Help or Hindrance? Causal Ambiguity and Supplier Involvement in New Product Development Teams

Suppliers are increasingly being involved in interorganizational new product development (NPD) teams. Successful management of this involvement is critical both to the performance of the new product and to meeting the project's goals. Yet the transfer of knowledge between buyer and supplier may be subject to varying degrees of causal ambiguity, potentially limiting the effect of supplier involvement on performance. Understanding the dynamics of causal ambiguity within interorganizational product development is thus an important unanswered empirical question. A theoretical model is developed exploring the effect of supplier involvement practices (supplier involvement orientation, relationship commitment, and involvement depth) on the level of causal ambiguity experienced within interorganizational NPD teams, and the subsequent impact on time to competitor imitation, new product advantage, and project performance. The model also serves as a test of the paradox that causal ambiguity both inhibits imitation by competitors, but adversely affects organizational outcomes. Survey data collected from 119 research and development‐intensive manufacturing firms in the United Kingdom largely support these hypotheses. Results from structural equation modeling show that supplier involvement orientation and long‐term relationship commitment lower causal ambiguity within interorganizational NPD teams. The results also shed light on the causal ambiguity paradox showing that causal ambiguity during interorganizational NPD decreases both product and project performance, but has no significant effect on time to competitor imitation. Instead, competitor imitation is delayed by the extent to which the firm develops a new product advantage within the market. A product development strategy based upon maintaining interfirm causal ambiguity to delay competitor imitation is thus unlikely to result in a sustainable competitive advantage. Instead, managers are encouraged to undertake supplier involvement practices aimed at minimizing the level of knowledge ambiguity in the NPD project, and in doing so, improve product and project‐related performance.     

New Product Development Speed: Too Much of a Good Thing?

New product development (NPD) speed has become increasingly important for managing innovation in fast‐changing business environments due to continuous reduction in the product life cycle time and increase in competition from technological advancements and globalization. While the existing literature has not produced consistent results regarding the relationship between speed and success for NPD projects, many scholars and practitioners assert that increasing NPD speed is virtually always important to NPD success. The purpose of this paper is to examine the implicit assumption that faster is better as it relates to new product success (NPS). From the perspectives of time‐compression diseconomies and absorptive capacity, the authors question the assumption that speed has a linear relationship with success. The authors further argue that time‐compression diseconomies depend on levels of uncertainty involved in NPD projects. Using survey data of 471 NPD projects, the hypotheses were tested by hierarchical regression analysis and subgroup polynomial regression. The results of this study indicate that NPD speed has a curvilinear relationship with NPS, and the nature of the speed–success relationship varies, depending on type and level of uncertainty. When turbulence or technological newness is high, the relationship is curvilinear, but when uncertainties are low, the relationship is linear. In contrast, the results of this study suggest a curvilinear relationship under conditions of low market newness but not when market newness is high. The present paper asserts that time‐compression diseconomies and absorptive capacity are important theoretical constructs in understanding speed in NPD. The different impact of market newness and market turbulence on NPD speed supports the distinction of newness and turbulence as two different sources of uncertainty. Discussion focuses on the implications of NPD speed under the different conditions of uncertainty. NPD teams need to pursue NPD speed as a critical strategy, but it is necessary to analyze the source and degree of uncertainty about projects before a time‐based strategy is selected. In order to address the challenges of high uncertainty, a firm needs to probe, learn, and iterate fast. In particular, NPD teams need to distinguish between the different requirements for new products in emerging and new markets, and those in fast‐changing markets. Moreover, NPD teams need to balance how fast they need to go with how fast they can go by considering team absorptive capacity and customer absorptive capacity.     

The (Unknown) Providers to Other Firms' New Product Development: What's in It for Them?

