Working Paper Alfred P. Sloan School of Management Evaluating Communications in Product Development Organizations Evaluating Communications in Product Development Organizations

This paper develops a novel technique for studying the effectiveness of product development organizations that conduct concurrent engineering. It is commonly argued that to create better products more quickly, the degree of coordination among team members must be enhanced. However, barriers to communication exist across organizational, cultural, and geographical boundaries in dispersed product development teams. In contrast to previous paradigms that encourage co-location and increased communication everywhere, this paper develops a methodology which predicts the important communication linkages and subsequently measures communication flows to determine where and to what extent the necessary transfer of information takes place. We have applied this method to the study of a product development project in industry, enabling us to learn generally about communication patterns in product development and specifically to characterize communication for the product development team smdied. This study documents three major findings: 1 ) 8 1% of all technical communication linkages were predicted in advance; 2) communication within co-located teams and across geographic distances was higher than anticipated; 3) two-way communication exchange is typical, even if one-way information transfer is predicted. These results have important implications for the management of large-scale product development projects; namely, that organizational design can be prescribed ahead of time by anticipating necessary communication linkages. We are able to conclude: 1) that essential technical interactions can be planned and do not necessarily require co-location; and 2) that unplanned, informal interactions should be facilitated by co-location of core team members. This pajjer concludes with a critical analysis of the research method and suggested improvements. While this work is aimed at establishing a methodology, implications are imponant for the management of new product development. INTRODUCTION The goal of this work is to define and explore a methodology for examining communication patterns within product development organizations. The methodology is based on first predicting important patterns of communication and then measuring communication to see if the anticipated linkages exist. The following study applies this methodology to a product development project in industry. The results offer funher insight into communication patterns in product development and provide a basis for