Agile R&D Units' Organization in Physical Product Development – An Empirical Investigation

While software firms increasingly rely on agile methods in their development processes and consequently transform to entirely agile firms, this movement lately also transferred to the domain of physical product development. More specifically, even traditional mechanical engineering firms increasingly rely on agilely organized Research and Development (R&D) units to cope with the current business environment’s increased demands for innovations at even shorter time intervals. However, since extant agility research primarily stems from the information systems and operations management fields, agility research in R&D and innovation management literature is rising but still scarce, resulting in the concept’s insufficient exploration in this context. Moreover, extant research shares agility literature’s general flaws, such as a strong focus on the firm or project level and software development. Moreover, literature highly focuses on the concept’s outcome perspective, i.e., increased adaptiveness, instead of elucidating how to organize to be agile, i.e., the capability perspective. As a result of these shortcomings, extant literature has neglected the practically highly relevant phenomenon of agile R&D units, particularly their organization, which makes them so adaptive in new product development (NPD). This dissertation addresses this shortcoming by linking insights from agility research, R&D and innovation management literature, and organizational theory. Based on an interview data set from twelve agility experts and three survey data sets from 178 R&D managers, 110 R&D project managers, and 454 R&D project employees, this dissertation conducts four investigations in the form of separate research studies. By the studies’ alignment, the dissertation, for the first time, elucidates what holistically constitutes agile R&D units’ organization (ARDO) and reveals ARDO’s consequences on the R&D units’ overall performance and the individual employees nested in the R&D units. Moreover, this dissertation contributes to agility, R&D and innovation management literature, as well as organizational theory in general, first by approaching the agility concept in a new context, via a new unit of analysis, and from a new angle, thus finally and holistically conceptualizing agility’s neglected capability perspective. Second, by providing a better understanding of agility’s and innovation performance’s interplay, particularly by further linking the concept to innovation’s front end. Third, ARDO’s identification and operationalization as such a competence advance dynamic capabilities theory, which facilitates future quantitative research on a dynamic capability in the context of R&D and on agile R&D units in physical product development in general.