New Product Development in Traditional Industries: Decision-Making Revised

Jon Mikel Zabala-Iturriagagoitia

doi:10.4067/s0718-27242012000100003

Jon Mikel Zabala-Iturriagagoitia

Open Access

https://doi.org/10.4067/s0718-27242012000100003

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Abstract

This paper investigates whether decisions considered as common in new product development literature are also valid in a region characterized by traditional industries. The research is grounded on innovative companies in the Valencian Region (Spain). Using the statistical tool of factor analysis, we test if the groups of decisions identified by the literature can be confirmed in our empirical sample. Therewith, we aim to link the theoretical and empirical fields in the context of new product development and product innovation management.

Highlights

Innovation is a complex process covering different dimensions
We believe most of the decisions identified by Krishnan and Ulrich are adequate for manufacturing firms in medium and high-tech industries. Is their list of decisions appropriate in a context of micro-firms and Small and Medium Size Enterprises (SMEs)? Are they valid in an environment where innovation is done by adaptation? Do they apply to firms in traditional industries? By focusing in a region with low R&D orientation, with industries positioned in low-technology sectors, family oriented micro and SMEs, and where innovation is mostly done by adaptation, we aim to examine the degree of universality of the decisions they listed
The first set of questions addressed by Krishnan and Ulrich are those related to the Product Development Decisions within a project

Summary

Introduction

Innovation is a complex process covering different dimensions (technological, product, process, organizational, managerial, marketing, etc.). Decision-making activities constitute a considerable percentage of the time invested in the development of a new good, determining the final product’s quality, innovation and costs, as well as the overall efficiency of the firm (Tsinopoulos and McCarthy, 2002). Due to the several dimensions of uncertainty, decisionmaking processes constitute one of the key issues within NPD (Kengpol and O’Brien, 2001; Krishnan and Ulrich, 2001). This is one of the goals of this paper, studying the decision-making processes of innovative firms in their NPD processes. The decisions made during NPD processes can so be divided into two major groups (Srinivas and Shekar, 1997): (i) repetitive decisions, that is, systematic processes that can be represented as algorithms (structured decisionmaking); and (ii) those than require human judgement (unstructured decision-making)

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