The Effect and Antecedents of New Product Development Motivation and Capability Jane Zhao Clint Chadwick University of Kansas

The Big Question What organizational factors promote innovation?  Prior answers of this question in strategic management literature lie mostly in knowledge-based factors

What remain unclear are…  What is the role of unit-level motivation in new product development (NPD)?  The comparative importance between NPD motivation and NPD capability  What are the antecedents to NPD motivation?

Unit-level NPD Motivation Two key elements 1. Collective willingness to collaboratively share and recombine their knowledge  NPD team members need this motivation to overcome opportunistic tendency induced by interdependent team task knowledge specialization and communication/coordination difficulties induced by knowledge diversity 2. Collective willingness to take measured risks in order to generate and implement new product designs  NPD team members need this motivation to overcome natural tendency of risk aversion.

The Effect of Unit-level NPD Motivation H1. Unit-level NPD motivation has a positive effect on firms’ NPD performance

The Comparative Effect between Unit-level NPD Motivation and Unit-level NPD Capability H2. Unit-level NPD motivation has a stronger positive effect on firms’ NPD performance than unit-level NPD capability Rationales  Motivation is harder to develop and maintain, easier to damage, and harder to imitate  High motivation can make up for the lack of capability, but not vice versa

HR Antecedents to NPD Motivation H3. Reward & Recognition aimed at enhancing NPD  NPD motivation  Reward and recognition of NPD behaviors  Reward and recognition of based on NPD outcome H4. Staffing & Training aimed at enhancing NPD  NPD motivation  Continuity and rigor of staffing process  Training of work-specific and team skills

Antecedents to HR Practices Strategic orientation  General philosophy and direction held by top management  reflected by the top managers’ perceived importance of the speed and scope of new product development H5. SO toward innovation  adoption of Reward & Recognition practices aiming at enhancing NPD H6. SO toward innovation  adoption of Staffing & Training practices aiming at enhancing NPD

Hypothesized Model H1 and H2H5 and H6H3 and H4

Sample  105 Chinese automotive firms’ R&D units  Represent the entire population of assemblers  Mean firm revenues = $127 million U.S.D  Sponsored by Chinese Development and Reform Commission and Chinese Society of Automotive Engineering  Thus, 100% response rate and missing data < 3%  A third-party survey collecting agency and respondent confidentiality are used to avoid social desirability problem

Data Characteristics  Multiple-respondent survey conducted in 2007  Within each firm, a senior manager, a NPD unit manager, a HR manager, and a key NPD engineer were surveyed on questions regarding NPD motivation, NPD capability, strategic orientation, and HR practices  NPD performance is archival from 2008  Revenue from new products over total revenue

Results Fit of the measurement model: CFI=0.95, RMSEA=0.60 Fit of structural model: CFI=0.93, RMSEA = Motivation-Performance link is stronger than capability- performance link with p<0.001

Conclusions  Unit-level NPD motivation has a stronger effect than NPD capability on NPD performance  HR practices are key organizational factors that enable and motivation NPD  Strategic orientation is a key antecedent to HR practices