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Environmental Uncertainty, Organizational Integration, and
New Product Development Effectiveness: A Test of
Contingency Theory
William E. Souder, J. Daniel Sherman, and Rachel Davies-Cooper
R&D/marketing integration clearly improves new-product development (NPD)
effectiveness. However, achieving this integration increases the costs of NPD
efforts. If technical and market uncertainty moderate the effects of integration on
NPD effectiveness, perhaps a firm can achieve NPD ess in a more cost-
effective manner by seeking the appropriate level of integration, based on the
perceived level of uncertainty.
In a study of 101 NPD projects at high-tech firms in the . and the .,
William E. Souder, J. Daniel Sherman, and Rachel Davies-Cooper explore the
interplay between technical and market uncertainty, integration, and NPD effec-
tiveness. Their study examines two types of integration: R&D/marketing integra-
tion and direct R&D/customer integration. The study measures NPD effectiveness
in terms of such indicators as NPD cycle time, prototype development proficiency,
design change frequency (a negative performance indicator), and product launch
proficiency. The responses from both the . and the . firms provide
balanced samples of high and low uncertainty projects, as well as essful and
essful projects.
The results of this study support previous research regarding the positive
effects of both R&D/marketing integration and direct R&D/customer integration
on NPD effectiveness. However, only one measure of NPD effectiveness—R&D
comercialization effectiveness—was affected by both R&D/marketing integration
and direct R&D/customer integration. This result suggests that the two types of
integration are distinct from one another and that managers need to emphasize
different types of integration, depending on which aspects of NPD effectiveness
their firms need to improve.
The results also suggest that technical an