INNOVATION CULTURE AND NPD PERFORMANCE 253

Innovation Culture, Collaboration

with External Partners and
NPD Performance caim_617 253..272

Malte Brettel and Nina J. Cleven

Researchers and managers have found that the use of external knowledge in the process of
new product development (NPD) helps to sustain a firm’s competitiveness by strengthening
its innovative performance. However, little is known about why some firms use external
knowledge sources for NPD in an extensive manner while others hardly ever use them. In
addition, there is disagreement about which external partners significantly contribute to the
innovative performance of a firm as valuable knowledge sources. Based on the resource-based
view (RBV) of the firm and Kitchell’s innovation adoption model, this paper expects a firm’s
innovation culture to have a significant impact on its openness to external knowledge –
measured in terms of its collaborative behaviour with five different external partners – and for
that behaviour to influence the firm’s NPD performance. A sample of 254 technology-based
firms across several industries is used to empirically test the research model with covariance-
based structural equation modeling (SEM). The findings deepen our understanding of the
discrepancies between successful pioneering firms active in technology and knowledge sourc-
ing and others being less successful.

Introduction (Lambe & Spekman, 1997; Ahuja, 2000) and

can give firms access to the complementary

T echnology-based firms operate in a com-

petitive environment of companies and
organizations that invest heavily in new tech-
nology and new product development (NPD),
so each firm is surrounded by knowledge
sources in the form of other firms. An increas-
ing number of researchers from a range of
research areas (e.g., strategic management,
technology and innovation management,
strategic networking, organization manage-
ment) have found that exploiting such knowl-
edge resources for NPD can strengthen the
competitiveness of firms that operate in a
dynamic environment (Hagedoorn & Duys-
ters, 2002; Rothaermel & Hess, 2007; Almirall
& Casadesus-Masanell, 2010). One of the most
prominent examples in this field of research is
Chesbrough who shaped the so-called open
innovation paradigm ‘that assumes that firms
can and should use external ideas as well as
internal ideas, and internal and external paths
to market, as the firms look to advance their
technology’ (Chesbrough, 2003, p. xxiv). Fol-
lowing this approach, collaboration with
external partners can result in new ideas
and knowledge for new product innovations
assets needed to turn an innovation into a
commercial success (Teece, 1986; Hagedoorn,
1993). Inter-organizational collaboration also
spreads the cost of research and development
(R&D) and allows firms to take advantage
of synergies (Hagedoorn & Duysters, 2002;
Howells, James & Malik, 2003; Kratzer,
Gemunden & Lettl, 2011).
Although the advantages of collaborative
activities in NPD are well known, there is little
research on the antecedents of a firm’s open-
ness to using external knowledge sources
or the antecedents of a firm’s more closed
approach to specific fields of R&D (Jones,
Lanctot & Teegen, 2001; Calantone, Cavusgil &
Zhao, 2002; Laursen & Salter, 2006; Lichtentha-
ler, 2011). As a result, little is known about why
some firms intensively incorporate external
knowledge by co-operating with external part-
ners in their NPD processes, while others still
follow the ‘old’ closed-innovation approach.
In this context, Knudsen (2007), for example,
states that ‘future research could contribute by
examining what appropriate antecedents and
mechanisms can make firms focus to a higher
extent on complementary knowledge’ (p. 135).

