Transcript Slide 1

Engineering Globalization Conference
May 2012
Managing Distributed Product Development Projects:
Integration Strategies for Language and Geographic Barriers
Aravind Chandrasekaran
The Ohio State University
Joint Work With:
Edward Anderson
University of Texas Austin
Allison Davis Blake
University of Michigan
Geoffrey Parker
Tulane University
Outline
I.
Motivation
II. Conceptual Foundation
III. Hypotheses
IV. Research Design
V. Empirical Results
VI. Key Findings
VII. Contributions
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I. Motivation: June 2006: The A380’s wiring literally comes up “short.”
 Fuselage sections
designed in Hamburg
were designed with a 2D
CAD system
 Sections designed in
Toulouse used a 3D
system
 Boeing has similar issues
with its Dreamliner
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I. Motivation: Airbus (EADS) vs. Boeing Stock
Airbus
April 2005 – April 2007
Boeing
June 14, 2006: Airbus announces delays due to Airbus 380 wiring harness redesign. 1/3 of EADS stock
value is lost.
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I. Motivation: More Examples of Distributed Product Development
“Distributed product development” (DPD) involves physical product and process
development activities that span across organizational boundaries and require
coordination of activities between these organizations (Hinds and Kiesler 2002)
I. Motivation: Barriers to DPD Work
Design of Boeing 787 dreamliner involved 100 Risk
Sharing Partners from Japan, Italy and United States
(Trimble 2007).
Spoke different languages and operated in different
time zones
Monkey-Proofing
Vs.
Development team were disappointed to see
their user-friendly computer screens destroyed by
real monkeys! (Amaral et al. 2011)
Very little knowledge on how to overcome geography and language barriers
especially when working on DPD work
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Research Question
How does one overcome language and geographic
barriers when managing DPD work?
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II. Conceptual Foundation: Distributed Product Development
 Research on Coordination
–
–
–
–

Task Conflict (Hinds and Mortensen 2005)
Team dynamics (Gibson and Cohen 2003, Armstrong and Cole 2002)
Trust issues (Jarvenpaa and Leidner 1999)
Tacit knowledge transfer (Orlikowski 2002, Makri et al. 2010, Srikanth and Puranam 2011)
Mostly studied within a single organization or restricted to one geographic
region
 Mostly software projects (Srikanth and Puranam 2007; Parker and Anderson 2012; Baradhan
and Kroll 2003)
 Physical product development (Eppinger and Chitkara 2006; Gokpinar et al. 2012)
– More design-fit interactions
– Cross functional teams
– Modularizing issues
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II. Conceptual Foundation: Distributed Product Development
 Managing DPD Requires
 Tacit knowledge transfer (Kogut & Zander 1992)
 This sort of information is particularly “fragile” in the face of:


Geographical issues (Sosa et al. 2002)
Language barriers (Varonis and Gass 1985)
 Personnel are the “key” tool to manage these challenges

Colocation of personnel (McDonough, Kahn and Barczak 2001)

Supply Chain Integrators (Parker and Anderson 2002)
We look at the effect of the following coordination mechanisms on both
geography and language
1. Colocation strategy
2. A Unifying strategy
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III. Hypotheses

Colocation Strategy - presence of individual(s) from the focal firm in the supplier
organization or the presence of supplier individual(s) in the focal organization, or both
(McDonough 2001)

With increase in geographic distance, colocation can improve
 team familiarity, team identification and overcome time zone differences (Gibson &
Cohen 2003; O’Leary and Mortensen 2010)

Colocation also bridges language barriers and minimizes miscommunication – e.g.
“Monkey Proofing” and creates a shared context (Amaral et al. 2011; Cross and Parker 2004)
Hypothesis 1: A Colocation strategy moderates the relationship between geographic distance and DPD
performance - i.e. the effect of a colocating strategy on DPD performance will be more beneficial with
increasing geographic distance.
Hypothesis 2: A colocation strategy moderates the relationship between language difference and DPD
performance. i.e. the effect of a colocating strategy on DPD performance will be more beneficial when there
are language differences between focal and supplier personnel.
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III. Hypotheses

Unifying Strategy – Providing supply chain integrators the power to make both
engineering and purchasing decisions (Parker and Anderson 2002)

With increase in geographic distance, unifying strategy can help negotiate budget
extensions given the purchasing rights and create synchronous communication across
supplier and focal firm

