Flexibility and control in managing collaborative and in-house NPD

Emer Curtis (Discipline of Accountancy and Finance, J.E. Cairnes School of Business and Economics, National University of Ireland Galway, Galway, Ireland)
Breda Sweeney (Discipline of Accountancy and Finance, J.E. Cairnes School of Business and Economics, National University of Ireland Galway, Galway, Ireland)

Journal of Accounting & Organizational Change

ISSN: 1832-5912

Publication date: 3 April 2019

Abstract

Purpose

Prior literature provides little insight on how management control systems have responded to the growth of collaborative new product development (NPD). The purpose of this paper is to contrast the use of budgets to manage collaborative and in-house NPD and to consider the implications for enabling flexibility.

Design/methodology/approach

The paper reports on the findings of a case study company in the medical devices industry that uses two different business models for its NPD activities. While the company engages in in-house NPD for its own products, it also engages in collaborative NPD services with a range of customers.

Findings

The study illuminates how two types of budgets (annual and project) can have very different impacts on flexibility under different business models. The annual financial budgets imposed rigid constraints on in-house NPD and resulted in reduced flexibility, whereas in collaborative NPD, they had little impact on flexibility. Project budgets created hard operational constraints in collaborative NPD which generated a highly pressurised yet highly creative environment, whereas project budgets had little impact on flexibility in in-house NPD.

Originality/value

The study contributes detailed empirical insights into the control systems used to manage collaborative NPD from the supplier perspective, where creativity is largely responsive and contrasts these with the management of in-house NPD where creativity is largely expected. The authors also contribute an analysis of the key control systems and other factors that sustain flexibility in this highly pressurised open innovation environment.

Keywords

Citation

Curtis, E. and Sweeney, B. (2019), "Flexibility and control in managing collaborative and in-house NPD", Journal of Accounting & Organizational Change, Vol. 15 No. 1, pp. 30-57. https://doi.org/10.1108/JAOC-07-2017-0057

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Publisher

:

Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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