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Network Competence: Its Impact on Innovation Success and Its Antecedents

Article  in  Journal of Business Research · February 2003

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 ARTICLE IN PRESS

Journal of Business Research 5728 (2002) 1 – 9

1 The impact of a company’s business strategy on its technological

of
2 competence, network competence and innovation success
Thomas Rittera, Hans Georg Gemündenb,*

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3
a
4 Copenhagen Business School, Copenhagen, Denmark
b
5 Institute of Technology and Innovation Management, Technical University of Berlin, Hardenbergstr. 4-5, HAD 29, D-10623 Berlin, Germany

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6

7 Abstract

8 This paper discusses the dual nature of the key to competitiveness in the network economy: On the one hand, a company needs
9
10
11
12
13
ed
technological competence in order to add value to products and processes. On the other hand, companies need to develop network
competence in order to link their organization to other players in the market to allow interactions beyond organizational boundaries. In this
paper, a basic framework for the successful implementation of a technology-oriented business strategy is developed, consisting of four
elements: business strategy, network competence, technological competence and innovation success. The model is empirically tested using a
database of 308 German companies. The results show that both network competence and technological competence have a significant
ct
14 positive impact on a company’s innovation success. Furthermore, the results suggest that a company’s technological strategy supports the
15 development of both network and technological competencies. D 2002 Elsevier Science Inc. All rights reserved.
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16
17 1. Introduction of cooperating partners (adopted from Gemünden et al., 38
1992). In a nutshell, research results indicate that an early 39
18 The explanation of firms’ innovation success has a long (Handfield et al., 1999; LaBahn and Krapfel, 2000; Mabert 40
or

19 research tradition and has lately received renewed attention et al., 1992) and intensive collaboration (Clark and Fuji- 41
20 due to increasing innovation costs, decreasing innovation moto, 1991; Heydebreck, 1996; Langerak et al., 1999; 42
21 times and increasing technology complexity. Researchers Wasti and Liker, 1977) leads to shorter innovation pro- 43
22 can be roughly divided into two camps: One group is looking cesses, reduced innovation costs and higher innovative 44
nc

23 into the internal success factors of innovations by, for output. Thus, innovation development has to be seen and 45
24 example, analyzing the innovation process, corporate cul- understood in a wider context than that of a single com- 46
25 ture, crossfunctional teams and technological competence pany, one that has been called a company’s technological 47
26 (Brown and Eisenhardt, 1995; Cooper, 1997; Cooper and interweavement or innovation network (Gemünden and 48
Kleinschmidt, 1995). The other set of explanatory variables Heydebreck, 1994; Heydebreck, 1996). The impact of
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27 49
28 is found on the boundary of the organization, and in its collaboration on innovation success varies in the different 50
29 network, by analyzing a firm’s interaction with other organ- innovation stages (Gruner and Homburg, 2000) and for 51
30 izations. This group of researchers is examining innovations different innovation aims (Gemünden et al., 1996). 52
31 as the result of interorganizational collaborations between Given these two areas for improvements in innovation 53
32 various companies (Biemans, 1992; Czepiel, 1975; DeBres- success, we need to analyze the underlying competencies on 54
33 son and Amesse, 1991; Gemünden et al., 1999; Håkansson, which their impact is based. In addition, we also need to 55
34 1987, 1989; von Hippel, 1988). The innovation process can understand the relative importance of these two different 56
35 involve collaboration with many different types of partners, arenas. In this paper, therefore, we analyse two different 57
36 each offering significant resources. Fig. 1 illustrates how the competencies: one describing the inside view and one des- 58
37 innovating firm can be embedded in an innovation network cribing the outside view. Furthermore, we look into the notion 59
of technology-oriented strategy as a driving force of both 60
competence development and innovation success (for a 61
* Corresponding author. Tel.: +49-30-314-26090; fax: +49-30-314-
discussion of competencies, see Heene and Sanchez, 1997). 62
26089. The paper addresses two main research questions: Which 63
E-mail address: hans.gemuenden@tim.tu-berlin.de (H.G. Gemünden). competencies does a company need in order to achieve inno- 64

