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This article examines the strategic process of new service development (NSD). The authors empirically explore the strategic influence of team-based organizational structure, NSD process design, and information technology (IT) choices on the speed and effectiveness of NSD efforts. Several literature-based relationships are tested with a recursive path model using a multi-industry sample of U.S. service organizations. Most results for the service sector are similar to those found in manufacturing: (a) NSD cross-functional team structures directly influence the effectiveness of the firm’s NSD efforts, (b) more formalized NSD processes indirectly influence the firm’s ability to develop new services by increasing the speed of NSD, and (c) IT choices directly affect both the speed of the NSD process and the general effectiveness of the firm’s NSD activities. Contrary to expectations, no direct relationship between the use of cross-functional team structures and the speed of NSD was found.
Froehle et al. (Tue,) studied this question.
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