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ItemOperational challenges of strategy execution(Georgia Institute of Technology, 2014-06-11) Kovach, Jeremy J.Operations management studies the process of transforming material, labor, energy, or ideas into goods or services. Operations strategy outlines how firms leverage their capabilities to achieve competitive advantage. While developing or possessing these capabilities is paramount, they must be successfully leveraged to yield competitive advantage. This thesis comprises three essays which consider how firms can successfully implement their operations strategy, specifically within the context of supply chain management, remanufacturing, and project execution. The first essay (Chapter 2) empirically investigates the performance benefits of operational slack and operational scope in dynamic environments. We investigate how contingent investments in operational slack and operational scope moderate the relationship between unstable and unpredictable markets on firm performance. The second essay (Chapter 3) considers how a firm's organizational structure and incentives influence its decision to participate in remanufacturing. Through a principal-agent structure, we determine the optimal sales agent commission structures and product portfolio of new and remanufactured product for the firm. The third essay (Chapter 4) considers the challenges of executing strategic initiatives. We recognize the dual role of performance metrics, they communicate the target outcomes (i.e., what types of project outcomes are sought), and at the same time they incentivize the organizational impetus (i.e., effort commitment) from the stakeholders. Using a game theoretic model, we investigate the implications of the target outcome (focused or flexible definition of success) and project uncertainty, which are dependent on the organizational structure of the firm.
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ItemDesigning service operations: value (economic and environmental) implications(Georgia Institute of Technology, 2012-07-05) Bellos, IoannisThe service sector has been identified as the main force of economic and potentially sustainable growth in most developed economies. Nevertheless, despite the role of services in today's economy, little is known about what drives service innovation and which tools and methods determine successful service design and development. This dissertation focuses on addressing the challenges associated with the design, development and operation of service offerings. In the first essay (Chapter II) we explore the design challenges of an organization that develops an experiential service. In experiential services, the customer value extends beyond the functional benefits of the service, and it encompasses the overall experience. We draw upon the perspective of the customer journey, which is widely used by design firms (e.g., IDEO), and we model the entire service experience as a process comprising individual service steps (also known as touchpoints). The value of the service is "co-produced" over several touchpoints between the customer and the service provider. We identify the non-monotonic effects of the co-production losses and service complexity on the provider's design decisions, (i.e., price), and the touchpoints she controls. Finally, we fully characterize the conditions under which the service provider may use these design decisions to effectively signal the experience potential of the service offering. In the second essay (Chapter III) we study the auto manufacturer's choice regarding whether to provide mobility service (e.g., car sharing) in conjunction with the traditional sales channel. A utility maximization model is used to characterize the consumer's choice between purchasing a vehicle, benefiting from the mobility service or relying on an outside option (e.g., public transportation). We characterize the benefit to the manufacturer of providing mobility service and the environmental implications of this strategy. In the third essay (Chapter IV) we study the implications of "reference point" effects on the optimal service design. We envision the service delivery as a two-stage process in which customer satisfaction is stochastic. The service provider needs to determine the optimal level of effort to exert at each stage, given that the customer experience at the first stage of the process can affect the expectations regarding the experience at the second stage of the process.
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ItemResource allocation, incentives and organizational structure for collaborative, cross-functional new product development(Georgia Institute of Technology, 2011-11-02) Hutchison-Krupat, JeremyThis thesis addresses important operational aspects relating to fundamental components of any successfully executed NPD strategy: the processes, incentives and structure of decision rights that should be implemented given the objectives and capabilities of the firm. The first chapter outlines when a firm might prefer to compensate members of a NPD project team either, as individuals (e.g. based on their functional contribution to overall value) or as a team (e.g. based on the overall profit generated). We find that neither team nor individual based compensation is preferred for all types of projects. Specifically, when there is higher uncertainty, the firm can benefit by employing team-based compensation. We discuss the implications of our findings towards the firm's ability to pursue different types of projects. In Chapter 3, we look at the strategic resource allocation processes that are employed by firms in order to decide whether NPD initiatives get funded or not. We find that there is not a "one size fits all" resource allocation process that all firms should employ. Furthermore,we extend this finding by further by providing a rationale explaining why even a single firm could benefit by employing multiple processes internal to the firm. Finally, in Chapter 4, we empirically explore how key managerial levers of the firm (i.e. incentives, tolerance for failure, and project management structure) affect an individual's propensity to invest in a project. Our analysis brings forth several under-explored and novel aspects. We examine how multiple managerial levers work in concert with one another (revealing interactions that, to our knowledge, have not been exposed). We also recognize an important aspect of most (if not all) NPD contexts: the probability of success is strongly tied to the level of resources that are invested.
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ItemThree essays on the role of information structures on new product development strategies(Georgia Institute of Technology, 2009-06-12) Oraiopoulos, NektariosThe new product development (NPD) process has been long conceptualized as an intense information processing task, yet several questions about the role of information in shaping NPD decisions remain open. For instance, the persistent representation of NPD decisions as a single decision-maker outcome in existing theory; it limits our understanding of decisions that involve multiple and heterogeneous organizational stakeholders, and it appears distant from the managerial realities. This dissertation focuses on managerial decisions where information acquisition, ownership and interpretation exhibit heterogeneity. The first essay (Chapter 2) examines the role of informational asymmetries that competing firms face when investing in R&D. The second essay (Chapter 3) reveals the detrimental effects of interpretive diversity (i.e., different people may interpret differently the same information) on project termination decisions. The third essay (Chapter 4) examines how consumers' information regarding future market conditions can affect a firm's strategy on striking a balance between its primary and secondary markets.
