An analysis of decision processes

This paper outlines three ways of looking at decision processes, and relates them to problems of research management. A classification of decisions is suggested, based on three dimensions of complexity. On each dimension, innovative decisions are normally more complex than operating decisions, but since the latter are more common, there is a danger that the former will be inadequately treated, as shown in an example. These dangers may be mitigated, first, by regarding complex decision-making as an explicitly cyclical process, and, second, by recognizing the significance of reference standards. Four types of reference standard—historical, external, planning, and imaginative—are noted, and brief consideration is given to their origins and to their influence on the perception not only of problems but also of solutions. It is argued that the range and quality of the reference standards used are likely to be significant factors in the success of research management.     

成品油销售网络投资项目后评价工作效果与问题评析

中国石油成品油销售网络投资项目后评价（简称＂销售项目后评价＂）工作促进了投资决策科学化、民主化、规范化管理水平的提高,促进了投资管理基础工作上台阶和后评价队伍整体素质的提高,丰富和发展了销售项目后评价的理论和实践。但是,由于开展销售项目后评价的历史较短,这一工作还处于起步阶段,不可避免仍存在一些问题——对后评价工作重要性的认识有待进一步提高;后评价方法体系需要不断完善;后评价成果信息的反馈与应用机制需要进一步健全;销售项目后评价专业人员比较缺乏,整体队伍素质需要进一步提高等。建议创新＂销售项目后评价＂方法体系,完善后评价管理制度,增强其实践指导作用;明确典型和单体项目选择依据和后评价工作经费来源及标准,保证该项工作的有效开展;进一步健全销售项目后评价成果的反馈和扩散机制,充分发挥后评价的作用;加强销售项目后评价专业队伍建设,规范咨询服务。     

Exploring Portfolio Decision‐Making Processes*

Portfolio management is the set of activities that allows a firm to select, develop, and commercialize a pipeline of new products aligned with the firm's strategy that will enable it to continue to grow profitably over the long term. To appropriately manage the firm's new product portfolio, decisions must be made about which projects to fund, to what levels, at what point in time. Previous research has investigated portfolio management decisions as individually discrete decisions. Significant streams of research have investigated both project selection and project termination decisions. This research project shows, however, that portfolio decision making may be better understood if it is considered as an integrated system of processes that considers these decisions simultaneously, along with other decisions such as those to continue a project with reduced funding. Using in‐depth data from four diverse case studies, we use a grounded theory approach to develop a general model of how firms make new product portfolio decisions. According to the findings from these cases, effective portfolio decision‐making processes produce a portfolio mindset, focus effort on the right projects, and allow agile decision making across the portfolio's set of projects. Effective portfolio decision making is the result of the interaction between three types of decision‐making processes that managers use in making decisions: evidence‐, power‐, and opinion‐based. Being able to use each of these types of processes to make decisions depends upon having the data inputs that they require. Three domain‐based decision input‐generating processes (i.e., cross‐functional collaboration, practices of critical thinking, and practices of market immersion) are associated with making evidence‐based portfolio decisions. In addition, organizational politics produces the inputs that are associated with power‐based portfolio decision making, while managerial intuition is associated with opinion‐based portfolio decision making. Firm cultural factors, including trust, collective ambition, and leadership style, are associated with how these evidence‐, power‐ and opinion‐based processes are combined into an overall portfolio decision making process, and whether the firm's processes are more rational and objectively made, or more politically and intuitively made. The article presents propositions for how the decision‐making processes interact in their associations with decision‐making effectiveness.     

Analytical techniques for focussing software research

For all the advances in the management of software research and development over the last few years, it is never easy to ensure that complex programmes of research are efficiently directed and assessed. There are a number of inherent difficulties that contribute to this, for instance—the complexity of modern technology, the abstract nature of research and the need to work in an area which is, by definition, largely unexplored. This paper discusses two techniques aimed at easing the evaluation of complex projects. Both techniques are designed to ensure that critical decisions and their dependencies are explicitly addressed. The effectiveness of the techniques is illustrated by their application to research in software engineering.     

