New Product Development - Jorgensen and Messner

Management control studies have often been focused on employee demeanor.  Employee attitudes are important to understand because employee efficiency is a critical aspect to an organization’s success.  That success is vitally dependent on how management handles the efficiency versus innovation conundrum.  Management Control in New Product Development: The Dynamics of Managing Flexibility and Efficiency (Jorgensen and Messner) aims to contribute to prior research by outlining enabling control functions, particularly in the area of new product development.  We will discuss the research and findings of Jorgensen and Messner and how they highlight key points in the tensions between innovation and efficiency in new product development. We’ll also dive into the effects of strategic change on enabling control systems as expressed by the article.  

Article Synopsis

Defining the Study

It is pivotal for organizations to find a balance between flexibility and efficiency, and a significant underlying factor that contributes to this balance is level of control. Efficiency is often best exploited by structure and routine, whereas flexibility, which leads to innovation, is encouraged by allowing employees to work freely, or with little restriction. New product development requires experimenting different ideas and innovation while being overseen and, to some extent, controlled by top management. Though new product development has not been a prevalent case in point for other studies, the concept of enabling formalization has been developed through research regarding management control and employee attitude responses. The basic overall conclusion stemming from the prior NPD studies that have been done states that control is needed, however, it should be applied differently than in, say, production and sales. Nixon (1998) and Imai et. al. (1985) for example, share similar points regarding the topic of “subtle control”, and refraining from adopting practices that might hinder exploration and distort innovation. Similarly, Clark and Fujimoto (1992, 169) state that “the challenge in product development is not so much unilateral pursuit of organic structure and permissive management style as a subtle balance of control and freedom, precision and flexibility, individualism and teamwork.” (Jorgensen and Messner, 2009). Clearly the ability to maximize efficiency while simultaneously implementing flexibility and employee motivation serves as a pressing challenge that is crucial for organizations to continue to improve upon.

Article Structure

Jorgensen and Messner break down their article into five parts, with parts two through four being the meat and positioning their study along with the field.  They begin their case study by comparing the approaches of enabling and coercive formalization techniques suggested by Alder and Borys (1996).  The enabling strategy has four key features discussed in the article: repair, internal transparency, global transparency, and flexibility. Repair illustrates whether or not non-expert employees are authorized to fix key disruptions or failures. Internal transparency relates to the ability of stakeholders in the organization to understand the strategy and logic of the organization.  Global transparency relates to the ability of the same group from internal transparency to understand the greater implications of their efforts within the organization.  Flexibility relates to the “degree of freedom granted to employees in how they use the system” (Jorgenson and Messner, 2009). The design and implementation of a system determines whether or not that system enables (and includes these four features) or coerces.  An enabling or coercive environment affects the tension level between efficiency and flexibility. These four practices or structural elements can be used as mechanisms to make tradeoffs between efficiency and flexibility in order to achieve high levels in both areas.

In a different approach, Alder et al. (1999) discuss four different mechanisms which can support both efficiency and flexibility across multiple tasks. The first of these four mechanisms are metaroutines, which formalize the boundaries of the creative process and turn non-routine tasks into more-routine tasks. Job enrichment is another enabling practice in which employees are led to understand their right to suggest ways to improve the existing formalization. It gives employees a voice. Thirdly, switching refers to a formalized process of switching between routine and non-routine tasks, as an alternative to carrying out both task types simultaneously. Switching may not be possible or powerful enough, which could result in the practice of partitioning, the final mechanism suggested. For example, in an organization, routine tasks of production are structurally partitioned from the non-routine tasks of product development (Newell et al. 2003)

Furthermore, Ahrens and Chapman along with other scholars expanded on the topic of enabling and how the use of control systems included elements of repair and flexibility, and how managers used systems to create internal and global transparency of operations. This encouraged division management to promote a positive perception of control systems among sub-divisional managers, spotlighting them “as important and practical aspects of restaurant management”. To piggyback off of past literature and research methods, this case study focuses on enabling control in Company’s new product development setting.