© 2011 Blackwell Publishing Ltd Volume 20 Number 4 2011

doi:10.1111/j.1467-8691.2011.00617.x
254
There is disagreement in the literature about
which external knowledge sources (customers,
suppliers, competitors, universities, etc.) con-
tribute significantly to firms’ performance in
innovation and so are reasonable partners
(Belderbos, Carree & Lokshin, 2004).
The aim of this research study is to add to
what is known about the answers to these
research questions. Building on the resource-
based view (RBV) of the firm (Barney, 1991)
and drawing on Kitchell’s (1995) ‘innovation
adoption model’, the present study develops
and empirically tests a theoretical model that
assumes that a firm’s innovation culture is
an internal variable that either facilitates or
impedes collaborative activities in the context
of NPD.
The article proceeds as follows: the next
section lays out the theoretical premises with
an introduction to the RBV and the construct
of innovation culture, followed by a brief over-
view of the literature on collaboration with
external partners. In the following section, the
research model is described and hypotheses
are generated. The fourth section presents the
research design and the dataset. The fifth
describes the methodology of analysis and
the results. The article closes with a detailed
presentation and discussion of the empirical
findings.
Theoretical Background
Innovation Culture and
the Resource-Based View
The resource-based view (RBV) of the firm
serves as the overarching theory for our study.
It was first presented by Wernerfelt (1984),
who suggested that firms that possess and
strategically exploit resources and capabilities
that are both valuable and rare will attain a
competitive advantage by capitalizing on
those assets. The RBV argues that those
resources and capabilities that are also inimi-
table and non-substitutable are particularly
important to the firm’s ability to improve
its short-term and long-term performance
(Barney, 1991). Current portrayals of the RBV,
however, make clear that no direct resource–
performance link exists and that strategic
resources have only potential value in helping
the firm take strategic actions (Ketchen, Hult &
Slater, 2007). If actions that capitalize on the
resources are taken, a competitive advantage
results that, in turn, enhances performance.
According to Barney (1986) and several other
researchers (Deshpandé, Farley & Webster Jr,
1993; Schein, 1996; O’Cass & Ngo, 2007), a
firm’s culture, defined as ‘a complex set of
Volume 20 Number 4 2011
CREATIVITY AND INNOVATION MANAGEMENT
values, beliefs, assumptions, and symbols that
define the way in which a firm conducts its
business’ (Barney, 1986, p. 657), can be a source
of sustained competitive advantage, so it con-
stitutes a strategic resource. Studies in the orga-
nizational literature, for example, suggest that
having a ‘strong’ corporate culture contributes
to improved corporate performance as it plays
a key role in determining the working climate,
leadership style, strategy formulation, organi-
zation behaviour and processes of the firm
(Saffold III, 1988; de Brentani & Kleinschmidt,
2004). Later, Hynes (2009) argues that corporate
culture has a pervasive effect on an organiza-
tion because the culture defines its employees,
customers, competitors and suppliers and how
the organization interacts with each one.
The ‘innovation adoption model’ established
by Kitchell supposes that ‘corporate culture
functions as a transforming agent to ensure
system survival’ (1995, p. 197); that is, when
they are exposed to environmental dynamics
(such as technology turbulence), successful,
adaptive companies enact cultural norms that
strengthen the firm’s capacity for outreach (to
markets, innovation, information, etc.) and its
ability to assimilate technologies. According
to Kitchell, ‘this may be achieved by fostering
cultural norms that emphasize flexibility to
change, openness in communication, and a
future orientation that focuses on staff devel-
opment and strategic planning’ (1995, p. 197).
In contrast, organizations that are less success-
ful in fostering these cultural norms are less
able to change themselves or evolve with their
environments.
Building on the RBV and Kitchell’s (1995)
innovation adoption model, the current study
focuses on a firm’s innovation culture – as one
facet of corporate culture – and analyses its
impact on the firm’s openness to external
knowledge. Later, we analyse how this open-
ness contributes to NPD performance. In the
literature there are various definitions of a
firm’s innovation culture. According to Koberg
and Chusmir (1987) and Deshpandé, Farley
and Webster Jr (1993), the key aspects of inno-
vativeness from a cultural perspective can be
described as creativity, openness, and recep-
tiveness to new ideas, risk taking and entrepre-
neurial mindset. Capon et al. (1992) and Gupta
and Wilemon (1990) speak of a climate of open-
ness and informal communication describing
innovation culture, while Kuczmarski (1998)
describes a mindset that motivates employees
to endorse holistically a belief in creating
newness.
Since an innovation culture is an intangible
resource that cannot be measured directly
(Godfrey & Hill, 1995), we conceptualize it as a
latent factor that is reflected in the four dimen-
© 2011 Blackwell Publishing Ltd
INNOVATION CULTURE AND NPD PERFORMANCE
sions: orientation toward new technologies,
learning orientation, willingness to take risks,
and future market orientation. Thereby, we
draw on de Brentani’s and Kleinschmidt’s
(2004) definition of innovative culture which
encompasses most of the dimensions of inno-
vation culture mentioned in the literature. In
general terms, then, we define an innovation
culture as ‘the degree to which organizations
are predisposed to learn continuously and
to develop knowledge with the intention to
detect and fill gaps between what the market
desires and what the firm currently offers’.
Collaboration with External Partners
Researchers observe that many firms have
come to rely more extensively than ever on
external linkages – becoming part of networks
in which resources, knowledge and informa-
tion circulate (Teece, 1992); providing knowl-
edge in areas where internal sources are
inadequate (Leonard-Barton, 1992) and coping
more effectively with the increasing speed,
risks and costs of NPD (Vanhaverbeke, Duys-
ters & Noorderhaven, 2002). The synergistic
effects of complementary resources and
knowledge can help firms accelerate NPD pro-
cesses (Faems, Van Looy & Debackere, 2005;
Knudsen, 2007; Laursen & Salter, 2006) and
react to changing environments in more
dynamic and flexible ways.
A review of the existing literature reveals
a multitude of potential external sources for
firms that want to use them. While the benefits
of competitor involvement are controversial
Strategic Resource
Innovation Culture Collaboration with External
Partners in the NPD Process
Orientation towards H1a -e
techn. innovation
Learning H2 a -e
orientation
Willingness to H3 a -e
take risks
Future market H4 a -e
orientation
Figure 1. Research Model and Research Hypotheses
© 2011 Blackwell Publishing Ltd
255
(McGill, 2007), customer involvement in
NPD, which has been analysed intensively, is
typically associated with positive interactions
(Voss, 1985; Von Hippel, 1986; Tomes, Arm-
strong & Clark, 1996; Brockhoff, 2003; Salomo,
Steinhoff & Trommsdorff, 2003). Studies have
also found the involvement of suppliers (Dyer,
1996; Ragatz, Handfield & Scannell, 1997;
Primo & Amundson, 2002; Van Echtelt et al.,
2008) and universities or research institutes to
be useful in developing successful new prod-
ucts (Hise, Futrell & Snyder, 1980; Santoro &
Betts, 2002). Another source that has attracted
the notice of researchers is consultants and
independent research institutes (Bessant &
Rush, 1995; Knudsen, 2007; Tether & Tajar,
2008). In a case study with a manufacturer
of industrial products, Alam (2003) found that
consulting engineering firms are a viable
external source for NPD. In pursuit of a com-
prehensive picture, we considered all of these
external partners – customers, suppliers, com-
petitors, universities and independent experts
such as public research institutes and consult-
ants – as potential partners for NPD projects.
Our study focuses on collaborations whose
objective is to gain input for new products
and technologies (for a review, see Powell,
Koput & SmithDoerr, 1996). The following
section describes the conceptual framework
and derives the hypotheses.
Research Model and Hypotheses
The research model underlying the present
study, shown in Figure 1, is based on Kitchell’s
Strategic Action Competitive Advantage
Performance
Outcome
H5
Customers
Suppliers H6
H7 NPD
Competitors performance
H8
Universities
H9
Indep. experts
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(1995) innovation adoption model, which
argues that a firm’s cultural norms strengthen
its capacity for outreach and its ability to
assimilate technologies; these abilities play a
key role in the firm’s survival because they
determine how the firm fosters or fails to foster
the flexible and outward-looking behaviour
required to handle environmental exigencies.
The model observes how an innovative culture
(a strategic resource), as measured by its four
latent variables, effectuates the firm’s collabo-
ration with external partners (strategic action)
to enhance NPD performance (competitive
advantage). The model is used to analyse the
firm’s innovation culture as an antecedent to
the firm’s openness toward collaboration with
external partners (Hurley & Hult, 1998).
An orientation towards technological innovation
reflects one important dimension of the inno-
vation culture of a firm (Hurley & Hult, 1998;
Herrmann, Gassmann & Eisert, 2007). Accord-
ing to Berthon, Hulbert and Pitt (1999), ‘firms
that enact a technological innovation orienta-
tion devote their energy towards inventing and
refining superior products’ (p. 37), whereby
two components, ‘openness to innovate’ and
‘capacity to innovate’, are called into action.
Atuahene-Gima and Ko (2001) see innovation
