Although there are opposing theoretical arguments on the relationship between the strength of a country's employment protection laws (EPLs) and innovation, empirical evidence tilts towards a positive relationship. However, research has mainly focused on the early stages of the innovation process, such as R&D and patenting. This study examines the role of EPLs in the later stages of the innovation process: the commercialization of new products. In particular, we focus on EPLs' relationship with two different new product commercialization outcomes: the launch and subsequent sales of new products. Using data on small European firms, we find that, controlling for invention, stricter EPLs are negatively associated with firms' likelihood of launching new products, but positively associated with the sales from new products. We discuss the implications of our results for theory and practice.

Prior research has documented the importance of the breadth and depth of external knowledge search for firms’ innovation performance. Still, most studies have focused on countries with abundant knowledge. We replicate and extend Laursen and Salter’s 2006 UK study using multiple EU multi-country datasets, which include countries with varying knowledge environments. Consistent with L&S, we find positive innovation performance effects of search breadth and depth, with diminishing returns. Adding to extant research, we find that the effect of search breadth is weaker in countries where knowledge is less abundant. We fail to find such systematic differences for search depth. Overall, by theoretically and empirically taking the firm’s national knowledge environment into account, we expand the environmental munificence perspective to the literature on open innovation.

Research Summary Building on the attention-based view of the firm, we elaborate the concept of dynamic capabilities and identify two constitutive elements: attention control and problem-solving. We show empirically that the control element of dynamic capabilities regulates how organizations (dis-)engage attention on operational versus change-oriented tasks. On this basis, we develop a process model of how control and problem-solving interact to reconfigure resources and thus modify ordinary capabilities. We study the adoption of lean management in the R&D unit of a large U.S. corporation. Our longitudinal case study identifies obstacles that organizations have to overcome to establish effective dynamic capabilities that enable their adaptation to changing environmental circumstances. Managerial Summary "The vast majority of all change initiatives fail": We hear this statement a lot in our interactions with practitioners. In this article, we suggest an explanation of why achieving persistent, behavioral change is hard: attention to change processes is difficult to maintain over an extended period of time. Initiatives start, then fade away. By studying the interplay of control mechanisms (that keep organizational attention on the long-term goals) and problem-solving tools (that identify what and how to change in the short term), we provide a framework that can generate actionable implications for executives. In particular, we focus on the decisive and yet underestimated role played by key performance indicators in sustaining attention on change initiatives.

The concept of market orientation comprises four components: customer and competitor orientations, each with a proactive and responsive dimension. Studies have considered both responsive and proactive customer orien-tation. Competitor orientation, however, has been investigated more narrowly. Research has focused specifically on its responsive dimension, a firm's posture of quickly responding to its competitors' actions and their offerings; but has largely disregarded proactive competitor orientation, a firm's posture towards altering the market's competitive behavior in its favor. This study investigates the role of responsive and proactive competitor orientation on influencing innovation and firm performance, as well as the mediating effects of technology and learning orientation. Utilizing a unique dataset that combines primary and time-lagged secondary data from 306 firms, we find that both responsive and proactive competitor orientation are observable drivers of performance in the market, but in notably different ways. Proactive competitor orientation drives innovation performance, directly and through technology orientation. Responsive competitor orientation, instead, enhances firm per-formance through learning orientation. By providing insights about the proactive side of competitor orientation, this study supplements and completes the so called "market orientation matrix". This framework provides guidance for leaders to develop and manage a practical application of, and future research on market orientation.

To date, we lack a detailed theoretical and empirical understanding of the country-level factors that influence firms’ commercialization (success) of new innovations. Building on a stakeholder-power perspective, we propose that country-level laws protecting the interests of stakeholder groups (i.e., employees, creditors, shareholders) differently impact the probability that a firm introduces new innovations to the market, as well as the turnover resulting from these innovations. Empirically, we use a data from 6,316 small, independent, manufacturing firms from 12 European countries. We find that more stringent employment and creditor protection has a negative effect on the probability that a firm introduces a new innovation to the market. However, both laws have a positive influence on the commercialization performance of new innovations once introduced to the market. Taken together, these findings deepen our understanding of how country-level factors such as stakeholder protection laws impact the commercialization (success) of new innovations.