Design and application of task administration protocols for collaborative production and service systems

This research investigates the design of Task Administration Protocols (TAPs) for effective task allocation and administration in collaborative production/service systems. Customer-focused and concurrent engineering service systems process tasks more effectively as a result of the power of collaboration among multiple participants. In such environments, however, complex situations might arise that require decisions that cannot be handled by simple Coordination Protocols (CPs). To design an effective control mechanism to manage complex situations, this research identifies basic problems in collaborative task administration and proposes the design framework of protocols to solve the problems. In the framework, TAPs consist of three component-protocols: (1) Task Requirement Analysis Protocol, (2) Shared Resource Allocation Protocol, and (3) Synchronization and Time-Out Protocol. Each component protocol is activated to address priority-based allocation, resource-aware allocation, and task re-allocation at a different task administration context, ranging from task initialization, task allocation, to task monitoring, respectively. To analyze feasibility and effectiveness of the proposed design, TAPs are applied to two collaborative production/service systems. Simulations are conducted to evaluate the performance achieved by different TAPs and non-TAP CPs under various load conditions. The results show that there is a significant performance improvement by TAPs over CPs in most cases, e.g., 84% vs. 64% in terms of task completion ratio. The advantage of TAPs can be explained by their design with relatively higher level of collaborative intelligence, addressing more complex control logic than non-TAP CPs.     

Managing asymmetries in information flows and interaction between R&D,manufacturing, and service in complex product development

Studies of new product development have demonstrated the value of effective interaction between research and development (R&D) and manufacturing, but few studies also include service operations despite their growing importance. Building on in‐depth studies of two firms in the capital goods sector, the paper illustrates how the structural differences between the R&D‐manufacturing and R&D‐service interfaces result in serious information and interaction imbalances, and presents managerial means to handle these. The paper makes three contributions. First, it shows the value of moving beyond a dyadic perspective to studies of more complex structures involving triads of specialized functions. Second, the paper underlines the role of informational flows that can compensate for asymmetries in such triads and facilitate thoughtful trade‐off decisions. Third, the paper highlights the importance of creating conditions for integrated knowledge‐based approaches across functions, which involve the generation and sharing of new knowledge. The paper ends with an emerging management agenda to support such integrative efforts in complex product development projects.     

New Product Portfolio Management Decisions: Antecedents and Consequences

This research employs organizational information processing theory to propose and examine the antecedents and consequences of new product portfolio management (NPPM) decisions. Understanding NPPM decisions is an important research area because these decisions affect firm profitability but are difficult to make because of limited reliable information. Recent survey results of Product Development and Management Association members and other NPPM professionals suggest nearly half of initial new product ideas are chosen to advance through the new product development (NPD) pipeline via informal processes. Thus, managers wield considerable influence in NPPM. Yet only limited research quantitatively examines how NPPM decisions impact performance and the role of manager dispositions. Using as the research context a marketing simulation exercise conducted with mid‐level managers, this research reveals important insights into the impact of the three NPPM dimensions—value maximization, balance, and strategic fit—on NPD and firm performance. The analysis suggests a critical role for the NPPM dimension of balance as it is the single dimension impacting performance. However, value maximization is relevant as a criterion for competing because, overall, managers see this dimension as important. At the same time, managers are cautioned in their use of strategic fit as it appears this dimension may constrain innovative choices. Furthermore, three manager dispositions proposed from organizational information processing theory—directive leadership style, need for cognition, and risk perceptions—all influence NPPM dimensions. Managers are recommended to consider the personality traits of managers involved in NPPM decisions to ensure thorough consideration of all dimensions.     

