Product Development Organizations

In addition to crafting an effective development process, successful firms must organize their product development staffs effectively. In this section, we describe several types of organizations used for product development and offer guidelines for choosing among these options. Organizations Are Formed by Establishing Links among Individuals A product development organization is the scheme by which individual designers and developers are linked together into groups. The links among individuals may be formal or informal and include, among others, these types: • Reporting relationships: Reporting relationships give rise to the classic notion of supervisor and subordinate. These are the formal links most frequently shown on an organization chart. • Financial arrangements: Individuals are linked by being part of the same financial entity, such as that defined by a particular budget category or profit-and-loss statement. • Physical layout: Links are created between individuals when they share the same office, floor, building, or site. These links are often informal, arising from spontaneous encounters while at work. Any particular individual may be linked in several different ways to other individuals. For example, an engineer may be linked by a reporting relationship to another engineer in a different building, while being linked by physical layout to a marketing person sitting in the next office. The strongest organizational links are typically those involving performance evaluation, budgets, and other resource allocations.
References and Bibliography
Many current resources are available on the Internet via www.ulrich-eppinger.net Stage-gate product development processes have been dominant in manufacturing firms for the past 30 years. Cooper describes the modem stage-gate process and many of its enabling practices. Cooper, Robert G., Winning at New Products: Accelerating the Process from Idea to Launch, third edition, Perseus Books, Cambridge, MA, 2001.