Product innovation performance deviation, learning ambidexterity and entrepreneurial orientation

Abstract

Abstract: Product innovation is a process of "invention + commercialization". To achieve higher product innovation performance, firms not only need good new product development performance (invention, NPDP) to support but also need good commercialization performance (CP) matching the NPDP when selling the newly developed products to market. However, in business practice, many firms have a large output gap between their NPDP and CP. Research shows that many firms can only successfully commercialize about 59% of new products, and only about 54% of the new products can successfully profit. The capabilities of invention and commercialization are equally important in the product innovation process. Their imbalance will lead to the waste of resources and the loss of operational efficiency, and will even threaten the existence and development of firms in the long run.
Therefore, this paper defines the imbalance between NPDP and CP as "product innovation performance deviation (PIPD)". PIPD can help firms analyze their weaknesses from performance feedback, so as to reasonably allocate production, achieving balanced arrangements of R&D and production. In this condition, how the firms close the gap in their capabilities through the instruction of PIPD is a problem worth discussing.
The purpose of this paper is to focus on PIPD based on the knowledge-based view and theory of reasoned action, to explore its impact on the balance or complementarity of learning ambidexterity. Introducing the entrepreneurial orientation (EO), a key situational factor of the product innovation process, the paper analyzes its moderating effect on the above-mentioned relationship.
To be more specific, first, for eliminating PIPD, firms not only need to conduct exploratory learning to pursue the knowledge beyond the current market; but also need to extend existing knowledge with exploitative learning. When a firm′s NPDP is greater than or equal to CP, namely PIPD being plus, it indicates that the firm has a stronger new product development capability than commercialization capability. Thus, the firm is encouraged to eliminate PIPD through exploitative learning, resulting in the imbalance of learning ambidexterity. On the contrary, when the NPDP is less than CP, namely PIPD being minus, it indicates that the firm has an insufficient investment in new product development. But at this time, employees are more inclined to further reduce exploratory learning to protect their short-term interests, because the invention is always high risk and long payback period. However, the imbalance of learning ambidexterity does not mean that PIPD destroys the learning structure. PIPD prompts the firm to realize that learning ambidexterity is important, so as to reach complementarity through enhancing its weak capability.
Furthermore, firms that are committed to product innovation also have high EO generally. However, EO will lead the firm to focus more on new product development but relatively ignore the commercialization. Therefore, when PIPD is plus, EO may lead the firm managers to still make radical strategies that are contrary to employees′ desire for exploitative learning. It is likely to cause employees′ negative emotions in learning. Based on this, this paper introduces the theory of reasoned action to explain the possible inconsistencies between strategic orientation and employees′ behavioral intention.
Using the effective questionnaire data of 257 domestic manufacturing firms to test the theoretical model, the results show that: (1) PIPD negatively influences the balance of learning ambidexterity, and positively influences its complementarity. (2) When PIPD is plus, EO will strengthen the negative relationship between plus PIPD and the balance of learning ambidexterity, meanwhile weakening the positive relationship between plus PIPD and the complementarity of learning ambidexterity. (3) When PIPD is minus, EO will weaken the negative relationship between minus PIPD and the balance of learning ambidexterity, meanwhile strengthening the positive relationship between minus PIPD and the complementarity of learning ambidexterity.
The paper expects to make three contributions. First, the paper expands product innovation research to construct the concept of "product innovation performance deviation" which can reflect the relative level of each required capability in the product innovation process. New product development or commercialization, the weakness of any aspect is bound to affect the overall achievement of product innovation. As an evaluation of the product innovation outcomes and construction of the targeted capabilities required by the firms, PIPD can provide a new theoretical perspective for product innovation research.
Second, the paper enriches the research on antecedents of learning ambidexterity. Existing studies are mainly based on exogenous variables to discuss the passive change of learning ambidexterity. This paper takes PIPD as an internal driving factor, believing that the outcomes of product innovation can prompt firms to adjust the structure of learning ambidexterity actively.
Third, the paper proposes the double-edged sword effects of entrepreneurial orientation and promotes the application of the reasoned action theory at the firm level. Current research mainly emphasizes the positive effects of EO on firms′ new product development. However, if a firm′s commercialization capability is weak, excessive EO may become an obstacle to the improvement of the capability.
This paper also provides some practical implications. Under the strategy of the "Made in China 2025", Chinese manufacturing firms not only need to improve their independent innovation capability but also have to pay attention to the commercialization part. Meanwhile, firm managers also need to objectively analyze the firms′ strengths and weaknesses to develop appropriate strategies rather than blindly follow the trend of the markets.

Key words: product innovation, new product development, innovation achievement transformation, learning ambidexterity, entrepreneurial orientation

Liu Ruijia, Yang Jianjun, Deng Cheng. Product innovation performance deviation, learning ambidexterity and entrepreneurial orientation[J]. Science Research Management, 2021, 42(3): 180-190.

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