Unifying strategy can also bridge language barriers by creating a single point of contact
between the focal and supplier organization personnel (Carlile 2002; Dougherty 1992)
Hypothesis 3: A unifying strategy moderates the relationship between geographic distance and DPD
performance – i.e. the effect of unifying strategy on DPD performance will be more beneficial with
increasing geographic distance.
Hypothesis 4: A unifying strategy moderates the relationship between language difference and DPD
performance i.e. the effect of unifying strategy on DPD performance will be more beneficial when there are
language differences between focal and supplier personnel.
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Research
IV.
Research
Design
Design
Multiple respondent primary data (Qualitative & Quantitative)
Sampling Frame
42 organizations involved in DPD activities (20 organizations participated,
47.61% response)
18 in North America, 2 in Europe
55 DPD Projects
Method
In person survey (2 Parts): Project Engineer and Project Supervisor
Time to complete: 20-30 minutes
Post survey qualitative interview (45 - 90 mins)
Project
Characteristics
Industry type
Supplier firms located in 10 countries
Germany, Belarus, Taiwan, China, Singapore, India, South Africa, United
States, Netherlands and United Kingdom
Supplier project personnel spoke 14 different languages
Bengali, Cantonese, Dutch, English, French, German, Hindi, Japanese,
Kannada, Russian, Spanish and Tagalog
Aerospace
Semiconductor
Automotive
Consumer products
Electronics Hardware
Food Processing
Integrated Software
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IV. Research Design
 Multiple Respondents from 55 projects from 20 organizations
 Project Supervisor: Project Performance (Cost, Quality, Responsiveness and
Relationship), Instruments, Team Size, Duration
 Project Engineers: Colocation Strategy, Unifying Strategy, Language and
Geography
 Only recently completed projects were sampled
 Post survey clarification issues
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IV. Research Design – Measures
Performance
Geographic Distance
Measures
Cost
Quality
Responsiveness
Relationship
Natural Log distance between focal
and supplier firm
Language Difference
Focal and Supplier Language of
communication
Colocation Strategy
Colocate personnel during DPD
Unifying Strategy
Project Duration
Team Size
Instruments:
Supplier Familiarity
% of Eng. Work Done in house
Integrate Purchasing and Engineering
functions
Time between starting and ending of
project
Scale Description
5-point Likert scale
NA
1 = Different
0 = Same
1 = colocation
0 = no colocation
1= unifying
0 = no unifying
# of Team Members
Amount of work done with this
supplier
5-point Likert Scale
Instrument for colocation
__% of hours of total design/eng
hours for this project performed in
house
Instrument for Unifying
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V. Results: Methods: Fixed effects Regression – Colocation Strategy
C olocat ion St rat egy
P redict or V ariables
2.99
Cost
3.42* *
3.29*
-0.01*
- 0.01
-0.01
- 0.02*
-0.04+
-0.05
-0.03+
-0.03
T eam Size
-0.26
-0.34
0.44
0.34
0.17
-0.01
0.45
0.45
Geographic Distance
-0.22*
-0.32+
0.24*
0.23+
0.15
-0.04
0.25+
0.29
Language Difference
-0.35
- 0.24
1.01* *
0.65* *
0.04
0.08
1.47*
1.29*
0.24
0.33
-0.43
- 0.95
-1.94* *
-2.05* *
-1.29*
-1.53* *
Constant
Project Durat ion (in mont hs)
Colocat ion
Quality
2.20*
2.53* *
Responsiveness
3.45* *
3.84* *
Relationship
2.86*
2.93*
Colocat ion x Geographic Dist ance
0.48
0.19
0.93* *
0.14
Colocat ion x Language Difference
1.52*
2.23* *
3.77* *
-0.15
R-Square
10.54
17.56
∆ R-Square
F-St at istic
--1.91
7.02
2.99*
24.68
--3.98*
36.61
11.93
47.23* *
38.10
52.23
38.03
39.64
---
14.13
---
1.61
5.49* *
83.79* *
5.92* *
24.96* *
+p<0.10, *p<0.05, **p<0.01
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5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
5
4.5
4
Cost
Responsiveness
V. Results: Methods: Interactions Plot
3.5
3
2.5
2
1.5
Small Geographic LargeGeographic
Distance
Distance
No Colocation
1
Colocation
No Language
Difference
Language
Difference
No Colocation
6
5
5
4.5
Responsiveness
Quality
4
3.5
3
2.5
2
1.5
1
No Language
Difference
Language
Difference
No Colocation
4
3
2
1
0
No Language
Difference
Language
Difference
No Colocation
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V. Results: Methods: Fixed effects Regression – Unifying Strategy
U nifying St rat egy
P redict or V ariables
Constant
Cost
3.22* *
3.17* *
Quality
2.40*
2.50* *
Responsiveness
4.29* *
4.22* *
Relationship
3.42*
3.46* *
Project Durat ion (in mont hs)
-0.02
3.22*
- 0.02*
-0.01
- 0.02
-0.03+
-0.03
-0.03+
-0.03+
T eam Size
-0.13
-0.08
0.24
0.28
-0.46
-0.52
0.02
0.11
Geographic Distance
-0.23*
-0.15
0.24*
0.37* *
-0.04
-0.14
0.13
0.19
Language Difference
-0.31
- 0.86*
0.96* *
0.34*
0.02
0.69
1.45*
0.82
Unifying
-0.22
-0.63+
0.16
-0.25
-0.58
-0.09
-0.37
-0.85+
Unifying x Geographic Dist ance
-0.01
-0.18
0.13
-0.07
Unifying x Language Difference
1.22*
1.21+
-1.45*
1.50*
R-Square
∆ R-Square
F-St at istic
10.63
20.93
22.71
35.12
13.65
21.36
25.51
33.80
---
10.30
---
12.41
---
7.71
---
8.29
3.82*
28.40* *
2.85*
5.68* *
2.65+
2.99*
5.92* *
6.45* *
+p<0.10, *p<0.05, **p<0.01
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V. Results: Methods: Interactions Plot
5
5
4.5
4.5
4
Quality
4
Cost
3.5
3
3.5
3
2.5
2.5
2
2
1.5
1.5
1
No Language
Language
Difference Difference
No Unifying
1
No Language
Difference
Language
Difference
No Unifying
Responsiveness
Relationship
5
4.5
4
3.5
3
2.5
2
1.5
1
5
4.5
4
3.5
3
2.5
2
1.5
1
No Language
Language
Difference Difference
No Language
Language
Difference Difference
No Unifying
No Unifying
Unifying
Unifying
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V. Results – Robustness Checks
 Durbin-Wu Hausman Test for endogeneity - No concerns
 No Second order effects between language and geography

