New Product Team Decision-Making: Regulatory Focus Effects on Number, Type and Timing Decisions

Abstract

Company executives rely on new product development teams to carry out their directives and make decisions according to management’s goals and objectives. However, new product team members bring their own motivational perspectives to strategic decisions. This research examines how individual and leadership motivations influence a dyadic team’s new product decisions. Specifically, this article investigates how matching vs. mismatched motivations between team members affect new product number, type, and timing decisions. In addition, this study asks how effective leadership-provided motivations are in guiding teams’ new product decisions. A set of hypotheses is developed using regulatory focus theory, which identifies basic motivational differences in individuals (i.e., promotion vs. prevention focus) and their effects on decision-making. The hypotheses examine the effects of regulatory focus match vs. mismatch within teams on the likelihood to introduce new products, the timing of new product introductions, and the types of new products introduced. To test the hypotheses, a controlled, yet realistic marketing and product management simulation is employed. A total of 124 undergraduate seniors (83 women and 41 men) at a large public university enrolled in a marketing management capstone course participated in this study for partial course credit.

Utilizing two person teams engaged in a business simulation ensured an appropriate level of controlled complexity in the decision-making task, while allowing the phenomena of interest to be isolated and tested. Results show that when dyads share the same motivational approach (regulatory focus match), leadership-prescribed goal pursuit strategies are largely ineffective. Only dyads that do not share the same motivational approach to decision-making (regulatory focus mismatch) make new product decisions consistent with leadership-prescribed goal pursuit strategies. For regulatory focus match dyads, the results demonstrate that a promotion focus (when compared to a prevention focus) leads to greater numbers of new products introduced, faster new product introductions, and more novel new product introductions. For new product managers, these results carry important implications. Which new product opportunities to invest in and which to forgo is presumably determined (to a large extent) by the strategic direction given to teams by top management. Results suggest that when team members share the same motivational approach, this not only influences new product decisions, but also diminishes or eliminates the influence top management can exert on new product decisions by prescribing specific goal pursuit strategies to teams. Such “isolation” from leadership influences does not have to be detrimental. For example, companies that seek to insulate new product development teams from influences from the top, such as is the case in many new venture incubations, would be well served to staff those teams ensuring a promotion focus match.

Keywords: New Product Decision-Making, Team Decision-Making, Regulatory Focus Theory, Motivation, Leadership Effectiveness, Dyads

JEL Classification: C1, C12, C9, C92, D7, D8, l00, L1, L2, M1, M12, M3, M31, M5, M54, O31