0148-2963/02/$ – see front matter D 2002 Elsevier Science Inc. All rights reserved.
PII: S 0 1 4 8 - 2 9 6 3 ( 0 2 ) 0 0 3 2 0 - X
 ARTICLE IN PRESS
2 T. Ritter, H.G. Gemünden / Journal of Business Research 5728 (2002) 1–9

65 vation success? What role does a company’s business strat- 2.1.1. Network competence 118
119
66 egy play in competence development and innovation success? Traditionally, research into marketing competencies has 120
67 The paper is organized as follows: First, we develop a focused on a company’s ability to attract customers and sell 121
68 basic model describing the impact of technological and them products and services. As a rule, authors do not consider 122
69 network competencies on a company’s innovation success. customers’ contribution to product and process innovation. 123
70 We then incorporate business strategy in our model. Sub- Nor do they consider technological knowledge and informa- 124
71 sequently, the results of an empirical test of the model are tion provided by other partners, particularly by suppliers, 125
72 discussed. Finally, we outline managerial implications and research institutions and partners in systems selling. More- 126

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73 issues for further research. over, the specific capabilities involved in managing a network 127
of innovation partners are not addressed either. In terms of 128
achieving innovation success, the foregoing discussion on the 129

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74 2. Theory and hypotheses network nature of innovation management suggests that we 130
75 need to take a broader network perspective. 131
76 2.1. A company’s competencies and their impact on Of particular relevance to a company’s innovation suc- 132

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77 innovation success cess is its ability to develop and use technology-oriented 133
interorganizational relationships to link the company’s 134
78 The term ‘‘core competence’’ was introduced into man- (technological) competencies with those of its partners in 135
79 agement studies by Prahalad and Hamel (1990), though the the innovation network. Ritter (1998) has developed a 136
80 discussion of a firm’s competence has a longer tradition (for concept of a company’s network competence, which cap- 137
81 a historical overview, see Carlsson and Eliasson, 1991; tures the level of network management task performance 138
82
83
84
85
Eliasson, 1990; Rasche and Wolfrum, 1994; Winter,
1987). The concept takes a starting point in the resource-
based view of competition, which explains a company’s
success in terms of its (internal) competencies.
ed and the network management qualifications possessed by
the people handling a company’s relationships. This concept
extends earlier notions of marketing competencies, because
it highlights the interactions by which firms acquire
139
140
141
142
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86 Competence is often understood as a series of processes information, exchange offerings and collaborate technolo- 143
87 or activities (Day, 1994; Li and Calantone, 1998; Prahalad gically. This view also takes account of the fact that 144
88 and Hamel, 1990). Alternatively, competence can been interorganizational relationships have specific problems 145
89 defined as a potential, or qualification, to perform activities, (e.g. opportunistic behavior, asset specifity, cf. Williamson, 146
re

90 i.e. ‘‘having the ability, power, authority, skill, knowledge, 1979), especially as relationships are investment processes, 147
91 etc., to do what is needed’’ (Oxford Advanced Dictionary, which include sunk costs. This underlines the need for a 148
92 1988). In this paper, the term competence is used to mean firm to develop a competence in managing its network. 149
93 not only having knowledge or possessing skills and qual- Network competence enables a company to establish and 150
or

94 ifications, but also using those qualifications. Thus, com- use relationships with other organizations. This results in a 151
95 petence becomes a two-dimensional construct. Possessing high degree of technological interweavement, which is, in 152
96 qualifications but not using them, or performing tasks turn, a major contributing factor to innovation success 153
97 without having the appropriate qualifications, results in (Biemans, 1992; Gemünden et al., 1996; Heydebreck, 154
nc

