At the beginning of this inquiry I set out to understand how dynamic capabili-ties, specifically the capability to develop new products, function through the mechanisms that animate these change processes. At that point I already not-ed that the mechanism discussion in the dynamic capability discussion has been theoretically driven and empirical studies that embrace this perspective are lacking. Therefore mechanisms have been used as abstract pieces of theory through which inputs are transformed into outputs. To investigate the func-tioning of mechanisms of new product development capability, I outlined three research questions that I sought to address. Now it is timely to address these questions in light of the findings.
The first question that I set out to answer related to the kinds of mechanisms that pertain to the new product development capability. Through the empirical inquiry I was able to postulate altogether 11 different mechanisms that pertain to the ideation, evaluation and outcome stages. Table 14 presents these postu-lated mechanisms.
Table 14: Postulated mechanisms
In addition to postulating the mechanisms, I also examined the nature and functioning of the mechanisms themselves. While the outlined mechanisms are idiosyncratic to Vaisala, the mechanism types on the general level can pro-vide us with some of the archetypical mechanisms that can explain how com-panies develop new products. This is evident when keeping in mind that many of the mechanisms draw parallels with existing research. For instance, on one hand the external knowledge embodiment mechanism draws parallels with the concept of absorptive capacity (Cohen and Levinthal 1990; Zahra and George 2002) as both relate to how an organization is able to use external knowledge in its own operations. On the other hand, the evaluation mechanisms depict different types of selection heuristic (Bingham and Eisenhardt 2011; Bingham, Eisenhardt and Furr 2007) configurations.
When postulating the mechanisms I was able to highlight how mechanisms emerge as configurations of recurring activities. This provided one answer to the question of how stable structures such as routines or simple rules can cre-ate change. Thus, when we focus on conjunctural causation we can start to understand the mutually strengthening effects that certain combinations of routines/rules can generate. This opens up a new avenue for understanding how the constitutive elements of dynamic capabilities function. Thus, I extend the idea that dynamic capabilities function as systems where certain combina-tions have mutually reinforcing effects (Loasby 2010) into studying the consti-tutive elements of capabilities and not only the combinations of capabilities.
Therefore, the challenge that structures create rigidity and efficiency (Bingham and Eisenhardt 2010) could be surpassed by the capacity to configure and re-configure the structures rather than by just removing structures vis-à-vis rou-tines and simple rules.
What is also noteworthy is that many of the mechanisms share common fea-tures. This raises the question whether slight alteration of routines/rules can bring about changes in the mechanism themselves. Therefore, it could be pos-sible that the introduction of new routines/rules could unlock potentialities that organizational capabilities hold. This highlights the idea brought up by
Loasby (2010) that the combination of elements of which capabilities are con-stitutive of can be more than the sum of its parts. Answering the first question created grounds for addressing the two subsequent questions to which I move on to next.
The second research question that I set out to answer relates to understand-ing how the mechanisms explain the successful use of new product develop-ment capability on the project level. To answer this question I first examined the different sets of mechanisms. In doing so, I concluded that the ideation and evaluation mechanisms are both distinct problem-solving processes where through ideation the initial product concepts are developed which are then positioned into the offering portfolio of the company in the evaluation stage.
Outcomes reveal the impact that the ideation and evaluation mechanisms gen-erated together.
Next I examined the nature and relationship of the different sets of mecha-nisms. The relationship of ideation and evaluation mechanisms provided fruit-ful understanding into how the new product development capability can func-tion. Ideation stage was very technology intensive whereas the customer per-spective was brought in as an important consideration in the evaluation stage.
In contrast to Danneels (2002) who argued that successful new product devel-opment stems from linking technological competences and customer compe-tences, the present study highlights the possibility of sequentially exercising them. In doing so, I speculated whether the technology-oriented search could open up a wider search space for the company and enable the development of offerings that customers are not yet able to articulate. The customer-focused evaluation could thereafter ensure that the commercialized products do indeed match customer needs.
Finally, to answer the second research question I examined key success paths (Woodside, Ko and Huan 2012) of mechanisms to understand how the mecha-nisms animate the new product development process in the new product de-velopment projects. In doing so, I tried to analyze how the capability functions as a system: particular combinations and patterns that define the effectiveness of the capability (Loasby 2010). The identified success paths proved to be very varied. This provided empirical support for the notion of Eisenhardt and Mar-tin (2000) that dynamic capabilities are fungible. However, despite the appar-ent fungibility of the success paths I was able to draw out tendencies on the outcomes that certain mechanism paths can generate. Local search always led into project termination or merely a product launch, whereas exploratory search always induced a product launch and some other effect on the organiza-tion. The success paths of external knowledge embodiment highlighted both the risks and benefits of working with a third party where actions cannot be fully controlled. Now I can proceed into addressing the third and final research question.
The third research question that I set out to answer relates to understanding how the mechanisms explain the successful use of new product development capability on the firm level. In doing so, I examined what led the organization
to transform, how the capability in itself transformed and how the company transformed into a multiproduct firm.
In examining the transformation of the organization I highlighted how the new product development capability can be used to operationalize strategy through altering search mechanisms and how multiple search strategies can be used simultaneously. The organization’s transformation was highlighted as a realignment of the organizational form in which the new product development capability and its transformation was the main driver. This can be seen as a process of continuous morphing (Rindova and Kotha 2001).
After examining the transformation of the organization and how it drove change in the new product development capability, I transitioned to examine how the capability in itself changed. This enabled me to highlight how it is possible to transform search activities towards new search domains. The in-terplay of ideation and evaluation mechanisms provides insight into how or-ganizations could balance efficiency and flexibility within new product devel-opment process. The search mechanisms can drift towards new directions, which was what happened when the search for new types of products was started. Still the evaluation remained fairly constant. Therefore, this destabili-zation in one part of the process can enable a company to increase flexibility of the process, providing one answer to the question of how organizations could balance efficiency and flexibility set out by Eisenhardt, Furr and Bingham (2010).
Next I transitioned to examine how the new product development capability contributed into the transformation of Vaisala into a multiproduct firm. In doing so, seeking faster growth, the intrafirm transfer of knowledge and de novo entry were identified as factors that drove the change, as has been sug-gested by Teece (1980; 1982). In addition to this, I highlighted three comple-mentary explanations related to exogenous reasons that could also explain this phenomenon. These were responding to customer needs, responding to con-textual changes and capturing profit opportunities. What these factors high-lighted was that efficiency also relates to how an organization aligns its activi-ties to the context it functions in, not only on the firm internal organization of activities.
With regards to the effects that the new product development capability can induce, the findings provide support for the notion that the capability is able to increase evolutionary fitness of the company (Helfat et al. 2007). I also high-lighted that the capability could affect growth and that it enables the organiza-tion to reconfigure as desired (Zahra, Sapienza and Davidsson 2006) which in this study is associated with the successful development of new products.
The present study is among the few studies that provide empirically ground-ed examination of the mechanisms of dynamic capabilities and their internal functioning in a product development context. Thus, whereas the existing studies provide a top down approach into understanding mechanisms, I exam-ined them from a bottom up perspective to understand their inner workings.
This drew to my attention the notion that the existing mechanism based re-search is fairly abstract and that the proposed mechanisms may rather be
cat-egories of mechanisms. As means to mend this, I proposed that mechanism could be used as a meta-layer between recurring activities and the capabilities themselves. Therefore, I called for a more nuanced understanding into how mechanisms are construed and used, and also proposed that mechanism based theorizing can provide for a level of analysis that could integrate differing per-spectives.