Ebrahim et al

International Journal of the Physical Sciences Vol. 5(7), pp. 916-930, July 2010 Available online at http://www.academicjournals.org/IJPS ISSN 1992 - 1950 ©2010 Academic Journals

Review

SMEs; Virtual research and development (R&D) teams and new product development: A literature review

Nader Ale Ebrahim*, Shamsuddin Ahmed and Zahari Taha

Department of Engineering Design and Manufacture, Faculty of Engineering, University of Malaya (UM), Kuala Lumpur

50603, Malaysia.

Accepted 10 June, 2010

INTRODUCTION

SMEs can successfully enter and remain in the global market if they can fulfill the customer needs for features and quality of products (Kusar et al., 2004). Their survival depended on their ability to market response, meeting performance and producing goods that could meet international standards (Gomez and Simpson, 2007). In other words, certain competitiveness may be a precon-dition for an SME’s survival when dealing with dynamic conditions in the business environment. To compete with global competition and overcome the rapid technology change and product variety expansion in the new manu-facturing environment, SMEs must be able to continue in product innovation (Laforet, 2008). One important trend is to enable them to create new knowledge and transfer that into reality. The SMEs are one of the sectors that have a strong potential to benefit from advances in Information and Communication Technologies (ICTs) and to adapt new business. A suitable combination of explosive knowledge growth and inexpensive information transfer

*Corresponding author. E-mail: nader.ale.um@gmail.com.

Small and medium-sized enterprises (SMEs) are indeed the engines of global economic growth. Their continued growth is a major subject for the economy and employment of any country. Towards that end, virtual research and development (R&D) could be a viable option to sustain and ease the operations of SMEs. However, literature shows there has not been a great deal of research into the diverse characteristic of virtual R&D teams in SMEs. This article provides a comprehensive literature review on different aspects of virtual R&D teams collected from the reputed publications. The purpose of the literature review is to provide an outline on the structure and dynamics of R&D collaboration in SMEs. Specifying the rationale and relevance of virtual teams, the relationship between virtual R&D team for SMEs and new product development (NPD) has been examined. It concludes with identifying the gaps and feebleness in the existing literatures and calls for future research in this area. It is argued to form of virtual R&D team deserves consideration at top level management for venturing into the new product development within SMEs.

Key words: Virtual teams, small and medium enterprises, new product development, R&D.

creates a fertile soil for unlimited virtual invention (Miles et al., 2000). Use of ICTs can be considered as a key factor for innovation and entrepreneurship. ICTs are indispensable for SMEs to innovate (Redoli et al., 2008). Web services can help the enterprises to get external service resources and carry out collaborative design and manufacturing (Dong and Liu, 2006). It is especially urgent for SMEs to make a network service platform to speed up the product development (Lan et al., 2004).

Internationalization of R&D Network is a recent phenomenon (Salmela and Lukka, 2004). International collaboration in R&D is, however, becoming increasingly important in creating knowledge that makes research and business more competitive. Under the pressure of globalize competition forces, producers are continuously innovating and upgrading the quality of their existing products.

Organizations are facing unprecedented challenges in an ever dynamic, constantly changing and complex environment (Rezgui, 2007). In this knowledge-based environment, the driving forces for this phenomenon are digitization, the Internet and high-speed data networks that are keys to addressing many operational issues from

design to logistics and distribution (Noori and Lee, 2006). Networking, communication technology is considered as general tools outsourcing and information and and means to respond to these challenges (Salmela and Lukka, competitive 2004). From the compete (Chen et al., 2008a). As a result multinational enterprises with industry suitable needs other direction, surviving in the firms within strategies a network to collaborate in an NPD or have increased their R&D investment in foreign countries (Reger, 2004).

globalization Responding responded to of to the work, increasing many decentralization organizations have and virtual (Cascio, 2000).

teams. their dynamic environments by Virtual teams are growing in introducing popularity communication Additionally, the speeded organizations up this technologies rapid trend so such development as the internet of new has (Hertel increasingly et al., employ that today, most of the large 2005). virtual teams to some degree cannot network survive competitive Considering without new global products market, that under the developed a firm simply (Chen et al., 2008b). Keeping virtual R&D teams in NPD cooperation, especially for high-tech industries under processes, efficiently poorly is operating of a innovatively, effectively and studies.

been addressed high importance, simultaneously but in the the issue previous has a While some studies have been conducted on usage of SMEs certain model in large companies, applications within studies exclusively focused on the virtual R&D teams, for have remained largely un-documented. A few example Zedtwitz, 2003b; Kratzer et al., 2005; Gassmann and Von (Tribe and Allen, 2003; Gassmann and Von Zedtwitz, virtual R&D teams for NPD in SMEs. So, literature shows 1999) and none of them concentrated on the that there has not been a great deal of research into the diverse which that are characteristic still ambiguous. of virtual This extensive R&D teams review in SMEs, shows and limited work had been directed towards exploring R&D analyzing the existing inter-relation among virtual summarized the key findings of earlier works on different teams and NPD in SMEs. Therefore, this paper aspects of virtual R&D teams in SMEs and establishes it a rationale in NPD. It provides the gaps and weaknesses in product development within SMEs. Base on the literature the existing literature on virtual R&D teams in new review, we then propose suggestions for future research.