98 incompetence (cf. Gemünden and Ritter, 1997, pp. 297). 1996). Furthermore, companies with a high level of network 155
99 Competence can be measured in two ways: In terms of competence follow more realistic and more market-oriented 156
100 the degree of task performance and qualifications (the inside innovation development paths and establish a better rela- 157
101 view) or, because competencies cannot be observed from tionship marketing strategy for selling innovative products 158
the outside (Day, 1994; Prahalad and Hamel, 1990), it can (Ritter, 1998; Ritter and Gemünden, in press). In addition,
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102 159
103 be evaluated in relation to competitors, i.e. a company’s network-competent companies can be assumed to have a 160
104 competence in a particular field is seen as greater or less greater level of market knowledge competence in, which, in 161
105 than its competitors’. turn, contributes to innovation success (Li and Calantone, 162
106 Several studies have looked at the content or types of 1998). This leads to our first hypothesis: 163
107 competency (e.g. Malerba and Marengo, 1995). While the
108 focus has traditionally been on technological competencies Hypothesis 1: The degree of a company’s innovation 164
109 and their impact on innovation and corporate success, recent success is positively correlated with its level of network 165
110 studies have taken a broader view by also including mana- competence. 166
111 gerial competencies (cf. Carlsson and Eliasson, 1991; Dosi 167
112 and Teece, 1993; Malerba and Marengo, 1995, Sanchez and 2.1.2. Technological competence 168
113 Heene, 1997). Based on the foregoing discussion, two types By technological competence means that a company’s 169
114 of internal competency are of particular interest for innova- ability to understand, use and exploit relevant state-of-the- 170
115 tion success: technological competence and a marketing or art technology internally. This competence enables a com- 171
116 network competence, which allows a firm to develop and pany to become a market pioneer through new product 172
117 use its innovation network. development and the use of new production processes. 173
 ARTICLE IN PRESS
T. Ritter, H.G. Gemünden / Journal of Business Research 5728 (2002) 1–9 3

174 Thus, companies with a high level of technological com- ness strategy is linked to marketing competence. For 210
175 petence will have greater innovation success than companies example: The degree of organizational scanning is signific- 211
176 with only a low level of technological competence (for antly higher in prospecting organizations (Hambrick, 1982). 212
177 empirical results, see Malerba and Marengo, 1995). This The perceived importance of marketing research is greater in 213
178 results in the second hypothesis. prospecting companies (McDaniel and Kolari, 1987), and 214
179 Hypothesis 2: The degree of a company’s innovation prospectors evaluate their distinctive marketing competen- 215
180 success is positively correlated with its level of tech- cies as significantly greater in several dimensions compared 216
with organizations using other strategies (Conant et al., 217

of
181 nological competence.
1990). Even though the definitions and operationalizations 218
182
of marketing competence vary significantly between studies, 219
183 2.2. The impact of business strategy
some elements of network competence are included. It is 220

o
therefore reasonable to assume that the reported positive 221
184 Business strategy can be described as a company’s
relationship between strategy and marketing competence also 222
185 behaviour in the market, including policies, plans and
holds for network competence. 223

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186 procedures (for definitions and typologies of strategy, see
The importance of technology-oriented relationships and 224
187 Brockhoff and Chakrabarti, 1988; Brockhoff and Leker,
their contribution to innovation success is well documented 225
188 1998; Conant et al., 1990; Ford, 1988; Gemünden and
(Gemünden et al., 1996; Håkansson, 1989; Hippel, 1988; 226
189 Heydebreck, 1995; Hinterhuber, 1982; Porter, 1980;
Shaw, 1985). Moreover, Gemünden and Heydebreck (1995) 227
190 Schewe, 1996). Given the aim of this paper to analyze the
and Heydebreck (1996) have shown that technology-ori- 228
191 impact on innovation success, we focus on the technological
ented companies have a high degree of technological 229
192
193
194
195
196
dimensions of business strategy. In particular, we hypothes-
ize that a technology-oriented strategy involves both placing
greater importance on R&D and new product development
and a desire to be the technological leader in the market.
Hambrick (1983) found that prospectors, who can be
ed interweavement. We therefore expect companies with a
technology-oriented strategy to adopt organizational ante-
cedents of network competence (Ritter, 1999) both in order
to gain network competence and to facilitate the flow of
230
231
232
233
ct
technological expertise across organizational borders. These 234
197 regarded as (technology) leaders for our purposes, have large
arguments can be summarized in the following hypothesis: 235
198 product R&D expenses. Similarly, McDaniel and Kolari
199 (1987) report that prospectors perceive new product devel- Hypothesis 4: A company’s network competence is 236
positively correlated with the strength of its technology- 237
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200 opment as very important. We therefore assume that a

