Attention to New Product Development in Alliances

Abstract

This paper extends the attention based view to alliances between buyer and supplier firms on product innovation. Attention of both firms increases when detailed specifications regarding the product’s parameters (e.g. functional principles, features, design elements) are developed and applied in the course of the alliance. Data collected from 279 European manufacturing firms reveal that moderate levels of “post-formational specifications” proposed by the buyer firm are associated with “superior” new product offerings by the supplier. Less superior products result when the specifications by the buyer are either minimal or high. Mutual knowledge creation is associated with increased attention of both partners so that they constructively work together even when the level of constraints in post-formational specifications is low or high. Thus, the attention related to mutual knowledge creation in the alliance enhances new product superiority of the supplier as well as moderates the relationship between the level of specifications and new product superiority.