Managing Joint Process Development: a Study of Buyer/supplier Collaboration at the Project Level

Excessive project budget overruns is a serious problem that may endanger long-term competitive advantage and financial viability of firms engaged with process development together with equipment suppliers. Joint development of new process technology often span organizational boundaries and are frequently described as both uncertain and equivocal. With the aim to propose better management methods for such projects, we combine case study research with a multi-wave, multiple informant survey study of 52 collaborative process development projects. Our results show that joint problem solving is the key to reduce equivocality, whereas early end-user involvement allows project participants to reduce uncertainty. Uncertainty has a clear negative effect on budget performance, whereas mixed results were obtained for equivocality. These findings provide important implications for both theory development and operations management practice.