Collaborative NPD: A Mixed-Method Approach to Partner Selection in Family and Nonfamily SMEs

Abstract

We use a mixed-method approach to elicit the multi-criteria decision models underlying the selection of new product development (NPD) partners by family and nonfamily SMEs. Specifically, a review of prior relevant literature combined with two focus group discussions with executives of local manufacturing SMEs led to the identification of a set of relevant selection criteria. Subsequently, these criteria were used as the attributes of hypothetical NPD partner profiles evaluated in a choice based conjoint study. Hierarchical Bayes analyses of choice data collected from CEOs of 152 manufacturing SMEs reveal that the decision models of both family- and nonfamily SMEs rely on a relatively similar hierarchy of selection criteria. However, corroborating socioemotional wealth (SEW) argumentation, family firms require a better combination of positively evaluated selection criteria before they consider collaborating with a given potential NPD partner. Moreover, when we split the family firm sample based on the scope of their socioemotional reference frame, we find that family firms primarily pursuing focused and short-term oriented SEW display this fastidiousness in their evaluation of potential partners in particular. Family firms with broader and more future-oriented SEW frames seem more opportunity-oriented, and their selection models are more similar to those of nonfamily SMEs.