For every inbound activity by a firm in open innovation, a reciprocal outbound activity by another firm must be generated. The reciprocal outbound activities range from transferring of knowledge and ideas to solutions delivered to other firms' new product development projects. This paper names the firms that produce the reciprocal outbound activity for “providers,” and is the first to empirically investigate such providers of ideas, solutions, and technologies for other firms' open innovation activities. The literature review shows a surprising shortage of research on who the providers are, how they engage with other firms, and not least what potential benefits can be achieved from supporting other firms' innovation activities. The paper uses a quantitative survey on Danish small and medium‐sized enterprises (SMEs) carried out in 2010 to identify the providers, the role they take on, and the main benefits the providers gain. This paper finds that firms that are providers are indeed an under‐researched and important phenomenon for firms' innovation activities. Compared to receivers of knowledge, the providers are younger, have a higher R&D intensity, adopt more open innovation practices, have higher absorptive capacity, and fewer barriers toward knowledge sharing as demonstrated by the NIH and NSH syndromes. Finally, although only tentatively, the paper finds that the provider firms are more product innovative compared to nonproviders. The paper further finds that more projects, more embedded relationships, and mutual rather than one‐way exchange relationships significantly raise the probability that a firm experiences a substantial benefit from providing to other firms' new product development projects. The overall ambition of the paper at this point is to inspire other researchers to pursue the agenda on the provider perspective for future research. To support such research, the paper suggests a broadening of the research perspectives from the receiver of knowledge, in the literature on interorganizational relationships and open innovation, to include the provider, and even suggests some preliminary ideas for such research. Hence, the contribution of this paper lies not only in opening a new research topic but also in identifying some first characteristics of the phenomenon adding a substantial perspective to the literature on open innovation and interorganizational relationships. The paper formulates three indicative recommendations for managers that consider becoming a provider to other firms' NPD.     

Do We Have to Get Along to Innovate? The Influence of Multilevel Social Cohesion on New Product and New Service Development

In this study, based on the Comparative Performance Assessment Study survey conducted by the Product Development Management Association, the authors develop and test a model which considers the antecedents and performance outcomes of social cohesion, a seemingly critical organizational factor in new product development (NPD). Using a sample of over 450 innovation and product development professionals from North America, Europe, and Asia, social cohesion is conceptualized and tested across three levels—within team cohesion, between team cohesion, and between firm cohesion. The results of a structural equation model indicate several differences between the antecedents of the varying forms of social cohesion. A post hoc exploration of the difference between goods‐ versus service‐dominant firms provides a clearer picture of cohesion's influence on innovation outcomes. Specifically, within team and between team cohesion are positively associated with new services performance, while for traditional goods‐based NPD, within team, between team, and between firm cohesion all appear to be positively related to performance. The findings suggest that high social cohesion is not always optimal and that managers should focus on specific types or levels of social cohesion as opposed to thinking about social cohesion as a one‐dimensional construct. The findings also suggest that goods‐ and service‐centric firms can use different tactics or strategies to drive social cohesion and, ultimately, new product performance, and that innovation managers may need to allocate resources differently depending on the nature of the market offering being developed. The paper also presents several implications for theory and practice, as well as future research directions related to the various levels of social cohesion and their influence on new product and new service performance.     

FibreDown:New Product Creates New Value

Feather, a thermal insulation material endowed by Mother Nature, is indeed a supply of choice either for an animal to nestle or for human to withstand the cold. In our daily life, feather has, more often than not, been used as wadding to provide warmth. An awful fact is that only the down, a petty part of feather; has largely been used, leaving the greater part of feather not yet fully utilized as restricted by its structural complexity. How to explore its in-depth development and how to exte…     

FibreDown:New Product Creates New Value

Feather, a thermal insulation material endowed by Mother Nature, is indeed a supply of choice either for an animal to nestle or for human to withstand the cold.In our daily life, feather has, more often than not, been used as wadding to provide warmth. An awful fact is that only the down, a petty part of feather; has largely been used, leaving the greater part of feather not yet fully utilized as restricted by its structural complexity. How to explore its in-depth development and how to exten…     

Backer Motivation in Crowdfunding New Product Ideas: Is It about You or Is It about Me?

Entrepreneurs are using crowdfunding to reach out to the general public to obtain financial support for their new product development. Those who offer project creators financial support are called backers. In this research, the authors examine two types of backer motivation, other‐orientation and self‐orientation, and their respective effects on a backer’s funding decision on new product ideas at the reward‐based crowdfunding platform. Other‐orientation is defined as a backer’s altruistic motivation to help others when making a funding decision; and self‐orientation is defined as a backer’s egoistic motivation to pursue internal feeling, such as personal satisfaction and power to control the project. They find that self‐orientation has a stronger positive effect than other‐orientation on the backer’s funding decision. Furthermore, the authors examine the difference between men and women, and find that the relationship between other‐orientation and funding decision is stronger for women than men, but the relationship for self‐orientation is stronger for men than women. The authors conduct three empirical studies to test the hypotheses in both the backer’s and the project creator’s contexts. In Study 1, they adopt a survey method to investigate effects of the backer’s motivation on his or her funding decision in the film category. In Study 2, they use data of 600 film projects from kickstarter.com to examine linguistic cues used by project creators that stimulate backer motivation. In Study 3, they conduct an experiment to further validate results of the difference between men and women. Although some research suggests that extrinsic reward is a reason for backers’ funding behavior, the authors emphasize that their psychological need also plays an influential role. In addition, findings of the difference between men and women enrich the crowdfunding literature by discovering distinct backer subgroups.     

