New Product Development Program Research Articles

Interteam Learning in Multiteam New Product Development Programs

Learning is a fundamental aspect of innovative new product development (NPD), and research shows that failures are a source of learning in NPD programs. However, little is known about the role of learning from successful experiences. We develop a model for learning from both success and failure, based on the characteristics of multiteam systems (MTS) and product complexity. Quantitative analysis of 167 NPD programs organized as MTS suggests that learning from success is crucial for NPD innovation at all levels of product complexity, while the effectiveness of learning from failure diminishes with increasing product complexity. Qualitative interviews provide further insights.

Does alliance orientation matter for new product success? An empirical study of Taiwanese electronics firms

PurposeFirms report varied levels of success in relation to using alliances to aid in new product development (NPD). This study aims to investigate internal processes that might influence the experience of alliance success. Specifically, this study investigates the role of mediating and moderating mechanisms underlying the alliance orientation (AO)–new product success relationship, while also investigating the impact of the level and consistency of AO. The primary goal is to understand the importance of a firm’s maintaining a consistent focus upon alliance scanning, coordination and learning.Design/methodology/approachA survey was conducted to collect data from 141 Taiwanese electronics companies. The proposed model and hypotheses were tested using path analysis in analysis of moment structures.FindingsAO improves the success of new products indirectly through the enhancement of product program innovativeness and NPD decision-making flexibility. The positive effect of AO on product program innovativeness and NPD decision-making flexibility is heightened when a firm consistently carries out a series of alliance management activities, including alliance scanning, coordination and learning. Market turbulence and the intensity of competition differentially affect the association between product program innovativeness and NPD decision-making flexibility and new product success.Research limitations/implicationsThe measures were self-reported and may result in the threat of common method bias. While this study focused upon protecting against and assessing this bias, collecting data from multiple sources would have helped to eliminate the bias. Further, the sample consisted of Taiwanese electronics firms. This makes it difficult to generalize this study’s findings to other industrial contexts.Practical implicationsWhile AO may be viewed as a dynamic capability, product program innovativeness and NPD decision-making flexibility represent competitive advantage in NPD program and process, respectively. Managers should not focus only on competitive advantage in NPD while overlooking the development of dynamic capabilities, as this study’s results demonstrate that both elements must work in tandem. AO is relevant at higher levels of the organizational hierarchy, while product program innovativeness and decision-making flexibility are operational, demanding cross-functional coordination and involvement within a firm. Senior executives ought to not only confirm the appropriate provision of their resources to activities and actions associated with product program innovativeness and decision-making flexibility in NPD but also continually monitor and assess whether the inputs of AO lead to desirable competitive advantage in the context of NPD.Originality/valueThis study sheds light on the underlying mechanism through which AO improves new product success. This research proposes two different aspects of AO, level and consistency, and empirically identifies their interactive effect in the context of NPD. The findings offer specific guidelines for the assessment and implementation of AO to improve new product success. Consistency, especially, has not been investigated in relation to alliance-generated new product success.

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Entrepreneurial and alliance orientation alignment in new product development

Given different strategic logics and implications of entrepreneurial orientation (EO) and alliance orientation (AO), this study develops an integrative model of an alignment between EO and AO in the context of new product development (NPD) and articulates the results of a study designed to examine its effects on a firm's NPD activities and performance outcomes. The authors empirically investigate the model through a cross-sectional survey of 141 Taiwanese electronics firms. Drawing from the coalignment perspective, these firms are distinguished into four strategic groups labeled as EO (high EO and low AO), AO (low EO and high AO), EA (high EO and high AO), and CO (low EO and low AO) firms. Empirical results suggest that the four groups of firms significantly differ in terms of NPD process characteristics (decision-making flexibility, market-focused learning, and internally focused learning), program characteristics (product program meaningfulness and newness), and performance outcome (new product success). Theoretical and managerial implications of the results are demonstrated.

The impact of ICT tools on new product development performance and collaboration

New product development (NPD) practitioners increasingly rely on information and communication technology (ICT), aiming to achieve lower costs, higher quality and greater speed to market. Only a little is known about the effect of various ICT tools on NPD performance, and exploring this would ease effective deployment of technological resources in innovation programmes. This study uses data collected in the Product Development Management Association's 2012 Comparative Performance Assessment Study, from 450 firms across different countries and industries. The direct and indirect effects of thirteen ICT tools on overall NPD performance are examined using hierarchical regression analysis. Results suggest that six ICT tools indirectly improve NPD performance by increasing collaboration, while the direct effects of PDM systems and project management systems are significant. The study implies that extensive use of ICT significantly contributes to improve collaboration, which is vital for achieving the NPD programmes' objectives, increasing competitiveness, and improving overall NPD performance.

