Team Empowerment, Uncertainty, and Performance In New Product Development

A recent theoretical analysis argues that the effectiveness of empowerment is contingent upon the degree of uncertainty in the environment (Wall, Cordery and Clegg 2002). In a study of 212 New Product Development (NPD) projects we found that the relationship between team empowerment and speed-to-market was moderated by uncertainty stemming from technological turbulence but not by uncertainty related to technological novelty. Further, we found that the relationship was a u-shaped function under conditions of low uncertainty whether the source was novelty or turbulence. The findings imply that NPD teams should be either not empowered or fully empowered under conditions of low uncertainty. In contrast, when uncertainty was high the empowerment-speed relationship differed depending upon the source of the uncertainty. Under conditions of high technological novelty a linear relationship between empowerment and speed was found, but under conditions of high technological turbulence the relationship was reverse u-shaped. Under the latter conditions a quadratic function indicated that very high levels of empowerment do not result in increasing speed-tomarket. Thus, a contingent view should apply to choose and implement the empowerment approach. Our findings also indicate that turbulence may be a more important source of uncertainty than newness with different implications for empowerment.