Environmental Uncertainty, Organizational Integration, and New Product Development Effectiveness: A Test of Contingency Theory

Souder, William E.; Sherman, J. Daniel; Cooper, Cary L.

doi:10.1111/1540-5885.1560520

Cited by 97 publications

(96 citation statements)

References 47 publications

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“…We reason that if the technological and market environments moderate the effects of the SOs on innovation performance, a firm should be able to achieve greater new product success by seeking the more effective (hence appropriate) SO to the environment (cf. Paladino, ; Souder et al., ).…”

Section: Discussion and Implications For Managementmentioning

confidence: 99%

What Are the Effective Strategic Orientations for New Product Success under Different Environments? An Empirical Study of Chinese Businesses

Yang¹,

Wang²,

Zhu³

et al. 2012

J of Product Innov Manag

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Innovation is an organization's spanning process that must continually change in response to, and in anticipation of, changing business environments. Research in the fields of marketing and management has examined individual strategic orientations (SOs) (such as market orientation) and their relationship to innovation performance. Few studies, however, have compared the effectiveness of different SOs for innovation performance in a single study. It is also not clear from previous research whether the business environment influences the effectiveness of the SOs. The objective of this paper is therefore twofold: it aims to evaluate (1) whether a focus on the customer, the technology, the competitor, or the interfunctional coordination, will have the greatest impact on new product success, and (2) whether the effectiveness of a specific SO varies with the environment. Data were collected from more than 500 senior executives in a wide range of manufacturing and service firms in China. Using cluster analysis and an ordinary least squares (OLS) regression model, which are commonly adopted to examine the effects of environments on the relationship between strategy and performance, we identified four subgroups of firms facing distinctively different market and competitive environments. As predicted, the results show that all four SOs have (albeit to a different degree) a significant and positive relationship with innovation performance. More importantly, the results point to the relative advantage in pursuing a specific SO by taking into account its effect under different environments and the effects of other SOs. However, the particularly strong effect of technology orientation compared to that of the other SOs on new product performance across all clusters is somewhat surprising. We offer some tentative explanations for this finding, though further research will be required to fully understand it. Overall, our findings indicate the need for managers to be responsive to environmental contexts and to allocate resources to pursue the effective (hence appropriate) strategic orientations for the specific context.

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Section: Discussion and Implications For Managementmentioning

confidence: 99%

What Are the Effective Strategic Orientations for New Product Success under Different Environments? An Empirical Study of Chinese Businesses

Yang¹,

Wang²,

Zhu³

et al. 2012

J of Product Innov Manag

View full text Add to dashboard Cite

show abstract

“…For this reason, Susman & Dean (1992) argue that concurrent engineering practices are likely to be more useful for new or major design changes, which by definition are more technically uncertain than minor ones. This suggests that product design novelty may moderate the relationship between stage of early simultaneous influence and product development performance (Collins & Hull, 1997;Souder et al, 1999;Song et al, 1999, Swink, 2000.…”

Section: Design Newnessmentioning

confidence: 99%

“…An opposing view argues that the integration of product design and manufacturing engineering may be even more important to the extent designs are novel (Rochferdt & Rudelius, 1992;Liker et al, 1999;Souder et al, 1999;Swink, 2000). According to this line of reasoning, manufacturing helps provide a heterogeneous perspective that can stimulate creative solutions to challenges where risks are high.…”

Section: Design Newnessmentioning

confidence: 99%

Early Simultaneous Influence of Manufacturing Across Stages of the Product Development Process: Impact on Time and Cost

Collins

Hull

2002

Int. J. Innov. Mgt.

