Stakeholders’ Influence on Product Design Decisions with Exogenous Uncertainty

This study examines how stakeholders exert an influence on product design decisions in the presence of exogenous uncertainty. Hitherto, research has traditionally viewed firms as one entity, and has prescribed an “optimal” product design decision at firm level. Inspired by field studies at Nokia and Philips, our research seeks to open the “black box” of R&D organizations by comparing design outputs in various situations of decision power distribution and task priority. It studies a fundamental yet often overlooked conflict in the team: the organization’s task priority and the team leader’s position power (project finalization). It also quantifies two types of personal cost related with stakeholders in development teams and identifies the organizational factors which lead to project termination. Simple empirical test is used to support our insights.