The role of the network lead company in integrating new product development processes across strategic partners

Abstract

In today's network world, advancement in new product development (NPD) is being driven by different types of networks, joint ventures, alliances, outsourcing and mergers. These business trends have resulted in complex organisations and development projects that cross location, company, country and cultural boundaries. The key success is no longer integrating the company's units and activities, but integrating the NPD process across a network of strategic partners. Managing the of an NPD process in this increased organisational complexity requires a sophisticated organisation design to facilitate and support the coordination of activities and the flow of information across the network. The research investigates the impact of organisational design of the network lead company (the main company in the network) on the NPD project's process with external partners and the subsequent effects on performance. The integration process elements in this research are: and coordination. I focus on the RD organisation in the network lead company. Within the RD organisation, I adopt the project level of analysis and answer the main research question: How can the network lead company design its RD organisation to support the NPD project's communication and coordination activities with the project strategic partners and improve project performance? The research centres on the with strategic partners in whom the network lead company has equity investments (minority holdings). Using data collected from three in-depth case studies of high-tech NPD projects conducted by three network lead companies from different industries, I attempt to extend and merge the knowledge of NPD management and the organisation theory by proposing a contingency model and developing a condition of fit between contextual conditions that characterise the high-tech NPD project and the organisation design of the network lead company. The model suggests that the efficient performance of the development project (shortest, cheapest, and highest quality possible) is contingent on how well the actual intensity levels of communication and coordination fits the required intensity levels. The research also indicates that the required intensity of communication and coordination between the network lead company and the project strategic partners in uncertain and complex project is dominated by the development cycle time (DCT) of the project. Conversely, the actual intensity of communication and coordination between the NPD project team of the network lead company and its project strategic partners is enabled by differentiated combination of RD organisational attributes: centralisation, formalisation, number of hierarchical levels, team empowerment, and power of the leadership.