Firm level random-effects

Quantile Regression for outliers
 Composite measure of project performance

Qualitative interviews from participants
 Checked for individual langauge difference (e.g. English – Chinese vs. English –
Bengali)
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VI. Conclusions – Key Findings
How to overcome language and geographic barriers when managing distributed product
development work?
 Colocation Strategy
 Helps manage both geography (responsiveness) and language barriers
 Unifying Strategy
 Helps manage language barriers
 Both Colocation and Unifying strategy can be expensive under no language
barriers
 Supply chain integrators are able to trade-off responsiveness for other
dimensions of performance when there are language differences `
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VII. Contributions
Contributions to Academe
Contributions to Practice
 Importance of colocating personnel and
using unifying strategy
 How should project managers cope with
 Differential effects of coordinating
mechanisms on performance
 Colocation helps with geographical and
 Language is significantly more difficult to
manage than geography
 Purchasing power to integrators creates
beneficial “tradeoff” of lessening cost to
improve other outcomes under language
barrier. Not helpful with geographical
barriers.
 Refine understanding on DPD compared
to software product development
coordination barriers?
especially language barriers.
 Investments in colocation and unifying
strategy can “backfire” if no language
barriers are present.
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Thank You!
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Some Quotes
“We spend a lot of time over there [to overcome language]. The official language is Mandarin, but workers
spoke Cantonese. They had same written language but [our contact person] could not speak/communicate with
the workers. Finally, we ended up taking a person from our Malaysian site who understood and spoke Chinese”
“[About Singapore suppliers] There always seems to be a quality difference. Sometimes they
don’t understand us or don’t understand a problem. They aren’t so good at problem solving.
We tried to resolve through teleconferences. Fly only if necessary, about once or twice a
year. [But it didn’t work]
We now have an engineering manager in Singapore, primarily to help with communication.
We have a hard time getting them to understand what we’re looking for. They don’t understand
the big picture. The [deleted company name] person [the engineering manager on site]
understands the suppliers. Our onsite people speak the local language. They’re native
singaporans although one is U.S. trained. We can slide them up to Taiwan when needed. They
can gather facts, go on the factory floor.”
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IV. Research Design
Construct
Measurement Items
DPD Performance
Please, tell us about the supplier and final project deliverable once the deliverable was
completed or reached normal volume production
1=Very Poor; 2=Poor; 3=Neutral; 4=Good; 5=Very Good
Cost: What was the cost of the deliverable relative to initial project targets?
Quality: What was the performance or functionality (other than reliability) of the
deliverable relative to initial project targets?
Responsiveness: Relative to initial targets, what was the effect of the deliverable upon
the ramp-up time of the final product(s) up to normal production volume?
Relationship: How good was your working relationship with this supplier on this
project?
Geographic Distance
Focal Firm: In what city, state/province (if applicable) and country were you primarily
physically located during this project? (Focal Firm Location)
Supplier Firm: In what city, state/province (if applicable) and country was the supplier
employee who was your primary supplier contact located?
Geographic Distance = Distance in Miles between Focal Firm and Supplier Firm
Focal Language: What was the first language of the majority of your firm’s personnel
that were assigned to this project?
Language Difference
Supplier Language: What was the first language of the majority of the supplier
personnel that were assigned to this project?
Language Difference = 0 (if Focal Language and Supplier 1st Language are same)
Language Difference = 1 (if Focal Language and Supplier 1st Language are different)
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IV. Research Design
Colocation Strategy
Unifying Strategy