201 company with a technology-oriented strategy will make more oriented strategy. 238
202 resources available to R&D, employ more highly qualified Finally, we follow the widespread assumption that, in 240
203 personnel and create a corporate culture amenable to learning 239
competitive markets, a (technologically) leading strategy is 241
or

204 and creativity. This leads to the following hypothesis: a successful one. Therefore, we propose a direct relationship 242
205 Hypothesis 3: The degree of a company’s technological between technology-oriented strategy and innovation suc- 243
206 competence is positively correlated with the strength of cess in the following hypothesis: 244
207 its technology-oriented strategy.
Hypothesis 5: A company’s innovation success is 245
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208 Apart from the relationship between strategy and tech- positively correlated with the strength of its technolog- 246
209 nological competence, several studies have shown that busi- ically oriented strategy. 247
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Fig. 1. Potential innovation partners and their contributions.

 ARTICLE IN PRESS
4 T. Ritter, H.G. Gemünden / Journal of Business Research 5728 (2002) 1–9

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Fig. 2. The theoretical model.

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278
248 The above hypotheses are summarized in Fig. 2. This 3.2. Operationalization and measurement model 279

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249 theoretical framework will be empirically analyzed in Sec-
250 tion 3. All constructs were measured using seven-point multi- 280
item scales (see Appendix A). Multiitem measures were 281
developed based on Cronbach’s alpha and item-to-total 282
251 3. The empirical study and results correlations exceeding appropriate levels (Cronbach’s 283
252
253 3.1. Data collection and sample

254
255
A questionnaire was designed and pretested on 14 com-
panies. We then contacted 741 German companies in mech-
ed alpha>.70, cf. Nunnally, 1978, p. 36; item-to-total correla-
tion>.30, cf. Kumar et al., 1995). Convergence validity was
checked through exploratory factor analyses, in which only
one factor is be extracted and the explained variance should
exceed 0.50.
284
285
286
287
288
ct
256 anical and electrical engineering, measurement technology In addition, confirmatory factor analyses using LISREL, 289
257 and control engineering to ask them to participate in the study. with covariance matrix as the input and Maximum Like- 290
258 Of these, 308 companies agreed, giving a response rate of lihood as the estimation method, were carried out to test the 291
259 43.3%. The data was collected between August and Decem- operationalization for each multiitem measure (see results in 292
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260 ber 1997 using standardized personal interviews. Table 1). In the context of scale validation, CFA is consid- 293
261 We used a key informant approach (cf. John and Reve, ered superior to the more traditional criteria mentioned 294
262 1982; Phillips, 1981), asking for respondents with an above (cf. Gerbing and Anderson, 1988). Because of sample 295
263 overview of the company, the technological network and size constraints, CFA were evaluated separately for each 296
or

264 innovation success. Half of our respondents were CEOs, construct (see Bagozzi and Baumgartner, 1994). 297
265 with another quarter being heads of their company’s R&D Several fit indices can be used to assess the adequacy of 298
266 department. In all other cases, the respondent was in the the model: The ratio of c2 over the degree of freedom (df) is 299
267 sales, production or controlling department. We believe that used as a descriptive measure of overall fit. Values of this 300
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268 this approach results in a very high quality of answers given. ratio smaller than 3 indicate an acceptable model fit 301
269 Our sample consists mainly of medium-sized companies: (Medsker et al., 1994), but higher values are also considered 302
270 40.7% have between 50 and 249 employees, and 24.9% sufficient (Hildebrandt, 1983). The goodness-of-fit index 303
271 between 250 and 999 employees. The remaining companies (GFI), the adjusted goodness-of-fit index (AGFI) and the 304
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272 are either very small (24.2% with less than 50 employees) or Comparative Fit Index (CFI) should exceed a minimum 305
273 larger corporations with more than 1000 employees value of 0.9 (Bagozzi and Youjae, 1988). For the root mean 306
274 (10.1%). Nearly half of the companies in the sample are square error of approximation (RMSEA), values up to 0.08 307
275 in mechanical and installation engineering (44.5%). Most of indicate a reasonable model fit (Browne and Cudeck, 1993). 308
276 the interviewed companies have been established for be- Root Mean Square Residual should not exceed 0.10. Table 1 309
277 tween 10 and 50 years (62.8%). shows the results of scale validations. Overall, most of the 310

