Strategic Orientation, Digital Capabilities, and New Product Development in Emerging Market Firms: The Moderating Role of Corporate Social Responsibility

Abstract

Strategic orientation represents an important antecedent condition for new product development (NPD) performance, which can help firms create competitive advantage and promote sustainable growth. This study aims to explore the role of strategic orientation (i.e., technology orientation, customer orientation) in promoting firms’ digital capabilities and NPD performance in the context of digital transformation. Using a resource-based view and its extended dynamic capabilities as a theoretical foundation, we provide a comprehensive framework by developing a set of hypotheses. In addition, we examine the moderating effect of corporate social responsibility (CSR) on the relationship between strategic orientation and NPD performance. Using data from a sample of 174 Chinese manufacturing firms, we perform structural equation modelling to empirically test our arguments. Our findings show that technology orientation and customer orientation play a critical role in driving firms’ digital capabilities. Moreover, we find that the two dimensions of strategic orientation tend to exert different effects on NPD performance, with technology orientation playing a more significant role than customer orientation in contributing to NPD performance. Finally, our findings strongly suggest that a firm’s CSR engagement moderates the relationship between its customer orientation and NPD performance, such that the higher the firm’s engagement in CSR, the greater the contribution of customer orientation to the firm’s NPD performance. Our findings provide new insights into non-market mechanisms such as CSR through which firms can compensate for their strategically oriented practices in the NPD process.

Influence of Digital Transformation Capability on Operational Performance

“…Technology orientation is very important for enterprises wanting to develop a digital transformation capability. This is similar to the results of Pan et al [33] and Lin and Kunnathur [34]. Pan et al [33] examined the relationship between two important types of strategic orientation, such as technology orientation and customer orientation, on new product performance in the context of digital transformation.…”

“…This is similar to the results of Pan et al [33] and Lin and Kunnathur [34]. Pan et al [33] examined the relationship between two important types of strategic orientation, such as technology orientation and customer orientation, on new product performance in the context of digital transformation. Moreover, as the new generation of digital technologies today facilitate rapid development of the digital economy, technology-oriented enterprises are more conducive to new product performance and are important drivers of superior corporate performance.…”

“…They conceptualized customer orientation as an enterprise's capacity to create and deliver superior customer value through the processing of market intelligence, as demonstrated by the enterprise's composite operational resources of market-sensing, customer-relating, and customer-response capabilities. Pan et al [33] used the resource-based view and its extended dynamic capability as a theoretical foundation, explored the role of strategic orientation (technology orientation and customer orientation) in promoting enterprises' digital capabilities, and new product development in the context of digital transformation.…”

“…In their research on strategic orientation, digital capabilities, and new product development in emerging market enterprises, Pan et al [33] carried out structural equation modeling by using sample data from Chinese manufacturing enterprises to empirically test their arguments. They found that technology orientation and customer orientation play a critical role in driving an enterprise's digital capability.…”

“…Pan et al [33], based on previous RBV research, defined digital capability with a flexible IT infrastructure and an information management capability. They emphasized that a digital capability is the key capability of enterprises in a technological environment.…”