Project Duration
Team Size
Supplier Familiarity
(instrument for
colocation)
1 = when focal firms colocate personnel at supplier firm or when supplier firm colocate
personnel at focal firm
0 = otherwise
1 = when purchasing and engineering management functions are unified within your
firm into one person or one organization
0 = otherwise
When did this project end? - When did this project start? (Month and Year)
Approximately, how may personnel from your firm, including yourself, were assigned to work on this
project?
I would describe the amount of work that I do with this supplier as
a. Much greater than with most other suppliers that I work with
b. Somewhat greater than with most other suppliers that I work with
c. About the same as most other suppliers that I work with
d. Somewhat less than with most other suppliers that I work with
e. Much less than with most other suppliers that I work with
Percentage of Engineering In terms of the total engineering hours spent for the product and process development
work done in-house
work involved in this project, estimate the approximate percentage of the total hours
(instrument for integrator) of technical work (e.g. design or engineering) performed by all external suppliers’
personnel vs. in-house personnel?
___________ % hours of total design/engineering hours for this project performed inhouse
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III. Hypotheses Development – Colocation & Geography
 Colocation - presence of individual(s) from the focal firm in the supplier
organization or the presence of supplier individual(s) in the focal
organization, or both (McDonough 2001)
 Lack of empirical consensus on colocation (Swink et al. 2006; Gulati and Puranam 2009)
 With increase in geographic distance, colocation can
 Improve team familiarity (Gibson and Cohen 2003)
 Improve team identification (O’Leary and Mortensen 2010)
 Overcome time zone differences (Sosa et al. 2004)
Hypothesis 1: A Colocation strategy moderates the relationship between geographic distance
and DPD performance - i.e. the effect of a colocating strategy on DPD performance will be more
beneficial with increasing geographic distance.
26
III. Hypotheses Development – Colocation & Language
 Colocation can expedite communication because language barriers are bridged
with “rich” face-to-face communication.
 Minimize miscommunication due to different representation schemas – “Monkey
Proofing” (Amaral et al. 2011)
 Creates a shared context which is useful in teams having diverse language and
cultural backgrounds (McDonough et al. 2001; Cross and Parker 2004)
Hypothesis 2: A colocation strategy moderates the relationship between language difference
and DPD performance. i.e. the effect of a colocating strategy on DPD performance will be more
beneficial when there are language differences between focal and supplier personnel.
27
III. Hypotheses Development – Unifying & Geography
 Unifying Strategy – Providing Supply Chain Integrators the power to make
decisions regarding both engineering and purchasing tasks (Parker and
Anderson 2002)
 With increase in geographic distance, unifying strategy can
 Synchronous communication between supplier and focal firm (Sosa et al. 2002)
 Helps negotiate budget extensions given the purchasing decision making rights
 Resolve conflicts that arise between purchasing and engineering functions
especially in the focal firm (Parker and Anderson 2002).
Hypothesis 3: A unifying strategy moderates the relationship between geographic distance
and DPD performance – i.e. the effect of unifying strategy on DPD performance will be more
beneficial with increasing geographic distance.
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III. Hypotheses Development – Unifying &Language
 Unifying Strategy creates a single point of contact
 Useful to navigate language barriers for day-to-day development activities
(Dougherty 1992, Carlile 2002)
 Helps prevent miscommunication (Geffen and Carmel 2008)
 Consistent patterns of communication Improves maintenance of product vision from
concept to product (Parker and Anderson 2002)
 Multiple points of contact (i.e. purchasing) can interfere with this (Carlile 2002)
Hypothesis 4: A unifying strategy moderates the relationship between language difference and
DPD performance i.e. the effect of unifying strategy on DPD performance will be more beneficial
when there are language differences between focal and supplier personnel.
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