The Moderating Role of Geographic Diversity on the Relationship between Environmental Uncertainty and Organizational Implementation Capabilities

Abstract

This study examined the moderating influence(i.e., geographic diversity) on the relationship between (1) environments such as technological change and competitive intensity and (2) a development process such as marketing and technical proficiencies. Data obtained from a survey of NPD projects by Korean firms suggest that the effects of external environments (e.g., competitive intensity) on organizational implementation capabilities (marketing and technical proficiencies). This research also shows that geographic diversity may increase the contribution of competitive intensity to organizational implementation capabilities. In highly competitive markets, operating in diverse country markets and pursuing international markets are paramount to enabling a firm to gain and sustain a competitive advantage in the face of heightened pressure to increase the project team’s capacity to proficiently execute new product marketing and technical activities. However, the results do not lend support to the proposed moderating effect of geographic diversity on the positive impact of technological change on marketing and technical proficiencies. The results imply that when a firm strives to develop new products in a market characterized by rapidly changing technology, geographic diversity does not strengthen or weaken the positive impact of technological change on organizational implementation capabilities.