Standards, trade and competition in the emerging global information infrastructure environment

Decentralized construction of the Global Information Infrastructure (GII) is substituting market-driven, ‘de facto’ standards and voluntary agreements on standards for technical compatibility, in place of the engineering decisions once made by public (and quasi-public) telecommunications network operators. Due to strategic economic behaviours on the part of private businesses and national governments, the goal of a fully interoperable GII remains elusive. The Internet does not offer an entirely credible alternative model, as the standards that have facilitated its explosive growth also are contributing to serious congestion problems, and the solutions proposed point to the Internet's re-integration into the public switched telecommunications network. Technical standards will shape the GII's implications for international trade and competition, and thus raise important, but inadequately recognized issues for regulation, competition and trade policy.     

The Fuzzy Front End of New Product Development for Discontinuous Innovations: A Theoretical Model

The fuzzy front end of the new product development (NPD) process, the time and activity prior to an organization's first screen of a new product idea, is the root of success for firms involved with discontinuous new product innovation. Yet understanding the fuzzy front‐end process has been a challenge for academics and organizations alike. While approaches to handling the fuzzy front end have been suggested in the literature, these tend to be relevant largely for incremental new product situations where organizations are aware of and are involved in the NPD process from the project's beginning. For incremental new products, structured problems or opportunities typically are laid out at the organizational level and are directed to individuals for information gathering. In the case of discontinuous innovations, however, we propose that the process works in the opposite direction—that is, that the timing and likelihood of organizational‐level involvement is more likely to be at the discretion of individuals. Such individuals perform a boundary‐spanning function by identifying and by understanding emerging patterns in the environment, with little or no direction from the organization. Often, these same individuals also act as gatekeepers by deciding on the value to the organization of externally derived information, as well as whether such information will be shared. Consequently for discontinuous innovations, information search and related problems/opportunities are unstructured and are at the individual level during the fuzzy front end. As such, the direction of initial decisions about new environmental information tends to be inward, toward the corporate decision‐making level, rather than the other way around. In order to cope with the special and complex nature of decisions made at the fuzzy front end of NPD for discontinuous innovations, this process is detailed as a series of decisions occurring over three proposed interfaces: boundary, gatekeeping, and project. The difference between each interface lies in the nature of the decisions made: At the boundary and gatekeeping interfaces, the primary impetus is individual‐level decision‐making; at the project interface, decisions occur at the organizational level. By articulating these processes in the form of a model, we achieve two objectives: (1) We outline a more detailed and comprehensive approach to understanding the nature of the front‐end decision making process for discontinuous innovations; and (2) we detail specific propositions for future research on each stage of the process.     

Entangled decisions: Knowledge interdependencies and terminations of patented inventions in the pharmaceutical industry

Research Summary : This study explores the role of knowledge interdependencies on the termination of patented inventions. Termination refers to the abandonment of inventive efforts that are no longer deemed promising. We argue that high interdependencies between an inventive effort and the other inventions in the same research program will increase the cognitive burden on managers and decrease the likelihood of termination. Further, in the presence of interdependencies, managers are likely to rely on heuristics for termination decisions. We focus on two such heuristics: interdependencies of an invention with those in other research programs and the level of external competition in the research program. We test our hypotheses with longitudinal data on patent terminations through non‐payment of renewal fees in the pharmaceutical industry. Managerial Summary : Effective management of innovation portfolios requires termination of opportunities that are no longer promising. Most current tools on termination assume that opportunities to be evaluated are independent from one another. This assumption may limit their usefulness in increasingly complex research domains, such as pharmaceutical R&D. In this study, we investigate how interdependencies among inventions influence firms' tendency to terminate those inventions. Our results on patent terminations show that a patent that is more interdependent with other patents in the same research program is less likely to be terminated. This suggests that managers may have difficulty in evaluating the inherent value of interdependent opportunities. This result is stronger when the patent is less interdependent with those in other research programs or in a more competitive area.     

