Co-operation with external organisation can decrease the risk of the new product development process

Reducing the risks of NPD-processes is one of the primary tasks of R&D managers and the objective of the research presented here. By using a simplified process FMEA the most important risks of the NPD.process have been identified and assessed. Since the basic reason for risk is lack of relevant information, an increase of specific know-how transfer by means of co-operation. Using the theory of transaction costs it was examined whether it is better for companies to create know-how or to acquire know-how from outside sources in the matter of the most important previously identified risks. By analysing the data from interviews with eight German companies it can be found that the success of collaborative R&D varies according to the research stage and the co-operation partner. Companies gain much more if they co-operate in the early phases of the NPD-process than in the later phases. Especially during the prototyping and construction phase companies tend to do better without external partners. Based on this research it can be recommended that industry companies should establish close links to research institutes, universities, customers and even competitors especially during the early stages of the NPD-process. The later external parties are incorporated in an actual NPD project the higher the co-ordination costs and therefore the less the overall added value for the company will be. This paper will help research managers to raise their awareness of the pros and cons of collaborations during the NPD-process.