Integrating Cross-Border Knowledge for Transnational New Product Development

Multi‐source knowledge integration, though widely regarded as fundamental for developing new products, remains obscurely understood and a significant challenge for organizations to accomplish. Prior research provides many insights on the approaches by which organizations transfer knowledge; however, how such transferred knowledge gets effectively embodied in products remains uncertain. Also unclear is whether different approaches for knowledge transfer differ in their effectiveness at realizing integration. This study analytically separates the transfer of cross‐border knowledge from its embodiment into products. It examines cross‐border knowledge transfer based on three different approaches: namely, the use of cross‐national teams, cross‐national communication, and cross‐national collaboration in the development of new transnational products. It examines cross‐border knowledge embodiment based on the extent to which new transnational products developed balance standardization with adaptation. The study uses a cross‐sectional survey administered to key members of transnational new product development teams in leading multinational companies across the world. The survey focuses on manufactured products that were developed across several industries: consumer products, consumer durables, and industrial products. Results from 90 new transnational product introductions surveyed reveal that knowledge integration is effective only when knowledge is transferred through cross‐national collaboration, and not when transferred through cross‐national teams and cross‐national communication. As integrating cross‐border knowledge in the development of transnational products involves making difficult trade‐offs for balancing standardization with adaptation, transferring knowledge through cross‐national collaboration stands out as being critical for successful outcomes. Although cross‐national teams and cross‐national communication enhance knowledge flows, they do not result in effective knowledge integration when developing new transnational products. These findings highlight an important point: All knowledge transfer approaches may not necessarily achieve knowledge integration. Hence, it is essential to systematically probe into the interrelationships between knowledge transfer and its effective integration and to identify an underlying set of contingencies that provide insights into when and why some knowledge transfer approaches are better than others at integrating knowledge.     

An Information Transfer Model for Integrating Marketing and R&D Personnel in New Product Development Projects

Marketing and R&D personnel are key actors in the development of new product innovations. Interdependence between the marketing and the R&D functions necessitates integration. Rudy Moenaert and William Souder feel that task specification, structural design and climate orientation are the major integration mechanisms advocated in the literature. Supported by an extensive literature review, they propose a nomological network which interrelates integration mechanisms, interfunctional information transfer, uncertainty reduction and new product innovation success. They develop a causal framework to describe the determinants of successful information transfer between marketing and R&D in the development of technologically new products.     

An Examination of New Product Development Best Practice

Efforts continue to identify new product development (NPD) best practices. Examples of recognized studies include those by the Product Development and Management Association's Comparative Performance Assessment Study and the American Productivity Quality Center NPD best practices study. While these studies designate practices that distinguish top‐performing companies, it is unclear whether NPD practitioners as a group (not just researchers) are knowledgeable about what represents a NPD best practice. The importance of this is that it offers insight into how NPD practitioners are translating potential NPD knowledge into actual NPD practice. In other words, are practitioners aware of and able to implement NPD best practices designated by noteworthy studies? The answer to this question ascertains a current state of the field toward understanding NPD best practice and the maturity level of various practices. Answering this question further contributes to our understanding of the diffusion of NPD best practices knowledge by NPD professionals, possibly identifying gaps between prescribed and actual practice. Beginning the empirical examination by conducting a Delphi methodology with 20 leading innovation researchers, the study examined the likely dimensions of NPD and corresponding definitions to validate the NPD practices framework originally proposed by Kahn, Barczak, and Moss. A survey was then conducted with practitioners from the United States, United Kingdom, and Ireland to gauge opinions about perceptions of the importance of different NPD dimensions, specific characteristics reflected by each of these dimensions, and the level of NPD practice maturity that these characteristics would represent. The study is therefore unique in that it relies on the opinions of NPD practitioners to see what they perceive as best practice versus prior studies where the researcher has identified and prescribed best practices. Results of the present study find that seven NPD dimensions are recommended, whereas the 2006 Kahn, Barczak, and Moss framework had suggested six dimensions. Among practitioners across the three country contexts, there is consensus on which dimensions are more important, providing evidence that NPD dimensions may be generalizable across Western contexts. Strategy was rated higher than any of the other dimensions followed by research, commercialization, and process. Project climate and metrics were perceived as the lowest in importance. The high weighting on strategy and low weighting on metrics and project climate reinforce previous best practice findings. Regarding the characteristics of each best practice dimension, practitioners appear able to distinguish what constitutes poor versus best practice, but consensus on distinguishing middle range practices are not as clear. The suggested implications of these findings are that managers should emphasize strategy when undertaking NPD efforts and consider the fit of their projects with this strategy. The results further imply that there are clearly some poor practices that managers should avoid and best practices to which managers should ascribe. For academics, the results strongly suggest a need to do a better job of diffusing NPD knowledge and research on best practices. Particular attention by academics to the issues of metrics, project climate, and company culture appears warranted.     

