Drivers of changes in product development rules

Abstract

Purpose– The purpose of this paper is to investigate the drivers that induce companies to change their rules for managing product development. Most companies use a form of rule-based management approach, but surprisingly little is known about what makes companies change these rules. Furthermore, this management technology also has developed over time into different versions, but what drives firms from one version to another has only been suggested, not empirically studied.Design/methodology/approach– The dynamics of the rules of five companies are analyzed over a period of more than ten years based on three rounds of interviews with 40 managers.Findings– Previous research has assumed that the dynamics of product development rules are based on internal learning processes, and that increasingly competent management will stimulate the implementation of newer and more complex rule regimes. However, the analysis here indicates that there are different drivers, both internal and external, that cause companies to adopt new rules or modify their existing ones, such as changes in organizational structures, organizational conflicts and changes in ownership or strategy. In addition, contrary to the predictions in previous research, companies sometimes move back and forth between different generations of rules. Companies that have moved to a more flexible third generation of rules might revert to their second generation rules, or supplement their flexibility with an increased level of management control and information systems. A model is proposed to explain the relationship between the drivers of rule change and the actual dynamics of rules, incorporating two sets of moderators: organizational moderators and rule-related moderators.Research limitations/implications– The findings indicate that many factors influence the modification of rules, and that there is no simple linear progression from one generation to another. Organizational learning is one among several other factors that influences the dynamics of rules for managing product development. Further research is needed to explore the dynamic relationship between different factors, the proposed moderators and changes to rules. Lack of historical record keeping in companies puts special requirements on research concerning rules.Practical implications– Companies need to consider how and why their present versions of rules have emerged, whether or not the existing rules can actually solve the challenges they face today, whether or not the rules support the intended company strategy, and what mechanisms influence their product development rules.Originality/value– A great deal of research has investigated the relationship between the uses of structured rule-based approaches to manage product development, but little is known about what makes these rules change. This is the first study to uncover the multitude of drivers that stimulate change in product development rules and to suggest sets of moderators that influence the outcome.