Flexibility and control in managing collaborative and in-house NPD

Abstract

Purpose Prior literature provides little insight on how management control systems have responded to the growth of collaborative new product development (NPD). The purpose of this paper is to contrast the use of budgets to manage collaborative and in-house NPD and to consider the implications for enabling flexibility. Design/methodology/approach The paper reports on the findings of a case study company in the medical devices industry that uses two different business models for its NPD activities. While the company engages in in-house NPD for its own products, it also engages in collaborative NPD services with a range of customers. Findings The study illuminates how two types of budgets (annual and project) can have very different impacts on flexibility under different business models. The annual financial budgets imposed rigid constraints on in-house NPD and resulted in reduced flexibility, whereas in collaborative NPD, they had little impact on flexibility. Project budgets created hard operational constraints in collaborative NPD which generated a highly pressurised yet highly creative environment, whereas project budgets had little impact on flexibility in in-house NPD. Originality/value The study contributes detailed empirical insights into the control systems used to manage collaborative NPD from the supplier perspective, where creativity is largely responsive and contrasts these with the management of in-house NPD where creativity is largely expected. The authors also contribute an analysis of the key control systems and other factors that sustain flexibility in this highly pressurised open innovation environment.

Moderating Role of Project Innovativeness on Project Flexibility, Project Risk, Project Performance, and Business Success in Financial Services

“…The study outcome depicts a substantial negative moderating effect on the performance of a project. The level of constraints under which different projects are executed such as no independence to projects, budget constraints, schedule deadlines, and quality of skilled resources assigned to the project is the cause of this moderation (Hoegl et al, 2008;Curtis and Sweeney 2019;Wu and Wu, 2020).…”

“…Importantly, project flexibility is related to the preventative strategies to mitigate risks that offer means to achieve success through projects, especially in a dynamic environment. Earlier studies (Zailani et al, 2016;Curtis and Sweeney 2019) proposed additional empirical research in project-based organizations especially considering project flexibility. Thus, this research paper will study the effects of managing risks and project flexibility on success of projects by measuring project performance and business success in Financial Services.…”

Controller involvement in a project management setting: effects on project functions and performance

“…2 The management accounting literature has only marginally addressed the relevance of controller involvement in task-driven, highly pressured, flexible, interdependent, sequential, and dynamic operational settings such as project management (e.g., Nixon, 1998;Nandhakumar and Jones, 2001;Van der Veeken and Wouters, 2002). 3 Relevant literature in this area concentrates on the use of management accounting information in other settings characterized by high uncertainty such as R&D and new product development (NPD) (Abernethy and Brownell, 1997;Davila, 2000;Jorgensen and Messner, 2009;Curtis and Sweeney, 2019) or creative environments (Cools et al, 2017;Davila and Ditillo, 2017).…”

“…Nixon, 1998; Nandhakumar and Jones, 2001; Van der Veeken and Wouters, 2002) [3]. Relevant literature in this area concentrates on the use of management accounting information in other settings characterized by high uncertainty such as R&D and new product development (NPD) (Abernethy and Brownell, 1997; Davila, 2000; Jorgensen and Messner, 2009; Curtis and Sweeney, 2019) or creative environments (Cools et al , 2017; Davila and Ditillo, 2017). Previous literature provides some indication of the potential role of controllers in these highly uncertain creative settings (Lee and Wang, 2020).…”