Trust, integrated information technology and new product success

PurposeThe purpose of this paper is to investigate the combined roles via trust relationships of the two technology cores of the firm: information technology (IT) and R&D and their impact on new product success.Design/methodology/approachA model was tested whereby trust and the integrated IT strategy account for a significant amount of the variance in a broad range of new product development (NPD) outcomes for a survey sample of 223 manufacturing firms. Respondents said design practices and quality methods like Six Sigma accounted for a total of over 25 percent of the reports of the most helpful approaches in promoting effective NPD. At the same time their biggest challenges were having a clear strategic direction within which to operate and resolving cost and resource issues which accounted for over a third (34 percent) of barriers to success.FindingsRespondents reported that a total of over 25 percent of the reports of the most helpful approaches in promoting effective included these quality methods. At the same time their biggest challenges were having a clear strategic direction within which to operate and resolving cost and resource issues which accounted for over a third (34 percent) of barriers to success. High-tech firms were less likely to report integrated IT strategies, but this tended to be counterbalanced by high levels of trust in the IT function and adoption of organizational innovations for execution of strategic intent. Implications for future research and practice are discussed.Research limitations/implicationsSurvey methods produce broad results with low response rates in most studies involving R&D and NPD, and this study is no exception.Practical implicationsWith the challenge of strategy alignment reported by many of these firms, it seems clear that the top management team cannot afford to leave NPD challenges to engineering teams and NPD programs without guidance and general vision.Social implicationsNPD has become the staple of most manufacturing firms as a way of meeting and beating the competition worldwide. However, trust between functional areas often starts before people are even employed and should begin in training and educational programs.Originality/valueDesigning NPD programs is at the heart of many firms’ competitive strategies and the fast learning companies are the winners. Very little is known about the trust relationship between IT and R&D and their combined effects on new product success which we have found to be significant and unexpected in their impacts.

New Product Development Process Implementation in a Business-To-Business Firm: The Driving and Moderating Factors for Improved Program Performance and Time-To-Market

ABSTRACTPurpose: The study aims to examine the critical factors affecting the implementation of a formalized new product development (NPD) process in a business-to-business (B-to-B) company with product-driven growth.Methodology/approach: Case study using a combination of survey, artifacts, and long interviewsFindings: The findings suggest that (1) the initial phase proficiency can improve NPD effectiveness (NPD program performance) and NPD efficiency (i.e., time-to-market), but this relationship is moderated by the effective communication of the new NPD process throughout the entire firm; (2) the process formalization enhances time-to-market and NPD program performance, but its effects are asymmetric and contingent upon the decision concerning the inclusion of ad hoc and extended NPD team members; and (3) the product approval (executive) committee’s (PAC) ineffective communication could alienate team members from NPD efforts while resource availability moderates the influence of PAC’s decision making quality on time-to-market.Research implications: Future research could examine the PAC decision-making quality as a multidimensional construct, composed of rigor and timeliness dimensions. That way, a more granular understanding of the effect of PAC decisions could be achieved. Future studies could make a clear distinction of the NPD process type in the study context when NPD decisions are examined.Practical implications: Managers should acknowledge that decision-making processes and their comprehension by worker bees affect an NPD program’s success. It is interesting to note that removing go-no go decisions by the product approval committees at each phase may not lead to faster product development as these executive committee meetings have double entendre: they are not only to get the executives informed and get their signoff, but also is a facilitator to capital approvals. Hence, appropriate measures must be taken to remove or ease all bottlenecks in the NPD process.Originality/value/contribution: This study uncovers several crucial factors that can improve the effectiveness and time-to-market of an NPD program in B-to-B companies, especially when firms implement a new formalized NPD process.

