Market Orientation and Successful New Product Innovation: The Role of Competency Traps
A firm’s high degree of market orientation may create competency traps (also known as rigidities) that reduce new product innovation. Competency traps lead firms to fall unconsciously into adherence to routines and denial of the need for change. They lead them to rely on past successful processes that may no longer be optimal.
This study provides further theoretical development of the concept as well as empirical research. Market orientation is behaviors that create superior value for buyers and superior performance for business. It has three dimensions: (1) customer orientation, (2) competitor orientation, and (3) interfunctional coordination.
Capability-rigidity theory suggests that these three dimensions may create competency traps – i.e., vision traps, technology traps, and routinization traps. Data on market orientation and competency traps were collected from 113 marketing managers in high-tech industries in China and subjected to structural equation modeling and reliability test analysis.
Analysis also sought to discover whether entrepreneurial orientation and network learning may help highly market-oriented firms reduce the potential adverse effects of competency traps on new product innovation. A scale was developed to allow managers to diagnose the existence and level of competency traps.
It was found that market orientation has a stronger negative effect on technology traps (and none on vision and routinization traps) in highly entrepreneurial-oriented firms than in low entrepreneurial-oriented firms. A firm’s customer orientation was negatively associated with new product creativity, whereas competitor orientation and interfunctional coordination are positively associated with new product creativity.
Also found was that different competency traps have different effects on new production innovation: vision traps may harm new product creativity, whereas routinization may foster new product creativity and efficiency. In highly market-oriented firms, entrepreneurial orientation affects a firm’s technology decisions and leads firms to avoid falling into technology traps, but network orientation may still lead to “groupthink” and reliance on industry norms.
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