REVIEW SEARCH METHOD

Collaborative It R&D involving SMEs have wide coverage. exchange applies to various activities ranging from information article is based on dependable and reputed publications. to new product development. This review It mainly covers aspects like SMEs characteristics, scope

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of virtual R&D teams and articles are collected from the following two sources: their relationship in NPD. The

(1) Reputed journals, related to the topic published since 1997.

books and practitioners’ literatures (2) focusing Research papers presented technology management issues. on R&D and SMEs in activities, various conferences NPD and

As R&D team in SMEs that involves NPD, there is a lack of there is no single definition of collaborative virtual specific research on the subject. A few studies were done on Therefore, R&D collaborations management intervention in the field, a broader spectrum in order to find in out multinational structures, dynamics companies. and of literatures in the areas of collaborative R&D in general, its literature has been considered. This review covered relevance current with SMEs, NPD in SMEs R&D these separate fields, as showed in Figure 1.

teams understanding and NPD and are thinking found at about and virtuality. the intersection SMEs, virtual The of since The magazines 1997 investigation is not included limited in to the the other reputed publication contains 200 items out of 345 selected items, which were and white papers. The list sources of references such as extracted relevant from 1,118 pre-investigated items. To databases academic keywords from a general model which is shown in Figure were used. publications, To find the some relevancy multidisciplinary find a set of 1 teams were used. The general model for SMEs; virtual R&D fragmented literature on the topic. There is no consensus and NPD enable a systematic integration of the in SMEs the literature sheltered or not. We is whether argue virtual that lack teams of are superior at articles outstanding per by publication virtual teams. year The shows distribution SMEs will be that 2007 of reviewed trend of publication shows virtual R&D team in SMEs for date for research on topic Figure was 2. The an NPD is an interesting topic in recent years.

VIRTUAL TEAMS

Although relevant virtual ‘virtual’ contexts (Chudoba et al., 2005). The concept of a “team” is literature teamwork is a current topic in the still unsettled on global across organizations multiple but institutional defining is complementary described as common skills a who small are number equally of committed people with they hold themselves mutually accountable (Zenun et al., purpose, goal and working approach for which to a 2007). It is worth mentioning that virtual teams are often formed tions to overcome geographical or temporal across boundaries of time and space by utilizing modern (Cascio and Shurygailo, 2003). Virtual teams separa-work computer-driven used to cover a wide range of activities and forms of

technologies. The term “virtual team” is 918 Int. J. Phys. Sci.

Figure 1. Literature fields included in the review: A general model.

or more organization tasks’’. It is generally accepted that virtual teams form socio-technical systems (Curseu et al., 2008). From these are other definitions, the key terms in virtual teams are:

A (Dafoulas group of people (may belong to different interdependent and Macaulay, 2002) who interact companies through (Gassmann geographically, and tasks Von to achieve common goals (Leenders organizationally Zedtwitz, and/or 2003b), time dispersed while communication et short-term and perpetual (Baskerville and Nandhakumar, technologies al., 2003), (Hertel work et mainly al., 2005), using for 2007).

Team and innovation

It

achieved by working in teams (Sorli et al., 2006). Most of is a widely accepted fact that innovation is better the collective successful al., 2006). All teams and virtual teams in particular, must efforts innovations of individuals are in developed NPD teams through (Akgun the et develop mechanisms for sharing knowledge, experiences and (Rosen insights applications et al., critical 2007). for Virtual accomplishing teams their missions products responsive to variations and changes in product/process and that development make the process concurrent offer feasible design business as well of the as information (Mulebeke and Zheng, 2006).

Benefit of virtual teams

Virtual Stamps, 2000; May teams reduce time-to-market (Lipnack and Kankanhalli and Carter, 2001; Sorli et al., 2006; Kusar Zheng, et al., et 2004; al., 2006; Ge and Chen, Hu, 2008; 2008; Shachaf, Mulebeke 2008; and 2002; Zhang et al., 2004; Sridhar et al., 2007). Lead time 2006; Guniš et al., 2007; Prasad and Akhilesh, or one time-to-market has been generally admitted to manufacturing of the most almost (Sorli important et al., 2006). keys for being Time the success in proportionally 1:1 correlation (Rabelo reduced if with the time-to cost, so also has an market cost will be limitations and that of Jr, time, 2005). space Virtual and teams is quicker organizational can overcome the reduce traditional (McDonough et al., 2001; Rice et al., 2007; Bergiel et al., transfer teams time face and (Piccoli costs et and al., travel 2004) affiliation costs and 2008; Cascio, 2000; Fuller et al., 2006; Kankanhalli et al., 2006; Prasad and Akhilesh, 2002; Olson-Buchanan et al., 2007; Liu, overcome 2007; Boudreau Lipnack et al., and 1998; Stamps, Biuk-Aghai, 2003; Liu and organizational the limitations of 2000). time, Virtual space teams (Piccoli et al., 2004). One of the most important of employ affiliation that traditional teams face and virtual R&D team can tap selectively into a centre of

Ebrahim et al. 919

excellence, (Criscuolo, using the best talent regardless of Fuller et al., 2006; Furst et al., 2004; Badrinarayanan and 2005; Cascio, 2000; Samarah et al., location 2007; Arnett, al., 1998; Boutellier et al., 1998).