Ambidextrous Idea Generation—Antecedents and Outcomes*

Ambidexterity, defined as the capability to develop both incremental and radical innovations, is an important driver of firm success. Idea generation is an essential starting point for both types of innovation. Therefore, this study investigates whether ambidextrous idea generation, defined as the capability to actively generate both incremental and radical ideas, affects new product development (NPD) success. Analyses on the Comparative Performance Assessment Study (CPAS) data, which includes data from 453 companies distributed over 24 countries, demonstrate that ambidextrous idea generation does indeed affect NPD program success. Consequently, this study also investigates which antecedents foster ambidextrous idea generation. The innovation paradox concept predicts that achieving ambidexterity requires overcoming paradoxical antecedents. Therefore, we tested whether combinations of financial and breakthrough orientations (the paradox of strategic emphasis), a formal innovation process and an innovation culture (the paradox of innovation drivers), tight and loose customer coupling (the paradox of customer orientation), and internal development and external collaboration (the paradox of openness) affects ambidextrous idea generation. The results show that only customer orientation and openness have the expected inverted u‐shaped effect. These finding are in line with construal level theory, which predicts that the organizational characteristics that influence idea‐generation activity must be at the same construal level to have the desired effect. The contribution of this study is twofold. First, the analyses indicate that ambidextrous idea generation has significant repercussions for the entire NPD program. Second, the results show that resolving innovation paradoxes only has an effect if the construal level of the paradox and the activity match. This finding indicates an important boundary condition for the innovation paradox concept.

The Effects of Decentralization in Strategy‐Making and National Culture on NPD Portfolio Planning

Traditionally, the understanding among scholars and practitioners has been that a portfolio of NPD projects is the expression of a firm's strategy and thus it must support the strategy. In keeping with this view, the current study focuses on new product development (NPD) portfolio planning, which is defined as a firm's effort to formulate portfolio decisions using a defined innovation strategy. Connecting portfolio decisions to a defined innovation strategy has been associated with higher innovation success. Surprisingly, empirical research indicates that portfolio decisions do not always support the company's innovation strategy. Furthermore, during recent years, an increasing number of authors underscore the importance of responsiveness and adaptability in portfolio decision‐making. The current study addresses these two issues by examining a direct effect of decentralization in strategy‐making on NPD portfolio planning, and a moderating effect of decentralization in strategy‐making on the relationship between NPD portfolio planning and NPD program success. The study also examines the influence of national culture on the proposed relationships. The theoretical model was tested using data from the 2012 PDMA Comparative Performance Assessment Study. Findings indicate that NPD portfolio planning positively influences NPD program success. Also, results revealed inverted U‐shaped direct and moderating effects, respectively, of decentralization in strategy‐making on NPD portfolio planning, and of decentralization in strategy‐making on the relationship between NPD portfolio planning and NPD program success. With regard to the moderating effect of national culture, results indicate that uncertainty avoidance does not moderate the relationship between NPD portfolio planning and NPD program success. Nonetheless, we found significant moderating effects of individualism and power distance on the curvilinear relationship between decentralization in strategy‐making and NPD portfolio planning.

Firm Characteristics and NPD Program Success: The Significant Influence of Global Discovery Management

Managing new product development (NPD) with a global point of view is argued to be essential in current business more than ever. Accordingly, many firms are trying to revitalize their NPD processes to make them more global. Therefore, examining global NPD management is one of the top priorities for research. While scholars have examined global launch management, there has been scant attention on the direct effect of global discovery management on NPD success. Therefore, this study investigates how a globally managed discovery phase enhances a firm's overall NPD success. Drawing upon the resource‐based view (RBV) and using Kotabe's () generic model for market success in global competition as the overarching framework, this study examines four drivers of NPD success: global discovery management, the firm's “global footprint,” its inbound knowledge sourcing practices (i.e., “open innovation proclivity”), and nationality of the teams (i.e., “cross‐national global NPD team use”). The hypotheses are tested using a sample of 255 business units from multiple industries, headquartered worldwide, and surveyed during the 2012 PDMA Comparative Performance Assessment Study (CPAS). The PLM‐SEM analyses show that, of the four drivers examined, only global discovery management strongly influences a firm's NPD program success. The findings enhance our understanding of the particularities in global NPD. Based on the study's results, suggestions are provided as to how multinationals can leverage their international operations in the course of their front‐end activities.

Exploring interaction-based antecedents of marketing-R&D collaboration: evidence from the Taiwan’s semiconductor industry

Marketing-R&D integration has been recognized as a key success factor of the NPD (new product development) programs. Although previous research has differentiated two integrative approaches (i.e., interaction and collaboration), a theoretical gap remains unaddressed: whether there is a relationship between Marketing-R&D interaction and collaboration? Lack of knowledge at this point not only shows a cleft in theory, but also prevents us from offering useful guidance for practitioners to better NPD practices and results. The present research, from an interpersonal interaction perspective, explores and tests interaction-based antecedents of Marketing-R&D collaboration. The results of a survey of 94 semiconductor companies in Taiwan provide fresh evidence for the effects of selected predictors on the collaboration. In addition, the collaboration is shown to have different impacts on the NPD process and NPD output performance at a firm level. Both theoretical and managerial implications of the current research are also advanced in this manuscript.

