Leadership Style: Its Impact on Cross-Functional Product Development

This article reports the results of a study in which cross-functional product development projects in six companies were analyzed. The study was conducted as part of an interdisciplinary research involving technological, organizational, and behavioral analysis. The article draws on an excerpt of the data collected on leadership styles among project managers as well as some data on organizational climate and team learning. Leadership style, especially the leaders' employee orientation, co-varied significantly with how members of the cross-functional teams perceived their work climate and possibilities for innovative learning. The results of the analyses point to the leader's behavior, rather than his power, as an important factor determining the work climate in successful cross-functional product development projects.     

Effective Control of New Product Projects: The Interaction of Organization Culture and Project Leadership

In all organizations where technological innovation plays a key role, a state of creative tension exists between those responsible for technological development of new products and the organization's need to satisfy customer demands. The need to maintain a balanced state of tension is clear. When the balance swings too far in the direction of technological development, technological wizardry runs amok. When it swings too far in the direction of satisfying customer demands, innovativeness can be stifled and technological stagnation can result. Maintaining a state of creative tension is important, then, for producing viable and technologically innovative products. A key task confronting managers, therefore, is fostering innovation while at the same time controlling and channelling it to meet the business needs of the organization. Perhaps nowhere is this need greater than in the new product development process. Edward McDonough and Richard Leifer report the results of a study which suggest that this task may be accomplished by relying on a bounded delegation style of project leadership and a culture which emphasizes a business orientation.     

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.     

Brand Community Members as a Source of Innovation

Brand community members have a strong interest in the product and in the brand. They usually have extensive product knowledge and engage in product‐related discussions; they support each other in solving problems and generating new product ideas. Therefore, brand communities can be a valuable source of innovation. So far, little is known about the member's ability and willingness to participate in a company's innovation process. How does passion for the brand, affiliation to the brand community, and trust in the brand affect the willingness to engage in a company's innovation process? What is the effect of brand passion on brand knowledge and on domain‐specific skills, which are considered important prerequisites for qualified and creative contributions to new product development? What is the effect of personality traits on the willingness and ability to engage in new product development? This research addresses these questions, which are interesting for managers who are thinking about opening up their innovation process and collaborating with brand communities and for academics exploring the opportunities of online communities for new product development and trying to develop promising new forms of open innovation networks. Drawing on brand community literature, relationship theory, creativity theory, and personality traits research, this paper introduces a comprehensive set of antecedents affecting brand community members' willingness to engage in new product development. It is argued that consumer creativity, identification with the brand community, and brand‐specific emotions and attitudes (passion and trust) as well as brand knowledge are important determinants of consumers' willingness to share their knowledge with producers. The paper also identifies two personality traits (i.e., extraversion and openness) that have significant influence on brand passion, creativity, and identification with the community. The hypotheses are tested on a sample of 550 members of the Volkswagen Golf GTI car community. Structural equation modeling was used to test the relationship among the constructs. Though a positive disposition toward a brand may be advantageous for consumers that are willing to interact with producers during new product development, our results show that it is consumer interest in innovations and the innovative process that drives them to get involved. Further, brand community members with more knowledge and more innovative skills seem to be more willing to contribute than less qualified community members.     

Supportiveness of Organizational Climate, Market Orientation, and New Product Performance in Chinese Firms

