The degree to which the research and development (R&D) department is regarded as more important for product innovativeness than is marketing, with greater potential to influence innovation decisions, appears ambiguous. This study examines how R&D’s level of power, relative to marketing’s, affects product program newness and meaningfulness, and thus market and financial performance. Relying on the motive of enhancement, this study reveals two underlying mechanisms to explain considerations of R&D and marketing depending on R&D’s power. A multi-informant sample of top executives and subordinates from 229 firms indicates distinct effects of R&D’s relative power on product program newness and meaningfulness. Specifically, R&D power exhibits a positive linear relationship with product program newness but a nonlinear effect with meaningfulness. To expand market and financial performance, firms should seek to generate meaningful product innovations through a moderate level of relative R&D power, particularly when their environments are characterized by high competitive intensity.
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The authors thank Gisela Bieling, Lisa Scheer, and Nicolas Zacharias for their helpful comments. Financial support from the Förderverein für Marktorientierte Unternehmensführung, Marketing und Personalmanagement e.V. (Association of Supporters of Market-Oriented Management, Marketing, and Human Resource Management) is gratefully acknowledged. We thank four anonymous reviewers for their insightful comments and suggestions throughout the review process.
Appendix: Items and scale sources
Appendix: Items and scale sources
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Stock, R.M., Reiferscheid, I. Who should be in power to encourage product program innovativeness, R&D or marketing?. J. of the Acad. Mark. Sci. 42, 264–276 (2014). https://doi.org/10.1007/s11747-013-0354-5
- Relative R&D power
- Product program innovativeness
- Nonlinear effects
- Motive of enhancement