Staging of innovation projects , real options theory , new product development process , ressource allocation , innovation portfolios
Abstract:
Building on real options literature, this study shows that the use of a staged
approach for the management of innovation projects affects the innovation
output of firms differently depending on firm characteristics and ambitions.
In particular, while staged project management increases the effect of inno-
vation expenditures on new product sales for firms envisaging incremental
or continuous innovations, this moderating effect is absent for firms aspiring
radical innovations. In addition, while staged project management has a pos-
itive moderating effect in firms with resource slack, this is not the case when
firms are resource-constrained. We further investigate the underlying mecha-
nisms to this latter finding by demonstrating that in resource-abundant firms
staged project organization is associated with delaying projects until more
information becomes available. Thereby these firms reap the waiting value
inherent to real options reasoning. By contrast, resource-constrained firms
using staged project management are shown to abandon a larger share of
their innovation projects and to concentrate resources on fewer projects. It
appears, however, that, due to budgetary pressure, they make the decision
to abandon at a too early stage where uncertainty is insufficiently resolved.
This can explain why there is no effect of staged project management on the
sales of resource-constrained firms from new products. The paper contributes
to theory development on when and why the staging of innovation projects
affects the innovation output of firms and to the literature on real options
reasoning in general.
Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.
![[img]](https://madoc.bib.uni-mannheim.de/style/images/fileicons/application_pdf.png)
Search Authors in