Managing program impacts in new product development: An exploratory case study on overcoming uncertainties

New product development (NPD) programs are designed to implement innovation strategies in a coordinated way. Managing program impacts in a multi-project setting is insufficiently covered in research and increasingly challenging in practice. This paper explores program impact management practice. The paper focuses on NPD program impact management as a joint effort where program stakeholders collectively identify, make sense of and overcome uncertainties and ambiguities to create and enhance the program impact. The qualitative study relies on in-depth access to a large-scale NPD program in the machine manufacturing industry. The results show that program impact includes several financial and non-financial aspects and is made jointly and separately by the program organization, thus involving different uncertainties and ambiguities. Through collective sensemaking, knowledge about the program impacts may be strengthened, and the impacts may be extended beyond immediate benefits.

The Impact of Company Resources and Capabilities on Global New Product Program Performance

Product innovation and the trend to globalization are two important and interrelated dimensions driving business today. In this article, the results of five published research articles on the topic of global new product development (NPD) are summarized to provide an integrated overview of the factors that impact global NPD program performance. The overall conceptual framework is based on three types of literature—NPD, globalization, and organization. The main theoretical approach for establishing relationships between factors is the dynamic capability/resource-based view. Accordingly, factors linked to outcome are seen as operating on different organizational levels, with more actionable initiatives or ‘capabilities’ largely mediating the softer and longer term background ‘resources’ of the firm. The analyses are based on a broad cross-industry sample of 467 firms (North America, Europe, B2B, goods/services). Three global NPD-related background resources (global innovation culture, resource commitment, and senior management involvement), labeled the ‘behavioral environment’ of the firm, are identified and shown to be linked to global NPD program performance via the mediated effect of four specific NPD capabilities (NPD process, strategy, team, and IT/communication). A qualitative synthesis of the findings is provided, along with recommended management initiatives with which firms can enhance their performance in the global NPD effort. Both sets of factors are found to be essential and highly interrelated, but it is the strength of the behavioral environment resources that distinguish the best performing firms, setting the stage for success in global NPD.

How Formal Control Influences Decision‐Making Clarity and Innovation Performance

Implementing formal planning instruments such as the stage‐and‐gate‐type system (SGS) and project management (PM) have long been seen as the key to new product development (NPD) success. They create the structure needed for managing NPD activities, supporting coordination among functional groups, reducing uncertainty and error, and assuring time and cost efficiency. But recent research presents ambiguous results, suggesting that SGS and PM as formal controls can also have a negative effect. Integrating ideas from three literatures—i.e., NPD management, organization control theory, and technical control theory—the present study assesses NPD programs in terms of three perspectives: (1) the formal control mechanisms used for managing NPD programs—specifically SGS, which is mainly seen as a higher organizational level approach used for guiding and implementing a portfolio of NPD projects, and PM, which is a precise formal control mechanism relevant for managing specific problems at a single project level; (2) the immediate outcome of the application of formal controls, i.e. decision‐making clarity (DMC); and (3) degree of NPD innovativeness, a key contingency hypothesized to impact the efficacy of formal controls. For the empirical analysis, data are collected through a survey of 162 corporate NPD programs (Austria and Denmark, manufactured goods and services) where a total of 1274 respondents provide information relevant to their position. Hierarchical regression analysis is used to test the relationships. Results indicate that the performance effect of NPD formal control is fully mediated by DMC. Further, of the six hypothesized outcome relationships, four are fully supported. Both SGS and PM are effective systems for managing NPD when degree of innovativeness is not taken into account. PM, however, loses its efficacy at higher degrees of NPD program innovativeness while SGS continues to work at achieving positive DMC at the radical end of the innovativeness spectrum. Analysis of interaction effects indicates that for more innovative NPD programs, best results are achieved when companies implement an interactive system of both SGS and PM, where the two systems complement each other.