t1.1 Table 1
t1.2 Results of the confirmatory factor analysis using LISREL—item level
Number Number of RMR
t1.3 Construct of items subconstructs c2/df ( P) GFI AGFI CFI RMSEA (standardized)
t1.4 Innovation success 6 2 7.16 (.00) 0.94 0.85 0.94 0.14 0.05
t1.5 Network competence 9 2 3.31 (.00) 0.94 0.90 0.95 0.08 0.04
t1.6 Technological competence 8 2 6.67 (.00) 0.91 0.83 0.85 0.14 0.07
t1.7 Business strategy 4 1 0.91 (.40) 0.99 0.98 1.00 0.00 0.01
 ARTICLE IN PRESS
T. Ritter, H.G. Gemünden / Journal of Business Research 5728 (2002) 1–9 5

t2.1 Table 2
t2.2 Results of the confirmatory factor analysis using LISREL—model level
Variance explained
by first factor Average
Indicator Standardised Item-to-total Cronbach’s alpha (exploratory Construct explained
t2.3 Construct (S = sum scale; I = item) factor loading correlation (a standardised) factor analysis) reliability variance
t2.4 C1 1 (S) .88 0.62 .74 81.0 0.77 0.63
t2.5 Innovation success 2 (S) .71 0.62
t2.6

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t2.7 C2 3 (S) .83 0.60 .72 79.7 0.75 0.60
t2.8 Network competence 4 (S) .72 0.60
t2.9
t2.10 C3 5 (S) .77 0.48 .65 73.9 0.65 0.49

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t2.11 Technology competence 6 (S) .63 0.48
t2.12
t2.13 C4 7 (I) .64 0.51 .73 56.2 0.77 0.45

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t2.14 Business 8 (I) .75 0.59
t2.15 Strategy 9 (I) .65 0.48
t2.16 10 (I) .65 0.53

311 criteria are met, and the scales can be accepted, since not all firms that have existed for 5 years or more, both measures 335
312
313
314
315
316
criteria need to be fulfilled.
To further validate our measures, we correlated the
developed scales with other potential measures. In the case
of business strategy, we asked the respondents about the
importance of new products for competitive advantage. The
ed show a significant correlation with the scales used in this
study (product innovation success: r=.42, sig.=.000, n = 298;
process innovation success: r=.45, sig.=.000, n = 235). Given
these results, the operationalization is statistically acceptable.
For all constructs that are composed of several factors
336
337
338
339
340
ct
317 correlation between the two measures is significant (r=.39, (subconstructs), the mean of the corresponding items for each 341
318 sig.=.000, n = 308), which further validates our measure. The factor were computed and used as inputs for the structural 342
319 level of network competence was related to the degree of the equation model. First, the measurement model was tested for 343
re

320 firm’s technological interweavement, i.e. the extent to which validity and reliability, following the procedure suggested by 344
321 the firm interacts with its environment to gain innovation Anderson and Gerbing (1988). The results of a confirmatory 345
322 inputs (Gemünden et al., 1992). An overall scale for inter- factor analysis using LISREL showed that the measurement 346
323 action with customers, suppliers, competitors and research model meets the widely employed guidelines. The global fit 347
or

324 institutions was built, using four multiitem scales. The criteria indicate a good fit between the data and the proposed 348
325 overall construct correlates significantly with the level of model [c(29)2 = 66.27; P=.000; GFI = 0.959; AGFI = 0.922; 349
326 network competence (r=.43, sig.=.000, n = 308). The firm’s NFI = 0.931; CFI = 0.958; RMSEA = 0.064, RMR = 0.039]. 350
327 technological competence was related to its percentage of Regarding detail fit criteria (cf. Table 2), a few measures fall 351
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328 R&D expenses. Both measures correlate significantly (r=.34, short of the desired thresholds, but this is regarded as 352
329 sig.=.000, n = 268). Finally, for the validation of innovation acceptable in research practice. 353
330 success, respondents indicated the percentage of sales 354
331 accounted for by new products (all products introduced to 3.3. Data analysis and results 355
332 the market less than 3 years ago). A similar measure was
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333 obtained for process innovations, i.e. the percentage of Data were analyzed using LISREL 8.30. The covariance 356
334 production produced on machines less than 3 years old. For matrix of the 10 indicators was entered into a Maximum 357

Fig. 3. Results of the structural model.

