New Product Portfolio Management Decisions: Antecedents and Consequences

Abstract

This research employs organizational information processing theory to propose and examine the antecedents and consequences of new product portfolio management (NPPM) decisions. Understanding NPPM decisions is an important research area because these decisions affect firm profitability but are difficult to make because of limited reliable information. Recent survey results of Product Development and Management Association members and other NPPM professionals suggest nearly half of initial new product ideas are chosen to advance through the new product development (NPD) pipeline via informal processes. Thus, managers wield considerable influence in NPPM. Yet only limited research quantitatively examines how NPPM decisions impact performance and the role of manager dispositions. Using as the research context a marketing simulation exercise conducted with mid-level managers, this research reveals important insights into the impact of the three NPPM dimensions-value maximization, balance, and strategic fit-on NPD and firm performance. The analysis suggests a critical role for the NPPM dimension of balance as it is the single dimension impacting performance. However, value maximization is relevant as a criterion for competing because, overall, managers see this dimension as important. At the same time, managers are cautioned in their use of strategic fit as it appears this dimension may constrain innovative choices.Furthermore, three manager dispositions proposed from organizational information processing theory-directive leadership style, need for cognition, and risk perceptions-all influence NPPM dimensions. Managers are recommended to consider the personality traits of managers involved in NPPM decisions to ensure thorough consideration of all dimensions.

An exploratory study of how a Korean chaebol’s learning culture facilitates customer service

“…In terms of managing tension and performance, it should be noted that an individual's performance may in some way be related to their risk perception (McNally, Durmusoglu & Calantone, 2013); and also, be linked with the amount of autonomy a team/function has. It is useful to note the contribution to the body of knowledge made by Ellemers, Sleebos, Stam and de Gilder (2013), and to make reference to Edmondson and Nembhard (2009, pp.125-126) who claim that struggling with challenges such as cross-functionality and conflict, enables team members to build capabilities for learning which facilitates collaboration, as crossfunctional teams are viewed as providing "greater access to more and different types of information".…”

A conceptual multi-dimensional evaluation model for new product portfolio management — Using hybrid fuzzy model of AHP-DEA

“…So in this study, we models and decision maker ca strategic fit model to implemen To achieve a balanced new managers evaluate projects ba the project mix evens out mult frame, innovativeness, financ [12], [6], [23]. …”

“…among the projects selected valuate NPD projects based flect firm strategy [12], [23]. gic fit of a project, decision alitative model considering l and Operational attributes.…”

A methodology for assessing the effect of portfolio management on NPD performance based on Bayesian network scenarios

“…The findings show that the best company achieved dramatically better portfolio success than the worst. And then, the consequences of portfolio management decisions on NPD performance are examined in marketing simulation exercises conducted with mid-level managers (McNally et al, 2013). The research reveals that the three outcomes of portfolio management decision, including value maximization, balance, and strategic fit, have impact on NPD and firm performance.…”

“…However, few studies focus on PM practices and assess their impacts on NPD performance (McNally, Durmuşoğlu, & Calantone, 2013;Patanakul, 2013).…”