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1. Introduction
In today’s highly competitive marketplace, characterized by unstable consumer preference and short product lifecycles, firms are under pressure to develop new products and services that are both timely and responsive to customer needs (Calantone et al., 2010). However, many companies have changed their organizational structures to become more responsive to customer needs. In this vein, some studies have revealed the important role of organizational structures in the development of new products (Hitt et al., 1996; Im and Workman, 2004; Lei et al., 1999; Menguc and Auh, 2010; Olson et al., 1995; Wei et al., 2014). Moreover, little previous empirical evidence has connected the effect of organizational structures, including both formalization and centralization, to new product performance (Auh and Menguc, 2007; Chen, 2007; Covin and Slevin, 1989; Damanpour, 1991; Gupta and Wilemon, 1988; Hage and Dewar, 1973; Moenaert et al., 1994; Mu et al., 2017; Pattikawa et al., 2006; Sethi et al., 2001; Yap et al., 1998). This study, therefore, contends that formalization and centralization have different effects on the performance of the new product development projects and empirically examines this issue.
A firm’s customer response capability is associated with its strategic orientation. As Chandler (1962) stated, “A firm’s strategy would dictate its organizational structure, and to the extent that the strategy and structure combination was optimal.” The alignment between organizational structure and its strategy orientation, therefore, has positive implications for performance. Therefore, previous literature has argued that strategic orientation would influence organizational structure (Chandler, 1962; Miles and Snow, 1978; Miller and Friesen, 1984; Mu et al., 2017; Rumelt, 1974; Venkatraman, 1989; Venkatraman and Camillus, 1984), and the interaction of organizational structure and strategic orientation is directly related to new product performance (Boyd and Fulk, 1996; Dekoulou and Trivellas, 2017; Dess and Keats, 1987; Nandakumar et al., 2010; Pattikawa et al., 2006). In other words, though organizational structures play a critical role in explaining new product performance, some contingency factors such as strategic orientation may affect their impact on new product development.
Figure 1 presents the research model and the proposed hypotheses of this study. The remainder of the paper proceeds as follows. The next section considers the literature and sets...