2008; Prasad and Akhilesh, 2002; Boudreau et business Also, virtual and Zheng, 2006), able to digitally or electronically unite environments teams (Bergiel respond et quickly al., 2008; to Mulebeke changing experts distances in highly specialized fields working at great R&D and continuation from each other (Rosen et al., 2007), make degree Teng, development project (Ojasalo, 2008; Badrinarayanan and of 2003; freedom Schmidt decisions to individuals et more al., 2001), effective (Cummings involved provide with greater the Arnett, greater 2008; (McDonough productivity, Prasad and Akhilesh, 2002). Creating producing better et al., 2001; shorter Mulebeke development and Zheng, 2006), times yees teams are other benefits outcomes and of virtual attracting better employ-from can generate the great competitive teams. Further, advantage such 2007; Chen et al., 2008c), useful for projects that require limited resources (Martins et al., 2004; Rice et al., cross-functional Kelley (Precup and Sankey, or cross 2008), boundary skilled inputs (Lee-processes (Gassmann and Von Zedtwitz, 2003b; Prasad et al., 2006), helping less transnational resistant to innovation change and (teams can be organized whether or not members are in Akhilesh, 2002) and higher degree of cohesion proximity 2000; production-oriented Gaudes to one et another) al., 2007), (Kratzer evolving et organizations al., 2005; Cascio, (Johnson et al., 2001; Precup et al., 2006) and providing to service/information-oriented from organizations and Hunsaker, 2008; Chen, 2008; Guniš et al., 2007; Prasad responsiveness with an (Powell unprecedented et al., 2004; level Hunsaker of flexibility and and 2004; Liu and Liu, 2007). Besides, virtual teams are self-Akhilesh, 2002; Pihkala et al., 1999; Piccoli et al., assessed 2005; and high performance teams more Poehler and Schumacher, 2007), (Chudoba employees et can al., professional easily their lives accommodate (Cascio, 2000), both employees personal and (Lurey and Raisinghani, 2001), optimize the contributions work without concern of space or time constraints perform of business tasks and organizational goals (Samarah et al., individual members towards the completion of 2007), manage reduce quite the development the pollution and (Johnson commercialization et al., 2001), communication well (Chesbrough mutual and coordination and Teece, and 2002), encourage improve tasks the competencies sharing of inter-organizational resources and managing Akhilesh, creativity (Chen (Leenders et al., et 2008a), al., 2003; cultivating Prasad and and and sharing Arnett, 2002; 2008), Atuahene-Gima, facilitate knowledge 2003; Badrinarayanan capturing and al., and experiences (Rosen et al., 2007; Zakaria et Sridhar et al., 2007; Lipnack and Stamps, 2000), improve

2004; Furst et al., 2004; Merali and Davies, 2001; 920 Int. J. Phys. Sci.

the al., coordination of R&D-related activities (Paul et al., 2005), 2008), detail and provide precision a vehicle of design for global activities collaboration (Vaccaro and et allow individuals for a particular job regardless of their location organizations to access the most qualified (Hunsaker organizations to respond faster to increased competition and Hunsaker, 2008) and enable (Hunsaker and Hunsaker, 2008; Pauleen, 2003).

more exceeded from co-located publications (Ahuja et al., The ratio of publications from virtual R&D member is 2003) and the extent of informal exchange of information is 2001). Virtual teams have better team outcomes (quality, minimal (Pawar and Sharifi, 1997; Schmidt et al., productivity de training Guinea and et satisfaction) (Gaudes et al., 2007; Ortiz 2000; Atuahene-Gima, 2003; Badrinarayanan and Arnett, expenses, al., 2005; faster Piccoli learning et (Pena-Mora al., 2004), reduce et al., 2008) Sobek, and finally key advantages in virtual teams are that they can reduce 2006). These greater benefits client are satisfaction not entirely (Jain new. and The time-to-market, increase in flexibility and team formation.

Pitfall of virtual teams

Virtual R&D teams in which members do not work at the same need to start quickly and perform instantly (Munkvold and time or place often faces tight schedules and a Zigurs, collaborate 2007). Virtual trip to a coffee corner or across the hallway to a trusted with more productivity team may at a allow distance, people but the to colleague review is still Zedtwitz, and the most reliable and effective way to vulnerable 2003a). revise a new idea (Gassmann and Von conflicts and power struggles (Rosen et al., 2007; Cascio, to mistrust, As a drawback, communication virtual breakdowns, teams are 2000; Nandhakumar, Kirkman et al., 2002; Taifi, technological 2007). It sometimes 2007; requires Baskerville complex and Badrinarayanan applications physical interaction (Cascio, 2000; Hossain and Wigand, and Arnett, 2008) (Bergiel and et has al., a lack 2008; of 2004; virtual teams, everything to be reinforced in a much more Kankanhalli et al., 2006; Rice et al., 2007). In structured, formal process (Lurey and Raisinghani, 2001) but and Sharifi, 1997).

