The impact of allowing customers to use control in collaborative new product development

Collaborative NPD typically gives rise to relational risks, implying uncertainty about the successful completion of the project and the pursuit of shared goals respectively. The extant literature argues that the manufacturer could use control mechanisms to overcome this risk but this study is the first to investigate the use of control mechanisms by the customer, rather than the manufacturer, to enhance customer participation and new product success. By examining survey-based data on 70 collaborative NPD projects from the plastics division of one of the world’s largest and most diversified industrial corporations, we found that the use of output and process control by the customer significantly increases customer participation in NPD projects, and that these effects are mediated by the manufacturer’s use of knowledge integration mechanisms. Additionally, we found that team stability initially increases customer participation in NPD, however, that excessive team stability has a counterproductive effect. Based on these results, we suggest three guidelines for NPD project managers on how to manage collaborative NPD in order to maximize customer participation: (1) allow the customer to use output and process control, (2) use knowledge integration mechanisms if the customer uses formal control mechanisms, and (3) assure NPD team stability during the project without jeopardizing team performance