Most knowledge development efforts in new product development have focused on Western economies and companies. However, due to its size, rapid growth rate, and market reforms, China has emerged as an important new context for new product development. Unfortunately, current understanding of the factors associated with new product success in China remains limited. We address this knowledge gap using mixed methods. First, we conducted 19 in‐depth interviews with managers involved in new product development in 11 different Chinese firms. The qualitative fieldwork indicated that firm behaviors and employee perceptions consistent with the phenomena of market orientation and the supportiveness of organizational climate both are viewed as important drivers of the new product performance of Chinese firms. Drawing on the marketing, management, and new product development literature this study develops a hypothetical model linking market orientation, supportiveness of organizational climate, and firms' new product performance. Direct relationships are hypothesized between both market orientation and supportiveness of organizational climate and firms' new product performance, as well as a relationship between supportiveness of organizational climate and market orientation. Data to test the hypothetical model were collected via an on‐site administered questionnaire from 110 manufacturing firms in China. The hypothesized relationships are tested using structural equation modeling. Results indicate a positive direct relationship of market orientation on firms' new product performance, with an indirect positive effect of supportiveness of organizational climate via its impact on market orientation. However, no support is found for a direct relationship between the supportiveness of a firm's organizational climate and its new product performance. These findings are consistent with resource‐based view theory propositions in the marketing literature indicating that market orientation is a valuable, nonsubstitutable, and inimitable resource and with similar propositions in the management literature concerning organizational culture. However, this study's findings also indicate that in contrast to a number of organizational culture theory propositions and empirical findings in some consumer service industries, the impact of organizational climate on firm performance in a new product context is indirect via the firm's generation, dissemination, and responsiveness to market intelligence. These results suggest that an effort to improve firms' new product performance by enhancing the flow and utilization of market intelligence is an appropriate allocation of resources. Further, this study's findings indicate that managers should direct at least some of their efforts to enhance a firm's market orientation at improving employee perceptions of the supportiveness of the firm's management and of their peers. This study indicates a need for further research concerning the role of different dimensions of organizational climate in firms' new product processes.     

Speed to Market for Innovative Products: Blessing or Curse?

The relationships among speed to market, quality, and costs are important to managers as they attempt to best establish incentives and set goals for new product development teams, allocate resources for new product development, or create positional advantage in the market. The existing literature suggests that the economic consequences of being late to the market are significant, including higher development and manufacturing costs, lower profit margins, and lessening of the firm's market value. Therefore, traditional logic has held that new product development managers need to manage the trade‐offs among speed to market, quality, and costs. While both scholars and managers have often acquiesced to performance trade‐offs among “faster, better, and cheaper,” this research attempts to improve understanding of the interrelationships between these objectives, and ultimately profit. Based on a survey of 197 managers, faster speed to market is shown to be related to better quality and lower costs; it is not necessary to sacrifice one of these outcomes. Further, the moderating roles of two dimensions of innovativeness (innovativeness to the firm and to the market) are examined on the relationships between speed and quality, as well as speed and profit. Both dimensions of innovativeness positively moderate the relationship between speed to market and quality. For more innovative products (both to the firm and the market), there is a stronger positive relationship between speed and quality than for less innovative products. Further, innovativeness to the firm negatively moderates the relationship between speed and profit. Thus, speed has a less positive impact on profit for highly innovative‐to‐the‐firm products compared with less innovative‐to‐the‐firm products. By being conscious of the projects’ levels of innovativeness (along with prioritizing various performance measures), managers can more rationally decide when to emphasize speed to market based on this study's findings.     

Investigation of Factors Contributing to the Success of Cross-Functional Teams

Although recent empirical research shows that most firms have implemented cross‐functional teams for the majority of the new product development projects undertaken, they are still finding it hard to ensure that these teams are successful in completing the new product development task. In this article, the author first reviews the vast literature on cross‐functional new product development teams to uncover the array of factors that have previously been demonstrated or hypothesized to relate to cross‐functional team success, when measured at the project level. He then analyzes the responses of 112 new product development professionals to determine which factors are more frequently mentioned as leading to project success. In looking at how to achieve successful teams, many factors have been suggested in the literature by a number of different researchers. The author suggests a model of these factors that divides them into three categories that help achieve success. Setting the stage for product development by developing appropriate project goals, empowering the team with the needed decision‐making power, assigning the appropriate human resources, and creating a productive climate should be related to fostering team success. Of these four factors, appropriate project goals is mentioned most often as being associated with success, followed by empowerment. Several specific team behaviors, including cooperation, commitment to the project, ownership of the project, and respect and trust among team members, also have been posited to contribute to team success. Of these, this research finds that cooperation is mentioned most often as being associated with success, followed by commitment and ownership. Finally, a number of researchers have suggested that team leaders, senior managers, and champions provide enabling support to cross‐functional teams in achieving success. Team leadership is the most frequently mentioned enabler, according to these findings, followed by senior management support. The author's results also show that increased use of cross‐functional teams in new product development is related to higher project success. However, achieving cross‐functional team success appears to be more complicated than previously thought. For example, across the set of factors identified in this research, the most frequently mentioned is obtaining the team behavior of cooperation. Setting appropriate project goals, a stage‐setting step that is completed early in the project, follows closely in relative importance. Finally, providing good team leadership as an enabler is the third most frequently mentioned factor in achieving success. This suggests that companies must work in all dimensions to maximize the probability of achieving team success.     

