Top management service commitment and new product development in manufacturing firms: the moderating role of dysfunctional competition

Abstract

Purpose This paper aims to investigate how top management service commitment (TSC) affects two dimensions of new product development (NPD), speed and product innovativeness, and to examine how dysfunctional competition moderates the effects in emerging economies. Design/methodology/approach Data were collected from 151 high-tech manufacturing firms in China. In one firm, two different top managers were surveyed to reduce the common method variance. The authors used the seemingly unrelated regression approach to test the hypotheses. Findings First, TSC negatively influences product innovativeness, an effect that dysfunctional competition attenuates. Second, despite not being significantly positive as hypothesized, the direct effect of TSC on NPD speed remains positive when dysfunctional competition is high rather than low. Third, the findings reveal that product innovativeness increases firm performance, but NPD speed shows no similar effect. Practical implications First, top managers should pay attention to the synergistic effect between industrial services and product businesses. Second, manufacturing firms in developing countries need to implement servitization when facing unlawful competitive behaviors. Originality/value In literature, the effect of industrial services on NPD is unclear. The present study enriches literature by connecting servitization with NPD and by focusing on the importance of top managers to the implementation of servitization. In addition, the authors extend the servitization literature to emerging economies and thereby provide significant insights into this context.

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