Strate gic Management Journal Strat. Mgmt. J., 26: 259–276 (2005) Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/smj.450 MARKETING AND TECHNOLOGY RESOURCE COMPLEMENTARITY: AN ANALYSIS OF THEIR INTERACTION EFFECT IN TWO ENVIRONMENTAL CONTEXTS MICHAEL SONG, 1 CORNELIA DROGE, 2 * SANGPHET HANVANICH 3 and ROGER CALANTONE 2 1 The Bloch School, Univers ity of Missouri, Kansas City , Misso uri, U.S.A.; TEMA, Eindhoven University of Technology, The Netherlands2 Eli Bro ad Gr aduate Sch ool of Man age men t, Mic hig an Sta te Universi ty, Eas t Lan sing, Michigan, U.S.A. 3 Williams College of Business, Xavier University, Cincinnati, Ohio, U.S.A. The dynamic capabilities perspective posits that a firm can leverage the performance impactof existing resources through resource con figuration, complementarity, and integration, but little empirical research addresses these issues. We investigate the effects on performance of marketing capabilities, technological capabilities, and their complementarity (interaction), and whetherthese effects are moderated by low vs. high technological turbulence. Results from SEM two- group analyses (with controls) show that both main effects positively impact performance in both environmental contexts. However, (1) their interaction effect is signi ficant only in the high- turbulence environment; (2) the marketing-related main effect is lower in the high-turbulence environment; and (3) the main effects of technology-related capabilities are the same in both environments. Our research suggests that the synergistic performance impact of complementary capabi liti es can be substa ntive in parti cular environ menta l conte xts: whil e syner gisti c ren ts cannot always be obtained, it is possible to leverage existing resources through complementarity. Copyright 2005 John Wiley & Sons, Ltd. INTRODUCTION The relationsh ips betwee n resour ces (or capabi l- iti es) and firm per formanc e hav e attracte d muc h research interest, but we still know relatively lit- tle about why some firms suc ces sfully use the ir capabilities while others do not (Helfat, 2000). The extant literature suggests that superior performance Keywords: dynamic marketing/technological capabilities; resource-based theory; interaction effect; SEM ∗ Correspondence to: Cornelia Droge, Eli Broad Graduate School of Management, Michigan State University, N370 North Busi- ness Complex, East Lansing, MI 48824-1122, U.S.A. E-mail: [email protected]can come from res our ce uni que ness (e. g., Bar - ney, 1991), from reconfigurati on and integr ation of exi sti ng res our ces (e. g., Eis enh ardt and Mar - tin, 2000; Teece, Pisano, and Shuen, 1997), and/or from the abilit y to resp ond approp riat ely to the surrou nding enviro nment (e.g., Mintz berg, 1987; Pfef fer and Sal anc ik, 1978; T an and Lit schert , 1994). Our st udy ai ms to contribute to this li t- era ture by focusi ng on two issues that are rel- ativel y neg lected: (1) the perf ormanc e impact ofthe interaction of capabilities (in addition to main eff ect s); and (2) the differential impact of capa- biliti es and their interaction in diffe rent environ- ments . The former addres ses wheth er complemen- tary capabi lit ies have synergistic eff ects , whi le Copyright 2005 John Wiley & Sons, Ltd. Recei ved 17 Octob er 2002 Final revision received 17 September 2004
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8/14/2019 Marketing and Technology Resource Complementarity
Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/smj.450
MARKETING AND TECHNOLOGY RESOURCE
COMPLEMENTARITY: AN ANALYSIS OF THEIR
INTERACTION EFFECT IN TWO ENVIRONMENTAL
CONTEXTS
MICHAEL SONG,1 CORNELIA DROGE,2* SANGPHET HANVANICH3 andROGER CALANTONE2
1 The Bloch School, University of Missouri, Kansas City, Missouri, U.S.A.; TEMA,Eindhoven University of Technology, The Netherlands 2 Eli Broad Graduate School of Management, Michigan State University, East Lansing,Michigan, U.S.A.3
Williams College of Business, Xavier University, Cincinnati, Ohio, U.S.A.
The dynamic capabilities perspective posits that a firm can leverage the performance impact of existing resources through resource con figuration, complementarity, and integration, but littleempirical research addresses these issues. We investigate the effects on performance of marketingcapabilities, technological capabilities, and their complementarity (interaction), and whether these effects are moderated by low vs. high technological turbulence. Results from SEM two-group analyses (with controls) show that both main effects positively impact performance inboth environmental contexts. However, (1) their interaction effect is signi ficant only in the high-turbulence environment; (2) the marketing-related main effect is lower in the high-turbulenceenvironment; and (3) the main effects of technology-related capabilities are the same in both
environments. Our research suggests that the synergistic performance impact of complementarycapabilities can be substantive in particular environmental contexts: while synergistic rentscannot always be obtained, it is possible to leverage existing resources through complementarity.Copyright 2005 John Wiley & Sons, Ltd.
