Improving sourcing decisions in NPD projects: Monetary quantification of points of difference

During new product development (NPD), firms make critical design and sourcing decisions that determine the new product's cost, performance, competitive position, and profitability. The purchase price of materials and components for the new product provides only part of the picture for design and sourcing decisions. All-encompassing analyses of cost and performance, such as total cost of ownership, are extraordinarily difficult to implement because they are demanding in terms of time, data and cooperation. We study monetary quantification of points of difference, which enables an NPD team to base its decisions instead on more focused, strategically-pertinent analyses of costs and performance. We propose a substantive model of its antecedents and consequences. We then test this model with data from matched samples of 144 project leaders and 144 cost analysts who participated in the same NPD projects. Using structural equation modeling, we also test hypothesized differences in perspectives between project leaders and cost analysts. Results demonstrate the pivotal role of monetary quantification of points of difference among the sourcing alternatives being considered, especially for cost analysts. Results also demonstrate that Decision Justification to senior management drives the NPD team's decision-making process. Finally, monetary quantification of points of difference leads to Uncertainty Reduction, which is found to be the primary antecedent of the judged success of applying analysis of cost and performance.     

Project management for new product development

This article examines the intersection of the project management body of knowledge with new product development (NPD). The area under examination is the development of consumer products that have a significant engineering production content. It is concluded that the project management method, with its structured task definition and software tools, is generally useful for managing NPD projects. However, in some areas, project management incompletely meets the needs of NPD. Specifically, NPD is characterized by complex interrelated activities and large uncertainties about precisely which solution path will be taken, such that the full scope of the project can often not be anticipated beforehand. The article identifies that more research is required to validate the stage‐gate and lean project management methods. Whereas cost is the primary focus in project management, with NPD there is a need to consider both cost and income (from product sales) in making strategic decisions. Communication and human resource management are important factors in NPD success, but existing project management perspectives have little to say about the social and behavioral aspects, such as organizational culture, team dynamics, and leadership styles, especially not for NPD. Current project management practices are very much based on “output control” (targets, appraisal, rewards, management by objectives), which the human resource management literature identifies as inhibiting innovation. There is also likely to exist an intersection, as yet poorly understood, between project management and knowledge management, particularly for innovation processes such as NPD. For practitioners, the main message is that the project management method provides a basic, but imperfect, tool for managing NPD. The relevance for researchers is that gaps have been identified in the project management method as it is currently applied to NPD. Several places are identified where further research is required to (a) better understand the causality between factors (e.g., human resource management) and project success and (b) adapt project management methods to better serve the NPD process.     

Threats to new product manufacturability and the effects of development team integration processes

The thesis of this article is that new product manufacturability (NPM) is influenced by certain challenges inherent in new product development (NPD), and by efforts to integrate manufacturing and other functional concerns into the product design process. This research tests the direct and interacting effects of these influences via a survey of 91 completed NPD projects representing a variety of manufacturing industries. While most hypotheses were supported, the analysis also provides some surprising findings. Project complexity and increased levels of design outsourcing are associated with poorer NPM. Product newness and project acceleration are associated with better NPM. All the measured aspects of development team integration are associated with better NPM, including intense manufacturing involvement, a collaborative work environment, supplier influence on the product design, and strong management support in the project. Furthermore, certain integration variables exert moderating effects on relationships between technological uncertainty, product newness, design outsourcing, project acceleration and NPM. By exposing these relationships this research extends the theory of product development influences on manufacturability beyond a focus on engineering-oriented approaches (e.g., design-for-manufacture). The results suggest that larger managerial issues must be addressed and that more contingency-oriented research is needed to explore the benefits and limitations of development team integration processes.     

The impact of technological learning on NPD outcomes: The moderating effect of project complexity

The innovative status of an emerging market is largely attributed to the technological learning maturity of its finest multinational companies (MNCs). This study uses the information processing perspective to investigate the impact of inter-/intra-functional technological learning (knowledge acquisition, information distribution, information interpretation and organizational memory) of 105 project teams on new product development (NPD) outcomes (project success, development speed and product entry timeliness) across nine MNCs. Of the four technological learning dimensions, only organizational memory did not possess a direct relationship with any NPD outcome dimensions. This study further contrasts the above impact across varying levels of project complexity. Information interpretation and organizational memory contribute to project success for low complexity projects. Conversely, for high complexity projects, development speed is contingent on organizational memory.     

