Behind the scenes: Addressing dual pressures for product standardization and adaptation in new product development in multinational corporations

Prior studies on product standardization-adaptation in multinational corporations (MNCs) have revealed environmental factors that can influence the choices of MNCs. However, these studies have not shown how these choices are made behind the scenes in new product development (NPD). In many industries, MNCs face the dual pressures for product standardization and adaptation from the environment. This study explores how MNCs facing dual pressures can make choices of product standardization-adaptation in NPD. A qualitative case study of four high-performing MNCs was conducted. The four MNCs were selected using the theoretical sampling approach. Data was collected, mainly through 74 semi-structured interviews. Coding was conducted, and four aggregate dimensions were generated. This study reveals that choices of product standardization-adaptation are made through a process in MNCs’ NPD, including four steps – organizing for NPD, organizational diversity, cross-unit integration, and combination of design practices. In addition, MNCs adopt different process variants to address different environmental pressures. By focusing on NPD, we shift the attention from product standardization-adaptation to product feature standardization-adaptation in MNCs, which is a fresh and refined perspective. We show a process in NPD composed of activities and mechanisms that managers might utilize for handling product standardization-adaptation challenges in MNCs. We contribute to the area of cross-unit integration in MNCs’ NPD by revealing mental mechanisms for mitigating tensions in cross-unit interactions.