INTRODUCTION
The relationships between resources (or capabil-
ities) and firm performance have attracted much
research interest, but we still know relatively lit-
tle about why some firms successfully use their
capabilities while others do not (Helfat, 2000). Theextant literature suggests that superior performance
Keywords: dynamic marketing/technological capabilities;resource-based theory; interaction effect; SEM∗ Correspondence to: Cornelia Droge, Eli Broad Graduate Schoolof Management, Michigan State University, N370 North Busi-ness Complex, East Lansing, MI 48824-1122, U.S.A.E-mail: [email protected]
can come from resource uniqueness (e.g., Bar-
ney, 1991), from reconfiguration and integration
of existing resources (e.g., Eisenhardt and Mar-
tin, 2000; Teece, Pisano, and Shuen, 1997), and/or
from the ability to respond appropriately to the
surrounding environment (e.g., Mintzberg, 1987;
Pfeffer and Salancik, 1978; Tan and Litschert,
1994). Our study aims to contribute to this lit-
erature by focusing on two issues that are rel-
atively neglected: (1) the performance impact of
the interaction of capabilities (in addition to main
effects); and (2) the differential impact of capa-
bilities and their interaction in different environ-
ments. The former addresses whether complemen-
tary capabilities have synergistic effects, while
Copyright 2005 John Wiley & Sons, Ltd. Received 17 October 2002Final revision received 17 September 2004
8/14/2019 Marketing and Technology Resource Complementarity
with a range of 57–1650 (this is an indica-tor of JV size). The industries represented were:
Chemicals and Related Products; Electronic and
Electrical Equipment; Pharmaceutical, Drugs, and
Medicines; Industrial Machinery and Equipment;
Telecommunications Equipment; Semiconductors
and Computer Related Products; Instruments and
Related Products.
Measurement of key model constructs
Before collecting data, we conducted four in-depth
case studies to validate measures. Table 1 presentsthe wording and scale points of key model vari-
ables. Cumulative normal probability plots demon-
strated that each of these measures was normally
distributed. Appendix 1 contains the complete cor-
relation matrix.
Respondents were required to rate the market-
ing-related capabilities and technology-related
capabilities of the JV. The marketing-related capa-
bilities, focusing on market sensing and exter-
nal linking capabilities, were developed from Day(1994). The technology-related capabilities, focus-
ing on technology development, new product
development, and manufacturing processes, were
also drawn from Day (1994). In addition to these
two latent independent constructs, we also have
the following independent variables as controls:
(1) market growth, the average annual growth rate
in percentage of total sales in the JV’s princi-
pal served market segment over the past 3 years;
(2) relative costs, the JV’s average total operat-
ing costs in relation to those of its largest com-
petitor in its principal served market segment;and (3) industry (six dummy variables represent-
ing seven industry groups).
Finally, the dependent construct performance
relative to profit, sales, and ROI objectives was
measured on 11-point scales anchored ‘low’/‘high.’
Using perceived performance scales relative to
objectives permits comparisons across firms and
Table 1. Measurement items and response formats
Construct and response format Measurement items
Marketing-related capabilities (MKT)Please evaluate how well or poorly you believe this
joint venture performs the specific activities orpossesses the specific capabilities relative to yourmajor competitors. (11-point scale with anchors:0 = Much worse than your major competitors;10 = Much better than your major competitors)(adapted from Day, 1994)
Customer-linking capabilities (i.e., creating and managingdurable customer relationships)
Market-sensing capabilities (predicting changes in customerpreferences)
Channel-bonding capabilities (creating durable relationshipwith channel members such as wholesalers, retailers)
Technology-related capabilities (TECH)Please evaluate how well or poorly you believe this
joint venture performs the specific activities orpossesses the specific capabilities relative to yourmajor competitors. (11-point scale with anchors:0
=Much worse than your major competitors;
10 = Much better than your major competitors)(from Day, 1994)
Technology development capabilitiesManufacturing processesNew product development capabilities
Technologically-turbulent environment Please indicate the degree to which you agree or
disagree with the following statement regardingthis joint venture (11-point scale with anchors:0 = strongly disagree; 10 = strongly agree)
The technology in our industry is changing rapidlyTechnological changes provide big opportunities in our
industryIt is very dif ficult to forecast where the technology in our
industry will be in the next 2–3 yearsTechnological developments in our industry are rather
minor (R)
Overall performancePlease rate the extent to which this joint venture (JV)
has achieved the following outcomes. (11-pointscale with anchors: 0 = low; 10 = high)
Overall profit margin relative to the JV’s objectiveOverall sales relative to the JV’s objectiveOverall ROI relative to the JV’s objective
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U n d e r l i n e d c o r r e l a t i o n s a r e s i g n i fi c a n t a t
p < 0 . 0 5 ( 2 - t a i l e d ) .
M , m a r k e t i n g - r e l a t e d c a p a b i l i t i e s ; T , t e c h n o l o g y - r e l a t e d c a p a b i l i t i e s ; P , P e r f o r m a n c e .
B e l o w t h e d i a g o n a l a r e c o r r e l a t i o n s f o r t h e l o w t e c h n o l o g i c a l l y t u r b u l e n t e n v i r o n m e n t ( n =
2 1 7 ) .
A b o v e t h e d i a g o n a l a r e c o r r e l a t i o n s f o r t
h e h i g h t e c h n o l o g i c a l l y t u r b u l e n t e n v i r o n m e