Scholars have argued that the exploitation–exploration interaction provides a source of competitive advantage beyond that provided by each individually. However, we know little about the mutual effects of exploitation and exploration on either incremental or radical innovation performance. To address this gap, we examine data from 171 manufacturing firms. We find incremental innovation performance is highest when exploitation interacts with an intermediary level of exploration. Radical innovation performance, however, is solely driven by exploration. A coupling with exploitation is not effective. We contribute to the extant literature, first, by disentangling the interaction effects of exploitation and exploration on radical and incremental innovation performance, respectively. Second, we extend extant literature that agrees that maintaining an appropriate balance of exploitation and exploration is critical for innovation performance and that has conceptualized this balance as symmetrical presence and magnitude of exploitation and exploration. In particular, we provide evidence in support of an asymmetric relationship.

This article studies how a world-leading technology-intensive firm organized to renew its architectural knowledge (AK) to escape the mirroring trap. On the strength of a longitudinal, in-depth, qualitative study, we develop a process model that identifies the phases, learning modes, and core design decisions that led to new AK. The analysis of our case highlights that the development of architectural and component knowledge could not be perfectly separated. Further, we infer that the renewal of AK can be attained through partial mirroring and by dissolving extant technical and organizational boundaries. Finally, we show how resource constraints affect the extent of AK generation.

Proactive Competitor Orientation is conceptually and empirically the most underdeveloped component of strategic orientation. In this paper, we theoretically develop, measure and inves-tigate Proactive Competitor Orientation and its relationships with other strategic orientation factors. We empirically test our model with data from 306 firms. The results reveal positive ef-fects of Proactive Competitor Orientation on multiple measures of performance. We also identi-fy Technology Orientation as a mediator between Proactive and Risk orientation and R&D per-formance, while Learning Orientation is a mediator of the relationship between reactive Market Orientation constructs and R&D performance. R&D performance mediates the relationship be-tween Technology Orientation and firm performance, but it does not mediate the relationship between Learning Orientation and firm performance. Our study provides an enhanced founda-tion for the continued theoretical development of strategic orientation, and allows for future research to build a greater understanding of how the various component concepts can be de-ployed in the marketplace.

As organisational governance has evolved from hierarchical structures to relational networks, project-based alliances are increasingly employed by automakers as part of their innovation strategy. In this study, we explore characteristics of different types of project-based alliances in the automotive industry. Employing dyadic data drawn from 59 new product development project-based alliances undertaken by two firms, we are able to discern the relevant characteristics of product, process, and software development projects. Our results suggest very different characteristics for each project type, with products and software presenting contrary results across almost all characteristics. Characteristics of process-focused projects are unique from either product and software alliance-based projects.

Prior research has identified set-based design as a method that accounts for the high level of uncertainty that is associated with the design of innovative products or systems. Rather than precisely specifying a system architecture in the early design stages, set-based design builds on designing a system and its architecture in an evolutionary way. The literature on set-based design has studied how a system's design evolves by moving from a number of optional design ideas to the final system through gradually eliminating unfeasible design ideas and continually developing design ideas for which engineers increasingly establish feasibility. However, little is known about how firms set up the design process and the organization to successfully create new products with set-based design. Our research contributes to closing this gap. First, we study how firms determine the number (i.e., portfolio) of design ideas to pursue, an important step of the early design process. Second, we study how firms organize for set-based design by assigning teams to develop design ideas and eventually design a system's architecture. Our research uses an exploratory case study approach, investigating five cases in three different firms. First, we find that the early design process is characterized by the absence of formal idea evaluation and selection. Instead, firms start to pursue all initially created design ideas, evaluating and selecting them in an evolutionary manner as the design project progresses. Second, we identify two organizational approaches associated with set-based design: assign one team to pursue all ideas or assign one team per design idea.