Profitability Goals,Control Goals,and the R&D Investment Decisions of Family and Nonfamily Firms

Research and development (R&D) investments can help build sustainable competitive advantages and improve firm performance. Nevertheless, managers also acknowledge the difficulties associated with managing R&D and the low chances of success of innovation programs. For this reason, researchers have long been interested in understanding how managers make R&D investment decisions. Research grounded in the behavioral theory of the firm suggests that a primary driver of R&D investment decisions is profitability: when profitability goals have not been met, managers are more likely to initiate a problemistic search through increasing R&D investments. While emphasizing profitability goals and their relationship with R&D investments, prior research largely downplays the role of goals beyond profitability that exist in a significant number of firms (family firms) that are owned and managed by family members whose primary concern is preserving their control over the organization. Research indicates that these family‐centered noneconomic goals lead family managers to minimize R&D investments and that the coexistence of multiple goals produces highly variable R&D investment behavior. Yet, how family‐centered goals for control and profitability enter decision‐making in family firms is not fully understood. In this study, we propose that family managers form distinctive reference points that capture supplier bargaining power and are used to evaluate the degree of external obstruction to their managerial control. The empirical analysis of panel data on 431 private Spanish manufacturing firms observed over the period 2000–2006 shows that the importance of profitability and control goals follows a sequential logic in family firms, such that family firms react more strongly to increasing supplier bargaining power when their profitability reference points have been reached. This study extends current understanding of the distinctive organizational processes engendered by family management in business organizations leading to new research opportunities at the intersection of the innovation management and family business literatures.     

R&D Project Termination Decisions: Processes, Communication, and Personnel Changes

The decision to terminate a project can demoralize project managers and team members, and increase concerns about job security. For these reasons, managers tend to delay project termination decisions. However, delaying project termination diverts scarce R&D resources from higher potential projects. Ramaiya Balachandra, Klaus K. Brockhoff, and Alan W. Pearson describe the results of a study that explores the manner in which managers inform staff of the decision to terminate or continue a project. Survey respondents are the highest ranking R&D managers in 78 large German, British, and U.S. companies. Respondents were asked to describe the procedures they use for monitoring R&D projects and deciding whether to continue a project. Underlying this research is the belief that more effective management of these processes can improve project team effectiveness, employee relations, and morale. All survey respondents use project monitoring procedures. Most use formal procedures, often supplemented with informal procedures. More than one person usually monitors projects. Project managers, their immediate superiors, and project staff typically have these responsibilities, but respondents also indicate that marketing managers often monitor projects. Compared to U.S. companies, European firms typically involve fewer people in project monitoring. U.S. firms involve more non-R&D personnel in these tasks. Most firms focus on monitoring such variables as time, technical success, and probability of technical success. Staff motivation is the least used monitoring variable. Cost control was mentioned more frequently by German respondents than by respondents from other countries. Decisions regarding the fate of a project usually come from individuals not directly involved with the project. Termination decisions are typically communicated in writing; no respondents use staff meetings to relate such decisions. Following the decision to terminate a project, management faces the difficult task of finding suitable jobs for project team members. Rather than assign an entire team to a new project, management typically disbands a team and assigns its members to other teams. The inherently uneven progress of R&D projects complicates these scheduling problems, and thus compounds the career uncertainty caused by project termination decisions.     

New Product Team Decision Making: Regulatory Focus Effects on Number,Type, and Timing Decisions*

