Role of management information system in new high-tech product development process: an exploratory study.

AuthorK.B., Saji

    In today's knowledge based economy, the information as well as the information flows are increasingly important issues, and ultimately, a major determinant of firm performance. Information is the most important asset that a business owns and, increasingly, is the key source of competitive advantage for a firm. For the high technology firms, which face an environment characterized by frequent innovation, high mortality rates, high priority on research and development, and stiff competition, the management of information is particularly crucial. These unique characteristics necessarily imply that the management and control of information is a prerequisite to success (Mohr, 1996).

    The economic value of information has been well explored in the transaction costs approach to IS design (Boisot, 1987; Ciborra, 1987; Ciborra and Olson, 1989). It is developed from the fundamental work of Williamson (1975) where Information Systems (IS) are seen as facilitating transactions between entities. In particular, the effect of asymmetries in information possessed by the two entities and the limited capacity of decision makers for rational behaviour are characterised as major factors in dysfunction of organisations. Williamson's concern was for economic analysis of firms through their use of information in carrying out market-type transactions and making buy-make decisions. Ciborra (1987) uses the transaction cost approach in IS to explain behaviour such as retention of information, misrepresentation of information, and resistance to change. The traditional 'decision-maker' model of authors such as Keen and Scott (1978) suggests that decisions are normally made by firms in a rational manner on the basis of formal information. This model is rejected by Ciborra (1987) because of its lack of consideration of all the stakeholders involved in the decision, as well as some well-reported characteristics of decision making such as the reliance on 'informal' information (Mintzberg, 1973).


    The survival of firms in today's business world is increasingly determined by their success in new product development. More than one third of a high tech firm's revenue comes from those products that did not exist five years ago. The high tech firms are those that invest heavily on research and development for generating technological capability, targeting product cum process innovations. The unique characteristics of high tech firms, driven by high complexity and high uncertainty, create very complex demands on information flows as high tech environments tend to be information intensive, in which both the amount of information is large and the speed of information transmission is fast. While the complexity refers to the degree of multiple skills and competencies required to develop a new product, the uncertainty is a central aspect of managing the product innovation process in general (Nambisan, 2003). Egelhoff (1988) states that uncertainty at the NPD project level means that more information processing and coordination are required to maintain integration between the project functions.

    The roots of the New High Tech Product Development (NPD) field can be traced to the R&D and engineering management literatures of the 1960s and early 1970s (Nambisan, 2003). These two domains gave early NPD research a project cum innovation-management...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT