Digital Strategy as a Key Mediator of New Product Development Managers’ Decision-making Behavior and Innovative Capabilities: an Empirical Analysis

Effectuation theory has gained prominence in the field of new product development (NPD). For instance, research has previously shown that the highly uncertain NPD process may benefit from an effectual behavior. However, literature also notices that decision-making behavior (i.e., causation and effectuation) depends on the context. Despite the dramatical changes digital technologies bring to innovation processes and relationships, the interplay of managerial decision-making behaviors in a digital context has not been examined. Hence, we investigate the influence of causation and effectuation on the NPD departmental digital strategy with the purpose to build dynamic innovative capabilities (i.e., exploitative and explorative capabilities) – a driver of NPD success. To prove our hypotheses, we collected survey responses from NPD managers in 213 firms. Our partial least squares structural equation modeling (PLS-SEM) analyses yield several findings. While digital strategy enables causal managers to build exploitative and explorative capabilities, it complements effectual managers in doing so