decrease monitoring and control of activities (Pawar management Virtual teams comprise of challenges of project Sanchez Jacobsa et technology et al., (Wong al., 2006; and Burton, 2000; Martinez-2005), Badrinarayanan finding and Arnett, 2008; Fjermestad, fit and 2008; (Qureshi Griffith and et al., Vogel, out the suitable task 2003; 2001; Ocker and conflict Arnett, 2008; Bell and Kozlowski, 2002), Badrinarayanan managing Fjermestad, 2008; Kayworth and Leidner, 2002; Piccoli et (Hinds and Mortensen, 2005; Ocker and al., 2004; Wong and Burton, 2000; Ramayah et al., 2003)

and with technophobia technologies) (Johnson et al., 2001). Cultural diversity in computer (employees and other who telecommunications are uncomfortable virtual teams leads to differences in the members thought processes. Therefore, develop trust among the members are challenging (Bell and Kozlowski, 2002; Griffith et al., 2003; 2005; Poehler and Schumacher; 2007; Kankanhalli et al., Shachaf, 2005; Jacobsa et al., 2005; Paul et al., 2006; Zigurs, 2007; Boutellier et al., 1998). Variety of practices Badrinarayanan and Arnett, 2008; Munkvold and (cultural and work diversity) and employee mobility nega-tively impacted performance in virtual teams (Chudoba et al., encouragement (Ryssen and Godar, 2000). 2005). Team members need special training and

RESEARCH AND DEVELOPMENT (R&D)

Nowadays, environment suggests that many firms seek new ways of unpredictable economic and business conducting make a profit and stay ahead of the competition (Laforet, their business through some innovation to 2008). Around the world, innovation is now recognized as a Hicks, prime source of competitive technologies 2008). independent that R&D can is a advantage (Hegde and be strategy for developing firms existing technologies gained through technology transfer to create intellectual new technologies property commercialized rights. and/or R&D under to build enable on (Zhouying, various endless goals 2005). (Robinson R&D efforts and Propp, are necessary 2008). R&D to realize is an based companies.

process for any forward thinking technology-advisable Innovative development of the existing products is may to keep ahead of advances that competitors approaches a firm outlining its needs for a product, R&D be making. Further, when a potential customer may 2006). The success of a company’s R&D effort is strongly be required to fulfill the request (Lawson et al., related functions to Research is an investment, not an expense (Boer, 2005). and the uniqueness technical aspects of the (Kratzer product, et both al., product 2005). Large R&D, to ensure future sustainability (Precup et al., 2006). amount of money is spent all over the world on From and increased inter-disciplinary different points nature of view, of the R&D increasing process in complexity turn has becomes less attractive without partners to share the cost the cost of research. Therefore, research (Howells et al., 2003).

R&D and distributed team

R&D are now dependent to different location drivers (Von Zedtwitz earn their knowledge from external sources (Erkena and and Gassmann, 2002). Many firms started to Gilsing, 2005). R&D units in foreign countries have

gained the more responsibilities and competencies adapted still-existing production in traditional mode of product developed besides decade attractive had in the home country and technical support for shown abroad (Reger, 2004). Trends in the last Hicks, 2008).

R&D destinations China and for India the were USA emerging (Hegde and as abilities Changes in telecommunications and marketing make it possible to coordinate data processing research, (Acs and Preston, 1997). Hegde and Hicks (2008) noted and production operation around the world that subservient to home R&D laboratories. “Corporate growth overseas R&D sites are auxiliary outposts, and forces, which result in companies with a more global R&D positioning” and “knowledge sourcing” are two nature change (Richtne´r and Rognes, 2008). move to take the advantage of ideal conditions for growth is a highly dynamic process that Technological may quickly (Hegde virtual are a matter of degree (Leenders et al., 2003).

and Hicks, 2008). For most R&D teams, being

SMALL SMEs

VIRTUAL TEAMS

AND MEDIUM ENTERPRISES (SMEs)

development. play an are Acs, important et al. (1997) role inferred to promote economic most indeed commercial countries, the engines SMEs of dominate global economic that small firms the industrial growth. and In importantly foreign Economists believe the wealth of nations and the growth direct SMEs infrastructure (Deros et al., 2006). More investment play an (FDI) important (Kuo role and in Li, flows 2003). of of performance their economies developing (Schröder, strongly 2006). depend In many on their SMEs’ bring the stability countries, to the national SMEs are economy. the unsung developed They heroes and help buffer that economic shocks behind equalizing income disparity among workers (Choi, cycles. that SMEs come also with serve the boom as the and key bust engine of 2003). emerging many new small firms in village townships and China’s recent rapid growth is also linked to in coastal areas, often named new industries (Acs et al., 1997).