Forecasting New Product Market Potential: Combining Multiple Methods

Multiple measurement approaches are often recommended to forecast market potential for new products; however, methodologies to accomplish this have not been fully developed. In this article, Robert Thomas describes an implementation of a multiple methods approach for combining independent forecasts of new product market potential to improve new product planning decisions. The approach involves (I) defining a concept of market potential for the new product, (2) obtaining independent operationalizations and measures of the concept with multiple methods, and (3) using the concept as a basis for reconciling and combining forecasts obtained from the different methods. In the last step, a systematic procedure linked to the conceptual definition of market potential leads to the estimation of judgmental weights for combining the independent forecasts. A case study for a new type of electronic mail service illustrates the approach.     

An Integrative Model of the New Product Development Process

Previous studies of new product development have identified a series of variables that are important determinants of new product success. The goal of this article is to demonstrate the nature of the complex interrelationships that exist among these variables. Roger Calantone and Anthony di Benedetto propose an integrative model of the new product decision process. They examine data gathered from a sample of industrial manufacturing companies and test their model empirically using three-stage least squares analysis. The article concludes with a discussion of implications for new product managers.     

Identifying Technology Commercialization Opportunities: The Importance of Integrating Product Development Knowledge

New product development (NPD) is a knowledge‐intensive activity, perhaps even more so in recent years given the shift toward more open innovation processes, which involve active inward and outward technology transfer. While the extant literature has established that knowledge is critical for NPD performance, knowledge generated through NPD can have an additional impact on external technology exploitation—as when firms go beyond pure internal application of knowledge to commercialize their technologies, for example, by means of technology outlicensing. Grounded in the knowledge‐based view of the firm, this paper examines how the integration of domain‐specific knowledge, procedural knowledge, and general knowledge generated through NPD affects a firm's proficiency in identifying technology commercialization opportunities. Additionally, analysis of how technology opportunity identification relates to technology commercialization performance is provided. Empirically, the paper draws on survey data from 193 Swedish medium‐sized manufacturing firms in four industries active with NPD, and regression analyses and structural equation modeling were used to test the hypotheses. The results highlight the importance of integrating domain‐specific and general NPD knowledge to proficiently identify technology licensing opportunities. The empirical findings also provide strong support for a subsequent link between technology opportunity identification and technology commercialization performance. Altogether, these results point to strong and previously unexplored complementarities between inward and outward technology exploitation, that is, between NPD and technology licensing. As such, the results provide important theoretical implications for research into the fields of knowledge integration, technology exploitation, opportunity identification, and technology markets. Moreover, the results have significant managerial implications concerning how knowledge generated through NPD can help firms to achieve both strategic and monetary benefits when trying to profit from technology. In particular, to set up proficient technology commercialization processes, it appears beneficial for firms to integrate knowledge that is gained through the ordinary activities of developing and commercializing products. Specifically, the integration of domain‐specific knowledge and general knowledge helps firms to match their technologies with new applications and markets, which is often the critical barrier to successful technology commercialization activities. Managers are thus encouraged to integrate domain‐specific knowledge and general knowledge from NPD to reap additional benefits in profiting from investments in innovation and technology.     

