Product Complexity and Mode Choice in Global Product Development
Name
cp_090501_makumbe-seering_poms09.pdf
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121.21 KB
Format
Adobe PDF
Checksum (MD5)
54a94578063da6115cc8100d4db0b65d
Author(s)
Makumbe, Pedzi
Seering, Warren
Rebentisch, Eric
Date Issued
May 1, 2009
Abstract
Despite the growth in the practice of global product development, little work has been done to
understand factors that influence mode choice in global product development. Our research fills
this gap in the literature by empirically investigating variables that drive firms to either globally
outsource, globally partner or develop modules themselves in a foreign country. We assume a
product-centric view, and combine the transaction cost theory and the resource based view of the
firm to explain mode choices based on the analysis of electromechanical products developed
across Asia, Europe, the Middle East, and South America for (or by) American firms. Though
we focus on complexity, we address product content specificity, product strategic importance
and designer’s technological capability as well. We find significant relationships between the
type of global product development and the product characteristics. However, the significance of
the relationship between complexity and the mode varies by region when we divide the world
into emerging countries and mature countries. While the relationship is significant in the
emerging countries, it is not significant in mature countries. These findings have implications for decision making in systematically assigning modes of development to different products being
developed globally.
Subjects
global product development
global outsourcing
product complexity
make or buy
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