Based on the dynamic capability view, this study examined the balance between exploration and exploitation capability. With this, we proposed a framework that synthesizes the impact of new product creativity and marketing program creativity on new product quality (internal product quality and external product quality), and further understanding the path to performance of new products in a select number of industrial and consumer products. The main findings revealed that the effect of new product creativity in consumer product firms through internal and external product quality was less dominant than those in industrial product firms. In contrast, the effect of marketing program creativity in industrial product firms through only external product quality was less dominant than those in consumer product firms. Additionally, this paper also discusses the research limitations, future research directions, and theoretical and practical implications.
Product quality has been viewed as an important capability and exploration activity within an organization (Garvin, 1988). Generally, quality activity involves the following: the removal of unwanted variations, the enforcement of strict standards and controls, the application of the best practice, and the elimination of waste and errors (Garvin, 1984b). In addition, creativity is also seen as an important exploitation activity of firms because it involves exploring many radical and unorthodox ideas by deliberately deviating from existing standards and controls. This even involves experimenting with prototypes and devoting resources to projects which are likely to fail. Hence, product quality and creativity are considered as two opposing philosophies requiring very different mindsets and attitudes.
However, from the dynamic capability view, the dynamic processes of exploitation and exploration are the key sources of an organization's sustainable competitive advantage (SCA) (Eisenhardt and Martin, 2000, March, 1991 and Teece, Pisano, and Shuen, 1997). This distinction is drawn from March's (1991) view of exploitation as “the refinement and extension of existing competencies, technologies, and paradigms” and exploration as “experimentation with new alternatives that have returns that are uncertain, distant, and often negative.” Discussions on the relationship between exploration and exploitation competence (or capabilities) on a firm's performance have attracted much research interest (e.g., Menguc & Auh, 2008). However, relatively little is still known about the reasons why some firms were able to successfully use or balance their exploration and exploitation capabilities (i.e., product quality and creativity), while others were not able to do so. In addition, previous studies indicate that maintaining an appropriate balance between exploration and exploitation activity is a primary factor for the entirety of a firm's system survival and prosperity (March, 1991 and Rothaermel and Deeds, 2004).
Sethi, Smith, and Park (2001) suggest that the most important manifestation of creativity may be the success of product quality en route to the success of a new product. Miller (1993) argues that quality improvement is the application of creativity in solving problems in work processes to produce breakthroughs as well as incremental change. The creativity (or innovation) process would include a broader range of criteria in which creativity is linked with product quality (Atuahene-Gima, 2005 and Tatikonda and Montoya-Weiss, 2001). However, previous studies did not employ the antecedent factors perspective in examining the relationship between creativity and product quality. Furthermore, the exact conceptualizations and meaning of creativity to product quality are still unclear (Siguaw, Simpson, & Enz, 2006), and it need to be addressed along this line. With this, the first objective of the current study is to contribute to the literature by establishing the relationship among creativity, new product quality, and performance.
To date, however, there has been relatively little research conducted on the marketing of creativity impact on product quality as well as new product performance under multiple industries comparison (i.e., industrial and consumer product firms). Cho and Pucik (2005) argue that understand the potential stable characteristics of the company, analysis must first determine which of the target industry sectors affect the industry life cycle. Hence, this study's second objective is to examine the differential impacts of industrial characteristics (i.e., industrial and consumer product firms) on creativity and product quality relationships to performance.
Final objective of this study as Ozer (2006) points out that in the opportunity identification and idea generation stages of the NPD process, Asia can be a valuable source of ideas on new products for the future, which is not only for the Asian market but also for the rest of the world. Hence, this study promotes each construct relationship more stable that select the Taiwan's high technology industry research sample. Furthermore, Siu et al., 2006, Tu and Yang, 2008 and Yang and Kang, 2008 state those high-technology firms in Taiwan are highly adept and aggressively competitive in their NPD capabilities. Under such highly competitive environment, the findings of this study will help to clarify the relationship between each construct.
Overall, this study is to address these oversights and present a framework that synthesizes the available knowledge in the creativity and new product quality by further understanding the path to performance of new products. Specifically, this study investigates two facets of creativity, namely, new product creativity and marketing program creativity. Then the paper proceeds with an assessment of the impact of each facets of creativity on the new product quality component, and further path to the new product performance in a select number of industrial and consumer products.