Faster New Product Development

Clearly today's business climate mandates the need for faster development of new products. Drawing upon his experience, Milton Rosenau describes several techniques that have not been mentioned explicitly in recent articles: short, focused development phases; management involvement and support; procurement and use of productivity improvements; multifunctional teamwork; distraction reduction; frozen specifications; and microcomputer-based project management software.     

Characterizing the Role of Design in New Product Development: An Empirically Derived Taxonomy*

This article empirically explores the nature of the role of design in the new product development process. The investigation adopts a multiple case study methodology. Data were collected through a six‐month interview program carried out with mid‐size to large U.K. manufacturing companies. The researchers articulate the scope and detailed nature of actions undertaken by design across all phases of the new product development process. Design functional, integration, and leadership actions are unraveled from the data. A taxonomy characterizing three roles for design in new product development is developed and explained. In the first role, design is explored as a functional specialism. The second categorization develops the role of design as part of a multifunctional team. The third role depicts the designer as process leader. Detailed actions and skills associated with each role are discussed and illustrated. Contextual factors explaining and influencing each design role are unraveled. These are articulated as speed of development process, innovativeness of the product development effort, and use of external design agencies. The implications of these findings for the development of design skills and capabilities are discussed in terms of recruitment, training, and educational policies.     

Integrating Product Innovation and Market Development to Strengthen Long-Term Planning

The steel industries of Europe and the United States are among the worst casualties of the industrial turmoil that has shaken the economic order during the past ten years, Other heavy manufacturing industries can claim similar suffering. In this article, Bela Gold draws on his long years of experience in studying the technology, productivity, and competitive structure of such industries. He suggests that traditional planning approaches won't haul heavy industry onto a winning track. A new long-term approach, based on an integration of product innovation and market development, is needed to meet the changing pressures these industries are facing.     

Benchmarking New Product Development Funding

Among the key success factors involved in new product development, identifying, and perhaps more precisely, defending appropriate funding levels can be one of the most difficult. This is especially true if your new products organization is new or if substantial changes have occurred either within your organization or your marketplace. Kathleen Pierz offers a benchmarking methodology developed as one element of a successful redesign and redirection of the new products organization at Ameritech advertising services, the Yellow Pages publishing unit of Ameritech.     

Marketing/R&D Interaction in New Product Development: Implications for New Product Success Rates

A growing body of literature has evolved which deals with the interaction between marketing and R&D in new product development. Much of this research, unfortunately, fails to associate various variables with new product success levels. Thus, it cannot suggest consensus guidelines for marketing's involvement to increase the performance levels of new products in the market place. Richard Hise, Larry O'Neal, A. Parasuraman and James McNeal report results of their analysis of the new product development procedures of 252 large manufacturing companies. The authors conclude that collaborative efforts between marketing and R&D during the actual designing of new products appear to be a key factor in explaining the success levels of new products, that management effort should focus on the design stage of the new product development process rather than on the earlier and later stages and that R&D's contributions cannot be ignored while decisions are made about marketing's role in developing new consumer and industrial products.     

Leadership Differences in New Product Development Teams

Innovativeness is unlikely without skilled leaders to guide the teams which develop new products and technologies. Although the importance of leadership to innovation success is often discussed, the specific practices of effective team leaders are not. In this study, Gloria Barczak and David Wilemon focus on the roles, functions and methods employed by leaders of operating and innovating types of new product development teams. Operating teams are part of the daily activities of the firm, are involved with current markets and develop products similar to current product offerings. Innovating teams do not routinely engage in day-to-day activities. They pursue new markets and develop products quite different from existing ones. The results suggest that successful leaders of both types of teams perform similar roles and functions. However, the methods they use to achieve them vary by the type of new product development team.     

