Implementing formal planning instruments such as the stage-and-gate-type
system ( SGS) and project management ( PM) have long been seen as the
key to new product development ( NPD) success. They create the structure
needed for managing NPD activities, supporting coordination among
functional groups, reducing uncertainty and error, and assuring time and
cost efficiency. But recent research presents ambiguous results,
suggesting that SGS and PM as formal controls can also have a negative
effect. Integrating ideas from three literatures-i.e., NPD management,
organization control theory, and technical control theory-the present
study assesses NPD programs in terms of three perspectives: (1) the
formal control mechanisms used for managing NPD programs-specifically
SGS, which is mainly seen as a higher organizational level approach used
for guiding and implementing a portfolio of NPD projects, and PM, which
is a precise formal control mechanism relevant for managing specific
problems at a single project level; (2) the immediate outcome of the
application of formal controls, i.e. decision-making clarity ( DMC); and
(3) degree of NPD innovativeness, a key contingency hypothesized to
impact the efficacy of formal controls. For the empirical analysis, data
are collected through a survey of 162 corporate NPD programs ( Austria
and Denmark, manufactured goods and services) where a total of 1274
respondents provide information relevant to their position. Hierarchical
regression analysis is used to test the relationships. Results indicate
that the performance effect of NPD formal control is fully mediated by
DMC. Further, of the six hypothesized outcome relationships, four are
fully supported. Both SGS and PM are effective systems for managing NPD
when degree of innovativeness is not taken into account. PM, however,
loses its efficacy at higher degrees of NPD program innovativeness while
SGS continues to work at achieving positive DMC at the radical end of
the innovativeness spectrum. Analysis of interaction effects indicates
that for more innovative NPD programs, best results are achieved when
companies implement an interactive system of both SGS and PM, where the
two systems complement each other. [ABSTRACT FROM AUTHOR]