their products and exploiting their intellectual capital in a To survive in the global economy SMEs have to improve network outside of knowledge-intensive relations Walsh step-change (2002) their borders noted that (Corso if small et al., firms 2003).Hanna inside and want to and they have to rethink their approach to cooperation. SMEs in their technological and innovation make base, a need there proper and up-to-date knowledge to compete and knowledge within SME’s (Nunes et al., 2006).Especially, is a strong need to create, share and disseminate in knowledge creation and innovation may speed up market

the emerging and dynamic markets the shared Ebrahim et al. 921

development in software, knowledge-sharing (Blomqvist are et al., not 2004). only the The key hardware elements and members but (Rosen examined et to also the ability and willingness of team al., actively 2007). take Dickson part in the knowledge-sharing manufacturing innovation and Hadjimanolis (1998) evidence strategic that companies. and networking among small companies They performing found some at “the tentative local operating network” beginning in shortage and need technological assistance.

of terms R&D of are more innovative than those activities “the local SMEs self-sufficiency”. always face capital In the networked Most firms today do not perform alone; they (Miles system et al., vertically with many value chain partners are flexible and quick responsive, although under-capitalized has a 2000). cooperative The typical network Taiwanese of SMEs production that are and sensitive to market demand and highly integrated in the formation global economy (Low, 2006). Strategic strategic has been touted as one of the most alliance critical and Keupp success actions (Dickson that SMEs must undertake for survival invest such less (2007) in tangible found that et assets, managers al., 2006). but more of Gassmann and in SMEs those should competitive advantage.

as R&D that will directly generate their areas future

Most

Virtual R&D teams in SMEs

including SMEs are heavily reliant on external sources, new knowledge (Jones and Macpherson, 2006). SMEs of customers and suppliers, for the generation of all for sizes present necessary must reach resources out into (Dickson their external et environment the manufacture and supply more, at competitive cost, in less SMEs era of will globalization, be determined it is obvious al., 2006). In the by their the survival ability of to delivery resources time, challenge, (Sharma with minimum defects, using fewer synergies SMEs can and reinforce Bhagwat, knowledge 2006). To face this succeed. that allow firms to overcome difficulties to create and different agents to overcome scarcity and/or difficulties in This may lead to new relationships between gaining 2007).

access to resources (Gomez and Simpson, inexpensive The combination of explosive knowledge growth unlimited resource services can help the enterprises to get external virtual information invention transfer (Miles creates et al., a fertile 2000). soil and Web for service manufacturing resources urgent (Dong and and impose Liu, collaborative 2006). It is design especially and networked to speed up the product development (Lan et for SMEs to construct a service platform of al., reveal that IT in SMEs is still in a backseat even though 2004). Sharma and Bhagwat (2006) study results the use of computers is continuously increasing in their

922 Int. J. Phys. Sci.

Table 1. Some of the major advantages of SMEs. operations.

The major characteristics of SMEs

To have a better understanding of SMEs behavior, a brief knowledge of the characteristics of SMEs is a must and therefore, the major characteristics of SMEs are listed in Tables 1 and 2 (These are for all types of SMEs (generalizations) and not all may hold true for every

Advantages References

Generally dominated by the entrepreneur (Jones and Macpherson, 2006; Schatz, 2006; Egbu et al., 2005; (owner-manager) Kotey and Slade, 2005; Bougrain and Haudeville, 2002; Love and

Irani, 2004; Sarosa and Zowghi, 2003)

Able to respond quickly to customer requests (Jones and Macpherson, 2006; Schatz, 2006; Levy and Powell, and market changes, Customers focused 1998; Mahemba and Bruijn, 2003; Wu et al., 2007; Canavesio

and Martinez, 2007; Huang et al., 2004; Abdul-Nour et al., 1999)

Flexible and fast-response to change, easily (Narula, 2004; Schatz, 2006; Deros et al., 2006; Mezgar et al., adaptive to new market conditions , dynamic in 2000; Levy and Powell, 1998; Nieto and Fern´andez, 2005; behavior, developing customized solutions for Sarosa, 2007; Davis and Sun, 2006; Starbek and Grum, 2002; partners and customers Abdul-Nour et al., 1999, Aragón-Sánchez and Sánchez-Marín,

2005).

Concentrated production and sales in their home (Narula, 2004; Perrini et al., 2007). country

Driven by client demands (Lawson et al., 2006; Schatz, 2006; Deros et al., 2006; Axelson, Quick decision-making (decisions are made by 2005) an individual or a few people, or a single individual)

It strongly correlated and inter-related with (Robles-Estrada and Gómez-Suárez, 2007; Sharma and respect to Innovation and entrepreneurship. Bhagwat, 2006; Gray, 2006; Gunasekaran et al., 1999; Bodorick

et al., 2002; Huang et al., 2001, Chew and Yeung, 2001) High innovatory potential

More extensive use of external linkages for (Laforet and Tann, 2006, Hoffman et al., 1998, Barnett and Innovate. Storey, 2000)

Un bureaucratic processes, flat and flexible (Haga, 2005, Axelson, 2005, Schatz, 2006, Sharma and structures Bhagwat, 2006, Deros et al., 2006, Levy and Powell, 1998,

Axelson, 2007, Massa and Testa, 2008)

Strong inter and intra-firm relationships , (Carbonara, 2005, Chen et al., 2007) managing a great amount of information Good at multi-tasking (Schatz, 2006; Axelson, 2007) Focused on gaining instant gratification with (Schatz, 2006) technology solutions.