Are really new product development projects harder to shut down?

Just as a good houseguest knows when it's time to say good-bye, effective managers must recognize when it's time to terminate a new product development (NPD) project. As a product progresses toward commercialization, a manager's reluctance to terminate a failing project becomes increasingly expensive. Despite this growing expense, however, many managers are reluctant to shut down failing NPD projects. Jeffrey Schmidt and Roger Calantone hypothesize that this reluctance may be even more pronounced for innovative new products than for incremental NPD efforts. They suggest that perhaps the excitement that really new products engender within a company makes managers more reluctant to shut down the NPD project, even in the face of clear-cut evidence that the project is not a winner. To test these assumptions, they conducted a decision-making experiment in which managers were asked to make go/no-go decisions at each stage in a hypothetical NPD project. One project involved an innovative new product; the other project involved an incremental development—that is, a line extension that offered only marginal size and cost reductions compared to current models. At the outset of the experiment, participants were given market share and profit objectives for assessing the new product's performance. At each stage in the hypothetical NPD project, the participants then received updated performance data. The performance data provided to participants was identical for the two hypothetical projects, and fell increasingly farther below the performance objectives as the project progressed. The results of the experiment support the hypothesized relationship between product innovativeness and managers' reluctance to terminate a failing NPD project. Given identical, poor, performance forecasts, the managers who participated in this experiment were more optimistic about the likelihood of success, were more committed to the project, and were more likely to opt for continuing the project when it involved the more innovative product. In fact, the participants were more likely to allow the highly innovative NPD project to proceed all the way through commercialization, notwithstanding the progressively ominous performance feedback.     

Does transformational leadership facilitate technological innovation? The moderating roles of innovative culture and incentive compensation

The present research investigates the relationships between SBU-level transformational leadership and technological innovation, as well as the moderating effects of innovative culture and incentive compensation. Paired data were gathered from 102 senior managers and 258 employees in 102 Taiwanese strategic business units (SBUs). The results indicate that transformational leadership behaviors promote technological innovation at the SBU level. Interestingly, a stronger innovative culture is a substitute for transformational leadership behavior for facilitating technological innovation. In addition, financial-incentive adoption neutralizes the relationship between transformational leadership and technological innovation.     

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.     

Controlling new product R&D projects

New products are critical to the success of most corporations. But managing the R&D projects that produce new products has proven to be a risky and tricky business. Theorists and practitioners claim that one of the major obstacles to higher new product output is the ‘tight’ control practices found in large corporations. The conventional wisdom argues that, to correct this, firms need to find ways ‘to loosen-up.’ But is that all there is to it? This article presents five findings for effectively controlling new product R&D projects. These findings emerged at the conclusion of an empirical research investigation into the formal and informal control practices that business unit managers use to control various new product R&D situations. The article concludes with several recommendations for those managers who want to control their new product R&D projects better.     

Corporate Innovation and Entrepreneurship: A Canadian Study

In his study of 112 corporate innovations, Russell Knight describes how 100 large Canadian corporations identified innovative ideas, evaluated them, and allocated resources to support their development. These innovations ranged from new product introductions to new processes or systems within these firms. He conducted a series of interviews with managers to explore both the role of corporate entrepreneurs and top management in creating a favorable environment for innovation within the firms, examining the roles of marketing research, research and development, production planning and finance in the process. The article reports several general conclusions regarding the practices of the more successful firms and presents several recommendations concerning how firms should organize to explore, develop and produce new innovative ventures within the corporation. These results are also contrasted with those of an earlier article Knight published in this Journal.     