orientation as ‘human resource practices that
foster support for innovative and risky behav-
ior and that enable employees to keep up with
changing technologies’ (p. 61). Thus, the ratio-
nale for an innovation orientation is that tech-
nology has the potential to create new markets
and customers. Worren, Moore and Cardona
(2002) further argue that an orientation towards
innovation is an intentional and calculated plan
or strategic intent that provides direction
towards an organization-wide commitment to
more and faster innovations.
Our study adopts the definition of orienta-
tion towards technological innovation pro-
vided by Herrmann, Gassmann and Eisert
(2007, p. 99):
[A]n openness to new types of technologies,
the ability to search for these technologies
proactively, being able to recognize them
early on, and reacting to them appropri-
ately, as well as an attempt to use these
technologies purposefully for innovation
to develop technologically first-class pro-
ducts that are superior to those of the
competitors.
Since firms are usually unable to develop
every new technology on their own and are
therefore dependent on external knowledge
sources, we assume that a firm’s orientation
towards technology innovation has a signifi-
cant impact on the firm’s collaborative activi-
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CREATIVITY AND INNOVATION MANAGEMENT
ties for NPD with diverse external partners.
Therefore, we formulate the following explor-
ative hypotheses:
Hypotheses 1a–e. Orientation towards techno-
logical innovation is positively associated with
collaborative activities with customers (H1a),
suppliers (H1b), competitors (H1c), universities
(H1d), and independent experts (H1e).
Another factor proposed in the literature as
an important dimension of a firm’s innovation
culture is learning orientation (Baker & Sinkula,
1999; Calantone, Cavusgil & Zhao, 2002).
Organizations in which management consid-
ers learning central to survival embed a learn-
ing orientation in their corporate cultures that
encourages their employees to question their
assumptions about the company, its environ-
ment, and their existing knowledge, and to
find new ways of learning (Argyris & Schön,
1978; Fiol & Lyles, 1985; Herrmann, Gassmann
& Eisert, 2007).
In the context of product innovation, learn-
ing orientation is key to a successful product
innovation process. Learning orientation indi-
cates the degree to which firms are committed
to challenging systematically the fundamental
beliefs and practices that define the innova-
tion process itself (Day, 1994). A learning
culture encourages firms to question the
information they process as well as whether
their particular approach to innovation is
applicable to processing that information.
More specifically, firms with a strong learning
orientation question whether the core beliefs
about customers, competitors and suppliers
that provided the basis for their past actions
continue to be applicable. Since sources of
knowledge for NPD do not reside exclusively
inside the firm but are also often found in the
interstices between the firm and universities,
research laboratories, suppliers and cust-
omers (Powell, Koput & SmithDoerr, 1996;
Kessler, Bierly & Gopalakrishnan, 2000;
Faems, Van Looy & Debackere, 2005), these
firms scan the external environment for new
technological paradigms that may offer a
better means by which to deliver core benefits
(Baker & Sinkula, 1999). Consequently, we
expect that the firm’s learning orientation has a
positive impact on collaborative activities
with external partners, and we formulate the
following explorative hypotheses:
Hypothesis 2a–e. Learning orientation is posi-
tively associated with collaborative activities
with customers (H2a), suppliers (H2b), com-
petitors (H2c), universities (H2d) and indepen-
dent experts (H2e).
The development of new or significantly
modified products is always related to risk,
© 2011 Blackwell Publishing Ltd
INNOVATION CULTURE AND NPD PERFORMANCE
such as the risk of failure caused by innovative
product technologies or by new products not
being adopted by the market as originally
expected. If external partners are added to
the NPD process, the potential for risks only
increases, for example, in terms of the risk
inherent in giving away sensitive knowledge
(Grindley & Teece, 1997; Veugelers, 1998) or
becoming too dependent on outside knowl-
edge (Doz, 1996). However, without taking
risks, firms cannot gain the experience from the
successes and failures that are required in order
to develop more competitive repertoires
(Sitkin & Pablo, 1992) and the new products
that will keep up with market trends.
For that reason, Kohli and Jaworski (1990)
argue that only if the top management demon-
strates a willingness to take risks and accepts
occasional failures as being natural are junior
managers likely to introduce new proposals
in response to changes in customer needs.
Following Herrmann, Gassmann and Eisert
(2007), a firm’s willingness to take risks is ‘a
characteristic of the enterprise culture and
expresses the extent to which a company is
prepared to accept the risks brought about by
the high uncertainty of innovation, to view
occasional setbacks as normal, and to invest
sufficient resources in new products even
though the chances for success are uncertain’
(p. 100). We adopt this definition in our study
and propose that the firm’s willingness to take
risks enhances the propensity to co-operate
with external partners in the process of NPD.
Hence, we formulate the following explorative
hypotheses:
Hypothesis 3a–e. A firm’s willingness to take
risks is positively associated with collaborative
activities with external partners, meaning
collaboration with customers (H3a), suppliers
(H3b), competitors (H3c), universities (H3d)
and independent experts (H3e).
The marketing literature has traditionally
emphasized that firms need to be market-
oriented by placing the highest priority on the
profitable creation and maintenance of supe-
rior value for customers (Kohli & Jaworski,
1990; Narver & Slater, 1990; Deshpandé, Farley
& Webster Jr, 1993). However, some authors
posit that a strong market orientation also
leads to incremental and application-oriented
innovations, rather than to truly breakthrough
innovations (Bonner & Walker, 2004; Knudsen,
2007). For example, Gatignon and Xuereb
(1997) found that a strong customer orientation
leads to less radical innovation. To prevent this
development, firms are urged to search for and
strategically invest in new products and tech-
nologies that are geared to satisfying the needs
of future customers. Chandy and Tellis call
© 2011 Blackwell Publishing Ltd
257
this emphasis a future-market focus and define
it as ‘the extent to which a firm emphasizes
future customers and competitors relative to
current customers and competitors’ (1998: 479).
In order to identify these future needs and
actions, firms must search in various directions,
both inside the company and especially
outside. Hence, we hypothesize:
Hypothesis 4a–e. Future market orientation
is positively associated with collaborative
activities with customers (H4a), suppliers
(H4b), competitors (H4c), universities (H4d)
and independent experts (H4e).
Collaboration with External Partners and its
Impact on NPD Performance
Collaboration with customers is one of the
most intensively discussed relationships in
the context of NPD. Customer involvement in
the process of NPD is often associated with
positive NPD performance because customer
input helps firms gain new ideas about pro-
ducts and solutions (Urban & Von Hippel,
1988), understand customers’ needs, and iden-
tify new market trends early (Li & Calantone,
1998). Customer input in the early stages of
NPD can also allay problems related to poor
design (Knudsen, 2007) and poorly conceived
market introductions (Tether, 2002; Belderbos
et al., 2004). Consequently, customer involve-
ment may lead to better product innovations
(Souder, Buisson & Garrett, 1997; Brockhoff,
2003) and increase the chance of NPD success.
A number of researchers confirm these
assumptions (Freel, 2003; Faems, Van Looy &
Debackere, 2005), but others find negative
(Lööf & Heshmati, 2002; Knudsen, 2007) or
insignificant relationships between collabora-
tion with customers and NPD performance
(Monjon & Waelbroeck, 2003; Belderbos,
Carree & Lokshin, 2004). For example, Bonner
and Walker (2004) note that customer involve-
ment can lead to negative and counterproduc-
tive effects if the focus lies only on the needs
of a single type of customer group and
product features do not satisfy the needs of a
broad range of customers. Further, Knudsen
observes that ‘the average customer is unable
to conceptualize ideas or improvements
beyond the realm of their own experience’
(2007, p. 133), a perspective that does not serve
the development of major product innovations
that address a wide range of customers. In
addition, Nieto and Santamaria (2007) remark
that firms that concentrate too heavily on cus-
tomers run the risk of losing access to impor-
tant new technological developments and may
fall behind. Nevertheless, we assume that the
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258
positive aspects of customer involvement in
the NPD process outweigh the negative ones
and hypothesize that:
Hypothesis 5. Collaboration with customers in
the NPD process has a positive effect on NPD
performance.
Supplier involvement in the NPD process is a
logical consequence of a focus on efficiency.
Because of their regular contact with the firms
that buy from them, suppliers are familiar with
the processes, demands and conceptions of
those firms and tend to be easy to communicate
with concerning NPD projects. Suppliers
have specific knowledge and competencies,
can be a source of innovative ideas and critical
technologies (Håkansson & Eriksson, 1993),
and are interested in strengthening their rela-
tionships with their clients. Van Echtelt et al.
(2008) argue that companies that are constantly
under pressure to deliver superior value to
their customers – and, thus, to enhance product