Product innovation through coopetition in alliances: Singular or plural governance?

This study researches how firms can improve their product innovation in coopetition alliances through alliance governance. Our survey-based study of 372 vertical alliances in the medical device industry contributes to a clarification of prior studies' contrasting findings on product innovation when coopetition is present in alliances. Our results show that the singular use of relational governance improves product innovativeness in vertical alliances that experience growing levels of coopetition. In contrast, the singular use of transactional governance reduces product innovativeness with growing coopetition. When firms apply both relational and transactional governance as plural governance, vertical coopetition alliances get access to new ways to improve their product innovativeness.     

Shouldn't Customers Control Customized Product Development?

Nowadays, customized product development (CPD) is increasingly prevalent in business‐to‐business settings, which has motivated manufacturers into development approaches wherein the customer plays an active role. When the customer is merely viewed as a passive receiver of the customized product, the manufacturer won't be able to truly empathize with the customer and might lack important suggestions to create and improve the customized product. It is, after all, the customer that holds pertinent development information and/or expertise. Yet, customers are not always motivated to participate and often need to be convinced about the manufacturer's ability to develop customized products in a timely and cost‐effective manner. Prior literature on interorganizational relationships suggests the use of formal control, i.e., process and/or output control, to fashion activities in line with expectations so that development goals can be attained. Thereupon, this study posits that the customer's use of such formal controls may stimulate customer participation in CPD. In addition, this study investigates whether manufacturers can indeed benefit from customer participation in CPD through improved new product performance. To accomplish the research objectives, survey‐based and accounting data are collected on 63 collaborative CPD projects between a plastics manufacturer and its industrial customers. In conjunction with an add‐on experimental study regarding the effect of formal control on customer participation, this study reveals that the customer's use of formal control significantly increases the level of customer participation in CPD. Additionally, this study confirms that customer participation positively impacts new product performance. Together, these results imply that letting the customer use process and/or output control helps the customer to believe more in the pursuit of CPD goals and successful product customization, thereby encouraging the customer to participate more actively in CPD. Besides, the findings imply that increased access to market and customer need‐related information obtained through customer participation is indeed critical for successful CPD.     

What Keeps Managers Away from a Losing Course of Action? Go/Stop Decisions in New Product Development

The purpose of this experimental study is to test whether specific approaches can reduce escalation of commitment—namely, decision‐makers' tendency to persist with an innovation project despite negative feedback that the initial investment has not reached its goals. This study focuses on the decision process for 137 research and development managers who must decide whether to abandon previously chosen courses of action or to continue in the face of probable and increasing losses in a stage‐gate system. The results show that visual decision aids and consultant advice reduce managers' decisions to continue funding a losing course of action. The results also show that using both approaches simultaneously has the strongest effect. Finally, the study reveals that the escalation of commitment issue can be reduced more effectively before an innovation project is commercialized while using both approaches.     

New Employee Relations Strategies in Britain: Towards Individualism or Partnership?

This article addresses the themes of individualism, partnership and collectivism in British industrial relations by reporting on a detailed three-year case-study-based research project. Drawing on this data set, we offer insights into practical developments in contemporary workplaces and into the thinking of managers and employee representatives as they attempt to steer new paths in their relations. In particular, we examine what happens in practice when senior management teams, in previously collectivized organizations, set out with the explicit intent of shifting the balance of emphasis towards more 'individualized' relations with employees and/or to devise new 'partnership' arrangements.     

In a Network Industry,Does Product Quality Matter?

The role of product quality in industries influenced by network effects has been the subject of significant debate among management theorists. Some have suggested that network effects can result in inferior products, as consumers value a large cohort of fellow adopters over the technical quality of a given product. Others argue that cases of market domination by inferior products are quite rare and that product quality is an important aspect of network‐based competition. Thus, a fundamental question has arisen from this debate: in industries influenced by network effects, does product quality matter? This research uses a sample of product releases in the application software industry from 1986 to 1998 to test the impact of product quality on installed base growth for a given product line. Using software quality measures from archival trade publication reviews, quality is found to have a positive and significant impact on growth, even after controlling for installed base size and other product, firm, and segment characteristics. This finding suggests that the first‐mover advantages often ascribed to network industries may be more complex than previously thought. Rather, effective strategy in network competition appears to center on the trade‐off between early product releases, with the intent of establishing an early installed base, and later product releases, with the intent of improving the quality of the focal product. Several potential extensions of this work are offered, with a specific focus on (1) the impact of variation in the strength of network effects across industries, and (2) the dueling incentives faced by incumbents in network industries, who may possess greater capabilities to produce high‐quality products but limited incentive to do so. Other potential contributions for theory and practice are offered and discussed.     

