Some firms are able to assimilate new technologies, while others suffer the fate of technological obsolescence. Some firms are able to enter new markets, while others stay bound to their current customers. This study proposes that these abilities can be conceptualized as 'second-order competences'. That is, the ability of a firm to build new competences by exploring new domains of activity is itself an important competence. This study focuses on two key second-order competences: the ability to explore new markets and the ability to explore new technologies. The investigation will explore organizational characteristics that are likely to have causal relations with these second-order competences and will assess how these competences in turn affect firms' new products and financial performance. Turbulence in customer, competitor, and technological sectors of the environment will be examined as contingencies for antecedent and outcome effects. A longitudinal research design will be used, involving secondary and two-wave multiple-informant survey data from publicly traded US manufacturing firms. The longitudinal design will allow examination of causal priority and time-lagged relationships among organizational characteristics, second-order competences, new products, and firm performance.
In addition to contributing to social scientists' understanding of factors that predict organizational longevity and success, the work should yield practical managerial insights. The causal characteristics the researchers seek to identify will amount to organizational 'levers' that managers can work with to create and enhance key second-order competences.
