Skip to main content
SpringerLink
Log in

Entrepreneurial firms’ network competence, technological capability, and new product development performance

  • Published:
Asia Pacific Journal of Management Aims and scope Submit manuscript

Abstract

Successfully developing new products is critical to an entrepreneurial firm’s continued success. Based on the resource management model, this study aims to answer the key research question: how entrepreneurial firms leverage network competence and technological capability to enhance their new product development (NPD) performance in a turbulent environment. Using data collected from 134 entrepreneurial firms in China, we investigate the performance effects of network competence and technological capability, and the moderating effects of technological turbulence and market turbulence. Our findings show that network competence has a positive impact on NPD performance and technological capability plays a mediating role between network competence and NPD performance. Technological turbulence enhances the performance effects of network competence and technological capability; market turbulence advances the performance effect of network competence, but fails to exert significant negative impact on that of technological capability. We discuss managerial implications of our findings and offer directions for future research.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

References

  • Afuah, A. 2002. Mapping technological capabilities into product markets and competitive advantage: The case of cholesterol drugs. Strategic Management Journal, 23(2): 171–179.

    Article  Google Scholar 

  • Ahlstrom, D. 2010. Innovation and growth: How business contributes to society. Academy of Management Perspectives, 24(3): 10–23.

    Google Scholar 

  • Ahlstrom, D., & Bruton, G. D. 2002. An institutional perspective on the role of culture in shaping strategic actions by technology-focused entrepreneurial firms in China. Entrepreneurship Theory and Practice, 26(4): 53–69.

    Google Scholar 

  • Akgün, A. E., & Lynn, G. S. 2002. Antecedents and consequences of team stability on new product development performance. Journal of Engineering Technology Management, 19: 263–286.

    Google Scholar 

  • Anderson, J. C., & Gerbing, D. W. 1988. Structural equation modeling in practice: A review and recommended two-step approach. Psychological Bulletin, 103(3): 411–423.

    Article  Google Scholar 

  • Anderson, P., & Tushman, M.L. 1990. Technological discontinuities and dominant designs: a cyclical model of technological change. Administrative Science Quarterly, 35: 604–633.

    Google Scholar 

  • Barney, J. B. 1991. Firm resources and sustained competitive advantage. Journal of Management, 17(1): 99–120.

    Article  Google Scholar 

  • Barney, J. B., & Arikan, A. M. 2001. The resource-based view: Origins and implications. In M. A. Hitt, R. E. Freeman, & J. S. Harrison (Eds.). Handbook of strategic management: 124–188. Oxford: Blackwell.

    Google Scholar 

  • Baron, R. M., & Kenny, D. A. 1986. The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6): 1173–1182.

    Article  Google Scholar 

  • Bruton, G. D., Ahlstrom, D., & Obloj, K. 2008. Entrepreneurship in emerging economies: Where are we today and where should the research go in the future? Entrepreneurship Theory and Practice, 32(1): 1–14.

    Google Scholar 

  • Calantone, R., Garcia, R., & Dröge, C. 2003. The effects of environmental turbulence on new product development strategy planning. Journal of Product Innovation Management, 20(2): 90–103.

    Article  Google Scholar 

  • Christensen, C. M., & Raynor, M. E. 2003. The Innovator’s Solution: Creating and Sustaining Successful Growth. Boston: Harvard Business School Press.

  • Cohen, W. M., & Levinthal, D. A. 1990. Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(1): 128–152.

    Article  Google Scholar 

  • Deng, Z. L., Hofman, P. S., & Newman, A. 2013. Ownership concentration and product innovation in Chinese private SMEs. Asia Pacific Journal of Management, 30(3): 717–734.

    Article  Google Scholar 

  • Eisenhardt, KM & Martin, JA. (2000). Dynamic capabilities: What are they?. Strategic Management Journal, 21(10–11): 1105–1121.

    Google Scholar 

  • Fransman, M. 1989. Conceptualizing technological change in the third world in the 1980s: An interpretive survey. Journal of Development Studies, 21(4): 572–652.

    Article  Google Scholar 

  • Grant, A.M. 2013. Give and take: A revolutionary approach to success. New York: Viking.

  • Grant, R. M. 1991. The resource-based theory of competitive advantage: Implications for strategy formulation. California Management Review, 33(3): 114–135.

    Article  Google Scholar 

  • Hair, J. F., Jr., Anderson, R. E., Tatham, R. C., & Black, W. C. 1998. Multivariate data analysis. Upper Saddle River, NJ: Prentice-Hall.

  • Han, J. K., Kim, N., & Srivastava, R. K. 1998. Market orientation and organizational performance: Is innovation a missing link?. Journal of Marketing, 62(10): 30–45.

    Article  Google Scholar 

  • Hsu, Y. H., & Fang, W. C. 2009. Intellectual capital and new product development performance: The mediating role of organizational learning capability. Technological Forecasting & Social Change, 76: 664–677.

    Article  Google Scholar 

  • Jaworski, B. J., & Kohli, A. K. 1993. Market orientation: Antecedents and consequences. Journal of Marketing, 57(3): 53–70.