Developing Sustainable New Products in the Textile and Upholstered Furniture Industries: Role of External Integrative Capabilities

Environmental sustainability has become one of the key issues for strategy, marketing, and innovation. In particular, significant attention is being paid by companies, customers, media, and regulators to development and consumption of green products. It is argued that through the efficient use of resources, low carbon impacts, and risks to the environment, green products can be essential to help society toward the environmental sustainability targets. The number of green product introductions is rapidly increasing, as demonstrated by the growing number of companies obtaining eco‐labels or third party certifications for their environmentally friendly products. Hundreds of companies representing most of the industries, such as Intel, SC Johnson, Clorox, Wal‐Mart, and Hewlett–Packard, have recently introduced new green products, underlining the need to develop products that create both economic and environmental values for the firm and customers. A review of the literature shows that academic research on green product development has grown in interest. However, to date, only a few empirical studies have addressed the challenge of integrating environmental issues into new product development (NPD). Previous empirical works have mainly focused on a set of activities for the green product development process at the project level. After years of paying no or marginal attention to environmental sustainability issues, most of the companies now generally realize that it would require knowledge and competencies to develop green products on a regular basis. These knowledge and competencies can be varied, such as R&D, environmental know‐how, clean technology/manufacturing process, building knowledge on measuring environmental performance of products, etc., that may be developed internally or can be integrated through external networks. Adopting a resource‐based view of the firm, this article aims at (1) investigating the role of capabilities useful for companies to integrate knowledge and competencies from outside of the firm on green product development in terms of both manufacturing process and product design and (2) understanding whether green product development opens new product, market, and technology opportunities, as well as leads to better financial performance of NPD programs. To this end, a survey was conducted in two Italian manufacturing industries in which environmental issues are becoming increasingly important, namely textiles and upholstered furniture. A questionnaire was sent to 700 firms, and 102 useable questionnaires were returned. Results show that (1) companies engage in developing external integrative capabilities through the creation of collaborative networks with actors along the supply chain, the acquisition of technical know‐how, and the creation of external knowledge links with actors outside the supply chain; (2) external knowledge links play a key role in the integration of environmental sustainability issues into the manufacturing process, whereas capabilities such as the acquisition of technical know‐how and the creation of collaborative networks prove to be more important for integrating environmental issues into product design; and (3) the integration of environmental sustainability issues into NPD programs in terms of product design leads to the creation of new opportunities for firms, such as opening new markets, technologies, and product arenas, though not necessarily leading to improved financial performance of the NPD programs.

Managing large engineering changes

Purpose – In new product development (NPD), changes to the initial designs are often proposed for on‐going design projects due to new insights. These engineering changes belong to a wide range from incremental to radical and, in their impact, even to discontinuous change. Consequently, the actual workload of development projects confronted with engineering changes does not match the initial work estimates for the project's work packages. Accordingly, the intended timing of readiness of development projects in an NPD program will drift away. This timing is one of the causes of change propagation to other projects which results in even more engineering changes. For larger changes, the effects on timing may be disastrous. The purpose of this paper is to reveal the cause‐and‐effect relationships triggered by various types of changes and explain the need for a more integrated approach to managing engineering change.Design/methodology/approach – A longitudinal case study was performed at a leading microlithogra...

Strategic innovation and new product development in family firms

PurposeThis study aims to investigate the relationship between the presence of the family variable within a business enterprise and the managerial factors affecting the success of new product development (NPD). This can be structured into three research questions: What is the relationship between the presence of the family variable within a business enterprise and the managerial factors affecting the success of NPD activities? How the managerial factors affecting the NPD process are faced in family firms? Which are the main differences (e.g. strengths and/or weaknesses) in dealing with the managerial factors affecting the NPD process between family and non‐family firms?Design/methodology/approachThe study employs a grounded‐theory and case‐study approach to investigate the relationship between the presence of the family variable within a business enterprise and the managerial factors affecting the success of NPD. The starting point is an in‐depth literature review on the managerial factors differentiating family from non‐family firms, and the managerial factors affecting NPD success. Then, a multiple case‐study on five Italian family firms and five Italian non‐family enterprises is conducted. The case‐studies lead to the development of an empirically grounded theoretical framework that outlines how the distinctive characteristics of family businesses are related to the managerial factors affecting NPD success.FindingsFamily firms clearly emerge as more long‐term oriented than non‐family enterprises. The long‐term orientation of family businesses vs non‐family companies seems to play a pivotal role in originating NPD projects with long‐term thrust. If a company is long‐term oriented it is reasonable to expect that it will put its long‐term vision in NPD programs, thus reaching a NPD long‐term thrust.Research limitations/ implicationsThe study advances research on strategic innovation and NPD in family vs non‐family firms. It develops new theory at the important intersection of family business and innovation/NPD research, filling a gap in the literature and providing justification and guidance for the design of more comprehensive studies. Future research could investigate and test the theoretical framework on a wider empirical base, using either qualitative or quantitative methods.Originality/ valueThe paper addresses the failure of innovation management research to recognize, embrace, and deliberately incorporate family firms. It therefore fills a gap in the literature and extends prior research by introducing specific propositions that are supported by the case data and originally integrating them in the general research stream on NPD and family‐firm characteristics. The originality of the study lies also in the fact that it appears to be the first comparative analysis on this specific topic involving both family and non‐family enterprises.

