Differences of organizational characteristics in new product development: cross-cultural comparison of Korea and the US

Abstract

To ensure success in the current age of globalization, it is imperative for companies to understand the management practices of competitors both within and outside national boundaries. This study investigates the differences in organizational characteristics in the context of the new product development (NPD) process and the impact of these differences on NPD performance between Korea and the United States. The results show that a high degree of participation in decision making, R&D-marketing integration, top management support, project manager's skill, project manager's motivating ability, project manager's authority from top management, and product champion's influence is essential for NPD project success regardless of the country in which a company operates. This is consistent with previous studies and suggests there is a global formula for successful NPD. However, the results also show that the use of venture teams, authority concentration, organizational organicity, project manager's participative style, and existence of the product champion had a different impact on NPD performance in Korea and the US. This implies that there could be country-specific factors that influence the success of NPD, therefore research results from one country should be applied with prudence to other countries. Furthermore, it was found that differences mainly stem from country-specific contexts surrounding NPD activities. With these findings in mind, we proposed an improved research model for cross-cultural study on the impact of organizational characteristics on NPD performance. The model suggests that in addition to a direct impact, the country-specific culture has an indirect impact which is mediated by institutional management systems such as the performance appraisal system.