The role of customer participation in building new product development speed capabilities in turbulent environments

In a sample of 204 SMEs, this study investigates how customer co-creation impacts firms’ ability to increase new product development (NPD) speed. The results show firms that collaborate with customers in the NPD process at greater levels are able to increase NPD speed capabilities and commercialize products at a faster rate. In addition, environmental turbulence is investigated as to how it may impact the relationship between customer participation and NPD speed. The results show that customer participation in NPD allows firms to better manage turbulent environments by enhancing the speed at which new products are brought to market. Finally, the results show that NPD speed mediates the relationship between customer participation and the performance of new products, thus highlighting the importance of developing new products faster. The principle contribution of the study is the examination of an additional moderating factor in regard to customer participation and NPD speed. The second contribution of this research is that while previous studies have examined the individual impacts of customer participation on NPD speed and NPD speed on NPD performance, this research statistically demonstrates the mediating process among the three constructs.

     

New product development projects: The effects of organizational culture

Despite the increasing use of project management within organizations, an attendant poor rate of success among these projects has been observed (Clancy & Stone, 2005; Ives, 2005). Seventy‐five percent of all business transformation projects fail (Collyer, 2000) and only 16% of U.S. IT projects are completed on time and on budget (Peled, 2000). In an attempt to overcome such a high project failure rate, this paper investigates the effects of organizational culture on the performance of particular types of projects: new product development (NPD) projects. Using data from 95 U.S. organizations, the study provides evidence of the significant effects of organizational culture on NPD projects.     

Understanding antecedents of new product development speed: A meta-analysis

New product development (NPD) speed is a key component of time-based strategy, which has become increasingly important for managing innovation in a fast-changing business environment. This meta-analytic review assesses the generalizability of the relationships between NPD speed and 17 of its antecedents to provide a better understanding of the salient and cross-situationally consistent factors that affect NPD speed. We grouped the antecedents into four categories of strategy, project, process, and team, and found that process and team characteristics are more generalizable and cross-situationally consistent determinants of NPD speed than strategy and project characteristics. We also conducted subgroup analyses and found that research method variables, such as level of analysis, source of data, and measurement of speed, moderate the relationships between NPD speed and its antecedents. We apply the study's findings to assess several models of NPD speed, such as the balanced model of product development, the strategic orientation and organizational capability model, the compression vs. the experiential model, the centrifugal and centripetal model, and the product development cycle time model. We also discuss the implications of our findings for research and practice.     

Knowledge-oriented human resource configurations,the new product development learning process,and perceived new product performance

We propose a set of organizational efforts that can help companies accumulate and learn knowledge related to new product development (NPD) activities. We call it the NPD learning process and argue that a set of coherent human resource management (HRM) practices, termed knowledge-oriented human resource (HR) configuration, can facilitate the NPD learning process. Collecting survey data from Taiwan, we find that the knowledge-oriented HR configuration is positively related to the NPD learning process and that the NPD learning process is positively related to managers' perceived new product performance. This study contributes to the literature of strategic HRM and innovation management.     

Resource Commitment,Organizational Diversity,and Research Performance: A Case of the National Telecommunication Program in Taiwan

Traditionally, a project team's resource commitment and organizational diversity are thought to be helpful to project performance; however, this relationship may falter when the project performance is considered in light of both cost and benefit. This paper integrates data envelopment analysis (DEA) and analytical hierarchy process (AHP) to evaluate project performance and explores the relationship between project performance and resource commitment and organizational diversity. The empirical study of research teams in the Taiwan National Telecommunication Program shows mixed results of this relationship. Implications for project management and governmental subsidy policy in dealing with resource commitment and organizational diversity are discussed.     

Understanding project champions’ ability to gain intra-organizational commitment for environmental projects

A key enabler of environmental projects is the ability of the project champion to gain commitment to the project from other stakeholders in his or her organization. This paper develops a model of commitment-gaining success that is based on intra-organizational influence theory. The model also includes project payback, customer pressure, government regulation, top management support and the project champion's position in the organizational hierarchy. The model was tested using survey data from 241 environmental professionals describing their attempts to gain the buy-in of purchasing managers, operations managers, industrial engineers and others for environmental projects. The results (obtained from hierarchical regression analysis) show that intra-organizational commitment is positively associated with the project champion's influence behavior—in particular, the champion's use of three influence tactics (inspirational appeals, consultation and rational persuasion) and avoidance of a fourth tactic (ingratiation). Commitment is also positively associated with project payback and with top management support for the environment and negatively associated with environmental regulation. The paper contributes to the OM knowledge base on environmental project implementation by bringing new theory to bear on the topic, by focusing on individual-level, rather than organization-level, variables and by taking a confirmatory, large sample approach which complements extant exploratory research. In addition, the paper contributes to the OM field by evaluating various antecedents to cross-functional integration. The results also provide specific guidance to those who champion environmental projects within their companies.     

