Academic journal article Research-Technology Management

Strategic, Organizational, and Operational Challenges of Product Innovation in China: Chinese Firms Tend to Engage in a Narrower Range of New-Product Development Techniques and Activities Compared to Western Firms

Academic journal article Research-Technology Management

Strategic, Organizational, and Operational Challenges of Product Innovation in China: Chinese Firms Tend to Engage in a Narrower Range of New-Product Development Techniques and Activities Compared to Western Firms

Article excerpt

In spite of growing interest among Western firms in doing business in China, we know very little about the new-product development (NPD) practices of Chinese firms. It is important for both Chinese and Western firms to understand the NPD practices of these firms for a variety of reasons. Even in the context of extensive government initiatives to foster innovation in China (Gywnne 2010a, 2011), individual firms will not be successful unless they adopt strategies, organizational structures, and processes that lead to effective NPD activities. Similarly, Western firms can have all the right reasons to engage in NPD in China, but their initiatives will not be successful unless they understand the NPD practices of their potential Chinese partners and can align their practices with those of the potential partners (Gwynne 2010b).

In an effort to address this gap, this paper presents the results of an empirical study of the strategic, organizational, and operational aspects of the NPD practices of Chinese Hong Kong firms and compares them to Western NPD practices.

The Study

This study is based on a larger study of NPD practices among firms listed in the Hong Kong stock exchange, China's largest stock exchange (Ozer and Cebeci 2010; Ozer and Chen 2006). We first called representatives of the 1,085 firms listed in the stock exchange to confirm that they engaged in NPD and that they were willing to participate in the survey. We mailed questionnaires, one per firm, to a total of 596 firms that met these two criteria and asked that the questionnaire be completed by a key informant responsible for NPD. After numerous follow-up phone calls, we were able to collect 122 complete questionnaires, for a response rate of 20.5 percent.

We assessed the importance that Chinese firms attach to NPD by asking respondents to choose the reason(s) why they engage in NPD from among ten options. In addition, we measured the level of top management support for NPD by asking the respondents to rate it on a five-point Likert scale. We also asked respondents to indicate the organizational structure(s) their companies used for their NPD by choosing from a list of ten options. Respondents were asked to indicate how critical it was for their companies to engage in a range of different NPD activities on a four-point Likert scale. Finally, respondents were asked to indicate whether or not they used a number of different NPD tools in a list gleaned from the literature (Mahajan and Wind 1992; Ozer and Cebeci 2010; Ozer and Chen 1996).

The average firm size was approximately 665 employees. Overall, 30.2 percent of participating firms had a high-tech base, while 27.9 and 41.8 percent, respectively, had low-tech and mixed technological bases. In addition, 35.2 percent operated in consumer markets, 27.0 percent in business-to-business markets, and 37.7 percent operated in mixed markets. Finally, 33.6 percent of firms offered goods, 35.2 percent offered services, and 31.1 percent reported mixed product offerings.

Overall, the survey revealed an interesting range of NPD practices. Most notably, the data indicated that, compared to theft Western counterparts, Chinese firms pursue very focused NPD objectives, enjoy relatively less top management support for NPD, prefer NPD committees or venture teams, engage in selective NPD activities, and utilize only one or two NPD tools.

Key Aspects of New-Product Development: Comparing Western and Chinese Practices

Researchers have long acknowledged that NPD is a lengthy and complex process involving various strategic, organizational, and operational considerations (Barczak, Griffin, and Kahn 2009; Cooper, Edgett, and Kleinschmidt 2004a, 2004b, 2004c). Inevitably, the practices that make up that process in any individual company are influenced by culture, both the culture of the company and the wider culture within which the organization operates. Our survey of Chinese firms revealed clear differences between Chinese and Western NPD practices and strategies. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.