development in terms of productivity, speed
and product quality – may choose to strengthen
their co-operation with their suppliers concern-
ing NPD processes in order to get relief (Primo
& Amundson, 2002; Ragatz, Handfield &
Petersen, 2002). Further, greater collaborative
activity with suppliers enables firms to concen-
trate on their core competencies and to com-
plement their R&D with that of the supplier
(Tether, 2002; Belderbos, Carree & Lokshin,
2004). In addition to increasing the efficiency
and effectiveness of NPD efforts, supplier
involvement helps firms identify technical
problems and ensure that product innovations
are portable in the production process
(Knudsen, 2007).
Risks related to collaboration with suppliers
in NPD may include an increase in depen-
dency and the danger that jointly developed
and otherwise secret knowledge is dissemi-
nated to the firm’s competitors who may also
be clients of the supplier. However, contracts
can be negotiated to minimize this danger.
Therefore, we hypothesize that:
Hypothesis 6. Collaboration with suppliers in
the NPD process has a positive effect on NPD
performance.
While competitor involvement in NPD pro-
cesses may seem counterintuitive, collabora-
tion with competitors can help to consolidate
supplementary knowledge and to generate
synergistic effects that can accelerate capability
development and reduce the time and costs
needed for NPD for both firms (Belderbos,
Carree & Lokshin, 2004; Tsai, 2009). This kind
of collaboration also allows firms to benchmark
their own technological capabilities and, as a
result, to differentiate themselves from each
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CREATIVITY AND INNOVATION MANAGEMENT
other more clearly (Linn, 1994). In this regard,
Tether (2002) argues that it makes more sense
for competitors to find areas where strengths
are complementary and to develop jointly a
new range of products, rather than to replicate
the other firms’ strengths. Further, collabora-
tion can help competitors implement standards
in the market, compete successfully against
third-party competitors (Perks & Easton, 2000),
and influence the regulatory environment.
Of course, there are risks related to collabo-
rative activities among competitors, such as the
unintended transfer of sensitive knowledge.
Therefore, a firm must weigh carefully the ben-
efits and risks of collaboration with competi-
tors, safeguard its own knowledge base from
unintended appropriation and imitation, and
ensure that areas of application of the jointly
developed knowledge are clearly defined.
Empirical studies on competitor involve-
ment in NPD processes have resulted in con-
flicting findings. For example, while Lööf
and Heshmati (2002) found that collaborating
with competitors is positively related to new
product sales, others have found negative
or insignificant relationships between this
kind of collaboration and sales (Cassiman &
Veugelers, 2002). Miotti and Sachwald discov-
ered in their research study that collaboration
with competitors is both rare and not signifi-
cant to NPD performance (Miotti & Sachwald,
2003). Because of the conflicting findings in the
literature and the mainly positive arguments
concerning collaboration among competitors,
we hypothesize:
Hypothesis 7. Collaboration with competitors in
the NPD process has a positive but insignificant
effect on NPD performance.
Universities and their research institutes are
a constant source of scientific knowledge cre-
ation and innovation. As research accelerates
and grows increasingly expensive, industry
tries to leverage academic knowledge specific
to specialized technical support and equip-
ment to complement internal R&D and gain
access to emerging technologies (Tidd & Tre-
whella, 2002). According to Spencer (2003),
firms that do not acquire technological knowl-
edge from universities may fall behind and
be less likely to make technological break-
throughs that lead to viable commercial prod-
ucts. Knowledge exchange with universities
may be in the form of formal agreements
based on stable relationships, like joint R&D
projects, or they may be in the form of informal
agreements that are more like sporadic
interchanges (Cassiman & Veugelers, 2006;
Segarra-Blasco & Arauzo-Carod, 2008). Uni-
versities are seen as low-risk sources of
information that is especially useful for basic
© 2011 Blackwell Publishing Ltd
INNOVATION CULTURE AND NPD PERFORMANCE
and long-term strategic research, particularly
in pre-competitive technologies. Moreover,
Tether (2002) argues that co-operation with
universities is likely to cost less than co-
operation with other external partners, such as
suppliers. However, while Tijssen (2002) and
Narin, Hamilton and Olivastro (1997) find that
NPD increasingly depends on the results of
basic university research, Laursen and Salter
(2004) find only a limited number of firms that
draw directly from universities as a source of
information or knowledge for their innovative
activities. Therefore, we hypothesize that:
Hypothesis 8. Collaboration with universities in
the NPD process has a positive effect on NPD
performance.
Independent experts, such as engineering
consultancies, specialized start-up firms and
public research institutes, are alternative
knowledge sources that employ a large pool of
distinguished technology specialists capable of
generating new product ideas. These experts
provide fundamental scientific and/or techno-
logical knowledge, applied knowledge and
specialist skills (Tether, 2002). Referring to
design consultants, Bruce and Morris (1998)
argue that internal designers often become
complacent and too familiar with the com-
pany’s approaches and products and fail to
provide innovative ideas, while external design
consultants can provide fresh ideas. Bessant
and Rush (1995) comment that consultants can
provide a variety of inputs to the innovation
process in roles that go beyond the traditional
provision of expertise; they provide technical
knowledge for tailored projects by acting as an
additional workforce or by advising the firm on
the product development process in general,
and contribute to NPD by providing informa-
tion about customer requirements, assisting
in development and testing of prototypes,
designing the new products, and assisting in
diffusion of the new products (Alam, 2003;
Knudsen, 2007). Even though the role of inde-
pendent experts in NPD processes is still
unclear and has been researched only to a
limited degree, we hypothesize that:
Hypothesis 9. Collaboration with independent
experts has a positive effect on NPD
performance.
Research Design
Sample and Data Collection
To validate the theoretical model empirically,
we administered a survey to a sample of
technology-based and knowledge-intensive
German companies during the period from
© 2011 Blackwell Publishing Ltd
259
March to May 2009. We chose technology-
based firms as our sample since they are
considered more important in creating new
wealth for society than are low-tech firms, and
they better manifest the influence of internal
capabilities and strategic networking. The
industries represented in the sample include
the mechanical engineering and tool-making
industry (29%); the electrical (14%), biotech-
nology and medical engineering (9%), auto-
motive (7%), pharmaceutical and health care
(5%) industries; and several other knowledge-
intensive industries. The mailing list for the
survey was obtained from company listings on
the German Chamber for Industry and Com-
merce database. Since it is widely believed that
top managers provide the best information
about environmental and organizational char-
acteristics, all surveys were directed to the
chief executive officer (CEO) of the firm and to
the manager of the R&D or marketing divi-
sion. Each was given the alternative to partici-
pate via an online version of the survey or to
take the pdf print-out version of the survey
and send it back by post or fax. Yu and Cooper
(1983) show that non-monetary incentives
increase response rates, so we offered respon-
dents the opportunity to receive a report on
the findings. One week after the first mailing
was dispatched, reminder mail was sent to
those from whom no reply had been received,
and a second and final reminder was sent
again one and a half weeks later. Altogether,
263 completed surveys were sent back, of
which only nine responding firms had to be
deleted because of missing information. This
meant that 254 evaluable surveys remained.
Most questionnaires (almost 60%) were com-
pleted by the CEO, followed by division and
departmental managers of the marketing and
distribution department and the R&D depart-
ment. Some 23 per cent of the respondents
answered by fax or post, and the rest partici-
pated in the online version of the survey. Most
of the participating companies were estab-
lished, internationally oriented companies
with a focus on the business-to-business (B2B)
customer segment. Further, 48 per cent were
medium-sized firms (50–500 employees), 34
per cent were small (1–50 employees), and 18
per cent were large (>500 employees).
Threats to Reliability and Countermeasures
We undertook additional steps to check the
reliability and validity of our data. First, we
used scale reordering, as suggested by Salancik
and Pfeffer (1977), which reduces the sequenc-
ing effects of consistency by arranging the
items on a self-reported questionnaire so that
measures of the dependent variables follow,
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260
rather than precede, those of the independent
variables. We adopted this method by placing
the NPD performance measure after all other
latent variables and in front of the control
variables.
To analyse the data for non-response bias,
online-offline bias, and informant-bias, we
applied the Mann–Whitney and Kolomogorov
–Smirnov tests, as recommended by Arm-
strong and Overton (1977). In the case of the
non-response bias, we sorted the sample by
response time and divided it into three groups
(early, middle and late) to determine whether
there are significant differences between the