Commercial Innovations from Consulting Engineering Firms: An Empirical Exploration of a Novel Source of New Product Ideas

Industrial firms interact with many outside organizations such as the customers, suppliers, competitors, and universities to obtain input for their new product development (NPD) programs. The importance of interfirm interactions is reflected in a large number of interdisciplinary studies reported in a wide variety of literature bases. As a result, several sources of new product ideas have been investigated in the extant literature. Yet given the growing complexity and risks in new product development, there seems to be a need for managers to obtain input from new and unutilized sources. Apparently, one source that industry has not tapped adequately for its NPD efforts is the consulting engineering firms (CEFs). To fill the aforementioned gap in the literature, this article explores the roles and suitability of CEFs in new product development by conducting a rigorous in‐depth case research of new product idea generation in a large Australian firm manufacturing a variety of industrial products. To generate ideas for the sponsoring firm, longitudinal field interviews with 64 managers and engineers from 32 large CEFs were conducted over a one‐and‐one‐half year period. The findings of the field interviews were combined with the documentary evidences and the archival data. This longitudinal data collection enabled the author to generate new product ideas over real time and to gain access to the information that otherwise might have been difficult to obtain. The results suggest that CEFs are a rich source of new product ideas of potential commercial value. However, industry is making little use of CEFs, which underscores the need for industrial firms to collaborate and to establish an effective idea transfer relationship with them. Moreover, the services of CEFs are not restricted to idea generation but can stretch across the entire NPD process. These findings of the study encourage product managers to conceptualize NPD as a highly synergistic mutually interdependent process between CEFs and industrial firms rather than simply an arm's‐length consulting transactions. Given the dearth of research on idea generation with CEFs, this study highlights the findings that are novel and that go beyond the techniques of new product idea generation established in the extant literature.     

Empowering Management in New Product Development Units

In a study of management in new product development units, Josef Frischer compared managers who primarily intend empowering subordinates for the benefit of the whole organization (managers with the leadership motive pattern) with those who essentially are concerned with the establishment and maintenance of a friendly relationship with subordinates (managers high in need for affiliation). Thirty-five managers, heading new product development functions or units in four high-technology plants, were assessed along with their subordinates. When managers exhibited a leadership motive pattern, their subordinates perceived their work groups, their managers, and themselves as more influential (empowered). They also reported a more innovative climate as compared with subordinates of managers high in need for affiliation. Beside, those in subordinate positions, who are affected by the empowering managers, are given the opportunity to successfully influence and manage the turbulence and complexity arising from the development of new products, thus helping to establish an organizational climate that supports innovative pursuits.     

Web-Based Product Development Systems Integration and New Product Outcomes: A Conceptual Framework

In hopes of improving the effectiveness of their new product development (NPD) processes, many firms increasingly are eager to adopt integrated web‐based NPD systems for NPD. However, few would argue that the mere use of web‐based NPD systems substantially will improve the NPD process. But we know little about how and when these systems can be used for enhancing NPD. An organization desiring to employ the web in its NPD process can use it at varying levels of functionality and sophistication, ranging from a tool for automating manual tasks and exchanging data to a means of integrating various intra‐ and interorganizational NPD functions and processes. At higher levels of technology sophistication or integration, an organization's NPD processes will get more integrated internally, i.e., between different stages of the NPD process and with the processes of its suppliers, technology providers, etc. Such integration of both internal and external NPD processes is considered important for successful innovation. Thus, on the surface, higher levels of web‐based systems integration may seem universally desirable. However, each increasing level of integration brings with it higher costs—not only the costs of expensive technology but also costs of implementing a complicated system, redesigning intra‐ and interorganizational processes, disrupting the status quo, and spending management time and energy during implementation. Therefore, it may not be wise for firms to jump blindly on the web‐based NPD bandwagon. High levels of web‐based NPD systems integration may be created when low levels of integration may not deliver the desired results. Further, if such systems are installed without appropriate conditions within and outside the firm, it may not be possible to exploit their full potential. As such, it is important to know how much web‐based NPD systems integration is suitable for different conditions. In this article, we develop a conceptual framework that focuses on how web‐based NPD systems integration can influence the outcome of NPD and how the relationship between systems integration and outcomes can be affected by various contextual factors. For this purpose, we draw on research in areas such as NPD, web‐based information systems, and organization theory and on many discussions we had with professionals and software vendors who deal with NPD and web‐based NPD systems. The contextual factors of interest in this framework are strategic orientation of the firm, product‐related factors, business environment, organizational factors, information technology factors, and partner‐characteristics. Managerial and research implications of the framework are discussed.     

