Managing the fuzzy front end of product and process development : case studies of process firms

Abstract: This thesis addresses different aspects of how to manage product development and process development. Two research studies have been conducted, both within the process industry. In the first study, the focus was on management control in collaborative product development and process development projects, whereas the focus in the second study was on managing the fuzzy front end (FFE) of product development and process development. Content-wise, the thesis comprises an introductory text and five appended papers with the overall purpose to increase our understanding of how process firms can improve the management of product development and process development, with a special emphasis on the fuzzy front end.The background to the first study was that it is difficult to manage collaborative development projects and that few empirical studies address accounting and control issues in such projects. However, the main focus in this thesis is on the FFE of the innovation process (the second study). The FFE is acknowledged as being one of the most critical stages of the whole innovation process, because the quality of emerging product- or process concepts is determined there. For example, improved product concepts can increase the overall speed of the innovation process as well as cutting costs. The costs of imposing changes in the FFE are still relatively low compared to changes in later stages. However, the FFE is difficult to manage because it implies a significant degree of uncertainty, and it is often characterised by ad-hoc decision-making and conflicting organizational pressures which make it difficult to plan and conduct. The existing research on the FFE has primarily focused on product development, but little is known about how to manage the FFE in other contexts. This thesis aims to shed light on the FFE in non-assembled product development and process development, mainly by means of multiple case studies.The first study of this thesis (paper I) shows that both informal and formal control mechanisms are important when firms conduct collaborative product development and process development projects. A central contribution in the first study is that it explores how the firms' motives affect the selection of formal and informal control mechanisms. For example, financial short-term motives (such as sharing development costs) were typically controlled by formal control mechanisms. On the other hand, informal control mechanisms were the main form of control if the motive was to build long-term relations with their customers. The main findings from the second study (papers II-V) were that the FFE phase of non-assembled product development and process development was conceptualized. These conceptualizations were done at a relatively detailed level and key activities in different sub-phases were thus identified. By conceptualizing the FFE of non-assembled product development and process development, a first and important step towards exploring how the FFE can be better managed was taken. In addition, the second study identified several managerial problems in the FFE, and the negative impact of many of these could arguably be decreased if more formal control mechanisms were introduced and applied. The empirical findings suggest a more formalized process for managing the FFE of non-assembled product development and process development. These findings are important in the light of a growing theoretical and managerial interest in the FFE phase of the innovation process.