New product success: is it really controllable by managers in highly turbulent environments?

Abstract

This research proposes and tests a model of direct and indirect effects linking four antecedents to new product success: (1) a proactive strategic orientation along with enabling (2) organic organizational structures should lead to more (3) innovativeness and (4) market intelligence. Innovativeness and market intelligence should in turn lead to greater new product success. The relationships among the four antecedents are not hypothesized to be moderated by environmental turbulence because their domain is intraorganizational. However, the relationships from intraorganizational constructs to new product success are hypothesized to be moderated by environmental turbulence because success depends in part on the environment in which the new product must compete. The model was tested using a sample composed of 202 small business units of manufacturers on the Fortune 500. The sample was heavily involved in new product development: Their average annual research and development budget was $360.4 million, and approximately 8.2% of sales came from products introduced in the last five years. A two-group structural equation model analysis supports the moderation model overall and reveals the pattern of direct, indirect, and total effects. The results show that innovativeness (but not market intelligence) directly predicts new product success when turbulence is high, whereas market intelligence (but not innovativeness) directly engenders new product success in low turbulence. Environmental turbulence also affects the total indirect impact of strategy proactiveness and organizational organicity on new product success. These indirect effects operate through innovativeness and market intelligence as complete mediators.