    Article  Google Scholar 

  • Jeong, I., Pae, J. H., & Zhou, D. S. 2006. Antecedents and consequences of the strategic orientations in new product development: The case of Chinese manufacturers. Industrial Marketing Management, 35: 348–358.

    Article  Google Scholar 

  • Kohli, A. K., & Jaworski, B. J. 1990. Market orientation: The construct, research propositions, and managerial implications. Journal of Marketing, 54: 1–18.

    Article  Google Scholar 

  • Lavie, D. 2006. Capability reconfiguration: An analysis of incumbent responses to technological change. Academy of Management Review, 31(1): 153–174.

    Article  Google Scholar 

  • Li, C. R., Chu, C. P., & Lin, C. J. 2010. The contingent value of exploratory and exploitative learning for new product development performance. Industrial Marketing Management, 39: 1186–1197.

    Article  Google Scholar 

  • Lin, P. 2009. The regulating role of environmental turbulence: An empirical study of the relationship between dynamic capabilities and performance. Journal of Shanghai University (Social Sciences), 16(6): 66–77.

    Google Scholar 

  • Lynn, G. S., Abel, K. D., Valentine, W. S., & Wright, R. C. 1999. Key factors in increasing speed to market and improving new product success rates. Industrial Marketing Management, 28: 320–329.

    Google Scholar 

  • Nunnally, J. C. 1978. Psyochomatric theory. New York: McGraw-Hill.

    Google Scholar 

  • Ortega, M. J. R. 2010. Competitive strategies and firm performance: Technological capabilities’ moderating roles. Journal of Business Research, 63: 1273–1281.

    Article  Google Scholar 

  • Pangarkar, N., & Wu, J. 2013. Alliance formation, partner diversity, and performance of Singapore startups. Asia Pacific Journal of Management, 30(3): 791–807.

    Article  Google Scholar 

  • Peng, M. W. 2003. Institutions, institutional change and economic performance. Academy of Management Review, 28: 275–296.

    Google Scholar 

  • Priem, R. L., & Butler, J. E. 2001. Is the resource-based view a useful perspective for strategic management research?. Academy of Management Review, 26(1): 22–40.

    Article  Google Scholar 

  • Ritter, T. 1999. The networking company: Antecedents for coping with relationships and networks effectively. Industrial Marketing Management, 28(5): 467–479.

    Article  Google Scholar 

  • Ritter, T., & Gemünden, H. G. 2003. Network competence: Its impact on innovation success and its antecedents. Journal of Business Research, 56: 745–755.

    Article  Google Scholar 

  • Ritter, T., & Gemünden, H. G. 2004. The impact of a company’s business strategy on its technological competence, network competence and innovation success. Journal of Business Research, 57: 548–556.

    Article  Google Scholar 

  • Sirmon, D. G., & Hitt, M. A. 2003. Managing resources: Linking unique resources, management and wealth creation in family firms. Entrepreneurship: Theory and Practice, 27: 339–358.

    Google Scholar 

  • Sirmon, D. G., Hitt, M. A., & Ireland, R. D. 2007. Managing firm resources in dynamic environments to create value: Looking inside the black box. Academy of Management Review, 32(1): 273–292.

    Article  Google Scholar 

  • Slater, S. F., & Narver, J. C. 1994. Does competitive environment moderate the market orientation performance relationship?. Journal of Marketing, 58(1): 46–55.

    Article  Google Scholar 

  • Song, M., & Di Benedetto, C. A. 2008. Supplier’s involvement and success of radical new product development in new ventures. Journal of Operations Management, 26: 1–22.

    Article  Google Scholar 

  • Song, M., Dröge, C., Hanvanich, S., & Calantone, R. 2005. Marketing and technology resource complementarity: An analysis of their interaction effect in two environmental contexts. Strategic Management Journal, 26(3): 259–276.

    Article  Google Scholar 

  • Song, X. M., Montoya-Weiss, M. M., & Schmidt, J. B. 1997. The pole of marketing in developing successful new products in South Korea and Taiwan. Journal of International Marketing, 5(3): 47–69.

    Google Scholar 

  • Song, X. M., & Parry, M. E. 1997. A cross-national comparative study of new product development processes: Japan and the United States. Journal of Marketing, 61(2): 1–18.

    Article  Google Scholar 

  • Su, Z. F., Peng, J. S., Shen, H., & Xiao, T. 2013. Technological capability, marketing capability, and firm performance in turbulent conditions. Management and Organization Review, 9: 115–137.

    Article  Google Scholar 

  • Tsai, K. H. 2004. The impact of technological capability on firm performance in Taiwan’s electronics industry. Journal of High Technology Management Research, 15(2): 183–195.

    Article  Google Scholar 

  • Teece, D. J., Pisano, G., & Shuen, A. 1997. Dynamic capabilities and strategic management. Strategic Management Journal, 18(7): 509–533.

    Article  Google Scholar 

  • Wei, J. 2000. Development and review of the research on the enterprise’s technological capability. Science Management Research, 5: 20–23.