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ItemEssays on knowledge management strategies in new product development(Georgia Institute of Technology, 2009-01-02) Ozkan, Gulru F.Management of knowledge involved in the new product development (NPD) projects is critical to the success of firms competing in environments that require rapid innovation. Unfortunately, many firms lack an understanding of how to develop knowledge management (KM) strategies that drive successful outcomes. In this thesis I develop a rich and multifaceted understanding of how KM strategies drive successful NPD outcomes. I examine KM strategies for NPD at two different decision making levels. First, I consider the how the manager of a single NPD project should pursue knowledge acquisition for its product and process design teams and knowledge transfer between the teams over time throughout the development project. The ability to develop and integrate knowledge drives the net revenue earned at the product release time. I show that two different dynamic KM strategies arise: a delay strategy and a front-loading strategy. I characterize drivers of each strategy and the drivers of the market entry time strategy. In contrast to the deterministic approach above, I introduce a stochastic model. The manager of a single NPD project maximizes expected net revenue which reflects the effectiveness of product and process development. I consider the effect of rework that occurs as a result of the KM activities. Although manager's strategies for knowledge creation satisfy either the delay or front-loading strategy the drivers of each strategy in this model are substantially different from those in the first model reflecting the stochastic nature of the project and the effect of rework. In a third model, I consider the strategic level question of how a firm engages in relationships with its competitor regarding the sharing or transfer of knowledge resources for NPD. I consider two cooperative mechanisms: knowledge transfer when both firms ultimately enter the market separately as competitors versus knowledge sharing when both firms enter the market together following the joint development of a new product. In this thesis, I develop the KM strategies followed by the firms for each cooperation mechanism. In addition, I analyze the impact of firm and market characteristics on firms decision to whether to cooperate or not, and other KM decisions.
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ItemStrata, Structure, and Strategy for Resource Allocation and New Product Development Portfolio Management(Georgia Institute of Technology, 2007-07-09) Chao, Raul O.Innovation and new product development (NPD) are critical to firm success and are often cited as means to a sustained competitive advantage. Unfortunately, the question of which innovation programs to pursue and how they should be funded is not trivial. This thesis examines the resource allocation and NPD portfolio problem. Special emphasis is placed on the organizational and behavioral factors that influence this problem. In doing so, we adopt a hierarchical perspective and posit that the resource allocation and NPD portfolio problem acquires a unique structure depending on the level at which the problem is considered. Beginning at the firm level, each study attempts to break open a black box to understand the drivers of effective resource allocation and NPD portfolio decisions at successively more detailed levels of analysis. We begin with an analysis of the firm's total R&D investment and we show how R&D intensity (the percentage of revenue that is reinvested in R&D) depends on a combination of NPD portfolio metrics and operational variables. We then extend the analysis to reveal how a simple evolutionary process explains the often cited consistency in R&D intensity at the industry level. Next, we analyze how the R&D investment is partitioned into "strategic buckets" consisting of NPD programs that are characterized by type of innovative activity (incremental or radical). We show how time commitment, technological/market complexity, and potential disruptions to the technology/market environment influence the balance between incremental and radical programs in the NPD portfolio. Finally, we analyze how individual NPD programs are funded and how they evolve over time in an organization setting that is defined by more or less autonomy. We find that how best to allocate resources depends on two types of autonomy bestowed upon managers: autonomy with respect to NPD funding and autonomy regarding how the NPD budget is monitored and controlled. We conclude with a discussion of the theoretical and managerial implications of our work.
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ItemJoint Product Development and Inter-firm Innovation(Georgia Institute of Technology, 2006-05-18) Erat, SanjivThis thesis examines the strategic drivers and processes governing the development of products and/or technologies by multiple economic entities. The thesis adopts an operational approach in addressing the question and examines the how of joint product development. For this purpose, the different mechanisms that enable joint product development licensing, outsourced development, and codevelopment are considered, and the focus is restricted to the analysis and characterization of the optimal management of joint product development mechanisms. Regarding the mechanism of licensing, the thesis examines both its dynamic inter-temporal implications (i.e., how licenses should be structured given that licensing will also occur in the future) as well as the role of the technology in question (i.e., how are licenses affected by the type of technology being licensed). Along the first dimension, the thesis finds that license fees (and the negotiation with potential licensees) may be structured so as to induce a controlled diffusion depending on the technology roadmap the provider firm has laid out for the future. On the second dimension, the study finds that when the technological solution being licensed requires minimal integration from the licensees side, it may be beneficial to restrict attention to a few potential licensees instead of licensing to the entire market. On the codevelopment side, the thesis presents an original case study that uncovers some of the salient features present in many joint development efforts. Subsequently, a mathematical model is proposed that captures the key dimensions of the phenomenon that were identified through the case study. Analysis of the normative model reveals the key role of market and development uncertainty in structuring the formal contractual agreements and sharing the value created through the codevelopment effort.