Managing New Product Development Teams in a Globally Dispersed NPD Program

Globalization is a major market trend today, one characterized by both increased international competition as well as extensive opportunities for firms to expand their operations beyond current boundaries. Effectively dealing with this important change, however, makes the management of global new product development (NPD) a major concern. To ensure success in this complex and competitive endeavor, companies must rely on global NPD teams that make use of the talents and knowledge available in different parts of the global organization. Thus, cohesive and well‐functioning global NPD teams become a critical capability by which firms can effectively leverage this much more diverse set of perspectives, experiences, and cultural sensitivities for the global NPD effort. The present research addresses the global NPD team and its impact on performance from both an antecedent and a contingency perspective. Using the resource‐based view (RBV) as a theoretical framework, the study clarifies how the internal, or behavioral, environment of the firm—specifically, resource commitment and senior management involvement—and the global NPD team are interrelated and contribute to global NPD program performance. In addition, the proposed performance relationships are viewed as being contingent on certain explicit, or strategic, factors. In particular, the degree of global dispersion of the firm's NPD effort is seen as influencing the management approach and thus altering the relationships among company background resources, team, and performance. For the empirical analysis, data are collected through a survey of 467 corporate global new product programs (North America and Europe, business‐to‐business). A structural model testing for the hypothesized effects was substantially supported. The results show that creating and effectively managing global NPD teams offers opportunities for leveraging a diverse but unique combination of talents and knowledge‐based resources, thereby enhancing the firm's ability to achieve a sustained competitive advantage in international markets. To function effectively, the global NPD team must be nested in a corporate environment in which there is a commitment of sufficient resources and where senior management plays an active role in leading, championing, and coordinating the global NPD effort. This need for commitment and global team integration becomes even more important for success as the NPD effort becomes more globally dispersed.

Information Processing and Firm‐Internal Environment Contingencies: Performance Impact on Global New Product Development

Innovation in its essence is an information processing activity. Thus, a major factor impacting the success of new product development (NPD) programs, especially those responding to global markets, is the firm's ability to access, share and apply NPD information, which is often widely dispersed, functionally, geographically and culturally. To this end, an IT‐communication strength is essential, one that is nested in an internal organizational environment that ensures its effective functioning. Using organizational information processing (OIP) theory as a framework, superior global NPD program performance is shown to result from an effective IT/Communication strength and the commitment components of the firm's internal environment, which are hypothesized to moderate this relationship. IT/Communication strength is identified in this study in terms of two components including the IT/Comm Infrastructure and IT/Comm Capability of the firm, whereas the moderating internal environment of the firm incorporates Resource Commitment and Senior Management Involvement. Data from a major empirical study of international NPD programs (382 SBUs) are used to develop and test this model. Based on a hierarchical regression analysis, the results are substantially supportive, with some unexpected findings. These shed light on the complex relationships of the firm's internal environment, OIP competency, and global NPD program performance.

The Role of Globalization in New Product Development

Research has long emphasized the importance of the development of new products for global markets. However, despite the increasing interest of firms in developing such products, we do not know empirically how such development impacts the performance of new product development (NPD) programs. Addressing this research gap in the literature, this study proposes and tests a series of hypotheses about the relationship between the development of new products with a global market focus and the performance of NPD programs, and investigates various organizational, procedural, and operational conditions that may moderate this relationship. The results of an empirical study indicate that the development of new products with a global market focus was positively related to the financial performance of NPD programs, and this relationship was stronger when firms used a cross-functional organizational structure in NPD and an NPD process. In addition, these results suggest that such development was positively related to the rate of new product introduction, and this relationship was stronger when firms used an NPD process. Finally, contrary to our theoretical expectations, these relationships were not moderated by firms' engagement in the fuzzy front-end NPD activities.