Mapping managers' market orientations regarding new product success

Research shows that managers' cognitive structures influence their decisions and firm outcomes, and that managers' shared understanding is critical to new product success. Yet, little is known about the content and structure of managers' knowledge regarding their business's market orientation (MO) and how such orientation relates to new product development. By drawing from research on managerial cognition, we suggest that an examination of managers' cognitive maps of their business's MO can provide valuable insights. First, cognitive maps provide information regarding the relative ranking of concepts that managers consider important to new product success. Second, they offer insights about the relationship among concepts by illustrating the causal logic flow, centrality, and strength of the association between concepts. Finally, cognitive maps reveal a gestalt or pattern of managers' understandings. This pattern provides an overall view of their perceptions of their firms' MO. Accordingly, the purpose of this article is to begin developing theory to explain the nature and extent of the sharing of managers' understanding of their business's MO across a company within the context of new product development. We develop several theoretical propositions using established research on market orientation and an exploratory investigation of the cognitive maps of a stratified sample of thirty managers of a highly successful frozen food division of a multinational company. We argue that managers of innovative companies with a history of successful new products in moderately dynamic industries will have established market orientations, as reflected in cognitive maps, which emphasize customer orientations more than competitor or technological orientations. Moreover, we suggest that managers will consistently recognize the importance of interfunctional coordination because it influences the firm's orientations towards customers, competitors, and technology by facilitating sharing of important market information necessary for successful new product development. Furthermore, we propose that the division of labor and functional specialization in a company will result in predictable differences across cognitive maps of managers in different functions and levels of the organization. For example, senior managers are likely to have a more balanced and integrated MO than junior managers, due to their knowledge of organization wide issues. The article also proposes an agenda for scholars interested in investigating the relationship between managers' cognitive maps of their company's market orientation and new product success. We note the importance of studying managers' cognitive structures in different types of industries over time, and how managers' cognitive structures may relate to their company's ability to learn. Managers could use cognitive mapping to recognize and evaluate beliefs that inhibit the sharing and interpretation of information between managers, departments, and levels and could design appropriate interventions.     

Transformational Leadership and Organizational Innovation: The Roles of Internal and External Support for Innovation*

Leadership has been suggested to be an important factor affecting innovation. A number of studies have shown that transformational leadership positively influences organizational innovation. However, there is a lack of studies examining the contextual conditions under which this effect occurs or is augmented. Therefore, this study aimed to investigate the impact of transformational leadership on organizational innovation and to determine whether internal and external support for innovation as contextual conditions influence this effect. Organizational innovation was conceptualized as the tendency of the organization to develop new or improved products or services and its success in bringing those products or services to the market. Transformational leadership was hypothesized to have a positive influence on organizational innovation. Furthermore, this effect was proposed to be moderated by internal support for innovation, which refers to an innovation supporting climate and adequate resources allocated to innovation. Support received from external organizations for the purposes of knowledge and resource acquisition was also proposed to moderate the relationship between transformational leadership and organizational innovation. To test these hypotheses, data were collected from 163 research and development (R&D) employees and managers of 43 micro‐ and small‐sized Turkish entrepreneurial software development companies. Two separate questionnaires were used to collect the data. Employees' questionnaires included measures of transformational leadership and internal support for innovation, whereas managers' questionnaires included questions about product innovations of their companies and the degree of support they received from external institutions. Organizational innovation was measured with a market‐oriented criterion developed specifically for developing countries and newly developing industries. Hierarchical regression analysis was used to test the hypothesized effects. The results of the analysis provided support for the positive influence of transformational leadership on organizational innovation. This finding is significant because this positive effect was identified in micro‐ and small‐sized companies, whereas previous research focused mainly on large companies. In addition, external support for innovation was found to significantly moderate this effect. Specifically, the relationship between transformational leadership and organizational innovation was stronger when external support was at high levels than when there was no external support. This study is the first to investigate and empirically show the importance of this contextual condition for organizational innovation. The moderating effect of internal support for innovation, however, was not significant. This study shows that transformational leadership is an important determinant of organizational innovation and encourages managers to engage in transformational leadership behaviors to promote organizational innovation. In line with this, transformational leadership, which is heavily suggested to be a subject of management training and development in developed countries, should also be incorporated into such programs in developing countries. Moreover, this study highlights the importance of external support in the organizational innovation process. The results suggest that technical and financial support received from outside the organization can be a more important contextual influence in boosting up innovation than an innovation‐supporting internal climate. Therefore, managers, particularly of micro‐ and small‐sized companies, should play external roles such as boundary spanning and should build relationships with external institutions that provide technical and financial support. The findings of this study are especially important for managers of companies that plan to or currently operate in countries with developing economies.     