average values of each indicator of the early and
late respondents. t-Tests indicated no signifi-
cant differences (p > 0.05). To test the data
for online-offline bias, we compared the two
groups of online and offline replies. To identify
the presence of informant bias, we compared
the responses of CEOs with those of all other
staff members and again detected no evidence
of potential biases. The results indicated no
evidence for any of the three potential biases.
Since the data for this study were obtained from
a single survey, common method variance was
possible (Crampton & Wagner, 1994; Lindell &
Whitney, 2001), but Harmans’s single-factor
showed that (a) no single factor emerged from
an exploratory factor analysis, and (b) no one
general factor accounted for the majority of the
covariance among the measures in the sample.
Thus, there is sufficient reason to believe that
there is no strong common method bias present
in the data (Podsakoff & Organ, 1986; Venaik,
Midgley & Devinney, 2005). A second test
developed by Liang et al. (2007) was also used
to seek out evidence of common method bias.
Results demonstrated that the average substan-
tively explained variance of the indicators is
0.811, while the average method-based vari-
ance is 0.003, making the ratio of substantive
variance to method variance about 270:1.
Further, most method factor loadings are not
significant so, given the small magnitude of
method variance, there is no serious concern
about a common method bias in this study
(Williams, Edwards & Vandenberg, 2003; Liang
et al., 2007).
Measures
To test the hypotheses suggested by the
research model, measures of each construct
were developed using multiple items and
Likert-type scales (1 = ‘strongly disagree’ to
7 = ‘strongly agree’). A comprehensive litera-
ture review helped to identify relevant con-
cepts and previously operationalized scale
items. Although some items were derived
from existing validated scales, the items that
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CREATIVITY AND INNOVATION MANAGEMENT
measure collaborative activities with external
partners were developed specifically for this
study. After several iterations of item editing
and refinement, we conducted pre-test inter-
views with researchers and practitioners in
order to identify any problems with question
wording and questionnaire layout. These inter-
views yielded many useful suggestions that
strengthened the content and validity of the
research tools.
We measured firms’ innovation culture using
four latent variables: orientation towards
technological innovation, learning orientation,
willingness to take risks, and orientation
towards future markets. Following Herrmann,
Gassmann and Eisert (2007), we measured the
first variable, orientation towards technologi-
cal innovation (a = 0.84), using six items that
reflect the willingness and proactivity of the
firm in adopting and using new technologies
in NPD. To capture the second variable, learn-
ing orientation (a = 0.86), we used four items
from Hult, Ketchen and Arrfelt (2007) that
detect the general view of the firm concerning
the importance of learning and the willingness
to learn continuously. The third variable, will-
ingness to take risks (a = 0.89), was measured
using five items from Jaworski and Kohli that
reflect the firm’s approach to risk taking in
NPD (Jaworski & Kohli, 1993). Finally, orienta-
tion towards future markets and future cus-
tomers (a = 0.78) was measured by five items
from Jaworski and Kohli (1993).
Because of data limitations, Faems, Van Looy
and Debackere (2005), Laursen and Salter
(2006) and Tsai and Wang (2009) – who,
among others, investigated the open innova-
tion phenomenon by analysing innovation
survey data sets (CIS and TTIS) – measured the
involvement of external partners in the NPD
process using single-item dummy variables.
However, Laursen and Salter commented
subsequently that ‘future research should
examine this issue by developing several fine-
grained items for each of the knowledge
sources’ (2006, p. 147). Tsai and Wang con-
cluded that ‘from a collaboration point of view,
it would be more convincing to analyse the
depth or closeness of partner collaboration’
(2009, p. 525). We followed these calls in our
study and developed five multi-item measures
for five external partners: customers, suppli-
ers, competitors, universities and independent
experts. These external partners are well rep-
resented in a variety of innovation surveys
(e.g., CIS and TTIS) and are also discussed
individually in several research studies. A
broad literature review (Gruner & Homburg,
2000; Jones, Lanctot & Teegen, 2001; Swan &
Allred, 2003; Atuahene-Gima, 2005; Fey, 2005;
Koufteros, Vonderembse & Jayaram, 2005;
© 2011 Blackwell Publishing Ltd
INNOVATION CULTURE AND NPD PERFORMANCE
Laursen & Salter, 2006; Tsai & Wang, 2009)
and several interviews with practitioners and
researchers resulted in five constructs, each
with three to four items, that capture sepa-
rately collaboration with customers (a = 0.85),
suppliers (a = 0.90), competitors (a = 0.87),
universities (a = 0.95) and independent
experts (a = 0.93). All measures query how
often and intensively the firm involves the
external partner in its NPD process and how
important the inter-exchange and integration
is to the firm. The measurement scale for these
items was a 7-point Likert-type scale from
1 = ‘fully disagree’ to 7 = ‘fully agree’.
Following Griffin and Page (1993) and Zahra
and Covin (1993), we operationalized product
innovation performance (a = 0.91) by measuring
the frequency of market launches of new prod-
ucts, the innovation publicity generated by the
firm, the degree of novelty of new products and
the percentage that new products represent in
the product portfolio and in the sales volume.
Respondents were asked to draw a comparison
with major competitors. Unlike a number
of researchers (Shan, Walker & Kogut, 1994;
Ahuja, 2000; Stuart, 2000; Nicholls-Nixon &
Woo, 2003), we decided against measuring
innovative outcome via patent output since, in
our view, patents do not measure a firm’s
ability to bring new products (innovations) to
market successfully but only to invent products
and technologies (Mansfield, 1986; Deeds &
Hill, 1996). All the scales used are listed in the
Appendix.
We controlled for several variables that may
influence the overall research model: firm size,
firm age, market, industry type and strategy.
The size of the firm is measured by the number
of full-time employees, which has been a proxy
for size in previous studies related to innova-
tion and firm performance (Caloghirou et al.,
2004; Schoenmakers & Duysters, 2006). We
controlled for firm size since previous studies
have shown that the number of employees is
highly correlated with the propensity of a firm
to co-operate with external partners in R&D
(Bayona, Garcia-Marco & Huerta, 2001; Fritsch
& Lukas, 2001). Firm age was measured in
years since foundation. We controlled for firm
age since the age of a company may predict the
experience it has in collaborating with external
partners. The control variable ‘market’ mea-
sures whether the largest market of the firm is
local, regional, national or international (Kitch-
ell, 1995; Laursen & Salter, 2006). The variable
takes values from 1 to 4, with 1 corresponding
to ‘local’ and 4 corresponding to ‘international’.
Further, we included 13 industry controls to
account for differences in the propensity to
innovate across industries. Finally, the survey
briefly described the cost leadership and
© 2011 Blackwell Publishing Ltd
261
differentiation strategies and respondents
were asked to verify the dominant strategy
type of their firms (Govindarajan & Fisher,
1990). We controlled for the firms’ leading strat-
egy type since it may prevent or benefit firms’
co-operation with external partners (Miotti &
Sachwald, 2003).
Measurement Reliability and Validity
Discriminant validity was tested by running a
confirmatory factor analysis for each construct
in the framework. To stabilize the indicator
reliability, all items with factor loadings of less
than 0.7 were dropped (Fornell & Larcker,
1981), although in two exceptional cases (will-
ingness to take risks, future market orientation)
the threshold of 0.6 was used to drop items
(Hulland, 1999). To assess construct reliability,
we calculated and analysed the composite reli-
ability (CR) and the average variance extracted
(AVE) of each construct; Bagozzi and Yi (1988)
recommend threshold values of 0.7 for CR and
0.5 for AVE. We also examined the Cronbach’s
alpha for each construct based on Nunnally’s
(1979) recommendation of a threshold alpha
value of 0.7. The factor loadings, CR, AVE and
Cronbach’s alpha of each construct met the
requirements. Table 1 summarizes the results.
Finally, the Fornell–Larcker Criterion was
tested by analysing the squared correlation
between each pair of factors to determine
whether they are below the average variance
extracted (AVE), and results support discrimi-
nant validity. Several positive and statistically
significant correlations between collaboration
indicators and internal capabilities suggest
that internal capabilities can help the collabo-
rative activities and vice versa. Also notable
are positive and statistically significant corre-
lations among collaboration indicators. Table 2
provides the correlations, means and standard
deviations of all variables.
Results
Goodness of Fit Measures
Our hypotheses were tested using causal
modelling by means of the covariance-based
structural equation method AMOS. The
overall goodness of fit indices indicate that
the hypothesized models are good repre-
sentations of the structures underlying the
data (Baumgartner & Homburg, 1996). The fit
indices are as follows: relative chi-square (c2/
df) = 1.64, comparative fit index (CFI) = 0.96,
normalized fit index (NFI) = 0.90, Tucker–
Lewis Coefficient (TLI) = 0.95, goodness-of-
fit index (GFI) = 0.86, adjusted goodness of
fit (AGFI) = 0.82, root mean square error of
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262 CREATIVITY AND INNOVATION MANAGEMENT