Company executives rely on new product development teams to carry out their directives and make decisions according to management's goals. However, team members bring their own motivational perspectives to strategic decisions. This research examines how individual and leadership motivations influence a dyadic team's new product decisions. Specifically, this article investigates how matching vs. mismatched motivations between team members affect new product number, type, and timing decisions. In addition, this study asks how effective leadership‐provided motivations are in guiding teams' new product decisions. A set of hypotheses is developed using regulatory focus theory, which identifies basic motivational differences in individuals (i.e., promotion vs. prevention focus) and their effects on decision making. The hypotheses examine the effects of regulatory focus match vs. mismatch within teams on the likelihood to introduce new products, the timing of new product introductions, and the types of new products introduced. To test the hypotheses, a controlled, yet realistic product management simulation is employed. A total of 124 undergraduate seniors (83 women and 41 men) at a large public university enrolled in a marketing management capstone course participated in this study for partial course credit. Utilizing two‐person teams engaged in a business simulation ensured an appropriate level of controlled complexity in the decision making task, while allowing the phenomena of interest to be isolated and tested. Results show that when dyads share the same motivational approach (regulatory focus match), leadership‐prescribed goal pursuit strategies are largely ineffective. Only dyads that do not share the same motivational approach to decision making (regulatory focus mismatch) make new product decisions consistent with leadership‐prescribed goal pursuit strategies. For regulatory focus match dyads, the results demonstrate that a promotion focus (when compared to a prevention focus) leads to greater numbers of new products introduced, faster new product introductions, and more novel new product introductions. For new product managers, these results carry important implications. Which new product opportunities to invest in and which to forgo is presumably determined by the strategic direction given to teams by top management. Results suggest that when team members share the same motivational approach, this not only influences new product decisions, but also diminishes or eliminates the influence top management can exert on new product decisions. Such “isolation” from leadership influences does not have to be detrimental. For example, companies that seek to insulate new product development teams from influences from the top, such as is the case in many new venture incubations, would be well served to staff those teams ensuring a promotion focus match.     

Extended revenue forecasting within a service industry

Revenue forecasting is an important topic for management to track business performance and support related decision making processes (e.g. headcount or capital expenditure). It focuses on how a business recognises operating revenue, which can differ from the point at which a sales order is won. Whilst there are many publications detailing forecasting theory, in a business context these largely focus on sales order recognition alone.This paper describes the development of a revenue forecasting tool appropriate for service provision. The organisation involved in the development of the revenue forecasting tool will remain anonymous for commercial reasons but will be referred to as “Organisation A”. The targeted outcome was to extend the forecast window from one month to three months with an error rate of no more than ±10%. The tool was required to consolidate supporting data, adopt appropriate analysis/projection techniques and extend the forecast window in a specific and complex business environment.The resulting tool returned high level results that were aligned to the original targets, and was developed with three components using a combination of projection approaches appropriate to the operating environment. Whilst limited to a specific service industry as a trial, the paper provides a useful reference point for revenue forecasting in complex service businesses and provides a basis for further research opportunities for extended revenue forecasting and business analysis approaches within other service industries.     

Stacking the deck: the effects of top management backgrounds on investor decisions

Young firms going public are dependent upon the decisions of investors for a successful public offering. Yet convincing investors to invest is not easy, as young firms have limited track records and, thus, face challenges associated with gaining legitimacy in their respective industries. This paper examines ways in which select information about firms undertaking an initial public offering (IPO) can affect investor decisions. Building upon recent research on upper echelons and signaling theory, we propose that the composition of a firm's top management team can signal organizational legitimacy that in turn affects investor decisions. In the context of young firms undertaking an IPO, such signals are critical, especially when objective measures of firm quality are not easily available. We introduce a typology of signals of organizational legitimacy to elaborate on our hypotheses. Analyses of a comprehensive set of data on the career histories of the top management teams of young biotechnology firms show that investor decisions are affected by the extent to which a firm's top management team has employment affiliations with prominent downstream organizations (e.g., pharmaceutical companies), with a diverse range of organizations, and upon the role experience of one key member of the top management team—the Chief Scientific Officer. We assess and find that these effects are not mediated by the prestige of a firm's lead underwriter. We conclude with a discussion of the implications of our study for strategy research on upper echelons and organizational legitimacy. Copyright © 2006 John Wiley & Sons, Ltd.     