Innovations in the automotive industry are increasingly building on contributions from different technological fields. Correspondingly, firms in this industry more than ever tend to form research and development (R&D) alliances that aim at innovating new products through integrating separate fields and transferring knowledge. While, in symmetrical R&D alliances, each partner intends to ultimately maintain their distinctive and specialized knowledge base, overlapping knowledge facilitates cooperation and ultimately alliance success. Thus, the capability for knowledge transfer between partners is crucial in such R&D alliances. The literature provides ample evidence that such knowledge transfer is more likely to succeed if the recipient firm has absorptive capability. However, whereas the characteristics of the knowledge transfer process and the recipient firm are well understood, limited attention has so far been given to the issue of the knowledge source firm's ability to transfer knowledge to R&D alliance partners. This study focuses on the impact of source firm capability on successful knowledge transfer in R&D alliances. The study develops a theoretical framework of disseminative capability consisting of five dimensions and tests it on a sample of 59 projects in R&D alliances in the automotive industry. To ensure content validity and avoid common source bias, data were collected from both alliance partners. To test the hypotheses, multiple regression analyses were performed. The results reveal that the source firm's disseminative capability including the attainment of expert knowledge, assessing the recipient firm's knowledge base, and encoding knowledge are positively related to knowledge transfer success, while, surprisingly, detaching knowledge and support of knowledge application in the recipient firm are negatively related. Intentionally or unintentionally, disseminating knowledge across firm boundaries is widely perceived as detrimental to a firm's competitive advantage. Accordingly, the literature tends to downplay disseminative capability as an important means of exploiting external knowledge in collaborative settings. By demonstrating potential benefits for the source firm to transfer knowledge to the allying R&D partner firm, this paper reinvigorates the collaborative dimension in knowledge transfer. Further, the paper is the first of this kind to theoretically explain and empirically show that dimensions of disseminative capability of collaborators in R&D alliances are important for knowledge transfer, whereas disseminative capability is the complementary inverse of an organization's absorptive capacity.

Organisational learning (OL) that enhances efficiency and the continuous improvement of processes is a key objective of lean product development and has become an important principle of new product development (NPD). Therefore, it is critical for an organisation to capture individuals’ and groups’ knowledge and learning about processes, institutionalise it, and deploy it organisation-wide. Since OL is more likely to occur if it is supported systematically, NPD scholars and practitioners recognise the importance of investigating facilitators’ effect on OL. However, there is no shared understanding of OL among existing studies. This disparity makes it hard to assess, compare, and integrate prior findings into studies. Our article addresses this gap. We investigate how value stream mapping (VSM) and its implementation in NPD affect OL in development processes. Therefore, we operationalise OL on the basis of Crossan et al .'s 4I framework, which is comprehensive and widely recognised (Crossan, M., Lane, H. and White, R., 1999. An organizational learning framework: from intuition to institution. The Academy of Management Review, 24(3), 522–537). We analysed the approach to VSM and its implementation in four longitudinal, comparative case studies in the German-speaking car supplier industry. Using the 4I framework, we captured VSM's effects on the various OL dimensions. We provide valuable insights for R&D managers who seek to improve their processes and want to implement VSM.

The alliance literature has recognized distance between partners' knowledge as important for innovation. However, theoretical reasoning as well as empirical results differ concerning the relationship of partners' knowledge base distance and innovation performance. We assume that the mixed results are caused by neglecting the role of relevant knowledge types. In this study, we examine the effect of technological and managerial knowledge distance on collaborative innovation performance. We examined 53 collaborative development projects and we find an inverse U-shaped relationship between technological knowledge distance and innovation performance, explained by the knowledge-based view and absorptive capacity. Our results also reveal that a short managerial knowledge distance is beneficial for innovation, which can be explained by transaction cost theory. Overall, our research helps to better explain knowledge distance's effect on collaborative innovation performance.

Lean development is a promising approach in new product development (NPD). However, despite the successful application of lean thinking and its principles to manufacturing, the adoption of the lean approach to product development is a quite novel undertaking. In this paper, we develop and test hypotheses pertaining to the elimination of waste, which is one of the major objectives of lean management. In particular, our study focuses on the question: What management factors are enablers for the elimination of waste in the context of NPD? We identified: 1 employee training 2 coaching 3 constructive failure treatment as effective means. Furthermore, implications for management practice are considered. Testing our hypotheses, we refer to data from 108 firms in the automotive supplier industry in German-speaking countries, i.e., Germany, Austria, Switzerland and Liechtenstein.

Alliance researchers agree that the selection of development partners in terms of the distance between their knowledge bases is critical. However, research results differ concerning the most effective distance between development partners’ knowledge bases. This paper strives for a more differentiated look at the knowledge base and, specifically, its content-related components. By drawing on theories of strategic alliances, innovation and knowledge-based view, we predict relations of knowledge distances of specific knowledge base components and innovation performance. We examined 53 development projects to determine the influence of development partners’ knowledge distance on innovation performance, focusing specifically on content-related knowledge base components. The findings reveal differences and suggest considering the distances of knowledge base components separately for partner selection. We highlight the implications for researchers and managers.