The influence of formal controls on customer interactivity in new product development

This study examines how formal control mechanisms, specifically output, process, and team reward controls used in new product development (NPD) projects, influence the degree of customer interaction during the project. It is argued that controls can differentially focus the efforts of the project team either internally on the organization's process or externally on the market and its customers. Data from 95 projects across several industries suggest that the use of output control and team rewards leads to higher customer interactivity. However, heavy reliance on process control can lead to reduced customer interactivity if not also accompanied with output controls. This study extends our understanding of using management controls to integrate the voice of the customer into new product development. (C) 2004 Elsevier Inc. All rights reserved.