Epsilon Open Archive

Abstract

It is common advice from strategy consultants that companies in the wood industry should increase their rate of innovation in order to survive global competition. Neither consultants nor academics, however, provide much advice on how this is to be achieved. For example, what resources are crucial for product innovation to take place and are current organizational structures suitable for development work? In this study, the product development processes of companies in this industry were examined. Product development was defined as the span of activities leading to products that are new to the firm, but not necessarily new to the market. The study combined the resource-based view of the firm and the organizational capabilities approach with innovation management theory. Thematic coding was used to analyze the comprehensive information obtained from semi-structured interviews with 19 product development experts in the industry. In addition, binary logistic regression, factor analysis and multiple regression analysis were used to analyze data obtained from structured interviews with 110 strategic business unit (SBU) managers in the industry. The product development processes in the investigated firms were informal and flexible, with an approach that emphasized testing and feedback procedures. The occurrence of recent product development projects among the investigated SBUs was positively influenced by the educational level among white-collar workers in these SBUs. Furthermore, the perceived level of success in product development projects in these SBUs was positively influenced by well-defined project targets and strong project leadership. The influence of customer involvement on project success, however, was more complex than expected – a finding that calls for further research on this topic. Finally, resource constraints, high pressure from daily operative work, and the ensuing difficulty of prioritizing development work were the most important perceived barriers to product development in this industry. Thus, promoting long-term innovative work in an environment focused on shortterm management of operations is a true challenge for wood industry managers.