Knowledge that Transforms

This article examines recent empirical research conducted or published on product development in the automobile industry with the objective of identifying what we have learned, and what we have yet to learn, about the effective management of this activity. The basic framework used to compare the studies examines variables related to product strategy, project structure or organizaton, and project as well as product performance. The evidence to date indicates that Japanese automobile producers have demonstrated the highest levels of productivity in development as well as of overall sales growth, and have used particular structures and processes to achieve this. The evidence does not clearly indicate what the precise relationships are between development productivity and quality or economic returns. We conclude that many other specific issues remain to be studied, and that, overall, researchers need to generate more precise conceptual models as well as empirical research that more tightly connect a company's competitive positioning and product strategy with its development-organization structure, management, and support technology, and then these variables with better performance measures.

This paper examines the introduction of new technologies in the manufacturing environment, and addresses two central questions. First, how can factories introducing new process technology deal with change rapidly and effectively? Further, what fundamental organizational changes are necessary to enable plants to respond successfully to the challenge of technological change? The research examined 48 projects where new manufacturing technologies were introduced. Projects were undertaken in plants in Italy, West Germany, and the United States which belong to a single company. In comparing success across regions, performance measured by startup time and operating improvement was significantly lower in the U.S. plants than in European operations. A significant portion of this performance gap can be explained by differences in the way project teams in each region used available mechanisms for identifying and solving the problems associated with new technologies. U.S. project teams were, on average, less likely than those in Europe to engage in preparatory problem-solving activities, or to solve problems by working with external technical experts, or by merging different functional perspectives within the project group. To understand the source of these differences, the paper examines historical and organizational differences among the operations in different geographic regions. Over time, local managerial choices had resulted in distinct sets of organizational capabilities, resources, and assumptions that affected the way plants in different regions approached technological problem solving. The paper argues, therefore, that such managerial choices constitute important strategic decisions which have long-lived implications for technological innovation in the manufacturing environment.

Employees frequently give technical information or advice to colleagues in other firms, including direct competitors. This paper addresses whether such information-transfer is in the economic interests of the firms involved. It is hypothesized that employees trade information in accordance with the economic interests of their firms. Conditions are discussed in which information trading creates an economic advantage for the participating firms. Data on specific information transfer decisions were obtained from a survey of 294 technically oriented middle-level managers from the U.S. specialty steel and mini-mill industry. The observed pattern of information transfer strongly supports the hypotheses (1) that employees trade information and (2) that such trading is desirable from a firm's point of view. Furthermore, the data suggest a positive link between the participation of a firm's employees in informal informationtransfer networks and the economic performance of the firm. Indeed, it can be in a firm's interest to make its boundaries penetrable for informal information trading rather than to discourage such transfers.

Effective government science and technology policy requires a reliable database on industrial innovation. This paper examines a number of issues concerning the measurement of industrial R&D by analyzing the relationship between data reported in the NSF/Census RD-1 survey - the basis for the official government R&D statistics - and data reported in two other sources (firms' 10-K reports and a federal procurement database). We advance and test a hypothesis which accounts for systematic discrepancies between RD-1- and 10-K-based estimates of company R&D. We also develop estimates of the extent of measurement error reflected in the various measures of R&D, and suggest some modifications to the RD-1 survey.

This paper explores a possible correlation between product tying and innovation in manufacturing equipment. An original study of innovations in electronic wire preparation equipment, described herein, suggests a relationship between the two. Specifically, certain parts used in the wire preparation process are effectively tied to the equipment that handles them, and innovations in that equipment nearly always originated with firms that manufacture both the parts and the equipment. Literature is examined to reveal that other production processes characterized by part-equipment tying have also exhibited frequent innovation from the same type of firm. A preliminary explanation for the relationship, based on existing tying and innovation theories, is forwarded. It is based on the assumption that when parts and machines can be tied, firms that sell both can appropriate greater economic benefit from equipment innovation that can firms that sell equipment only. If this indeed explains the equipment innovation by part/equipment manufacturers, then product tying, generally considered a potentially harmful restraint of trade, may in some circumstances be an inducement to innovation.