New Product Development Process: A Perspective for Reexamination

In spite of the increased sophistication of new product development processes, the percentage of successful new product introductions has not improved significantly in the last two decades. This calls for a reexamination of the new products development process. Yoram Wind and Vijay Mahajan suggest 13 strategic guidelines for the development of new or modified products. These guidelines, if followed, could improve a firm's chances of developing and introducing successful new products.     

Autonomous Teams and New Product Development

An autonomous team is an emerging tool for new product development (NPD). With its high degree of autonomy, independence, leadership, dedication, and collocation, the team has more freedom and stronger capabilities to be innovative and entrepreneurial. Several anecdotal cases suggest that autonomous teams are best when applied to highly uncertain, complex, and innovative projects. However, there is no empirical study to test such a notion. Moreover, autonomous teams are not a panacea, and implementing them can be costly and disruptive to their parent organization. When should this powerful, yet costly tool, be pulled out of the new product professional's toolbox? This paper attempts to answer this question. The objective of this study is to explore under which circumstances an autonomous team is the best choice for NPD. Based on contingency and information‐processing theories, autonomous teams are hypothesized to be more effective to address projects with: (1) high technology novelty and (2) radical innovation. To test these hypotheses, the relative effectiveness of four types of team structures: autonomous, functional, lightweight, and heavyweight are compared. The effectiveness measures include development cost, development speed, and overall product success. Vision clarity, resource availability, and team experience are the controlled variables. The empirical results based on the data from 555 NPD projects generally support the research hypotheses. Relative to other team structures, autonomous teams are more effective in addressing projects with high technology novelty or radical innovation. The results also suggest that heavyweight teams perform better than other teams in developing incremental innovation. These results provide some evidence to support contingency and information‐processing theories at the project level. Given the importance of the development of novel technology and radical innovation in establishing new businesses and other strategic initiatives, the findings of this study may not only have some important implications for NPD practices but may also shed some light on other important topics such as disruptive innovation, strategic innovation, new venture, corporate entrepreneurship, and ambidextrous organization.     

New Product Development in the Pharmaceutical Industry: Pooling Network Resources

Pharmaceutical innovation increasingly involves some pooling of resources of finance, equity, technology, information, and intellectual property between pharmaceutical companies and other organizations. The organizations and their exchanges constitute a network which can be regarded as a growing store of these varied resources preferentially accessible to network members. D. Jane Bower examines some network effects in management decision making in Ciba-Geigy (Switzerland) and Elan Corporation (Ireland). She concludes that participation in a common network has enabled these firms to access a pool of resources of knowledge, experience, and finance. This pool has been generated by past exchanges among network members, including providers of finance, and has increased the network's collective reservoir of knowledge.     

Sourcing,Filtering, and Evaluating New Product Ideas: An Empirical Exploration of the Performance of Idea Markets

The proliferation of interconnectivity and interactivity through Internet‐based technologies enables new forms of support for new product development. This paper analyzes idea markets, which use widely distributed knowledge, the power of markets, and the Internet to support the crucial initial tasks of the new product development process, including the sourcing, filtering, and evaluation of new product ideas. Idea markets employ virtual stocks to represent new product ideas and allow participants to suggest and trade new product ideas in a virtual marketplace. This paper empirically explores the performance of idea markets in a real‐world field study at a large, high‐tech business‐to‐business company that includes more than 500 participants from 17 countries and features various idea sourcing tasks. The results indicate that idea markets are a feasible and promising method to support the fuzzy front end of the new product development process. Idea markets offer a platform and formal process to capture, select, and distribute ideas in an organization, which motivates employees to communicate their ideas to management. By effectively sourcing and contemporaneously filtering, idea markets help reduce the number of ideas brought to management's attention to those that seem worthy of further consideration. Because idea markets also have the ability to source many ideas, they can increase efficiency at the fuzzy front end of the new product development process.