The Effects of Environmental Turbulence on New Product Development Strategy Planning

Abstract

Managers need guidance on how to cope with turbulent environments in order to improve corporate performance. Research on environmental turbulence has suggested that firms adopt a less centralized, more organic structure in dynamic, uncertain environments. Little work has been done specifically, however, on how environmental turbulence affects strategy planning for new product development (NPD). In this article, we specify a baseline model with firm innovativeness, market orientation and top management risk taking as antecedents to NPD speed and corporate strategic planning; these in turn are modeled as antecedents to NPD program (not project) performance. Two conceptualizations of the role of environmental turbulence are examined: (1) that market turbulence and technological turbulence are additional direct antecedents to NPD program performance; and (2) that the baseline model is moderated by turbulence (that is, that the strengths of the paths differ depending on levels of turbulence). A crosssectional survey methodology including four diverse industries [automotive, electronics, publishing, and manufacturing/research and development (R&D) laboratories] was used to test the hypotheses. The latter conceptualization is supported. In particular, the paths from innovativeness to strategic planning and from risk taking to NPD speed are significantly greater in highly turbulent environments. A set of managerial recommendations and implications are provided. First, managers must recognize the possible improvements in new product performance by actively including NPD personnel in corporate strategic planning and also by involving corporate planners in NPD activities. Second, managers also should recognize that turbulent environments heighten the need to make risky investments, and sometimes, risky decisions; risk-taking decisions ought to be encouraged in such environments.

The impact of organizational culture on Concurrent Engineering, Design-for-Safety, and product safety performance

“…We selected the two-group methodology because Ahire et al (2000), Calantone et al (2003), and Koufteros et al (2006) demonstrated in similar studies that this device is more appropriate to evaluate moderator effect compared to an approach in which environmental effects are posited as direct effects. Appendix A presents a six-stage procedure proposed by Hair et al (2010) for conducting a multi-group analysis.…”

A Structural Equation Model for Analyzing the Impact of Environmental Turbulence on Non-Financial Performance

“…In the contrast, Calantone et al (2003) reached, in the study under title "The Effect of Environmental Turbulence on New Product Development Strategy planning", that the environmental turbulence with its elements affects the new product development strategy planning in four different industries in the united states of America.…”

“…MacCormack and Verganti (2003) described the ET as an anatomical description of the responding process to the environmental changes in a flexible form, while Calantone, Garcia, and Dröge (2003) showed that ET is the uncertainty state residing in the environment and the threats/risks that it is possible to be encountered by the businesses organization. Pavlou and El Sawy (2006) stressed that ET represents a common scale for change and prediction in the environment in which the works organization operates.…”

Mobile Travel Services: The Effect of Moderating Context Factors

“…this procedure has been frequently used in various studies (Calantone, Garcia, & Dröge, 2003;Coote, Forrest, & tam, 2006;Dayan & Di Benedetto, 2010) and the steps taken to check for moderator effects are as follows. First, the items of each moderator constructs (mobility context, physical context, and social context) were summed to create a composite scale.…”