    Google Scholar 

  • Zahra, S., & George, G. 2002. Absorptive capacity: a review, reconceptualization and extension. Academy of Management Review, 27(2): 185–203.

    Google Scholar 

  • Zhan, W., & Chen, R. 2013. Dynamic capability and IJV performance: The effect of exploitation and exploration capabilities. Asia Pacific Journal of Management, 30(2): 601–632.

    Article  Google Scholar 

  • Zhao, X. Q., & Xu, Q. R. 2001. Evaluation of technological capability: Theory and method. Science of Science and Management of S&T, 4: 64–67.

    Google Scholar 

  • Zhao, X. Q., & Xu, Q. R. 2006. Research on spiral process of technological capability’s accumulative path. Science Research Management, 1: 40–46.

    Google Scholar 

  • Zhou, K. Z. 2006. Innovation, imitation, and new product performance: The case of China. Industrial Marketing Management, 35(3): 394–402.

    Google Scholar 

Download references

Acknowledgments

The authors would like to thank Rae Pinkham and Marc Ahlstrom of Burlington County College for their editorial and research assistance. This research was partially supported by the China Natural Science Foundation (71202160 and 71272175), China Postdoctoral Fund (2012M520758), Heilongjiang Postdoctoral Fund (LBH-Z12103) and the Fundamental Research Funds for the Central Universities under Grant No. HIT.NSRIF.2010085 and HIT.HSS.201101.

Author information

Authors and Affiliations

  1. School of Management, HIT-UMKC Institute for Entrepreneurship and Innovation, Harbin Institute of Technology, Harbin, People’s Republic of China

    Bo Yu, Shengbin Hao & Dapeng Liang

  2. Department of Management, The Chinese University of Hong Kong, Shatin, NT, Hong Kong

    David Ahlstrom

  3. School of Management, Tongji University, Shanghai, People’s Republic of China

    Steven Si

Authors
  1. Bo Yu
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Shengbin Hao
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. David Ahlstrom
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Steven Si
    View author publications

    You can also search for this author in PubMed Google Scholar

  5. Dapeng Liang
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Shengbin Hao.

Appendix A Study measures

Appendix A Study measures

The Cronbach’s alpha of constructs and factor loadings of the items are shown in parentheses.

  1. 1.

    Network competence (Cronbach’s alpha = .82)

    Network management task execution (1 = not at all, 5 = very intensive)

    To what extent are the following activities performed?

    NMTE1:

    Planning (.79)

    NMTE2:

    Organization (.60)

    NMTE3:

    Controlling (.64)

    NMTE4:

    Coordination (.75)

    Network management qualifications (1 = not at all, 5 = to a very high degree)

    To what extent do the people performing the above activities have the following qualifications?

    NMQ1:

    Special qualifications (.83)

    NMQ2:

    Social qualifications (.78)

  2. 2.

    Technological capability (1 = very low, 5 = very high, Cronbach’s alpha = .88)

    Human resources capability

    HC1:

    Number of scientific and technical personnel (.78)

    HC2:

    Number of senior technicians (.61)

    HC3:

    Cultural level of employees (.64)

    Equipment capability

    EC1:

    Number of equipment at international advanced level (.76)

    EC2:

    Soundness of the current equipment (.64)

    Information capability

    IC1:

    Level of information network (.73)

    IC2:

    Number of technical files (.74)

    IC3:

    Degree of technical file meets R&D demand (.69)

    Organization capability

    OC1:

    Quality and experience of management (.83)

    OC2:

    Number of agencies at all levels engaged in R&D (.84)

    OC3:

    R&D funding availability (.73)

  3. 3.

    Technological turbulence (1 = strongly disagree, 5 = strongly agree, Cronbach’s alpha = .78)

    TT1:

    The technology in our business is changing rapidly (.76)

    TT2:

    Technological changes provide big opportunities in our industry (.87)

    TT3:

    Many product ideas are made possible from technological breakthroughs (.86)

  4. 4.

    Market turbulence (1 = strongly disagree, 5 = strongly agree, Cronbach’s alpha = .74)

    MT1:

    In our business, customer's product preferences change a lot over time (.70)

    MT2:

    Our customer tends to look for new product all the time (.83)

    MT3:

    We see demand for our products and services from new customers (.76)

  5. 5.

    NPD performance (1 = highly dissatisfied, 5 = highly satisfied, Cronbach’s alpha = .81)

    NPD1:

    Contribution of new products to overall profit margin (.79)

    NPD2:

    Attaining profitability goals (.83)

    NPD3:

    Customer acceptance of new products (.78)

    NPD4:

    Time from specs to full commercialization (.79)

Rights and permissions

Reprints and permissions

About this article

Cite this article

Yu, B., Hao, S., Ahlstrom, D. et al. Entrepreneurial firms’ network competence, technological capability, and new product development performance. Asia Pac J Manag 31, 687–704 (2014). https://doi.org/10.1007/s10490-013-9365-5

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10490-013-9365-5

Keywords

Search

Navigation