Behavioral Reasons for New Product Failure: Does Overconfidence Induce Overforecasts?

Efforts to organize and integrate research findings on new product performance determinants have lagged since the last significant overview paper appeared over a decade ago. Importantly, this literature has not considered entire categories of factors that are known to affect managerial decisions and behavior, namely those that pertain to decision‐makers' cognitive limitations and incentive structures. This research empirically investigates one specific cognitive distortion heretofore neglected in studies of new product commercialization—overconfidence, commonly defined in the literature as excessive belief in one's own abilities to generate superior performance. To lay the groundwork for subsequent exploration, the paper first introduces a behavioral model that both organizes well‐understood new product performance determinants and illuminates others heretofore not studied, namely incentive alignment and cognitive limitations and biases. The model summarizes extant research and allows development of research hypotheses related to overconfidence. The hypotheses and empirical investigation motivated by the model address two questions about the impact of overconfidence on new product commercialization activities. First, the study explores whether overconfidence is associated with overforecasting new product demand. Second, it evaluates two complementary mechanisms that may account for overconfidence‐induced overforecasts. The empirical findings are based on data generated in the course of management simulation workshops conducted among graduate students at three leading business schools in India. Three hundred thirty participants played individually four rounds of a computer‐based simulation game that involved decisions pertaining to new product development (including product formulation) and commercialization strategies. The decisions were captured and analyzed using statistical techniques. The results reveal that decision‐makers' overconfidence is associated with a higher likelihood of overforecasting new product sales. The observed effect is fully mediated by flawed tactical decisions that dampen demand, namely elevated product pricing. Sensitivity analyses show that these results are robust to a number of alternative explanations. However, the study finds no evidence implicating overconfident individuals as poor “innovators”—overconfident and nonoverconfident decision‐makers experienced comparable market demand for their new products. The paper concludes with a discussion of the results and provides specific recommendations for practice.     

The Value of Crowdsourcing: Can Users Really Compete with Professionals in Generating New Product Ideas?

Generating ideas for new products used to be the exclusive domain of marketers, engineers, and/or designers. Users have only recently been recognized as an alternative source of new product ideas. Whereas some have attributed great potential to outsourcing idea generation to the “crowd” of users (“crowdsourcing”), others have clearly been more skeptical. The authors join this debate by presenting a real‐world comparison of ideas actually generated by a firm's professionals with those generated by users in the course of an idea generation contest. Both professionals and users provided ideas to solve an effective and relevant problem in the consumer goods market for baby products. Executives from the underlying company evaluated all ideas (blind to their source) in terms of key quality dimensions including novelty, customer benefit, and feasibility. The study reveals that the crowdsourcing process generated user ideas that score significantly higher in terms of novelty and customer benefit, and somewhat lower in terms of feasibility. However, the average values for feasibility—in sharp contrast to novelty and customer benefit—tended to be relatively high overall, meaning that feasibility did not constitute a narrow bottleneck in this study. Even more interestingly, it is found that user ideas are placed more frequently than expected among the very best in terms of novelty and customer benefit. These findings, which are quite counterintuitive from the perspective of classic new product development (NPD) literature, suggest that, at least under certain conditions, crowdsourcing might constitute a promising method to gather user ideas that can complement those of a firm's professionals at the idea generation stage in NPD.     

