Search results

Cumulative capability models are dominating frameworks explaining how manufacturing organizations gain their performance capabilities, such as quality, delivery, flexibility and cost. When innovation capabilities are excluded from the framework, the models are incapable of explaining how companies sustain substantive capabilities in a changing environment. Responding to this gap, the purpose of this paper is to propose and test a “sand cone” cumulative capability model that includes the innovation competitive performance alongside the competitive performance of quality, delivery flexibility and cost.

Two competing cumulative models were proposed. The extended cumulative capability model hypothesizes the development of innovation in sequence with other competitive performance dimensions. The affected with innovation cumulative model hypothesizes innovation performance as a predecessor of other performance dimensions. The models were tested using a multimethod approach on a representative sample of 500 manufacturing companies. An analysis of correlations among competitive performance, frequencies of plants following prescribed sequences, fit statistics of covariance-based structural equation modeling and analysis of strength and statistical significance of path coefficients enabled us to select a model that best represents the collected data.

The findings reveal that innovation competitive performance operates as a predecessor of quality, delivery, flexibility and cost and is developed in relation to these performance dimensions. The modified model also provides a theoretical explanation of how innovation performance helps to sustain reliable production systems that can perform consistently over time within a tolerable range of quality, delivery, flexibility and cost performance.

The results are significant for practitioners, especially for companies that are operating in volatile environments because the results provide insight on how to develop innovation competitive performance in relation to quality, delivery, flexibility and cost performance.

This study extends the cumulative capability models with innovation competitive performance. It advances the contingency approach on cumulative capability models.

The article aims to focus on the debate around the interplay between product innovation and servitization. Two conflicting approaches characterize the debate, disagreeing as to whether product innovation and servitization are complementary or not.

The authors examine two competing models proposing a direct effect of product innovation on servitization and an indirect effect through digitalization, using the sample of 500 manufacturing firms of a country participating in the European Manufacturing Survey, 2018 edition.

The results reveal that product innovation has no direct effect on servitization. However, the authors found that digitalization capabilities mediate the effect of product innovation and servitization. The present findings reveal that product innovation has a substantial indirect effect on servitization through digitalization capabilities, supporting the approach proposing the complementarity between product innovation and servitization.

The data used in this paper correspond to a single country. The limited geographical sampling frame may likewise limit the generalizability of the findings. Researchers are encouraged to replicate the analysis with data from other countries, and to further enrich the analysis with complementary path options and resulting performance measures.

When applying a capabilities perspective, the authors find that product innovation capability is not directly related to servitization as capability. The present findings point toward the fact that if companies only have product innovation capability, this does not facilitate servitization. If companies have both product innovation capability and digitalization capability, such a situation facilitates servitization, a decision which often falls within managers’ responsibilities.

Existing studies focus on antecedents and/or outcomes of single issues, either product innovation, servitization or digitalization. Only some offer dual associations (product innovation and servitization, digitalization and servitization), and even less position simultaneously at the intersection of the three pillars. Herein lies the novelty of the present approach and analysis, which explains the extent to which product innovation, digitalization and servitization are related.