Impact of social media technologies on new product development performance: theory and empirical evidence

ABSTRACTIn current unpredictable environments, it is essential to understand customers’ needs as quickly as possible. Social media platforms are important sources of knowledge and developing a social media capability is critical in quickly sensing customers’ requirements. Social media capability can enable firms to co-create internal knowledge between employees, functional departments, and business units and external knowledge with customers. Despite the potential of social media for innovation, prior research has not studied the internal processes that should be developed to manage and leverage the information obtained through social media. Drawing upon the IT-enabled organisational capabilities perspective and the social media affordances theory, this study proposes a research model on the impact of social media capability, social knowledge co-creation, and NPD dynamic capabilities on NPD performance. The research model was tested on a sample of large European firms using survey and secondary data. Results show that social media capability enhances NPD performance by enabling firms to co-create knowledge and developing NPD dynamic capabilities. This study contributes by: (1) operationalising and measuring social media capability and social knowledge co-creation; and (2) demonstrating how social media capability improves NPD performance by co-creating knowledge and developing NPD dynamic capabilities to develop new products.KEYWORDS: Social media capabilitysocial knowledge co-creationNPD performancesocial technologies-driven business innovationbusiness value of social media technologiesopen innovation AcknowledgementsWe want to thank for the research sponsorship received by the Government of Andalusia and the European Regional Development Fund (European Union) (Research Project B-SEJ74-UGR20), and the Government of Spain (Research Grant FPU13/01643 and Research Project PID2021.124725NB.I00).Disclosure statementNo potential conflict of interest was reported by the authors.Notes1. This manuscript refers to employees as all organisational members (executives and non-executive employees from functional departments and business units).2. Kock and Hadaya (Citation2018) suggested the use of the inverse square root method to calculate the minimum required sample size, so the estimators are not biased. Regarding Kock and Hadaya (Citation2018) method, considering an alfa level of 0.1, and minimum path coefficient value of 0.200 for which we want to find significance, the minimum sample size to consider should be 113.3. In a first step we estimated the construct variables’ scores of the dimensions of the second-order constructs (i.e., social media capability, social knowledge co-creation, and NPD dynamic capabilities) to used them as the measures of the second-order constructs in a second step.4. Composite constructs are also labelled artefacts (or emergent variables) because the composite model is the way of modelling artefacts and composite constructs (Henseler, Citation2021). Composite construct is one type of formative measurement in which: (1) indicators are the ingredients or components of the construct, (2) correlations among indicators are probable but not required, (3) there is no measurement error if the composite reliability is assumed to be fixed to one, and (4) dropping an indicator may change the composite meaning.5. We repeated this empirical analysis by controlling for firm’s proactiveness, firm size, industry, firm age, IT investment, and innovation investment on the three endogenous variables, and this analysis yields similar results.6. VIF values range from 1.059 to 1.911 for all constructs included in the proposed model.Additional informationNotes on contributorsJose BenitezJose Benitez is a Professor of Information Systems (IS), Department Chair of Information Systems and Business Analytics, and the Bridgestone Endowed Chair in International Business at the Ambassador Crawford College of Business and Entrepreneurship, Kent State University, Kent, Ohio, USA. His research interests cover the impact of digitalization on companies and individuals and the development of theory and quantitative research methods in IS research. His research has been published in about 50 papers in leading journals including MIS Quarterly, Journal of Operations Management, Journal of Management Information Systems, Journal of the Association for Information Systems, European Journal of Information Systems, Journal of Information Technology, Information & Management, Decision Support Systems, Decision Sciences, and Journal of Business Research. Jose was recognized as an Association for Information Systems (AIS) Distinguished Member Cum Laude in July 2021 and received the AIS Sandra Slaughter Service Award in December 2022. He currently serves as a Senior Editor of the European Journal of Information Systems, Information & Management, and Decision Support Systems and as an Associate Editor of the Journal of the Association for Information Systems. He also serves as an Editorial Review Board member for Information Systems Research. In addition, Jose has served as a Guest Editor of Decision Sciences. His teaching interests and instructional expertise cover managing digital business transformation, digital innovation, the business value of digital technologies, IT management, IT strategy, theory development, and quantitative research methods in IS research at Ph.D., Executive MBA, Global MBA, MIM, and BBA. Jose is a passionate speaker who enjoys working with students, colleagues, and executives to positively impact the business world and society. He has also provided consulting services and worked on IT development and digital transformation projects with many leading companies worldwide. Jose can be contacted at jbenite1@kent.edu.Jessica BraojosJessica Braojos is an Assistant Professor of IS and OM at the School of Business and Economics of the University of Granada, Granada, Spain. She holds a Ph.D. in Business Administration (with a concentration in IS) from the University of Granada. Jessica’s research interests cover how firms can select and leverage social media to create and capture business value. Her research has been published in the Journal of the Association for Information Systems, Information & Management, Journal of Business Research, International Journal of Information Management, and International Journal of Hospitality Management, and presented at top conferences such as the Academy of Management Annual Meeting, Americas Conference on Information Systems, Pacific Asia Conference on Information Systems, and the Annual Conference of the European Decision Sciences Institute.Paul PavlouPaul Pavlou is the Dean of the C. T. Bauer College of Business at the University of Houston, Houston, USA. He is also a Cullen Distinguished Chair Professor of IS. Paul received his Ph.D. from the University of Southern California, Los Angeles, USA. His research has been cited over 90,600 times by Google Scholar, and he was recognized among the “World’s Most Influential Scientific Minds” by Thomson Reuters based on an analysis of “Highly Cited” authors in Economics and Business for 2002-2012. Paul is a Distinguished Fellow of the INFORMS IS Society. He won several best paper awards for his research, including the Sheth Foundation Award for “Long-Term Contributions to Marketing” in the Journal of Marketing (2019), the Maynard Award for the “Most Significant Contribution to Marketing” in the Journal of Marketing in 2015, the Information Systems Research Best Paper Award in 2007, and 2006 IS Publication of the Year Award. He won the Best Paper Award in 2012, the Runner-Up to the Best Paper of 2005, the Best Interactive Paper in 2002, and the Best Student Paper Award in 2001 from the Academy of Management. Paul also won several reviewer awards, including the 2009 Management Science Meritorious Service Award, the Best Reviewer Award of the 2005 Academy of Management Annual Meeting, and the 2003 MIS Quarterly Reviewer of the Year Award. Paul is currently a Senior Editor at Production and Operations Management, and Information Systems Research and earlier at MIS Quarterly and the Journal of the Association for Information Systems. Paul also won the Best Doctoral Dissertation Award at the 2004 International Conference on Information Systems. He received over $2,000,000 in grants from funding agencies, such as the National Science Foundation. His research appeared in Management Science, Information Systems Research, MIS Quarterly, Journal of Marketing, Journal of Management Information Systems, Journal of Marketing Research, Journal of the Academy of Marketing Science, Decision Sciences, and Journal of the Association of Information Systems. His research spans several disciplines (IS, OM, Decision Sciences, Marketing, and Strategy) with an emphasis on data science, analytics, artificial intelligence, digital business strategy, and research methods.Javier LlorensJavier Llorens is a Full Professor of Operations and Information Management at the School of Business and Economics of the University of Granada, Granada, Spain. His work has been published in top OM and IS journals such as the Journal of Operations Management, Journal of the Association for Information Systems, Decision Support Systems, Information & Management, International Journal of Operations & Production Management, International Journal of Production Economics, Omega-International Journal of Management Science, British Journal of Management, European Journal of Operational Research, International Journal of Production Research, and Supply Chain Management-An International Journal.