 ARTICLE IN PRESS
6 T. Ritter, H.G. Gemünden / Journal of Business Research 5728 (2002) 1–9

t3.1 Table 3 Firstly, a company’s technological competence is not the 401

t3.2 Results of discriminant validity measures
only factor of its innovation success. In the network eco- 402
t3.3 C1 C2 C3 C4 nomy, increasing attention must be paid to a company’s 403
t3.4 Average explained variance 0.63 0.60 0.49 0.45 ability to interact with its environment. Failing this, the 404
t3.5 C1 0.63 company’s strategic flexibility will be limited to its in-house 405
t3.6 C2 0.60 0.32 resources. This is inefficient given the increasing pace of 406
t3.7 C3 0.49 0.33 0.37 change in today’s markets and the complexity of today’s 407
t3.8 C4 0.45 0.29 0.26 0.55
technologies. It has been shown that network competence 408

of
enables a firm to establish and use technology-oriented 409
interorganizational relationships with partners who possess 410
358 Likelihood analysis. The test of the developed model indi- critical resources. 411

o
359 cated that the relationship between business strategy and Secondly, business strategy is not directly related to 412
360 innovation success is not significant. We therefore excluded innovation success. This result highlights the fact that it is 413
361 this relationship. Fig. 3 shows the test results regarding the not enough to just claim technological leadership. Such a 414

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362 (reduced) structural model, indicating the structural equa- strategy supports the development of important competen- 415
363 tion coefficients, the t values and the explained variance cies, which then enables a company to achieve innovation 416
364 (Table 3) of the endogenous constructs h1 to h3. An success. A clearly formulated strategy will include the 417
365 adequate level of fit in the structural model is indicated importance of competence development, as well as making 418
366 by the fit criteria [c(31)2 = 78.08; P=.000; GFI = 0.952; sure that contributing factors are in place. For example, to 419
367 AGFI = 0.914; NFI = 0.916; CFI = 0.944; RMSEA = 0.070, support network competence access to resources, network- 420
368
369
370
371
RMR = 0.047].
As shown in Fig. 3, the results support Hypotheses 1 and
2. Both network competence and technological competence
have a significant positive impact on innovation success. We
ed oriented human resource management, integrated commun-
ication structures and an open corporate culture are required
(cf. Ritter, 1998; Ritter and Gemünden, 1998). In short: The
mission statement must be translated into action.
421
422
423
424
can see that the impacts of both types of competencies are
ct
372 The limitations of this study call for further research in 425
373 about equal. This shows the importance of considering both the following areas: Firstly, the study looked at the role of 426
374 types of competencies as an explanation of innovation competencies in innovation success, the focus being on the 427
375 success, which depends as much on internal technological sources of innovation in terms of internal (technological 428
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376 strength as on the ability to access the technological resour- competence) and external (network competence) factors. 429
377 ces of others through interorganizational relationships. Other factors also play a role in a company’s innovation 430
378 Strategy has a strong impact on network competence and success, however, including internal management processes 431
379 technological competence. Companies that strive for tech- for new product and process development. Some authors 432
or

380 nological leadership build up greater levels of competence, have claimed that modularity in product design is a critical 433
381 presumably by making more resources available, devel- success factor (Sanchez, 1996, 1999) because it allows the 434
382 oping a supportive corporate culture and employing more decoupling of processes for developing new products, 435
383 highly skilled people (for antecedents of network compet- enabling those processes to become concurrent, autonomous 436
nc

