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臺大管理論叢
第
27
卷第
3
期
23
Proposition 1a. In process competition, an increase in investment in process innovation
capabilities leads to an increase in competitive tension.
Proposition 1b. In process competition, an increase in investment in process
improvement capabilities leads to a decrease in competitive tension.
The premise of our theory is highlighted by the findings that competition is a key driver
of process innovation. Our simulation results clearly depict that the three capability
development trade-offs lead to distinct operational performance under competition.
Specifically, if the follower fails to consider competition (i.e., a capability development
trade-off with constant fraction) or simply focuses on survival pressure (i.e., a short-termism
capability development trade-off), its chances of adjusting its process capabilities to align
with the dynamic competitive environment are slim. Ultimately, it will not generate a
revolutionary process. On the contrary, the competitive tension will motivate the follower to
recognize the value of radical innovation for long-term capability development. As proposed
by Mendelson and Pillai (1999), todayʼs dynamic and highly competitive global environment
has dramatically increased the pace of firmsʼ internal operations development. Therefore, a
sustained investment in innovation capabilities will facilitate a better operational
performance. Formally,
Proposition 2. In process competition, the positive relationship between process
innovation capabilities and competitive tension is mediated by process
capability development trade-offs: This positive relationship is
negatively mediated by either the constant-fraction or short-termism
capability development trade-off but positively mediated by the long-
term-growth capability development trade-off.
6.2 The Lock-In Effect
Our conceptualization of process competition captures the action-reaction exchanges
between rivals. In a competitive environment, the leader can directly influence the followerʼs
capability development trade-offs in two ways. The first is to build barriers to prevent
effective learning of the current best practice, which, in our model, is measured as
improvement effectiveness. The second way is to embrace intensive retaliation threat to raise
the followerʼs survival pressure, which in our model, is measured as the leaderʼs aggressive
attack.