In‐House Globalization: The Role of Globally Distributed Design and Product Architecture on Product Development Performance

Changes in the global economy and technological advances are stimulating increased geographic distribution of new product design and development efforts. For large organizations that design and develop complex products, this geographic distribution has added a new layer of complexity to product development operations. In this empirical study of a large auto manufacturer, we examine the operational performance implications of splitting the design of vehicle subsystems across multiple geographic locations. Our results indicate that global distribution diminishes the chance of completing tasks on time and degrades subsystem design quality. Finally, by examining the interplay between subsystem centrality and global distribution, we found that higher centrality in the product architecture amplifies the impact of global distribution on subsystem error rates.

[1]  Klaus Brockhoff,et al.  Internationalization of research and development , 1998 .

[2]  Richard L. Daft,et al.  Organizational information requirements, media richness and structural design , 1986 .

[3]  E. von Hippel,et al.  Sources of Innovation , 2016 .

[4]  Pamela J. Hinds,et al.  Distributed Work , 2002 .

[5]  Alfonso Fuggetta,et al.  Open source software - an evaluation , 2003, J. Syst. Softw..

[6]  E. Hippel.  Sticky Information and the Locus of Problem Solving: Implications for Innovation , 1994 .

[7]  Karl T. Ulrich,et al.  Beyond Make‐Buy: Internalization and Integration of Design and Production , 2005 .

[8]  T. Hout,et al.  Competing Against Time , 1990 .

[9]  Steven D. Eppinger,et al.  Special Issue on Design and Development: Sourcing By Design: Product Complexity and the Supply Chain , 2001, Manag. Sci..

[10]  E. McDonough,et al.  An investigation of the use of global, virtual, and colocated new product development teams , 2001 .

[11]  H. Ernst,et al.  How Teamwork Matters More as Team Member Dispersion Increases , 2007 .

[12]  Ron Sanchez,et al.  Modularity, flexibility, and knowledge management in product and organization design , 1996 .

[13]  Christoph H. Loch,et al.  A Retrospective Look at Production and Operations Management Articles on New Product Development , 2009 .

[14]  Kim B. Clark,et al.  Design Rules: The Power of Modularity , 2000 .

[15]  Jeffrey H. Dyer,et al.  The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage , 1998 .

[16]  Edward G. Anderson,et al.  Managing Outsourced Product Design: The Effectiveness of Alternative Integration Mechanisms , 2007 .

[17]  Richard D. Metters,et al.  A typology of offshoring and outsourcing in electronically transmitted services , 2008 .

[18]  Pamela J. Hinds,et al.  Out of Sight, Out of Sync: Understanding Conflict in Distributed Teams , 2003, Organ. Sci..

[19]  T. Allen.  Managing the flow of technology , 1977 .

[20]  George Q. Huang,et al.  Current practices of engineering change management in UK manufacturing industries , 1999 .

[21]  Morten T. Hansen,et al.  How do multinational companies leverage technological competencies? Moving from single to interdependent explanations , 2004 .

[22]  Audris Mockus,et al.  An Empirical Study of Speed and Communication in Globally Distributed Software Development , 2003, IEEE Trans. Software Eng..

[23]  Robert P. Smith,et al.  A model-based method for organizing tasks in product development , 1994 .

[24]  J. H. Davis,et al.  An Integrative Model Of Organizational Trust , 1995 .

[25]  C. Terwiesch,et al.  Managing the Process of Engineering Change Orders: The Case of the Climate Control System in Automobile Development , 1999 .

[26]  James H. Liu,et al.  Distance Matters: Physical Space and Social Impact , 1995 .

[27]  Pamela J. Hinds,et al.  Understanding Conflict in Geographically Distributed Teams: The Moderating Effects of Shared Identity, Shared Context, and Spontaneous Communication , 2005 .

[28]  Melissa A. Schilling,et al.  The Use of Modular Organizational Forms: An Industry-Level Analysis , 2001 .

[29]  Steven D. Eppinger,et al.  Sloan School of Management Working Paper Factors That Influence Technical Communication in Distributed Product Development: an Empirical Study in the Telecommunications Industry Factors That Influence Technical Communication in Distributed Product Development: an Empirical Study in the Telecommunica , 2022 .

[30]  Edward G. Anderson,et al.  A Hierarchical Product Development Planning Framework , 2005 .

[31]  David Robertson,et al.  Product development performance: Strategy, organization, and management in the world auto industry , 1992 .

[32]  Mohan Subramaniam,et al.  Integrating Cross-Border Knowledge for Transnational New Product Development , 2006 .

[33]  A. Chandler,et al.  Regional Advantage: Culture and Competition in Silicon Valley and Route 128 , 1994 .

[34]  J. Hausman.  Specification tests in econometrics , 1978 .

