Strategies for Environmental and Traditional Quality Efforts During New Product Development: Balancing Complementarity and Conflict

Abstract

This paper investigates the optimal rate and timing of efforts for environmental and traditional quality to be pursued by a manager for a new product during a development project. It assumes that the manager's goal is to maximize the profits earned from a new product release and that the revenue is driven by the product's utility. Product utility is determined by the levels of both traditional quality (e.g., the performance and reliability dimensions), and environmental quality, which is higher when there are product attributes reducing the environmental impact of the product. Both the levels of environmental and traditional quality are directly affected by product development efforts to increase their quality levels and their mutual interactions. Four cases are presented where the timing and rates of efforts pursued for environmental and traditional quality show different trends, depending on the firm or industry characteristics. This study provides insights about how attribute complementarity and conflict affect environmental and traditional quality levels and how this influences managers' decisions to pursue higher quality levels of each. In addition to the attributes' complementarity and conflict, the nature of the quality advancement sought (i.e., incremental or radical advancement) is critical in determining the manager's quality optimization strategies.