Kwaku Atuahene-Gima and Janet Y. Murray
Executive Summary
A critical determinant of new technology firms’ performance and survival in emerging countries such as China is successful new product development (NPD). Because new technology firms are confronted with substantial resource constraints and predisposed to liabilities of newness, their ability to explore and exploit knowledge for NPD represents a decisive factor in their survival. Researchers have emphasized that new venture top management team’s (TMT) behavior affects product effectiveness. Thus, it is crucial to examine TMT learning in the NPD context in order to understand how NPD provides value to new ventures. Based on social capital theory, Atuahene-Gima and Murray developed a theoretical framework that examined the differential effects of the structural, relational, and cognitive dimensions of social capital on exploratory and exploitative learning in NPD in new ventures in China. Their findings suggest that different dimensions of social capital are indeed significantly related to the level of exploratory and exploitative learning. Their results also support the argument that new technology ventures need a balance of exploratory and exploitative learning to enhance performance. Thus, managers from multinational firms operating in China should be aware of the important role of social capital in enhancing new product performance.
The sampling frame for the study was new technology ventures located in the industrial parks in Guangdong province in China, where many foreign-owned and local new technology ventures have been established to develop new products both for the domestic and international market. A trained interviewer administered the questionnaire on site. Data were obtained from 179 firms, with half of the sample from the electronic information industry and the remaining from non-electronic information industry.
Atuahene-Gima and Murray provide important managerial implications. Their study has confirmed that investing in internal and external social capital, especially in a country like China, ultimately enhances new product performance. To facilitate both exploitative and exploratory learning, managers in new ventures should understand that organizational politics affect the level of learning. In addition, managers should strive to cultivate relationships with individuals both inside and outside their own industries to increase their current knowledge and acquire new ones outside their domain of knowledge. Finally, managers should promote the importance of trust and solidarity among team members by providing opportunities for social interactions and sharing the firm’s vision.
Biography
Kwaku Atuahene-Gima is Professor of Marketing and Innovation Management at the China Europe International Business School (CEIBS) in Shanghai. He was formerly Professor of Innovation Management and Marketing, head of the Department of Management (1996 – 1999), founder and Director of the Center for Innovation Management and Organizational Change at the City University of Hong Kong. He received his Bachelor of Science (Honors) (Business Administration) from the University of Ghana, Master of Commerce (Marketing) from the University of New South Wales, and Ph.D. (Innovation Management and Marketing) from the University of Wollongong. He is an Honorary Professor of Remin University, Beijing. He has also taught at Queensland University of Technology and University of Wollongong. Prior to academia, he held executive positions in product development, distribution, marketing and materials management in the pharmaceutical industry for several years. Kwaku’s teaching and research interests focus on innovation management, creativity, marketing innovation, and product development.
Janet Y. Murray is E. Desmond Lee Professor for Developing Women Leaders and Entrepreneurs in International Business at the University of Missouri-St. Louis. She received her Ph.D. in marketing from the University of Missouri–Columbia in 1992. Murray has taught courses in marketing and international business at the undergraduate, Master’s and doctoral levels. She has previously held faculty positions in marketing and international business at Saint Louis University, Cleveland State University, and City University of Hong Kong. Murray's research interests focus on global sourcing and international marketing strategies, international strategic alliances, learning and knowledge transfer, and competitive strategy in transitional economies. Her research has appeared in journals such as Journal of Marketing, Strategic Management Journal, Journal of International Business Studies, Journal of Business Research, Journal of International Marketing, Journal of World Business, Industrial Marketing Management, Journal of Business Research, Management International Review, International Marketing Review, and others. She was a recipient of four Best Paper Awards.
Journal of International Marketing, Vol. 15, No. 2, June 2007
View Table of Contents.