[35]  Jonathon N. Cummings.  Work Groups, Structural Diversity, and Knowledge Sharing in a Global Organization , 2004, Manag. Sci..

[36]  N. Venkat Venkatraman,et al.  Offshoring Without Guilt , 2004 .

[37]  John Scott.  What is social network analysis , 2010 .

[38]  Fan Zhang,et al.  Optimal Transfer Trees and Distinguishing Trees for Testing Observable Nondeterministic Finite-State Machines , 2003, IEEE Trans. Software Eng..

[39]  Geoffrey G. Parker,et al.  FROM BUYER TO INTEGRATOR: THE TRANSFORMATION OF THE SUPPLY‐CHAIN MANAGER IN THE VERTICALLY DISINTEGRATING FIRM , 2002 .

[40]  Alan MacCormarck.  Product-Development Practices That Work: How Internet Companies Build Software , 2001 .

[41]  R. Gulati,et al.  STRATEGIC NETWORKS , 2000 .

[42]  H. White.  A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity , 1980 .

[43]  Tom A. B. Snijders,et al.  Social Network Analysis , 2011, International Encyclopedia of Statistical Science.

[44]  Alan MacCormack,et al.  Exploring the Structure of Complex Software Designs: An Empirical Study of Open Source and Proprietary Code , 2006, Manag. Sci..

[45]  Martine R. Haas,et al.  Knowledge Gathering, Team Capabilities, and Project Performance in Challenging Work Environments , 2006, Manag. Sci..

[46]  David B. Audretsch,et al.  MANAGING KNOWLEDGE SPILLOVERS: THE ROLE OF GEOGRAPHIC PROXIMITY , 2003 .

[47]  G. Hoetker.  The use of logit and probit models in strategic management research: Critical issues , 2007 .

[48]  Karl T. Ulrich,et al.  Assessing the Importance of Design Through Product Archaeology , 1998 .

[49]  Sirkka L. Jarvenpaa,et al.  Is Anybody Out There? Antecedents of Trust in Global Virtual Teams , 1998, J. Manag. Inf. Syst..

[50]  W. B. Johnston,et al.  Global work force 2000: the new world labor market. , 1991, Harvard business review.

[51]  D. Armstrong,et al.  Managing distances and differences in geographically distributed work groups. , 2002 .

[52]  Kim B. Clark,et al.  Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of , 1990 .

[53]  K. Eisenhardt,et al.  PRODUCT DEVELOPMENT: PAST RESEARCH, PRESENT FINDINGS, AND FUTURE DIRECTIONS , 1995 .

[54]  Geoffrey G. Parker,et al.  The Effect of Learning on the Make/Buy Decision , 2002 .

[55]  Akbar Zaheer,et al.  Geography, Networks, and Knowledge Flow , 2007, Organ. Sci..

[56]  Sirkka L. Jarvenpaa,et al.  Communication and Trust in Global Virtual Teams , 1999, J. Comput. Mediat. Commun..

[57]  Steven Eppinger,et al.  The new practice of global product development , 2007, IEEE Engineering Management Review.

[58]  James D. Herbsleb,et al.  Familiarity, Complexity, and Team Performance in Geographically Distributed Software Development , 2007, Organ. Sci..

[59]  Joel A. C. Baum,et al.  Geography and strategy , 2003 .

[60]  Wallace J. Hopp,et al.  The Impact of Misalignment of Organizational Structure and Product Architecture on Quality in Complex Product Development , 2010, Manag. Sci..

[61]  Edward Lorenz,et al.  Collective Learning, Tacit Knowledge and Regional Innovative Capacity , 1999 .

[62]  Geoffrey G. Parker,et al.  The Effects of Outsourcing, Offshoring, and Distributed Product Development Organization on Coordinating the NPD Process , 2007 .

[63]  J. Jarillo.  On strategic networks , 1988 .

[64]  Karl T. Ulrich,et al.  The role of product architecture in the manufacturing firm , 2011 .

[65]  Christoph H. Loch,et al.  Accelerating the process of engineering change orders: capacity and congestion effects , 1999 .

[66]  Paul M. Leonardi,et al.  Transformational Technologies and the Creation of New Work Practices: Making Implicit Knowledge Explicit in Task-based Offshoring , 2008, MIS Q..

[67]  P. Hilton,et al.  Handbook of new product development , 1961 .

[68]  Donald Gerwin,et al.  An Evaluation of Research on Integrated Product Development , 2002, Manag. Sci..

[69]  Daniel A. Levinthal,et al.  Modularity and Innovation in Complex Systems , 2002, Manag. Sci..

[70]  Robert E. Kraut,et al.  --Understanding Effects of Proximity on Collaboration : Implications for Technologies to Support Remote Collaborative Work , 2001 .

[71]  David A. Griffith,et al.  The Role of Globalization, Time Acceleration, and Virtual Global Teams in Fostering Successful Global Product Launches , 2007 .