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This paper focuses on the concept of ESI (early simultaneous influence) as a cornerstone of concurrent engineering. How much influence downstream functions such as manufacturing engineering should exert in product design decisions is investigated by stage of development. Six stages were defined as: (1) research, (2) product concept, (3) prototype and test, (4) final design, (5) tooling and facilities, and (6) ramp-up to full production. Performance is measured as time compression at the tooling and facilities stage and reduction in manufactured cost. Results from analysis of 74 companies suggest that manufacturing influence has significant effects on performance at the first three stages. Its peak impact is at the third stage, a crossroads of work by up and downstream functions. If the design is new, however, the peak impact of ESI is earlier as indicated by significant interaction effects at the research and product concept stages. We also show * This paper was read at PICMET, Portland, June 1997 Int. J. Innov. Mgt. 2002.06:1-24. Downloaded from www.worldscientific.com by UNIVERSITY OF SUSSEX on 02/07/15. For personal use only. 2 P. D. Collins & F. M. Hull that high levels of manufacturing influence at the end stage have a weak negative interaction effect with performance when designs are new. To the extent that high levels of manufacturing influence within their own domain preclude reciprocal influence by upstream functions, this result is consistent with the notion of concurrency as simultaneous influence by multiple functions at all points along the value chain.

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“…To illustrate, Souder et al. () found 3 of 28 interactions with uncertainty to be significant and cite several articles to suggest that this is a typical hit rate. In contrast, a contribution of this research is the identification of a potentially stronger contingency.…”

Section: Introductionmentioning

confidence: 99%

Managing the Trade‐off between Ambiguity and Volatility in New Product Development

Carson¹,

Wu²,

Moore³

2012

J of Product Innov Manag

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Uncertainty is widely recognized to be a key contingency influencing optimal new product development processes. However, extant new product research treats uncertainty in a largely unidimensional manner. Even in studies where multiple dimensions of uncertainty are measured, they are hypothesized to behave in a similar manner. This paper advances a theory describing how ambiguity and volatility place different and conflicting demands on new product development processes. Drawing on ideas from the organization theory and learning literatures, the theory suggests that more ambiguous environments favor slower development processes based on larger samples of data and interpretations whereas more volatile environments favor faster and more flexible development processes. Five hypotheses are advanced suggesting that as the level of ambiguity increases (decreases) relative to the level of volatility, firms should respond by decreasing (increasing) the role of top management in new product development, increasing (decreasing) front‐end and back‐end participation, allocating more (less) time and effort to ideation, and using more (less) aggressive screening processes. Some of these hypotheses are highly intuitive (participation and screening) while others are counterintuitive (top management involvement and screening aggressiveness). The theory is tested using primary data on the development of 120 new products and their subsequent performance collected from firms in U.S. manufacturing industries. The data largely confirm the hypotheses and provide strong evidence of a trade‐off between ambiguity and volatility that can be managed to improve new product performance. The exception is back‐end participation, which should be lower in relatively more ambiguous environments, in contrast to the hypothesis. A comparison with three alternative models shows that ambiguity generally has a larger impact on appropriate new product development processes and success than either the level of volatility or the overall level of environmental uncertainty. A detailed examination of the estimated relationships shows that for ideation and screening, the relative level of ambiguity and volatility determines optimal new product development processes, whereas for top management involvement and participation, processes can be designed based primarily on the level of ambiguity alone, with less concern over the degree of volatility. The study highlights the importance of considering the composition of uncertainty in addition to its overall level in contingent approaches to new product development. Real‐world examples of highly ambiguous and highly volatile new product development contexts are discussed.

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Environmental Uncertainty, Organizational Integration, and New Product Development Effectiveness: A Test of Contingency Theory

Cited by 97 publications

References 47 publications

What Are the Effective Strategic Orientations for New Product Success under Different Environments? An Empirical Study of Chinese Businesses

What Are the Effective Strategic Orientations for New Product Success under Different Environments? An Empirical Study of Chinese Businesses

Early Simultaneous Influence of Manufacturing Across Stages of the Product Development Process: Impact on Time and Cost

Managing the Trade‐off between Ambiguity and Volatility in New Product Development

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