The moderating effect of environmental uncertainty on new product development and time efficiency

This empirical study examines the influence of environmental uncertainty on industrial product innovation. The present study addresses what is believed to be a shortcoming in the new product development literature and explores potential effects of environmental uncertainty on the development process, project organization, and on project timeliness with a sample of development projects in two countries, Canada and Australia. When looking at the combined sample of 182 completed projects, this study finds that the perceived market-related project environment has a direct and positive impact on time efficiency. Further, this research finds that a higher degree of technological uncertainty moderates the relationship between development process, project organization and time efficiency. Consequently, innovating companies may benefit by adapting some of their development approaches to different environmental conditions and to varying degrees of uncertainty. However, when examining country-specific effects, the results change quite significantly. In particular, the findings indicate that environmental uncertainty in the Canadian sample neither directly impacts time efficiency, nor does it have any moderating effect. Instead, technical proficiency in the development process, project team organization, and process compression appear to be viable strategies to increase time-efficient development. In contrast, the results of the Australian study suggest that perceived market and technological uncertainty impact time efficiency. In particular, under conditions of technological unpredictability, project team organization increases time efficiency, whereas process compression appears to decrease time-efficient product development. However, process compression seems to be a viable strategy in environments characterized by lower technological uncertainty. The results also point to the importance of disaggregating data when studying product development processes across countries.