The Need for Speed: How Reputation Incongruence Impacts New Product Introduction

Abstract

Much work has examined the antecedents and consequences of firm-level reputation for product quality. However, products also have their own unique reputations, and the effects of these reputations have yet to garner any systematic investigation. In this paper, we study the speed with which products are released after an incident of reputation incongruence, or divergence between cumulative firm-level reputation for product quality and the reputation of the firm’s most recently introduced product. We hypothesize that reputation incongruence will speed up the introduction of a firm’s next product(s). We test this theory in the context of the U.S. video/computer game industry, analyzing a sample of 4,349 games released between 1996 and 2010 by 197 game publishers. Results indicate that reputation incongruence increases the sense of urgency firms face (to either exploit a short-lived opportunity or mitigate a reputational threat), and thus increases the speed with which the firm introduces new products. In addition, we show that this relationship is stronger when the firm’s most recently introduced product is similar to its cumulative product portfolio. We use these findings to build on existing theory regarding both firm reputation and new product production.