A Contingency‐Based Approach to the Use of Product Platforms and Modules in New Product Development

To face the challenges of increasing demand for variety, more specific customer demands and shortening product life cycles, firms increasingly adopt mass customization techniques. Two important such techniques are product modularization and product platform development, which allow firms to reach high levels of product variety, and at the same time, keep complexity and its related costs at a limited level. Often modularization and product platform development are treated as variants of the same basic idea. However, even if the concepts are closely related, they also have some fundamental differences, which influence their usefulness and applicability in different settings. One potential shortcoming of existing literature on modularization and product platforms is the present lack of research on their limitations and potential negative effects. Therefore, the purpose of this paper is to identify and explore contingencies influencing the applicability of modularization and product platforms, respectively, taking their different economic effects as a starting point. Moreover, the paper addresses how different organizing solutions are interrelated with the use of modularization and product platform approaches. The empirical observations originate from studies of three Swedish manufacturing firms. The study reveals that important contingencies affecting the applicability of modularization and product platforms are demand side characteristics and the speed of environmental change. Furthermore, it is seen that firms need to organize themselves differently with respect to how they combine modularization and platforms, for example, in terms of degree of centralization, formalization, and allocation of decision‐making authority, and that this poses challenges to the combined use of the two approaches.     

Unveiling the role of risk-taking in innovation: antecedents and effects

This study addresses innovation development with a focus on risk-taking, widely considered a relevant driver for the exploration and exploitation of new ideas. The study empirically examines the effects of risk-taking propensity on innovation performance and its antecedents. We consider the role of several key antecedents related to the organizational structure and the activities of firms aimed at encouraging employees to take risks in innovation. We performed an empirical survey within a global and innovation-oriented Swedish company to test our hypotheses. Correlation and linear regression analyses were used to analyze the collected data. The results highlight the significant effect of risk-taking on innovation performance and show that the availability of organizational resources, innovation support activities, clear innovation goals, and collaboration have a significant positive effect on risk-taking. However, contrary to the hypothesis, well-established innovation processes have a significant but negative effect on risk-taking and innovation performance. This study contributes to existing knowledge on the role of risk-taking for innovation, providing insights into designing organizational contexts that encourage an appropriate risk appetite in employees.     

Does Fathers’ Care Spill Over? Evaluating Reforms in the Swedish Parental Leave Program

The aim of reserving months for fathers in the Swedish parental leave system was to increase fathers’ use of leave as well as encourage gender equality in the home and labor market. Using data from the Swedish Social Insurance Agency, this study investigates the effects of the reform – reserving one month of leave for fathers in 1995 and a second month in 2002 – on gender equality in the home. The study uses the take up of the parental benefit for the care for sick children (CFSC) as a proxy for gender equality and follows parents’ use of CFSC for twelve years for the first reform and ten years for the second reform. Results indicate the first reform led to more equal leave sharing, mainly because use of the benefit decreased among mothers with low education, and at least in part fulfilled the aim of increasing gender equality in the home.     

Headquarters involvement and efficiency of innovation development and transfer in multinationals: A matter of sheer ignorance?

We compare two theoretical perspectives on the knowledge situation of headquarters (HQ) in multinational corporations: the bounded rationality perspective and the sheer ignorance perspective. We claim that these perspectives lead to different expectations when it comes to HQ's role and the effects of HQ involvement in innovation processes at the subsidiary level. More specifically, we examine the impact of HQ involvement on the efficiency of 71 subsidiary innovation projects. The findings show that HQ involvement in innovation development and transfer has a negative rather than a positive impact on efficiency in both processes. We contribute by showing and suggesting that the sheer ignorance perspective might provide a more accurate portrayal of the HQ knowledge situation than the bounded rationality perspective does. This study furthers understanding of the role of HQ in the contemporary, knowledge-creating multinational.     

Comparing Merger Policies in the European Union and the United States

We collect a sample of EU and US merger investigations, estimate models of the regulatory decisions, and use the models to compare merger policies. Our approach allows us to decompose observed differences into policy effects and case-mix effects. Focusing on dominance mergers, we find that the EU is tougher than the US on average, in particular for mergers resulting in moderate market shares. However, the US appears to be more aggressive for coordinated interaction and non-dominance unilateral effects cases. Overall, our analysis detects substantial differences in policies, but it does not classify one regime as being more aggressive than the other.     

Do brands matter? A comparison of branded and independent hotels’ performance during a full economic cycle

By analyzing longitudinal data of more than 51,000 hotels operating in the United States during the previous economic cycle, it is possible to draw conclusions regarding the performance of branded hotels compared to independent operations under various economic conditions. The results of the study indicate that while branded properties experience significantly higher occupancy rate during the different phases of the economic cycle, independent hotels experience significantly higher average daily rate (ADR) and rooms revenues per available room (RevPAR) during the same time period. While branded hotels are faced with various payments attributable to the brand, such as royalty payments and other franchise fees, those fees do not have a deleterious effect on net operating income (NOI) compared to NOI for independent hotels, suggesting that independent hotels are unable to bring their ADR and RevPAR premiums to the bottom line despite their savings in franchise expenses. Instead, the results indicate similar NOI for branded hotels and independent hotels during economic expansion, but significantly higher NOI for branded hotels during economic recession. The results of this study suggest that the intangible asset value of hotel brands may not be a static construct, but may vary by time. Sources of such intangible value of brands may include shared resources, guest loyalty programs, and yield management systems. These results contribute insight into the complex hotel owner decision of choosing between a brand affiliation and independent operation.     

Remodularization of a Product Line: Adding Complexity to Project Management

Faced with ever-tighter schedules, product development professionals employ various methods for staying at least one step ahead of the competition. In particular, an autonomous, cross-functional team offers an effective structure for meeting the sometimes conflicting objectives of timely delivery of a high-quality, easily manufactured product. To complicate matters, however, companies must manage not only individual projects, but also entire product lines. Changes in product and process technology eventually necessitate revamping of the product architecture—that is, the remodularization of a product line. Can an autonomous project team provide the long-term perspective necessary for such efforts? Or, does remodularization of a product line require centralized oversight by functional management? Mats Lundqvist, Niklas Sundgren, and Lars Trygg explore this issue by examining product development efforts at two Swedish manufacturing companies. Specifically, their study explores this research question: Does a high degree of project autonomy limit the possibility for effective remodularization of product architecture? Both companies were involved in remodularization projects with stringent requirements for project cost and duration, but the companies employed markedly different managerial models in these efforts. One company took a centralized approach, except that two design engineers worked full time on the project. The other company used the autonomous model, with two exceptions: functional managers worked closely with some project members during the task specification phase of the project; and the project leader, though a heavyweight in many respects, did not have formal decision-making power. The latter project demonstrated that an autonomous project team can maintain a long-term perspective during development of a product. In other words, this project team was able to meet challenging time and cost objectives while developing a product consisting of highly compatible modules and subsystems. Although a centralized management approach might be expected to offer greater efficiency, the company using that approach failed to meet project goals for development time, product cost, and long-term product line effectiveness. However, the shortcomings of that effort are more directly attributable to the management style of the project leader than to the management structure employed.