Innovative versus incremental new business services: Different keys for achieving success

In companies where new product development plays an important strategic role, managers necessarily contend with a portfolio of projects that range from high technology, new‐to‐the‐world, innovations to relatively simple improvements, adaptations, line extensions, or imitations of competitive offerings. Recent studies indicate that achieving successful outcomes for projects that differ radically in terms of innovativeness requires that firms adjust their NPD practices in line with the type of new product project they are developing. Based on a large‐scale survey of managers knowledgeable about new product development in their firm, this study focuses on new business‐to‐business service projects in an attempt to gain insights about the influence of product innovativeness on the factors that are linked to new service success and failure. The research results indicate that there are a small number of “global” success factors which appear to govern the outcome of new service ventures, regardless of their degree of newness. These include: ensuring an excellent customer/need fit, involving expert front line personnel in creating the new service and in helping customers appreciate its distinctiveness and benefits, and implementing a formal and planned launch program for the new service offering. Several other factors, however, were found to play a more distinctive role in the outcome of new service ventures, depending on how really new or innovative the new service was. For low innovativeness new business services, the results suggest that managers can enhance performance by: leveraging the firm's unique competencies, experiences and reputation through the introduction of new services that have a strong corporate fit; installing a formal “stage‐gate” new service development system, particularly at the front‐end and during the design stage of the development process; and ensuring that efforts to differentiate services from competitive or past offerings do not lead to high cost or unnecessarily complex service offerings. For new‐to‐the‐world business services, the primary distinguishing feature impacting performance is the corporate culture of the firm: one that encourages entrepreneurship and creativity, and that actively involves senior managers in the role of visionary and mentor for new service development. In addition, good market potential and marketing tactics that offset the intangibility of “really new” service concepts appear to have a positive performance effect.     

How Experienced Product Innovators Organize

It seems that reorganizing the product development function is a common and regularly administered solution to any perceived new product malaise. It's as though new product managers keep seeking some perfect form of organization that will lift their work to new levels of success. This article helps with the search. Axel Johne believes that experience can be a good teacher so he examined how experienced product innovators organize, in comparison to firms which are not so experienced. His results are interesting to all managers who wonder how product innovation can best be managed.     

The Performance Impact of Content and Process in Product Innovation Charters

The significance of product innovation charters (PICs) cannot be overemphasized, as they provide understanding and a tool for setting organizational goals, charting strategic direction, and allocating resources for new product portfolios. In a unique way, a PIC represents a sort of mission statement mutation for new products. With the backdrop of strategy formulation and product innovation literatures, this article investigates the impact of both content specificity within PICs and satisfaction with the PIC formulation process on new product performance in North American corporations. A survey was undertaken among executives knowledgeable about their organization's new product development process. The respondents included chief executive officers, vice presidents, directors, and managers. The findings demonstrate that significant differences exist both in PIC content specificity and process satisfaction between highly innovative and low innovative firms. The study also shows that PIC specificity in terms of the factors mission content and strategic directives positively influences new product performance. Further, the study demonstrates that satisfaction with the process of formulating PICs plays a positive and powerful mediating role in the PIC specificity–performance relationship. The results suggest that product innovation charters, like their mission statement cousins, may be of more value than most managers realize. The study shows that achieving a state of organizational satisfaction with a PIC's formulation process is critical for obtaining better new product performance. Directions for future research also are suggested.     