Table 1. Confirmatory Factor Analysis of Major Constructs

Factor Number Range of Cronbach’s Composite Average

of items parameter alpha reliability variance
estimates (CR) extracted
(AVE)

Innovation culture
Orientation towards tech. inn. 6 0.73–0.86 0.84 0.91 0.76
Learning orientation 4 0.72–0.92 0.86 0.91 0.78
Willingness to take risks 5 0.66–0.93 0.89 0.93 0.76
Future market orientation 5 0.64–0.81 0.78 0.87 0.69
Collaboration with . . .
. . . Customers 4 0.74–0.83 0.85 0.91 0.76
. . . Suppliers 4 0.75–0.94 0.89 0.93 0.83
. . . Competitors 3 0.87–0.89 0.87 0.94 0.89
. . . Universities 4 0.93–0.97 0.96 0.98 0.93
. . . Independent experts 4 0.87–0.94 0.95 0.96 0.87
NPD performance 5 0.75–0.95 0.91 0.94 0.84

Table 2. Pearson Correlations, Means, Standard Deviations (N = 254)a

1 2 3 4 5 6 7 8 9 10

Collaboration with . . .
1 . . . Customers 0.87
2 . . . Suppliers 0.34** 0.91
3 . . . Competitors -0.002 0.11 0.94
4 . . . Universities 0.33** 0.24** 0.11 0.96
5 . . . Independent experts 0.26** 0.32** 0.19** 0.52** 0.93
6 Orientation tow. 0.48** 0.26** 0.04 0.31** 0.20** 0.87
techn. innovation
7 Learning orientation 0.42** 0.25** 0.01 0.25** 0.14* 0.56** 0.88
8 Willingness to take risks 0.35** 0.26** 0.09 0.25** 0.28** 0.50** 0.40** 0.87
9 Future market 0.15* 0.22** 0.12 0.28** 0.26** 0.25** 0.25** 0.30** 0.83
orientation
10 NPD performance 0.42** 0.30** 0.00** 0.28** 0.20** 0.61** 0.49** 0.50** 0.32** 0.92

Means 5.18 4.53 3.59 3.67 3.32 5.06 5.67 4.81 3.69 4.24
S.D. 1.32 1.51 2.29 2.08 1.71 1.31 1.16 1.33 1.29 1.45

a
Square roots of AVE are listed on the matrix diagonal.
* p < 0.05.
** p < 0.01 (two-tailed).

approximation (RMSEA) = 0.05, standardized to collaboration and collaboration to perfor-

root mean square residual (SRMR) = 0.08.
Hypothesis Testing
Although the model was calculated en bloc
using covariance-based structural equation
modelling, we display the results in two tables
(Tables 3 and 4) and discuss them in terms of
the two parts of the model (innovation culture
mance). Table 3 shows the results of hypoth-
esis testing of the first part of the model, which
relates innovation culture with the firm’s col-
laboration activities with external partners in
the context of NPD: only nine of the 20 hypoth-
esized relationships are supported. Hypoth-
eses H1a–H1e suggest that orientation towards
technological innovation is positively related
to collaboration with all observed external

© 2011 Blackwell Publishing Ltd

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INNOVATION CULTURE AND NPD PERFORMANCE 263

Table 3. Results of Covariance-Based Structural Equation Modeling with AMOS, First Part of the
Research Model

Hypothesis Description of path Path coefficient Result

and significance

Collaboration with . . .
H1a OtTIa → . . . Customers 0.431 **** Supported
H1b OtTI → . . . Suppliers 0.133 n.s. Not Supported
H1c OtTI → . . . Competitors 0.110 n.s. Not Supported
H1d OtTI → . . . Universities 0.606 *** Supported
H1e OtTI → . . . Independent experts 0.317 ** Supported
Collaboration with . . .
H2a LOb → . . . Customers 0.207 ** Supported
H2b LO → . . . Suppliers 0.102 n.s. Not Supported
H2c LO → . . . Competitors -0.115 n.s. Not Supported
H2d LO → . . . Universities -0.126 n.s. Not Supported
H2e LO → . . . Independent experts -0.259 * Not Supported
Collaboration with..
H3a WttRc → . . . Customers 0.115 * Supported
H3b WttR → . . . Suppliers 0.104 n.s. Not Supported
H3c WttR → . . . Competitors 0.016 n.s. Not Supported
H3d WttR → . . . Universities 0.016 n.s. Not Supported
H3e WttR → . . . Independent experts 0.201 * Supported
Collaboration with..
H4a FMOd → . . . Customers 0.044 n.s. Not Supported
H4b FMO → . . . Suppliers 0.238 **** Supported
H4c FMO → . . . Competitors 0.112 n.s. Not Supported
H4d FMO → . . . Universities 0.601 **** Supported
H4e FMO → . . . Independent experts 0.493 **** Supported

* p < 0.10.
** p < 0.05.
*** p < 0.01.
**** p < 0.001 (one-tailed).
a
OtTI = Orientation towards technological innovation, b LO = Learning orientation, c WttR =Willingness to
take risks, d FMO = Future market orientation.

Table 4. Results of Covariance-based Structural Equation Modeling with AMOS, Second Part of the
Research Model

Hypothesis Despription of path Path coefficient Result

and significance

Collaboration with . . .
H5 . . . Customers → NPD performance 0.455 **** Supported
H6 . . . Suppliers → NPD performance 0.148 ** Supported
H7 . . . Competitors → NPD performance 0.006 n.s. Supported
H8 . . . Universities → NPD performance 0.068 * Supported
H9 . . . Indep. Experts → NPD performance -0.001 n.s. Not supported

* p < 0.10.
** p < 0.05.
*** p < 0.01.
**** p < 0.001 (one-tailed).