Informal and dynamic strategies (Sharma and Bhagwat, 2006) Capable of going international early and rapidly (Gassmann and Keupp, 2007) Having tight control over production processes (Levy and Powell, 1998) due to close management involvement Productive (Beck et al., 2005) Knowledge creating (Egbu et al., 2005, Levy et al., 2003) Fast learning and adapting routines and strategy (Axelson, 2005) Great potential to adapt new production methods Creating astute alliances, networking (Dijk et al., 1997; Massa and Testa, 2008; Partanen et al., 2008;

Karaev et al., 2007; Kearney and Abdul-Nour, 2004) SME’s.). SMEs are not scaled-down versions of large companies. There are different characteristics that distinguish them from large corporations and that can, of course, change across different countries and cultures. SMEs are generally independent, multi-tasking, cash-limited and owner-based actively managed by the owners, highly personalized and informal structured, largely localized enterprises in their area of operations that are largely dependent on internal sources to the growth of finance (Perrini et al., 2007).

Table 2. Some of the major disadvantages of SMEs.

Ebrahim et al. 923

NEW PRODUCT DEVELOPMENT (NPD)

Product life cycle of manufactured goods falls shorter every year. Today, leading-edge firms can exploit global asset configurations to customize existing products and services and they also have the ability to combine their resources with an expanding knowledge base to create a continuous stream of new products and services (Miles et al., 2000). With the needs to respond quickly to dynamic customer needs, increased complexity of product design and rapidly changing technologies, selecting the right set of NPD is critical to a company’s long-term success (Chen et al., 2008a). Furthermore, combination of factors such as ever changing market needs and expectations,

References

(Wang and Chou, 2008; Pullen et al., 2008; Hanna and Walsh, 2002; Lu and Beamish, 2006; Nieto and Fern´andez, 2005; Axelson, 2007; Deros et al., 2006; Partanen et al., 2008; Caputo et al., 2002; Abdul-Nour et al., 1999; Kearney and Abdul-Nour, 2004; Bodorick et al., 2002; Sarosa, 2007; Jansson and Sandberg, 2008; Kim et al., 2008a; Yusuff et al., 2005; Laforet, 2008)

limited degree of information (Wang and Chou, 2008; Sharma and Bhagwat, 2006; Egbu et al., 2005; Lin et al., 2007; technology (IT) implementation Eikebrokk and Olsen, 2007; Corso et al., 2003; Sarosa and Zowghi, 2003) Weak at converting R&D into (O’Regan et al., 2006a; O’Regan et al., 2006b) effective innovation

Lacking some of the essential (Dickson and Hadjimanolis, 1998; Sharma and Bhagwat, 2006; Lee and Ging, 2007; Rolfo resources for innovation (poor and Calabrese, 2003; Massa and Testa, 2008; Hausman, 2005; Tiwari and Buse, 2007; innovative capabilities) Singh et al., 2008) Severe resource limitations in R&D

Strategy is based on low price, high (Hobday et al., 2004) quality offerings, rather than new product innovations

Not having formal R&D activities (Adams et al., 2006; Bougrain and Haudeville, 2002)

Strategy formulation on the basis of (Gomez and Simpson, 2007; Lindman, 2002; Yusuff et al., 2005) what available, lack a long run perspective

Reliance on the small number of (Sharma and Bhagwat, 2006) customers, and operating in limited markets. Reactive and fire fighting mentality.

Rely on outdated technology, labor-(Deros et al., 2006; Beck et al., 2005; Caputo et al., 2002) intensive and traditional management practices

Lagging in the export, lack the (Mahajar et al., 2006; Jansson and Sandberg, 2008) resources necessary to enter foreign markets

Lack of formal competitor analysis, (Woodcock et al., 2000) data collection during NPD processes.

Absolute size, fewer technological (Narula, 2004) assets

lack of the industrial engineers or (Ahmed and Hassan, 2003) right kind of manpower to apply various statistical and managerial methods or tools

Disadvantages

Scarce resources and manpower

uneven competition and emerging technologies and among others, challenging industrial companies to continuously increase the rate of new products to the market to fulfill all these needs (Sorli et al., 2006). Because of the above circumstances, product innovations are central in securing a firm’s competitive advantage from international markets (Jeong, 2003). NPD is vital and needs to be developed both innovatively and steadily (Chen et al., 2008a).

New product development process

Today’s uncertain and dynamic environment presents a

924 Int. J. Phys. Sci.

fundamental challenge to the NPD process of the future (MacCormack process et al., 2001). NPD is a multi-dimensional Kusar where al. and (2004) involves summarized multiple different activities stages (Ozer, of a 2000). preliminary in earlier assessment, whereas at the later stages a new product is market stages, analysis, the objective business is and to technical make NPD, a designed and developed. The stages could be seen as:

1. process)

Definition of goals (goals of the product development 2. calculation, goals of market)

Feasibility study (term plan, financial plan, pre-3. and parts, product planning and its control processes) Development (first draft and structure of the product 4. Design (design of components, drawing of material) of parts, bills

