Sch, Shanghai, Peoples R China; City Univ Hong Kong, Ctr Innovat Management & Org Change, Hong Kong, Hong Kong, Peoples R China

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