Collaboration expectation gaps,transparency and integrated NPD performance: A multi-case study

This paper explores the implications of what happens when a buying firm's desired and realized levels of collaboration differ in the context of an integrated new product development (NPD) project. Using analysis of six case studies, we observe varying levels of such collaboration expectation gaps (CEG) and conclude that these gaps can impact NPD project performance. In addition, collaboration transparency is established when a firm and its partner firm comprehend the factors (benefits, risks, costs) that motivate collaboration between them. We observe that the presence of collaboration transparency impacts the emergence of CEG across the phases of an NPD project. These findings extend existing theory on buyer-supplier relationships in NPD projects and introduce CEG and collaboration transparency as important concepts in understanding improved collaboration performance.     

Purchasing involvement in technologically uncertain new product development projects: Challenges and implications

This paper explores an emerging field of research within purchasing that concerns the changing role of purchasing when companies embark on technologically uncertain NPD projects. Where existing research has examined the role of purchasing in facilitating early supplier involvement in new product development, little research has been done to date on how purchasing's role might change when facing technologically uncertain NPD that require new capabilities and new technology. Based on an in-depth case study of a technologically uncertain NPD project in the passenger ship rescue equipment industry, the paper sheds light on how supplier involvement in NPD projects with a high degree of technological uncertainty impacts on a company's sourcing strategies and the challenges this poses for purchasing.Based on the case study findings, we propose a) that early purchasing involvement in technologically uncertain NPD projects requires a mature purchasing organization that possesses competences to interact effectively with R&D and b) that involving a new supplier from a different industry in NPD projects characterized by technological uncertainty requires a leap of faith from both innovating firm and supplier. The paper contributes to research in early supplier involvement in new product development, in particular the thin branch within this body of literature that now focuses on early purchasing involvement.     

The relationship between brokers’ influence, strength of ties and NPD project outcomes in innovation-driven horizontal networks

This paper examines the impact of a broker's perceived use of power – position (i.e., coercive, reward and legitimate) and personal (i.e., expert, information and referent) – on strength of ties between network members and new product development (NPD) project outcomes. Our sample consists of 100 individuals drawn from 42 organizations that were involved in different innovation-driven horizontal networks. The results of structural equation modeling suggest that the perceived use of both personal power bases and position power bases by the broker are positively related to the strength of ties between members. Strength of ties, on the other hand, is positively related to NPD project outcomes of design performance and development time. Finally, results show that the relationships between a broker's use of different power bases and NPD project outcomes are fully mediated by the strength of ties between networks members. Implications for research, theory, and practice are discussed.     

Measuring performance in new product development projects: A case study in the aerospace industry

Implementing a performance measurement system (PMS) for research and development (R&D) is fundamental for supporting decision making and motivating researchers and engineers; however, this is a very challenging task, because effort levels are not measurable and success highly uncertain. Even if the subject has largely been debated in academic and practitioners literature so far, an acknowledged managerial approach is not available yet. This paper investigates the implementation and use of a PMS in new product development (NPD) projects, which represents a relatively unexplored issue in the R&D performance measurement debate. In particular, studying the case of a military aircraft development project, it provides a reference framework that integrates the major literature contributions' findings and suggests a practical approach for the design and implementation of an effective PMS for NPD.     

An exploratory study of gender in project management: Interrelationships with role,location, technology,and project cost

This study explores whether gender differences in project managers are related to gender differences in their team members. Gender differences are explored in the context of project managers' and team members' location to one another, the project team's use of technology, and the cost and size of the project teams. Using log‐linear analysis of 563 project team members' responses, several significant findings are reported—including the likelihood of same‐gender project manager and team member dyads as well as gender differences in project contextual factors. Implications for organizational and project management researchers and decision makers conclude the article.     

The importance of client heterogeneity in predicting make-or-buy decisions

Scholars have begun to merge the transaction cost economics and capabilities perspectives to examine outsourcing decisions. Further integrating these perspectives with intermediation theory, we assert that a firm's decision to use an intermediary when entering a foreign market is largely a function of the intermediary's relative capabilities and relative transaction costs (i.e., relative advantage). We hypothesize that the intermediary's relative advantage is influenced by three significantly intertwined exchange conditions: client heterogeneity, intermediary risk, and firm learning. Using a sample of 929 new foreign market initiatives by a global consulting firm, our results support our theory.     