Will It Spread or Not? The Effects of Social Influences and Network Topology on Innovation Diffusion

Innovation diffusion theory suggests that consumers differ concerning the number of contacts they have and the degree and the direction to which social influences determine their choice to adopt. To test the impacts of these factors on innovation diffusion, in particular the occurrence of hits and flops, a new agent‐based model for innovation diffusion is introduced. This model departs from existing percolation models by using more realistic agents (both individual preferences and social influence) and more realistic networks (scale free with cost constraints). Furthermore, it allows consumers to weight the links they have, and it allows links to be directional. In this way this agent‐based model tests the effect of VIPs who can have a relatively large impact on many consumers. Results indicate that markets with high social influence are more uncertain concerning the final success of the innovation and that it is more difficult for the innovation to take off. As consumers affect each other to adopt or not at the beginning of the diffusion, the new product has more difficulties to reach the critical mass that is necessary for the product to take off. In addition, results of the simulation experiments show under which conditions highly connected agents (VIPs) determine the final diffusion of the innovation. Although hubs are present in almost any network of consumers, their roles and their effects in different markets can be very different. Using a scale‐free network with a cut‐off parameter for the maximum number of connections a hub can have, the simulation results show that when hubs have limits to the maximum number of connections the innovation diffusion is severely hampered, and it becomes much more uncertain. However, it is found that the effect of VIPs on the diffusion curve is often overestimated. In fact when the influence of VIPs on the decision making of the consumers is strengthened compared with the influence of normal friends, the diffusion of the innovation is not substantially facilitated. It can be concluded that the importance of VIPs resides in their capacity to inform many consumers and not in a stronger persuasive power.     

Trade Union Approaches towards the ICE Regulations: Defensive Realism or Missed Opportunity?

Reflecting debates about whether statutory workforce‐wide consultation arrangements are likely to undermine or underpin trade union representation, unions' approaches towards the UK's Information and Consultation of Employees Regulations 2004 have been ambivalent and their engagement with the legislation limited. Evidence from longitudinal case studies in 25 organizations suggests that the introduction of information and consultation bodies did not have the effect of marginalizing trade union representation and collective bargaining, and in some cases reinforced unions' standing within the organization. The article highlights the implications for union strategies and legislative reform, and suggests a research agenda.     

In Chains? An Empirical Study of Antecedents of Supplier Product Development Activity in the Automotive Industry*

In the literature on interorganizational collaboration in product development, considerable attention is given to supplier role classifications. Such classifications often link to a supplier's position in the overall supply chain, but the claim that this position has a substantial impact on its product development activities has seldom been empirically validated. The results from the present survey among Swedish automotive suppliers demonstrate that supplier product development activity is significantly affected by the position of the supplier in the supply chain and the supplier's strategic focus on innovation. While the latter has a stronger impact on product development activities, there is also an interaction effect implying that the effects of a supplier's innovation strategy are contingent on its supply chain position. Contrary to expectations, customer development commitment does not have any significant direct effect on supplier product development activities. Instead, this relation is fully mediated by supplier innovation strategy. These findings imply that, in contrast to conventional wisdom, product development activities are not strictly organized in “chains.” Although supply chains can be useful metaphors for understanding the distribution of regular production activities between firms, they arguably apply less to the distribution of product development activities.     

Paths to Success: How Do Market Orientation and Entrepreneurship Orientation Produce New Product Success?

The purpose of this paper is to examine the relationship between strategic orientation and the performance of new products. In this paper, we develop a conceptual model that explores the roles of market orientation (MO) and entrepreneurship orientation (EO) on new product performance and seek to understand the mediating roles of process and product characteristics. Based on a survey of 471 small and medium‐sized enterprises in Korea, we found that MO and EO positively affect new product performance. The main impact of MO is through new product development proficiency and product meaningfulness and that of EO is through proficient intellectual property management and product novelty. Academic and managerial implications are also discussed.     

Do Social Media Tools Impact the Development Phase? An Exploratory Study

Over the past two decades, firms have increasingly adopted information technology (IT) tools and services to improve the new product development (NPD) process. Recently, social media tools and/or tools that include social networking features are being utilized to allow users both inside and outside the organization to easily communicate and collaboratively design, manage, and launch new products and services. Unfortunately, there is little empirical evidence to suggest what influence these new IT tools have on NPD performance. Through a project‐level, exploratory, empirical study, the impact of these new IT tools on the development phase of the NPD process is investigated. We find that the use of these new tools is significantly lower than the adoption of traditional IT tools such as e‐mail and computer‐aided‐design. Traditional tools have a significant, positive impact on NPD outcomes, including team collaboration, the concepts/prototypes generated, and management evaluation. Interestingly, new media tools such as project wikis and shared collaboration spaces also have a significant, positive impact on concepts/prototypes generated, and management evaluation. Surprisingly, social networking tools like weblogs and Twitter negatively impact management evaluation while having no impact on NPD team collaboration and concepts/prototypes generated. These results suggest that social networking tools in their current guise are not helpful to the NPD team and may in fact be distracting to innovation management during the development phase.