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Evaluation of performance in a product development context

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  • Cedergren, Stefan
  • Wall, Anders
  • Norström, Christer

Abstract

In today's competitive environment, the need is greater than ever to deploy product development investments more effectively. To assist managers, we have developed two conceptual tools to support the evaluation of performance in product development. The Performance Measurement Evaluation Matrix (PMEX) helps managers evaluate performance measurement systems they currently use, in order to identify areas requiring improvement. Results from using the PMEX indicate that it is common to associate performance measurements with the efficiency aspects of time, cost, and quality, without monitoring the value created. Performance is largely perceived by managers in terms of time, cost, and quality of the activities in the later phases of the development process. We contend that an effective performance measurement system is based on performance criteria, and then derives measurements based on these. It is argued that there should be a change in the perception of performance, before performance evaluation systems can be improved. The Product Development Organizational Performance Model (PDOPM) assists in developing the perception of performance by relating uncertainty, efficiency, and effectiveness at three generic activity levels within the product development function. The use of our tools provides an improved perception of performance and its measurement, thus enabling improvements to the evaluation of performance.

Suggested Citation

  • Cedergren, Stefan & Wall, Anders & Norström, Christer, 2010. "Evaluation of performance in a product development context," Business Horizons, Elsevier, vol. 53(4), pages 359-369, July.
  • Handle: RePEc:eee:bushor:v:53:y::i:4:p:359-369
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    References listed on IDEAS

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    1. Cooper, Robert G., 1990. "Stage-gate systems: A new tool for managing new products," Business Horizons, Elsevier, vol. 33(3), pages 44-54.
    2. V. Krishnan & Karl T. Ulrich, 2001. "Product Development Decisions: A Review of the Literature," Management Science, INFORMS, vol. 47(1), pages 1-21, January.
    3. Hauser, John & Katz, Gerald, 1998. "Metrics: you are what you measure!," European Management Journal, Elsevier, vol. 16(5), pages 517-528, October.
    4. Hauser, John R. & Katz, Gerald M. & International Center for Research on the Management of Technology., 1998. "Metrics : you are what you measure!," Working papers 172-98, Massachusetts Institute of Technology (MIT), Sloan School of Management.
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    Cited by:

    1. VAN CAMP, Jelle & BRAET, Johan, 2013. "Proposing a taxonomy for performance measurement systems' failures," Working Papers 2013004, University of Antwerp, Faculty of Applied Economics.

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