Information Use in New Product Development: An Initial Exploratory Empirical Investigation in the Chemical Industry*

In‐depth interviews with product developers and product development software providers in a previous qualitative phase of research uncovered eight general types of information that are used across the new product development process (strategic, project management, financial, market and customer, wants and needs, technical, competitor, and regulatory information) and three general approaches to managing information in the process (project‐centric, functionally oriented, and fully distributed). This paper presents a second phase of research trying to understand the role that managing knowledge and information plays in developing new products and achieving NPD success. This research phase empirically investigates use of the eight types of information across three general phases of the NPD process in the chemical industry using 81 mail survey responses from marketing and new product development professionals. Respondents were asked to indicate the degree to which each of the eight information types was used in each of the following general phases of new product development: the fuzzy front end, development, and testing and launch. The respondents also provided information on new product development success, information management system sophistication, and innovation strategy. This research makes several contributions to new knowledge. First, this research suggests that information management in product development is even more complex than initially posited in Zahay et al. (2004) , with each of the eight types of information identified being used in each of the three phases of development. Unexpectedly, for all but one type of information use is higher in later stages of the NPD process, even though use of several kinds of information early in the project is associated with increased success. Thus, managers may need to encourage teams to start gathering information from outside the firm earlier than is currently the norm. Second, the results suggest that more sophisticated information management systems are indeed associated with increased use of various different types of information, as expected. Third, more sophisticated information management systems are more highly associated with success than less sophisticated information management systems. These results are important, as most new product development information management systems are limited in their ability to handle complex and non‐quantitative information such as customer wants and needs, as well as strategic, competitor, and regulatory information. However, being able to transmit information on these issues is associated with increased firm performance and project success from these data. Thus, firms need to figure out how to improve their ability to manage and use non‐quantitative information more effectively.     

Managing Capacity in the High-Tech Industry: A Review of Literature

This article surveys a new generation of analytical tools for capacity planning and management, especially in high-tech industries such as semiconductors, electronics and bio-techs. The objectives of the article are to (1) identify fundamental theory driving current research in capacity management, (2) review emerging models in operations research, game theory, and economics that address strategic, tactical and operational decision models for high-tech capacity management, and (3) take an in-depth look at capacity-optimization models developed in the specific context of semiconductor manufacturing. The goal of this survey is to go beyond typical production-planning and capacity-management literature and to examine research that can potentially broaden capacity-planning research. For instance, we explore the role of option theory and real options in modeling capacity decisions. We not only examine capacity-planning problems from the perspective of a particular firm, but also the interaction of capacity investment among supply chain partners. Not only are these issues increasingly important in the fast-changing high-tech environment, they draw on new tools from different disciplines and pose significant intellectual challenges. We also examine papers that represent the multifaceted nature of high-tech capacity planning, integrating capacity decisions with issues related to contracting, coordination, sourcing, and capacity configurations.     

引进型管理创新知识源分析——以广州本田环境绩效管理模式为例

根据我国企业实践,绝大多数管理创新属于引进型创新,即在组织外部已存在的管理实践或思想的基础上引进加工而成的创新。因此,有效获取管理创新知识,即知识源问题,成为我国企业引进和实施管理创新的关键。在总结管理创新相关研究的基础上,提出管理创新的三类主要知识源：内部知识源、市场知识源和专业知识源。研究发现：大部分企业以非当地企业为参照群体;咨询机构是我国企业管理创新的重要来源;政府政策导向作用明显;内部员工没有发挥应有的作用。在此基础上,对广州本田的环境绩效管理模式创新做案例分析,具体分析管理创新中知识源的作用。     

Worker welfare on Kenyan export vegetable farms

The paper analyses farm worker welfare on three different types of farms in Kenya producing vegetables for export. The three types of farms differ by certification to international production standards as well as by size. A multidimensional approach measures welfare using human capital, income, physical and mental health, and life satisfaction. The findings suggest that GlobalGAP certification has a positive impact on worker welfare as farm workers are given more training. Workers on large certified farms earn more than those on small farms but also show more health problems. Certification on small farms is associated with higher satisfaction of workers with their life compared to workers on non-certified small farms. From a development policy perspective this paper does not support a clear cut policy on which types of farm to support as overall benefits of a support strategy will depend of the number of beneficiaries reached through the different farm types.