© 2011 Blackwell Publishing Ltd

Volume 20 Number 4 2011
264
partners. With parameter estimates significant
at the 0.001, 0.01 and 0.05 levels, hypotheses
H1a, H1d and H1e – which posit that orienta-
tion towards technological innovation is posi-
tively related to collaboration with customers,
universities and independent experts – are
supported, whereas hypotheses H1b and H1c
– which relate orientation towards technolo-
gical innovation with collaboration activities
with suppliers and competitors – are not.
Regarding hypotheses H2a–H2e, which pro-
pose that learning orientation leads to
collaborative activities with all five external
partners – only one hypothesis, H2a, which
relates learning orientation with customer col-
laboration, is supported. Regarding the firm’s
willingness to take risks, two hypotheses,
H3a and H3e – which suggest that a firm’s
willingness to take risks leads to collaborative
activities with customers and independent
experts – are supported by parameter esti-
mates significant at the 0.1 level, but H3b–
H3d are not. Finally, a firm’s future market
orientation turned out to be significantly
and positively (0.001) related to collaboration
with suppliers, universities and independent
experts, but not to collaboration with custom-
ers and independent experts.
Table 4 displays the results of hypothesis
testing of the second part of the model, which
relates collaboration with external partners in
the context of NPD with NPD performance.
Four of the five hypothesized relationships
are supported. Hypotheses H5, H6 and H8
suggest that collaboration with customers,
suppliers and universities is positively related
to NPD performance; with parameter esti-
mates significant at the 0.001, 0.05, and 0.1
levels, these three hypotheses are supported
and indicate that customer involvement influ-
ences NPD performance most, followed by the
involvement of suppliers and universities. By
yielding a positive but insignificant path coef-
ficient for the relationship between collabora-
tion with competitors and NPD performance,
the results further verify H7. However, H9,
which relates collaboration with independent
experts to NPD performance, is not supported;
although parameter estimates are positive,
they are not significant.
Discussion and Implications
Based on the resource-based view (RBV) of the
firm and Kitchell’s (1995) innovation adoption
model, this study empirically investigates the
effect of a firm’s innovation culture on its
behaviour to collaborate with external partners
in the process of NPD. We considered innova-
tion culture an intangible strategic resource
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CREATIVITY AND INNOVATION MANAGEMENT
and measured it using four variables: orienta-
tion towards technological innovation, learn-
ing orientation, willingness to take risks and
future market orientation. We also analysed
the impact on NPD performance of collabora-
tion with five different types of external part-
ners. We empirically validated our research
model using a sample of 254 technology-based
firms and covariance-based SEM with AMOS.
Our analyses confirmed several of the hypoth-
eses presented, but not all. The following dis-
cussion addresses these results and outlines
the academic and practical implications for
researchers and managers.
Our results indicate that a firm’s orientation
towards technological innovation has a signifi-
cant and positive relationship to a firm’s
collaborative activities with customers, univer-
sities and independent experts. This result sug-
gests that these external partners are important
sources of knowledge for firms that consider
technological innovation a strategically impor-
tant task and that want to keep up with new
technological trends by inventing and refining
superior products (Atuahene-Gima & Ko,
2001). Collaboration with customers may help
firms determine which kinds of technologies
are needed for future innovations, and collabo-
ration with universities may allow firms to
keep up to date with the latest technological
developments. For their part, independent
experts such as engineering offices and inde-
pendent research institutes may help firms to
conceptualize and implement certain innova-
tive product ideas. Although suppliers are dis-
cussed in the literature as important sources
of knowledge for product design, quality
improvement, improved cycle time and cost
reduction (Ragatz, Handfield & Petersen, 2002;
Song & Thieme, 2009), our analysis shows that a
firm’s orientation towards technological inno-
vation is not related to collaborative activities
with suppliers. This result may be explained
if firms contact suppliers to implement tech-
nological innovations and new ideas or to
improve the current status of products and
product development processes, but do not
expect their suppliers to provide them with
technological innovations.
The results of this study also reveal that a
firm’s learning orientation and willingness to
take risks have a marginal positive association
with collaboration with customers and inde-
pendent experts (0.1–0.05). This result suggests
that firms consider customers and independent
experts the most important partners from
whom to learn in the context of NPD, and that
firms are willing to take on the risks associated
with these collaborative activities. On the other
hand, learning orientation and willingness to
take risks are not related to the willingness to
© 2011 Blackwell Publishing Ltd
INNOVATION CULTURE AND NPD PERFORMANCE
collaborate with suppliers, universities or com-
petitors. Future research is recommended to
verify this finding.
Finally, a firm’s orientation toward future
markets has a significant positive relationship
to collaboration with suppliers, universities
and independent experts. This result suggests
that firms that intend to invest in the develop-
ment of products and technologies for future
customers expect important inputs from the
interchange with these external partners. This
finding is in line with several findings in the
literature (Bercovitz & Feldman, 2007; Tether
& Tajar, 2008; Song & Thieme, 2009). While
Song and Thieme (2009) find that suppliers
are an important source from which to gather
market intelligence, Spencer (2001) empha-
sizes the relevance of published university-
based research for corporate R&D in the
US, and Alam (2003) points to independent
experts, such as engineering consultants, as a
rich source of valuable new product ideas.
However, a firm’s orientation toward future
markets is not related to customer and com-
petitor involvement in NPD, suggesting that
firms do not expect stimuli for new or signi-
ficantly modified product ideas from colla-
boration with their buyers and competing
companies. Future research is necessary to
investigate this finding further.
Our results reveal that firms that have a het-
erogeneous network of collaborative partners
perform better in terms of sales turnover of new
or improved products. However, not all of the
five external partners we observed significantly
contribute to NPD performance. Results show
that collaboration with customers is positively
and significantly related to NPD performance,
confirming that customers are an important
source of knowledge for firms in the process of
NPD. This finding is in line with findings of
several other researchers (Von Hippel, 1986;
Souder, Buisson & Garrett, 1997; Gruner &
Homburg, 2000). Customer involvement helps
firms to understand customers’ needs and to
align their products to those needs (Brockhoff,
2003), reducing product inadequacies and
making NPD processes more efficient. In com-
parison with the involvement of other external
partners, customer involvement turned out to
have the strongest effect on NPD performance.
As a result, customer involvement can lead
to more application-oriented development
projects with shorter time horizons, less risk
and lower investments (Knudsen, 2007). Still,
customers should not be the only external
partner because the development of new prod-
ucts that satisfy specialized customer needs
may represent the needs of only one particular
and narrowly defined customer group (e.g.,
lead users) and ignore the needs of other
© 2011 Blackwell Publishing Ltd
265
current and potential customers (Bonner &
Walker, 2004). In addition, Thomke and Von
Hippel (2002) remark that, even when custom-
ers know precisely what they want, they often
cannot express that information to manufactur-
ers clearly or completely. Consequently, NPD
collaboration with customers needs to be
carried out carefully.
Collaboration with suppliers also has a sig-
nificantly positive impact on NPD perfor-
mance. Although they are the second most
important external partners, suppliers are
highly engaged in the enhancement of their
own products; however, because they hold a
large amount of technological knowledge in
their fields, collaborative activities with them
help firms to update their products to the
best available technology and to ensure that
new product ideas are producible (Primo
& Amundson, 2002). Moreover, long-term
mutual relationships, which are often coupled
with geographic proximity, favour supplier
involvement (Wasti & Liker, 1997), so collabo-
ration with suppliers provides a valuable
source of knowledge and can help technology-
based firms improve their NPD performance.
Nevertheless, firms must always bear in mind
the importance of protecting sensitive knowl-
edge and avoid developing serious depen-
dency when collaborating with suppliers
(Doz, 1996).
Universities, particularly science and aca-
demic research institutions, are an important
factor in the development of major innovations
(Rosenberg & Nelson, 1994), so it is not surpris-
ing that collaboration with universities also
contributes significantly to NPD performance.
Cohen, Nelson and Walsh (2002) analyse the
channels of knowledge transfer between public
research organizations and innovative firms
and find that universities can play two particu-
larly important roles: suggesting new ideas and
helping to complete foundering projects. Inte-
grating universities into NPD processes pro-
vides firms with access to the latest research,
technological developments and advisory
services in R&D. However, compared to col-
laboration with suppliers, more effort is likely
to be required to ensure clear communication
through bureaucratic structures, so universities
are best suited to strategic, long-term R&D
partnerships.
While collaboration with customers, suppli-
ers and universities (in that order) have posi-
tive effects on NPD, our results show that
collaboration with competitors and indepen-
dent experts does not contribute significantly
to NPD performance. The risks associated
with collaboration among competitors may
result in the use of such partnerships in only
rare and exceptional cases (e.g., Miotti & Sach-
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266
wald, 2003). Collaboration with independent
experts, such as engineering consultants, is
usually undertaken in order to solve highly
specific and tangible problems (Bessant &
Rush, 1995), so the involvement of experts
does not necessarily contribute to firms’
general performance in innovation. However,
since researchers have recently found that
independent experts are a rich source of new
product ideas of potential commercial value
(Alam, 2003; Tether & Tajar, 2008), firms are
advised to exploit this knowledge source in
their NPD processes. Future research should
make further inquiries in this context.
Limitations and Future Research
Opportunities
Like every empirical study, this research has
several limitations that should be considered
when interpreting the results. First, the con-
struct of innovation culture and its relationship
to firms’ innovation adoption behaviour needs
to be investigated further. The current research
took the first step in analysing the correlation
between culture and openness, but there is
still much more in-depth research needed to
understand this correlation fully. Therefore,
the model developed for this study should be
tested in different settings (e.g., in additional
industries and countries) as well as with other
measurements of innovation culture. Second,
we did not differentiate the type or phase of
product innovation, although it is reasonable
to assume that different external partners
contribute differently to NPD performance
depending on the type and phase of the inno-
vation (e.g., idea generation, design, construc-
tion, incremental vs. radical innovation, etc.).
In order to elucidate the contribution of each
knowledge source to the process of NPD,
future research should break the innovation
side of the model into type and phase to
analyse this aspect of the relationship. Third,
the literature based on dynamic capability
theory and organizational learning perspec-
tives suggests that the form of collaboration
undertaken by a firm depends on the difficulty
of the learning environment and the complex-
ity associated with knowledge development
and transfer (Teece & Pisano, 1994; Nagarajan
& Mitchell, 1998). Thus, different types of col-
laborative activities (e.g., formal vs. informal,
equity-based vs. non-equity based, long term
vs. short term) may be appropriate in different
situations, but we did not investigate this
aspect of the question. Fourth, we did not con-
sider moderating effects in our research,
although environmental influences (e.g., tech-
nological, market and competitive dynamism)
Volume 20 Number 4 2011
CREATIVITY AND INNOVATION MANAGEMENT
may influence the causality of the model. Fifth,
although the sample includes a wide range
of high-technology industries, the data are
limited to one country and to technology-
based industries. This limitation may put
boundaries on the generalizability of the
results, so future research that considers the
relationships examined here in terms of a
variety of international firms and industries
in other kinds of settings is necessary before
results can be generalized with any confi-
dence. Sixth, future research may extend the
five external knowledge sources investigated
in this study to include other classes, such as
trade fairs, technology transfer centres or incu-
bators. Finally, additional work and the appli-
cation of other methods may validate the linear
relationship between collaborative activities
and NPD performance (Pek et al., 2009).
Despite these limitations, we believe that
our research contributes to the present litera-
ture on collaboration and provides several
practical and actionable suggestions for
researchers and managers in the field of new
product development.
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(2003) Recent Advances in Causal Modeling
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Malte Brettel is Professor of Entrepreneur-
ship at the RWTH Aachen University,
Germany. He researches in Entrepreneurial
Strategies and Innovation, and has pub-
lished in journals such as Strategic Manage-
ment Journal, Journal of Product Innovation
Management, Journal of Business Research,
Management Decision, and International
Journal of Strategic Management.
Nina J. Cleven (cleven@win.rwth-
aachen.de) studied at the RWTH Aachen
University, Germany, where she graduated
with a Diploma in Mechanical Engineering
and Business Administration. Today she is a
PhD student at the faculty of business and
economics at the RWTH Aachen University.
Her research interests are innovation man-
agement, technology and knowledge trans-
fer and strategic networks in new product
development.
© 2011 Blackwell Publishing Ltd
INNOVATION CULTURE AND NPD PERFORMANCE 271

