Upper management control of new product development projects and project performance

Upper management control of new product development projects and project performance While some degree of freedom and flexibility is an essential ingredient to productive cross‐functional NPD teams, upper‐managers are faced with the challenge of instituting effective control mechanisms which head projects in the right strategic direction, monitor progress toward organizational and project goals, and allow for adjustments in the project if necessary. But too much or the wrong type of control may constrain the team's creativity, impede their progress, and injure their ultimate performance. Therefore, this study examines formal and interactive control mechanisms available to upper‐managers in controlling new product development (NPD) projects, and the relationship between these mechanisms and NPD project performance. Formal output and process controls are examined which consist of the setting and monitoring of outcomes, such as goals, schedule and budgets, and of processes and procedures, respectively. This study also looks at how the effectiveness of these control mechanisms may be contingent upon the degree of innovativeness in the project and the degree to which the project is part of a broad product program. In addition, the use of formal rewards for achieving team performance as opposed to rewards for individual achievement is investigated. Lastly, interactive controls are examined which consist of upper‐managers interacting directly with project members in the development of strategy and operational goals and procedures prior to the start of the project, and upper‐managers intervening in project decision‐making. Questionnaire data are collected on 95 projects across a variety of industries. The findings suggest that while NPD projects teams need some level of strategic direction concerning the objectives to be accomplished and the procedures to be followed, upper‐level managers can exert too much control. In particular, the findings showed a negative association between the use of upper manager‐imposed process controls and project performance. The findings also indicated that the degree to which upper‐managers intervened in project‐level decisions during the project was negatively related to project performance. However, the results showed support for the notion that early and interactive decision‐making on control mechanisms is important for effective projects. In particular, early team member and upper‐management involvement in the setting of operational controls, such as goals and procedures for monitoring and evaluating the project, was positively associated with project performance. This study provides additional insight into our understanding of upper‐management support in new product development. The study suggests that upper‐managers can over control with the wrong type of controls, and suggests effective ways of implementing participative and interactive control mechanisms. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Product Innovation Management Wiley

Upper management control of new product development projects and project performance

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Publisher
Wiley
Copyright
© 2002 PDMA.
ISSN
0737-6782
eISSN
1540-5885
D.O.I.
10.1111/1540-5885.1930233
Publisher site
See Article on Publisher Site

Abstract

While some degree of freedom and flexibility is an essential ingredient to productive cross‐functional NPD teams, upper‐managers are faced with the challenge of instituting effective control mechanisms which head projects in the right strategic direction, monitor progress toward organizational and project goals, and allow for adjustments in the project if necessary. But too much or the wrong type of control may constrain the team's creativity, impede their progress, and injure their ultimate performance. Therefore, this study examines formal and interactive control mechanisms available to upper‐managers in controlling new product development (NPD) projects, and the relationship between these mechanisms and NPD project performance. Formal output and process controls are examined which consist of the setting and monitoring of outcomes, such as goals, schedule and budgets, and of processes and procedures, respectively. This study also looks at how the effectiveness of these control mechanisms may be contingent upon the degree of innovativeness in the project and the degree to which the project is part of a broad product program. In addition, the use of formal rewards for achieving team performance as opposed to rewards for individual achievement is investigated. Lastly, interactive controls are examined which consist of upper‐managers interacting directly with project members in the development of strategy and operational goals and procedures prior to the start of the project, and upper‐managers intervening in project decision‐making. Questionnaire data are collected on 95 projects across a variety of industries. The findings suggest that while NPD projects teams need some level of strategic direction concerning the objectives to be accomplished and the procedures to be followed, upper‐level managers can exert too much control. In particular, the findings showed a negative association between the use of upper manager‐imposed process controls and project performance. The findings also indicated that the degree to which upper‐managers intervened in project‐level decisions during the project was negatively related to project performance. However, the results showed support for the notion that early and interactive decision‐making on control mechanisms is important for effective projects. In particular, early team member and upper‐management involvement in the setting of operational controls, such as goals and procedures for monitoring and evaluating the project, was positively associated with project performance. This study provides additional insight into our understanding of upper‐management support in new product development. The study suggests that upper‐managers can over control with the wrong type of controls, and suggests effective ways of implementing participative and interactive control mechanisms.

Journal

The Journal of Product Innovation ManagementWiley

Published: May 1, 2002

References

  • Determinants of timeliness in product development
    Cooper, Cooper; Kleinschmidt, Kleinschmidt
  • PDMA research on new product development practices: updating trends, and benchmarking best practices
    Griffin, Griffin
  • Assessing new product development practices and performances: establishing crucial norms
    Page, Page
  • How new top managers use control systems as levers of strategic renewal
    Simons, Simons

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