Improving the New Product Development Process: A Fractal Paradigm for High-Technology Products

Those professionals who are charged with improving the new product development (NPD) process may well feel as though they have been asked to bring order out of chaos. For every level in the organization, and for every step in the NPD process, they must contend with myriad, often interdependent choices—of products and processes; of tools and technologies; of proven best practices and hypothesized solutions. In turn, each choice may cascade into several additional decisions. With so many issues to address and so many variables to consider, practioners and researchers alike need a clear, but complete, framework for exploring, understanding, and improving the NPD process. To help bring some order to the study and the practice of NPD management, W. Austin Spivey, J. Michael Munson, and John H. Wolcott introduce a new metaphor, or paradigm, for product development: a fractal paradigm. Like some fractal images, their framework for understanding the essence of NPD rests on the concept of self-similarity. In other words, the picture their framework provides for understanding and managing the NPD process consists of the same set of concerns, regardless of the level at which the process is viewed. They developed this fractal paradigm during an empirical study of technology transition in a highly successful federal laboratory organization. Whether the focus is on the organization, the division, the team, or the individual, the essence of the NPD process as viewed through their framework comes down to two sets of factors: management factors and resource factors. In turn, each of these factors cascades into several interrelated sets of concerns. For example, the management factors comprise concerns about leadership and the management system. The resource factors include concerns about information, infrastructure, time, and money. Regardless of the level of detail at which the framework is viewed, improving the NPD process requires attention to all of these factors, by all levels within the organization. For example, visionary leadership on the part of senior management will have little effect if middle management and line supervisors fail to provide the necessary leadership for their respective groups of subordinates. Notwithstanding the complexity of the NPD process, the fractal paradigm focuses attention on those few key factors that must be managed continually, throughout all levels of the organization, to ensure successful commercialization of new products.     

New Product Strategies of Large, Dominant Product Manufacturing Firms: An Exploratory Analysis

Although researchers have expended considerable effort exploring the links between new product strategy and firm-level performance, most studies of this subject focus on small- to medium-sized firms. Compared to smaller firms, however, large companies typically maintain broader portfolios of products and have easier access to capital markets. Such fundamental differences suggest the need for closer examination of the relationship between new product strategy and the performance of large firms. Based on a study of 459 new products introduced during a 5-year period, Richard W. Firth and V. K. Narayanan profile the new product strategies of 18 large companies. They examine the methods used to acquire new products (internal development or external sources) as well as three dimensions of each firm's new product introductions: newness of embodied technology, newness of market application, and innovativeness in the market. In other words, these profiles identify the degree to which a firm's new product introductions involve core technologies and markets that are new to the firm, as well as the degree to which the market views these products as innovative. Because new product strategy is an investment decision, the study also examines the relationship between these strategic profiles and two facets of firm-level performance: risk and return. The study identifies five archetypes of new product strategy: Innovators, who produce innovative products by using their existing resources; Investors in Technology, who focus on expanding their technological base. Searching for New Markets, firms that venture into unfamiliar markets by introducing products closely aligned with those in their existing portfolios; Business as Usual, firms that rely on existing technologies and products to serve existing markets; and Middle-of-the-Road, firms content to introduce new products rated as low to moderate along all three dimensions of the strategic profile. For new products closely aligned with their core markets and technologies, the firms in this study typically rely on internal development. To introduce products involving new technologies or market applications, they turn to acquisition from external sources. Firms that emphasized market innovativeness in their new product introductions enjoyed higher returns than less innovative firms. And contrary to conventional wisdom, they gained this advantage without an accompanying increase in risk. In other words, continual innovation might provide a large firm with the means for achieving higher returns without higher risk.     

Triggers for virtual customer integration in the development of medical equipment — From a manufacturer and a user's perspective

Virtual customer integration (VCI) involves customers throughout all stages of the new product development process. Firms across industries have started to experiment with virtual user integration and expect to utilize their knowledge, creativity, and judgment. However, little research exists that looks at the motivations of customers and managers to engage in virtual product development projects. In this paper we try to identify the triggers for virtual customer integration (VCI) from the manager's as well as from the customer's perspective. Using Ajzen's Theory of Planned Behavior we aim at explaining managers' motivation for the adoption of VCI based on a sample of 104 managers engaged in the product development process of manufacturing firms of medical technology. Drawing on motive research, we test six categories of customer motivations to engage in VCI projects on a sample of 105 users of medical technology. The results show that for mangers subjective norms and attitude predict the intention to use VCI. For customers, interest in innovation and product improvement are the most important drivers, whereas monetary compensation and prestige are not significant, and surprisingly the desire to help people even has a negative impact on the participation of VCI.