Project Management Institute

The role of reward systems in product innovations

an examination of new product development products

Focusing on new product development projects, this study suggests that the effect of a market orientation on innovation performance relationships may differ depending on whether the market orientation is responsive or proactive. This study argues that process-based and outcome-based rewards moderate the effect. Based on a survey of 186 new product development projects in 122 high-tech firms, this study found that responsive and proactive market orientations have positive influences on incremental innovation performance and radical innovation performance, respectively. In addition, the positive effect of a proactive market orientation on performance is strengthened by process-based rewards, whereas the positive effect of a responsive market orientation on performance is positively moderated by outcome-based rewards.
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