384 ence, see Ritter, 1999). This confirms Hypotheses 3 and 4. and distributed, thereby enabling modular organization 437
385 We also tested a model including a direct relationship designs to be adopted for product development. By includ- 438
386 between business strategy and innovation success. The ing these factors, we can develop a broader frame of 439
387 results showed that a technology-oriented strategy has no reference, which would allow further insights into the 440
direct impact on innovation success. Thus, Hypothesis 5 is mechanisms that trigger innovation success.
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388 441
389 not supported. Based on the model as a whole, the following Secondly, only technology-oriented business strategy has 442
390 explanation can be given: Strategy supports competence been analyzed. The remaining question concerns the impact 443
391 development, which, in turn, leads to innovation success. of other strategies on a company’s competencies and its 444
392 Success comes from converting strategy into action. innovation success. Furthermore, do companies with differ- 445
393 The model explains a good proportion of innovation ent strategies benefit from having these competencies? 446
394 success and network competence and a large proportion of Thirdly, our analysis focused on innovation success. 447
395 the variance in technological competence. This indicates Further research could examine the impact on corporate 448
396 that the analysis has included the major drivers of the con- success. Even though innovation success is known to be a 449
397 structs in question. major contributor to corporate success, other sources of 450
corporate success need to be considered at the same time. 451
Finally, industry-specific or environmental characteristics 452
398 4. Managerial implications and further research were not included in our model. There is evidence that 453
market and technology dynamics can moderate the impact 454
399 Our theoretical discussion and the results of the empirical of strategy and competencies, as well as affect a firm’s 455
400 study have two major implications for management. competency development. 456
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457 Our study combines internal and external elements that To what extent do the people performing the above 503
458 are proposed to have a positive impact on innovation activities have the following qualifications? 504
459 success. We were able to show that both play an important
460 role. Given the fast pace of change in today’s world, the  Special qualifications 505
461 dynamics of competence development will become a  Social qualifications 506
462 major managerial concern and an academic challenge in 507
463 the future. For all activities, multiitem scales were used. Due to 508
limitations of space, we are unable to list them all. A 509

of
complete list and statistical information can be found in 510
464 5. Uncited reference Ritter (1998). These scales have been retested with several 511
groups of respondents from various countries, see Ritter et al. 512

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465 Jöreskog and Sörbom, 1996 (in press). 513
514
A.3. Technological competence 515

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466 Appendix A. Measures
Technological Collaboration Reasons (1 = strongly dis- 516
467 The questionnaire survey used in this publication was agree, 7 = strongly agree, Cronbach’s alpha=.77) 517
468 conducted in German. The following items were translated
469 for documentation purposes only.  Because we are the only firm with whom such 518
470 products and processes can be developed. 519
471 A.1. Innovation success

472 Product Innovation Success (1 = strongly disagree, 7 =

473 strongly agree, Cronbach’s alpha=.72)
ed  Because we are the only firm which can use the results
of this development project.
 Because we have excellent technological know-how.
 Because we are known for successful innovations.
520
521
522
523
ct
524
474  Compared with our competitors, our product modifi- Technological Expertise (1 = strongly disagree, 7 = 525
475 cations and innovations have a better market response. strongly agree, Cronbach’s alpha=.64) 526
476  Our competitors have more success with their product
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477 innovations (reverse scored).  We are very satisfied with the exclusiveness of our 527
478  Our products are of state-of-the-art technology. technological know-how. 528
479  Our production processes are highly complex. 529
480 Process Innovation Success (1 = strongly disagree, 7 =  Our products are highly complex. 530
or

481 strongly agree, Cronbach’s alpha=.78)  Considerable user know-how is required to use our 531
products. 532
482  We have very modern production facilities. 533
483  Our production facilities are more advanced than Business Strategy (1 = strongly disagree, 7 = strongly 534
nc

484 those of our competitors. agree, Cronbach’s alpha=.73) 535

485  Our production facilities are of state-of-the-art
487
486 technology.  We are the technological leader in our industry. 536
488  We place high emphasis on our R&D activities. 537
489 A.2. Network competence  We take technological risks.
U

538
 We constantly develop our products. 539
540
490 Network Management Task Execution (1 = not at all,
491 7 = very intensive, Cronbach’s alpha=.89)
492 To what extent are the following activities performed? References 541

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