New product development 335
departments. Thus, such integrating managers
have to rely on persuasion and on their ability
to encourage group decision making and
compromise to achieve successful results.
Matrix structures. Whereas all the previous
mechanisms maintain the primacy of the
functional departmental structure, a matrix
organization structures activities not only
according to product or market focus, but also
by function. Thus, individuals are responsible to
both a functional manager and a new product
manager.
According to this research, two newer structural
forms have appeared in order to improve the
timeliness and the effectiveness of the product
development efforts within rapidly changing
environments. These forms are:
Design teams. Like the matrix structure, design
teams are composed of a set of functional
specialists who work together on a specific NPD
product. The difference is that such teams tend
to be more self-governing and have greater
authority to choose their own internal leader(s),
who have more autonomy to establish their own
operating procedures and to resolve internal
conflicts.
Design centres. These centres have many of the
same characteristics as a design team. However,
such a centre is a permanent addition to an
organization’s structure, and members of the
centre are involved in multiple development
projects over time.
As one moves from bureaucratic control toward
more organic and participative structures, the
structural complexity of the mechanisms increa-
ses. Authority becomes more decentralized,
rules and procedures less formalized and less
rigidly enforced, and the individual units tend
to have more autonomy. Consequently, mem-
bers of relatively organic structures are more
likely to share information across functional
boundaries and to undertake interdependent
tasks concurrently rather than sequentially.
In other words, as we move from left to
right, structures become less ‘mechanistic’ and
more ‘organic’ (Burns and Stalker, 1961). Rela-
tively organic mechanisms such as design teams
have some important potential advantages for
co-ordinating product development. Indeed, the
participative decision making, consensual con-
flict resolution and open communication pro-
cesses of such a structure can help reduce
barriers between individuals and functional
groups. Such participative structures can also
create an atmosphere where innovative ideas
are proposed, criticized and refined with a
minimum of financial and social risk. Besides,
by facilitating the open exchange of creative
ideas across multiple functions, the likelihood of
producing innovative products that successfully
address the market desires, as well as technical
and operational requirements, is increased.
Finally, reduced functional barriers help
ensure that unanticipated problems that appear
during the development process can be tackled
directly by the people concerned. This reduces
the possibility that vital information may be
delayed, lost or altered.
On the other hand, more participative
structures also have some potential disadvan-
tages, especially in terms of costs and temporal
efficiency. Creating and supporting several
development teams can lead to overabundance
in personnel and facilities. The main reason for
this is that employees have less relevant experi-
ence when developing innovative product con-
cepts and then depend more heavily on other
functional specialists for the expertise, informa-
tion and other resources needed to achieve a
creative and successful product. And these
flows of information and resources are facili-
tated by less formal participative co-ordination
structures. Thus, there is potential for stagnation
in the process if the focus of control is unclear.
In the light of this discussion, let us now
look at what kinds of structures are used for
NPD.Structures used by industry
In the PDMA Best Practices study, the best com-
panies were more likely to use multifunctional