Use Of Formal Processes Research Articles

Consistency Matters in Formally Selecting Incremental and Radical New Product Ideas for Advancement

Several new product development (NPD) scholars have argued that formal processes should be used when selecting incremental new product ideas for advancement at the very beginning of the fuzzy front end (FFE), but that such formal processes may be less beneficial when selecting radical new product ideas. However, arguments also exist for using formal idea selection processes for both types of new product ideas. In practice, informal processes are used for selecting both idea types and more formal processes are used for selecting radical ideas. Unequivocal empirical evidence for either of the opposing views or practices is lacking.This study sheds light on this matter using data from 161 of the firms that participated in the Product Development and Management Association's latest (2012) Comparative Performance Assessment Study. The results reveal that the highest idea success rate (i.e., the proportion of selected ideas that are eventually launched as new products and are successful in the marketplace) is associated with firms’ use of formal processes to select the vast majority of both incremental and radical new product ideas for advancement. This finding supports earlier claims that even for (raw) idea selection processes that take place at the very beginning of the FFE, managers need to adopt a portfolio perspective and consistently use formal idea advancement selection processes to ensure attaining the right balance between radical and incremental projects in later stages of the NPD pipeline to enhance overall NPD success. Notably, this finding shows that common managerial practices of using inconsistent approaches for selecting radical and incremental ideas for advancement need to be reconsidered.

Ambidexterity in Agile Distributed Development: An Empirical Investigation

Distributed software development has become a common reality with the advent of off-shore development and the need to be close to markets. Also, the dynamic nature of the environment in which businesses operate suggests the use of agile development methods. Whereas distributed software development requires the use of formal processes advocated by plan-driven approaches, rapidly changing environments are appropriate candidates for the use of agile development methods. This tension in agile distributed development poses conflicting demands between alignment and adaptability in the software development process. We conducted a multisite case study of three projects that use agile distributed development to examine how these organizations developed contextual ambidexterity—the ability to pursue conflicting demands simultaneously. Our findings, presented as a conceptual framework, indicate that conflicting demands between alignment and adaptability posed by agile distributed development can be addressed by a set of balanced practices that shape performance management and social context—two important antecedents of contextual ambidexterity.

Market Information and New Venture Performance: Differences Between Established and Emerging Technology Standards

<para xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink"> The authors examine the significance of formal processes for market information acquisition and use as antecedents to success of Chinese new ventures. Building on insights from the entrepreneurial planning literature, the authors construct a theoretical model in which formal processes for market information and market utilization have direct, positive main effects on new venture financial performance, and in which the existence of an established technology standard has a direct effect on performance and also affects the relationship between market information processes and performance. The authors test hypotheses derived from the model using a dataset comprising 222 Chinese new ventures. Consistent with expectations, the authors find that new venture financial performance was positively associated with the use of formal processes for the generation of market information. However, the impact on performance of formal processes for market information utilization depended on the firm's technological environment. In particular, for firms facing an established technology standard, the use of formal processes for market information utilization did not significantly affect performance. In contrast, the use of formal processes for market information utilization had a significant impact on performance among ventures that faced an emerging technology standard. </para>

The impact of formal processes for market information acquisition and utilization on the performance of Chinese new ventures

The authors examine the performance impact of formal market information processes. Specifically, a theoretical model is developed that hypothesizes that formal processes for market information acquisition and utilization have direct and positive main effects on new venture success and is then tested using a sample of 222 new ventures located in China. Findings indicate that new venture success is positively correlated with the use of formal processes for market information acquisition and use. Moreover, the relative importance of formal processes to the acquisition and use of market information depends on whether the new venture serves an emerging or established market. In particular, the impact of formal processes for information acquisition is higher among new ventures that serve emerging markets. In contrast, the impact of formal processes for information use is higher among new ventures that serve established markets. We present managerial implications of our results. For example, a new venture with a strong market orientation can respond quickly to emerging marketplace needs, and can even seize the advantage from incumbents. If it is in an emerging market, however, the new venture management team should strive to excel at information acquisition; in an established market, it is important for the management team to excel at information utilization.

Do market information processes improve new venture performance?

Does market information improve new venture performance? While some researchers argue that entrepreneurs do not need formal processes to collect and use market information, others suggest that the use of formal market information processes is positively related to firm performance. In this paper, we hypothesize that new venture performance is an increasing function of (1) the firm's level of customer interaction and (2) the use of formal processes for collecting and utilizing market information. We also hypothesize that these linkages will be stronger among new ventures serving emerging markets (i.e., markets in which customer needs and segments are evolving). We test these hypotheses using data collected from 224 new ventures located in the United States. Our findings indicate that, regardless of market condition, formal processes for the collection of market information are positively associated with the use of formal processes for market information utilization and this relationship is stronger among firms serving established markets. In addition, new venture performance is positively associated with the use of formal processes for utilizing market information and this relationship is also stronger in established markets. We also find that, in emerging markets, new venture performance is a positive function of the use of formal processes for collecting market information. Contrary to expectations, we find that, regardless of market condition, the level of customer interaction has a negative relationship with the use of formal processes for market information utilization and no significant relationship with performance.