NPD and SMEs

New product development is of high importance for both large et producers have to continuously innovate and upgrade the al., and small and medium-sized organizations (Pullen 2008). To cope up with force of globalization, quality of their existing products (Acs and Preston, 1997). In these circumstances, companies offer their customers the time right (Kusar and products at with features and quality, at the right needed to et al., the 2004). right price A multidisciplinary can expect market approach success managing be successful in launching new is context, teams developing daily operations products and environments new products in the turbulent (Flores, 2006). In the NPD market knowledge because of rapidly changing customer face quick depreciation of technology and needs, (Akgun et al., 2007).

wants and desires, and technological know-how performance. For instance, (Cooper et al., 2004) identify There are quite a few researchers done to assess NPD various and NPD program include the percentage of business profits project measures levels. of Measures NPD performance of performing at the the program entire from spending, new products, return on investment on products. positive growths. With some exceptions, papers address-All and of the these success measures rate of R&D show launched/developed that NPD brings ing the problems and tools needed for implementing NPD in small organizations are lacking (Toni and Nassimbeni, 2003).

NPD and dispersed team

Different product idea needs to be conceived, selected, developed, products may need different processes. A new tested Sanchez et al., 2006). The specialized skills and talents and finally launched to the market (Martinez-

needed develop for company locally developing in pockets new products of excellence often remain and have no choice but to access such dispersed knowledge or even around the world. Firms, around therefore, the and 2005). Virtualization in NPD has recently started to make skills to diffuse their new products (Kratzer et al., sober virtuality in NPD is now technically possible (Leenders et headway due to developments in technology; al., (OEMs) 2003). advantage have Automotive original equipment manufacturers development, of formed their partnerships with suppliers to take Hoegl, design and technological manufacturing expertise (Wagner and in complex, they also have to collaborate more closely than 2006). As product development becomes more in the past. These kinds of collaborations almost always involve team-working individuals benefits (Anderson supported from by different IT, offers locations, notable so potential virtual in et al., 2007). May and Carter (2001) European automotive industry have shown that enhanced their case study on virtual team-working in the communication and collaboration between geographically distributed supplier quality, sites engineers (between 20 to 50%) for the new product. reduced make at automotive manufacturer and costs them to and get reduced benefits such time-to-market as better

NPD and virtuality

New recognized as one of the corporate core functions (Huang product development (NPD) has long been et changes al., 2004). turbulent has techniques environment accelerated The rate of market and technological requires in the past years and this marketplace to market (González bring the and successful new Palacios, new methods and 2002). products The to world the (Starbek and Grum, 2002). Therefore, to successfully and requires short product development times efficiently developing capture organizations are forced to move from traditional face-to-new products all the and services, experience more needed and more in face between teams NPD the to two virtual types teams of teams or adopt a combination members needs Sanchez both collaborated within and outside with (Precup new et al., 2006). the firm product (Martinez-team 2000) and NPD teams are necessary in most businesses et al., 2006; McDonough et al., 2001; Ozer, (Leenders et al., 2003).

companies under intense pressures to build critical mass, In addition, the pressure of global competition put reach increasingly new markets and plug skill gaps, NPD through (Cummings all being forms pursued across multiple efforts are nations differences in time zones and physical distances in such and Teng, of organizational 2003). Given arrangements the resulting efforts, attention (McDonough et al., 2001).

virtual NPD projects are receiving increasing Table 3. Covering lack of SMEs by virtual teams.

Ebrahim et al. 925

Disadvantage of SMEs

Scarce resources and manpower (Wang and Chou, 2008; Kim et al., 2008, Pullen et al., 2008; Hanna and Walsh, 2002; Lu and Beamish, 2006; Nieto and Fern´andez, 2005; Axelson, 2007; Deros et al., 2006; Laforet, 2008)

Lacking some of the essential resources for innovation, Severe resource limitations in R&D (Dickson and Hadjimanolis, 1998; Sharma and Bhagwat, 2006; Lee and Ging, 2007, Rolfo and Calabrese, 2003, Massa and Testa, 2008, Hausman, 2005)

Not having formal R&D activities (Adams et al., 2006) limited degree of information technology (IT) implementation (Wang and Chou, 2008; Sharma and Bhagwat, 2006; Egbu et al., 2005; Lin et al., 2007; Eikebrokk and Olsen, 2007; Corso et al., 2003)

Weak at converting R&D into effective innovation Easing transnational innovation (Gassmann and Von Zedtwitz, 2003b) (O’Regan et al., 2006a; O’Regan et al., 2006b) Higher team effectiveness and efficiency (May and Carter, 2001, Shachaf

and Hara, 2005)

Strategy formulation based on what is available Respond quickly to changing business environments (Bergiel et al., 2008; (Gomez and Simpson, 2007) Mulebeke and Zheng, 2006)

Rely on outdated technology, labor-intensive and Most effective in deciding (Hossain and Wigand, 2004)

traditional management practices (Deros et al., 2006; Provide organizations with a unprecedented level of flexibility and Beck et al., 2005) responsiveness (Powell et al., 2004, Hunsaker and Hunsaker, 2008, Chen,

2008)

Lagging in the export (Mahajar et al., 2006) Provide a vehicle for global collaboration and coordination of R&D-related

activities (Paul et al., 2005 )

Advantage of virtual team

Able to tap selectively into the centre of excellence, using the best talent regardless of location (Criscuolo, 2005; Cascio, 2000; Samarah et al., 2007; Fuller et al., 2006; Furst et al., 2004). Reducing relocation time and costs, reduced travel costs (McDonough et al., 2001; Rice et al., 2007; Bergiel et al., 2008; Cascio, 2000; Fuller et al., 2006; Kankanhalli et al., 2006).

