Impacts of environmental turbulence on entrepreneurial orientation and new product success

Abstract

Purpose – What leads to new product success (NPS) is a very complex issue. Although prior research widely demonstrates that entrepreneurial orientation (EO) is a determinant for NPS and environmental turbulence is a form of unpredictability which impacts on the success of a product, little research has been conducted to examine if and to what extent environmental turbulence induces the EO behaviors of a firm and how these behaviors contribute to NPS. The paper aims to discuss these issues. Design/methodology/approach – This study, which used data collected from 244 China-based electronics manufacturers, proposed and tested the theoretical relationships among the three constructs in the context of the electronics industry in China. Findings – Results revealed that the three dimensions of EO (innovativeness, proactiveness and risk-taking) drive NPS. Environmental turbulence strongly influenced all three dimensions of EO, though its influence on NPS was mixed as there existed a strong negative but insignificant direct association between the two constructs. Innovativeness, which was found to be most effective in driving NPS in the EO and NPS relationship, was relatively less responsive to environmental turbulence than proactiveness. The study confirmed the postulated role of environmental turbulence in inducing the EO behaviors of a firm, signaling environmental turbulence, if tactfully leveraged, can play a positive role in new product development (NPD). Research limitations/implications – The study is quantitative using data emanating from the electronics manufacturing industry in China, further empirical study would be useful to verify and complement the results in other industries and other countries. Originality/value – This study contributes to the scholarly inquiry of EO and NPD by exploring the influences of environmental turbulence and EO on NPS. As environmental turbulence induces EO and EO mediates the relationship between environmental turbulence and NPS, simultaneous consideration of these two constructs can lend useful insight into their joint impacts on NPD. Theoretical and managerial implications were examined and policy implications, especially the practicality of the findings to policymakers in China, were discussed.

How do firms achieve sustainability through green innovation under external pressures of environmental regulation and market turbulence?

“…Similarly, we believe that firms can cope with market turbulence through two forms of green innovation, green process and product innovation, and then improve their financial performance. It has been stated that "market turbulence breaks the status quo, steals customers, and forces firms to leave their comfort zone and provide new capabilities and products" (Wong, 2014). First, investing in green process innovation can encourage firms to master new technologies associated with less polluting production processes.…”

“…Hence, one of the key tasks of an enterprise is to satisfy its customers' demands as best as possible. Green process innovation can help firms improve their environmental image and cut production costs, but for customers, these benefits are not directly available (Turulja & Bajgoric, 2019;Wong, 2014). In contrast, when firms spend more on developing green products, they can offer customers better products and promote energy conservation and emission reduction (Melander, 2018).…”

“…Compared with green process innovation, developing new green products primarily focuses on satisfying the needs of end users (Demirel & Kesidou, 2019). Although the latter is more difficult and time consuming, its benefits are more visible and directly beneficial to customers (Chang, 2018;Turulja & Bajgoric, 2019;Wong, 2014). Thus, green product innovation is more likely to gain the trust of consumers, further enhances firms' financial performance, and finally helps firms effectively manage the pressures of market turbulence (Doran & Ryan, 2016;Xie, Huo, & Zou, 2019).…”

The role of technological capability in the internationalization of the company and new product success: a systematic literature review

“…Technological capability is the ability of the company to execute any relevant technical function, including the ability to develop new products, processes, and technological knowledge in order to obtain higher levels of organizational efficiency (Tsai, 2004). Through technological capability, the company can gain a competitive edge within the industry, particularly in a high-tech environment (Duysters & Hagedoorn, 2000;Afuah, 2002;Archibugi & Coco, 2004;Ortega, 2010), such as the chemical, electronic, or pharmaceutical industry (Schoenecker & Swanson, 2002;Tsai, 2004;Wong, 2014).…”

Orientasi Kewirausahaan, Orientasi Pasar, dan Kinerja Perusahaan

“…Proaktifitas perusahaan menentukan sikap pengembangan produk baru terhadap penciptaan gagasan inovatif dan mewujudkan ide-ide menjadi kenyataan. (Wong, 2014) Pengambilan risiko berbeda dari proaktif, karena dimensi ini mencerminkan kesediaan untuk menggunakan pendekatan baru, untuk merambah ke sesuatu yang tidak diketahui tanpa mengetahui kemungkinan keberhasilan. (Caseiro & Coelho, 2018).…”