Behind the scenes: Addressing dual pressures for product standardization and adaptation in new product development in multinational corporations

Abstract

Purpose
Prior studies on product standardization–adaptation in multinational corporations (MNCs) have revealed environmental factors that can influence the choices of MNCs. However, these studies have not shown how these choices are made behind the scenes in new product development (NPD). In many industries, MNCs face the dual pressures for product standardization and adaptation from the environment. This study aims to explore how MNCs facing dual pressures can make choices of product standardization–adaptation in NPD.

Design/methodology/approach
A qualitative case study of four high-performing MNCs was conducted. The four MNCs were selected using the theoretical sampling approach. Data were collected, mainly through 74 semi-structured interviews. Coding was conducted and four aggregate dimensions were generated.

Findings
This study reveals that choices of product standardization–adaptation are made through a process in MNCs’ NPD, including four steps – organizing for NPD, organizational diversity, cross-unit integration and combination of design practices. In addition, MNCs adopt different process variants to address different environmental pressures.

Research limitations/implications
This research focuses on high-performing MNCs in manufacturing industries. Future research can explore different types of firms.

Practical implications
Managers in MNCs should focus more on the process of choices for product standardization–adaptation, than on the level of product standardization–adaptation. They should also keep monitoring the environmental pressure and employ experienced engineers.

Originality/value
By focusing on NPD, the authors shift the attention from product standardization–adaptation to product feature standardization–adaptation in MNCs, which is a fresh and refined perspective. The authors show a process in NPD composed of activities and mechanisms that managers might use for handling product standardization–adaptation challenges in MNCs. The authors contribute to the area of cross-unit integration in MNCs’ NPD by revealing mental mechanisms for mitigating tensions in cross-unit interactions.

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Identifiers

ORCID for Yang Liu: orcid.org/0000-0002-9540-9719

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