The Impact of Company Resources and Capabilities on Global New Product Program Performance

Product innovation and the trend to globalization are two important and interrelated dimensions driving business today. In this article, the results of five published research articles on the topic of global new product development (NPD) are summarized to provide an integrated overview of the factors that impact global NPD program performance. The overall conceptual framework is based on three types of literature—NPD, globalization, and organization. The main theoretical approach for establishing relationships between factors is the dynamic capability/resource‐based view. Accordingly, factors linked to outcome are seen as operating on different organizational levels, with more actionable initiatives or ‘capabilities’ largely mediating the softer and longer term background ‘resources’ of the firm. The analyses are based on a broad cross‐industry sample of 467 firms (North America, Europe, B2B, goods/services). Three global NPD‐related background resources (global innovation culture, resource commitment, and senior management involvement), labeled the ‘behavioral environment’ of the firm, are identified and shown to be linked to global NPD program performance via the mediated effect of four specific NPD capabilities (NPD process, strategy, team, and IT/communication). A qualitative synthesis of the findings is provided, along with recommended management initiatives with which firms can enhance their performance in the global NPD effort. Both sets of factors are found to be essential and highly interrelated, but it is the strength of the behavioral environment resources that distinguish the best performing firms, setting the stage for success in global NPD.     

When does inward technology licensing facilitate firms' NPD performance? A contingency perspective

Many firms find inward technology licensing (ITL), as a means to access external technological knowledge, an effective and relatively inexpensive way for new product development (NPD). However, although the literature has suggested some advantages and disadvantages of ITL with respect to NPD, the relationship between ITL and licensee firms' subsequent NPD performance has not yet been found convincingly evident. Sharing with many other likeminded scholars and practitioners, we believe that the dynamics between external knowledge, internal capability, external environment, and firm performance should be investigated through a contingency perspective. Thus, this study posits that a firm's propensity to develop new products through ITL is contingent upon two categories of contingency factors that are internal and external to firms. Using a dataset containing information about Chinese firms' licensing activities, we find support for our hypotheses: the positive relationship between ITL and NPD performance of a licensee firm is moderated by firms' absolute and relative absorptive capacity and the knowledge endowment in the region where the licensee firm operates.     

The relationship between quality management and new product development: evidence from China

Research suggests that organizations involved in new product development (NPD) can adopt quality management (QM) systems to optimize their NPD processes and thereby build their NPD competence. This paper contributes to a further understanding of the link between QM and NPD by investigating why and how more effective QM can promote and assist NPD. Based on taxonomy of QM practices, we examine the differences between the effects of infrastructure quality management practices (IQMP) and core quality management practices (CQMP) on a firm’s NPD capability and NPD performance. We also incorporate NPD practices in a conceptual model, to examine the integration effects of QM practices and NPD practices. The results show that IQMP significantly promotes NPD capability, while the influence of CQMP on NPD capability is relatively insignificant. Furthermore, our results indicate that the integration of design and manufacturing has a significant negative influence on NPD capability. Our findings highlight the significant role NPD capability plays in explaining the link between QM practices and NPD performance. Our findings also suggest to practitioners that they should integrate QM with other technology management practices in order to optimize their NPD processes.     

Entrepreneurship and Dynamic Capabilities: A Review,Model and Research Agenda*

abstract The emergent literature on dynamic capabilities and their role in value creation is riddled with inconsistencies, overlapping definitions, and outright contradictions. Yet, the theoretical and practical importance of developing and applying dynamic capabilities to sustain a firm's competitive advantage in complex and volatile external environments has catapulted this issue to the forefront of the research agendas of many scholars. In this paper, we offer a definition of dynamic capabilities, separating them from substantive capabilities as well as from their antecedents and consequences. We also present a set of propositions that outline (1) how substantive capabilities and dynamic capabilities are related to one another, (2) how this relationship is moderated by organizational knowledge and skills, (3) how organizational age affects the speed of utilization of dynamic capabilities and the learning mode used in organizational change, and (4) how organizational knowledge and market dynamism affect the likely value of dynamic capabilities. Our discussion and model help to delineate key differences in the dynamic capabilities that new ventures and established companies have, revealing a key source of strategic heterogeneity between these firms.