Reducing time-to-market [Time also has an almost 1:1 correlation with cost, so cost will likewise, be reduced if the time-to market is quicker (Rabelo and Jr. , 2005)] (May and Carter, 2001; Sorli et al., 2006; Kankanhalli et al., 2006; Chen, 2008; Shachaf, 2008; Kusar et al., 2004; Ge and Hu, 2008; Mulebeke and Zheng, 2006)

Organizations seeking to leverage scarce resources across geographic and other boundaries (Munkvold and Zigurs, 2007)

More effective R&D continuation decisions (Cummings and Teng, 2003). It can manage the development and commercialization tasks well (Chesbrough and Teece, 2002)

Sharing knowledge, experiences (Rosen et al., 2007; Zakaria et al., 2004; Furst et al., 2004)

Web base collaboration

The Internet, incorporating computers and multimedia have provided potential for remote integration and collaboration in business and manufacturing applications (Lan et al., 2004). A web-based collaborative product design platform enables geographically dispersed authorized users to have access to the company’s product data such as product drawing files stored at appointed servers and carry out product design work simultaneously and collaboratively in any operating systems (Zhan et al., 2003). It is however, hard to allocate funding and to design infrastructures and software to support virtual team-working (Chudoba et al., 2005). Despite the widespread use of computers for personal applications, few programming frameworks exist for creating synchronous collaborative applications (Holloway and Julien, 2006). An integrated system can effectively support a dispersed team (Li et al., 2004). SMEs: VIRTUAL R&D TEAMS AND NPD

A global market needs a short product development cycle; therefore SMEs are also forced into shifting from sequential to concurrent product development. Virtual teams are dramatically influencing organizations and doing virtual R&D for SMEs is not a choice but a duty to reduce the time-to-market in the intensively competitive market environment.

With the findings of Gassmann and Keupp (2007) advantages of virtual teams for SMEs are extracted and illustrated in Table 3. Managers of SMEs should invest less in tangible assets, but more in those areas that will directly produce their future competitive advantage such as R&D. Therefore, managers of SMEs should recognize that virtual teams in NPD are essential in modern organizations.

Simple transmission of information between new product teams’ members is not adequate; the virtual R

926 Int. J. Phys. Sci.

and each D bringing the idea to practice. For a successful adoption of team. team Managers should also should constructively have an action interact plan within for virtual on the success factors of NPD should be considered.

teams to develop a new product, relevant impact

CONCLUSION

This paper is provided a comprehensive literature review covering NPD. popular Web the service topics of technology, SMEs, virtual although R&D now teams and can produce new findings. Currently, from the point of the but still not matured enough, so dealing is with very it topic, major publications. There are still notable gaps in virtual it suffers from the limit of coverage in almost all R&D development team study within efforts and effects on new product provide an assessment on patterns, practices, technology would now be SMEs. important. A comprehensive Such a study empirical would or virtual types of activities niches. teams that should be carried out by R&D and their effectiveness as well as preconditions do SMEs It can in also SME’s detail to with realize the methods more effective being NPD used must application consider for virtual R&D teams. From the traditional R&D structure to the distributed R&D in SMEs. view, it can look into the transition from a Extensive research is needed to understand the different characteristics in of successful virtual R&D teams into SMEs. Future research shall be the benefits We believe, and this problems study provides for NPD arise in a this further direction. step exploring NPD, SMEs and virtual R&D teams separately intending at shifting away from to the formation and development of a collaborative tools which collaboration can be used as an optional strategy for the can support a dispersed team effectively. R&D knowledge products, services or processes, among SMEs, which are sharing and easing the development of new suffering from lack of resources.

on A review of the literature shows the factors that impact development, are still ambiguous. Effective management the effectiveness of virtual teams for new product can help a virtual R&D teams in SMEs to overcome the constraints Future developing research imposed would by now applying seem virtual to be R&D teams. with NPD. Such a study needs to propose a model for virtual case study) a comprehensive in different aspects study of (combining essential virtual teams survey for for collaboration during the NPD process. While most of the research and activities relevant to SMEs do not technology support potentially worthwhile. Similar potential advantages have transfer, international such research as virtual cooperation encourage teams will and be been listed in Table 1. Therefore, it is vital to bridge this gap research and help them carry out or outsource research and unlock growth opportunities for SMEs through to develop new technology - based products, processes

and technological services, exploit research results, incorporate know-how and train their employees acquire to pattern has a major obstacle ahead. Therefore, setting-up development processes. Setting-up a new an infrastructure for virtual R&D team in SMEs still needs many Web base collaborative system. engineering efforts, especially designing a proper

Abdul-Nour G, Drolet J, Lambert S (1999). Mixed production, flexibility

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