Appendix

Table A1. Measurement Scales

Innovation culture

Orientation towards technological innovation (adapted from Herrmann, Gassmann & Eisert,
2007, a = 0.84)
1. We often use innovative technologies in the new product development.
2. Our products always reflect state-of-the-art technology.*
3. We are very proactive in the development and deployment of new technologies.
4. Relative to our competitors, our development programs and new products are
technologically more ambitious.*
5. We are very proactive in the construction of new technological solutions to serve the
customers’ needs.
6. We always rank among the first to use a new technology for new product development.*
Learning orientation (adapted from Hult, Ketchen & Arrfelt, 2007, a = 0.86)
1. The willingness to learn is the key in the process of new product development.
2. The basic requirement for static improvement of our new product development processes is
our willingness to learn.
3. In our view employee learning is an investment not an expense.*
4. General consensus in this company is that once we quit learning we endanger our future.
Willingness to take risks (adapted from Jaworski & Kohli, 1993, a = 0.89)
1. To bring innovative products on the market we do not avoid taking risks in the
development process.
2. We are convinced that it makes sense to take financial risks to increase profits.*
3. We favour and support the development of innovative products, knowing well that some
will fail.
4. We agree that it is necessary to take risks in the context of new product development.
5. We accept that new products occasionally fail.
Future market orientation (adapted from Jaworski & Kohli, 1993, a = 0.78)
1. Compared to our major competitors we place more emphasis on customers of the future, as
opposed to existing customers.
2. We search purposefully for new areas of applications for our (new) products.*
3. Our market research efforts are aimed at obtaining information about customers’ needs in
the future, relative to their current needs.
4. It is easy for us to promptly detect shifts in our markets.*
5. The search for new markets has a higher priority for us than the expansion of our business
activity in existing markets.
(1 = ‘fully disagree’ and 7 = ‘fully agree’)

Collaboration with external partners in the NPD process

Involvement of customers (new scale, a = 0.85)

1. We maintain regular communication with our customers with the aim to incorporate gained
information directly into our product development process.
2. We involve customers directly in the innovation process.
3. We assemble effective relationships with our customers, to better implement solutions for
their needs by using the most adequate technology.
4. We regularly carry out market research (e.g., surveys, analyses of target groups etc.) to gain
more information about our (potential) customers.*

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Table A1. continued

Collaboration with external partners in the NPD process

Involvement of suppliers (new scale, a = 0.89)

1. We maintain regular communication with our suppliers to get in-depth knowledge about
ongoing technological developments.
2. We involve suppliers actively in product development process.
3. Our suppliers play an important role in our product development processes.
4. We induce R&D co-operations with our suppliers to configure our product development
process more effectively.*
Involvement of competitors (new scale, a = 0.87)
1. Within the development of new products or technologies we align with selected
competitors to accelerate the development process and to share costs.
2. We carry out R&D co-operations with competitors to profit from synergies as long as no
sensitive knowledge is concerned.
3. We exchange information with competitors and accomplish benchmarks with them, to be
up-to-date concerning the latest technological developments and trends.*
Involvement of universities (new scale, a = 0.96)
1. We maintain R&D co-operations with universities to jointly develop and improve new
product technologies.
2. We maintain regular communication with universities to be always up-to-date with the
latest technological inventions.
3. In case of tangible technological problems concerning product development processes, we
regularly work closely with universities.
4. The regular exchange with universities is important for our firm.*
Involvement of independent experts (new scale, a =0.95)
1. We work together with independent experts (e.g., public research institutes, engineering
consultants, specialized start-up firms, etc.) in terms of contractual agreements, to solve
technological problems within new product development processes.
2. We regularly get in touch with independent experts within the process of new product
innovation.
3. In the context of new product development processes we work together with institutions
(e.g., public research institutes, engineering consultants, specialized start-up firms, etc.) and
people with special knowledge to benefit from their ideas.
4. The regular exchange with independent experts is important for our firm.
(1 = ‘fully disagree,’ and 7 = ‘fully agree’)

Performance Measurement

New Product Development Performance (adapted from Griffin & Page, 1993; Zahra & Covin,
1993, a =0.91)
1. We bring new and innovative products more often to market than other firms.*
2. In our market we are known for our innovative products.
3. Our new products differ substantially from their precursors.*
4. The percentage of new and innovative products in the product portfolio is significantly
higher in comparison to our competitors.
5. The percentage of sales generated through new and innovative products is significantly
higher in comparison to our competitors.
(1 = ‘fully disagree’ and 7 = ‘fully agree’)

* eliminated items.

© 2011 Blackwell Publishing Ltd

Volume 20 Number 4 2011