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Virtual R&D Teams for NPD in SMEs

Virtual R&D Teams for NPD in SMEs

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Published by Nader Ale Ebrahim
Ale Ebrahim, N., Ahmed, S., & Taha, Z. (2008, 29-30 October). Virtual R&D Teams for NPD in SMEs: Past, Present and Future Trend. Paper presented at the APCMOTTE2008 (Asia pacific Conference on Management of Technology and Technology Entrepreneurship) Melaka, Malaysia.
Ale Ebrahim, N., Ahmed, S., & Taha, Z. (2008, 29-30 October). Virtual R&D Teams for NPD in SMEs: Past, Present and Future Trend. Paper presented at the APCMOTTE2008 (Asia pacific Conference on Management of Technology and Technology Entrepreneurship) Melaka, Malaysia.

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Published by: Nader Ale Ebrahim on Aug 02, 2012
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 Asia Pacific Conference on Management of Technology and Technology Entrepreneurship Melaka , 29-30 October 2008 
Virtual R&D Teams for NPD in SMEs:Past, Present and Future Trend
Nader Ale Ebrahim, Shamsuddin Ahmed and Zahari Taha
Department of Engineering Design and Manufacture,Faculty of Engineering, University of Malayaaleebrahim@perdana.um.edu.my
This paper provides a comprehensive review on different aspects of virtual teams based on authentic and reputedpublications. The purpose of the state-of-the-art literature review is to provide an overview of what is knownabout the structure and dynamics of R&D collaboration in SMEs. SMEs are the backbone of the world business.The focus of the investigation is on virtual R&D teams in SMEs. After providing a definition and importance of virtual teams, research and development (R&D), small and medium enterprises (SME) and new productdevelopment (NPD), the relationship between them will be examined. This paper seeks to address some of thegaps in the existing extensive literature on virtual teams as a general and virtual R&D teams in new productdevelopment in SMEs, as a concentrate topic. Covering previous literatures, the research gaps derive andpropose the way of further studies and recommend are provided. Along extending future research somemanagerial implication will be discussed. It is argued that the preparation for virtual R&D team working shouldbe given consideration in the management of R&D new product development projects
: R&D, Virtual Team, Small and Medium Enterprises, Literature Review
Responding to the increasing de-centralizationand globalization of work processes, manyorganizations have responded to their dynamicenvironments by introducing virtual teams. Virtualteams are growing in popularity [1]. Additionally,the rapid development of new communicationtechnologies such as the Internet has acceleratedthis trend so that today, most of the largerorganization employs virtual teams to some degree[2]. Taking into account that under the increasinglycompetitive global market, a firm simply cannotsurvive without new products developed undernetwork cooperation, especially for high-techindustries [3]. Firms rely heavily on new productdevelopment to successfully compete inincreasingly competitive global markets [4].R&D teams need to access and retrieveinformation from as many sources as possible [5].Virtual teams are important mechanisms fororganizations seeking to leverage scarce resourcesacross geographic and other boundaries [6].Internationalization of markets, specialization of skills and knowledge, and the requirement toinvolve an increasingly large pool of knowledgesimultaneously in the NPD process have all pushedfirms to rely more and more on dispersed teams intheir NPD endeavor [7].Faced with the challenges of increasedglobalization of markets and of technologicalchange, SMEs need reinforced support throughtransnational research cooperation to enhance theirinnovation and research investment. SMEs’survival depended on their capability to improvetheir performance and produce goods that couldmeet international standards [8]. In other words, acertain level of competitiveness may be aprerequisite for an SME’s survival when dealingwith dynamic conditions in the businessenvironment. To compete with global competitionand, overcome rapid technology change andproduct variety proliferation in the newmanufacturing environment, SMEs must be able tosustain product innovation [9]. One very importanttrend to enable new knowledge creation andtransfer in and to SME's is the development of collaborative environments and networks toincrease their innovation capabilities as a singleunit but also the capabilities of the network as awhole through collective learning [10].In this paper first based on earlier work different aspect of virtual R&D teams in SMEs willbe analysis. After providing a definition of virtualteams, importance of research and development(R&D), small and medium enterprises (SME)characteristics and new product development(NPD) issues, the relationship between them will beexamined. Finally this paper highlight severalavenues to address some of the gaps in the existingextensive literature on virtual teams as a generaland virtual R&D teams in new product
 Asia Pacific Conference on Management of Technology and Technology Entrepreneurship Melaka , 29-30 October 2008 
development in SMEs, as a concentrate topic. Withcover all previous research derives research gaps,propose the way of further studies and recommendimprovements. This paper would help researchers,managers and policy makers to better foster newproduct development in SMEs through virtual R&Dteams.
Virtual team and related concern:
This era is growing popularity for virtual teamstructures in organizations [1, 11]. Martins et al.[12] in a major review of the literature on virtualteams, conclude that ‘with rare exceptions allorganizational teams are virtual to some extent.’Although virtual teamwork is a current topic in theliterature on global organizations, it has beenproblematic to define what ‘virtual’ means acrossmultiple institutional contexts [13]. Amongst thedifferent definitions of the concept of a virtual teamthe following from is one of the most widelyaccepted: [14], ‘‘we define virtual teams as groupsof geographically, organizationally and/or timedispersed workers brought together by informationtechnologies to accomplish one or moreorganization tasks’’. The degree of geographicdispersion within a virtual team can vary widelyfrom having one member located in a differentlocation than the rest of the team to having eachmember located in a different country [15].
 Benefits and pitfalls of virtual teams:
For the purpose of having a clear mentalityabout virtuality and the function of the virtualteams different aspects of such issue needs to beinvestigated and examined in more details. Alikeother management paradigms, implementing theconcept of working within virtual teams can bringabout positive and negative impacts, a carefulcomparative analysis of the different anglestherefore would be fruitful.Virtual R&D teams which members do notwork at the same time or place [16] often face tightschedules and a need to start quickly and performinstantly [6]. Virtual team may allow people tocollaborate more productivity at a distance, but thetripe to coffee corner or across the hallway to atrusted colleague is still the most reliable andeffective way to review and revise a new idea [17].As a drawback, virtual teams are particularlyvulnerable to mistrust, communication break downs, conflicts, and power struggles [18]. On theother hand, virtual teams reduce time-to-market[19]. Lead Time or Time to market has beengenerally admitted to be one of the most importantkeys for success in manufacturing companies [20].Table 1 summarizes some of the main advantagesand Table 2 some of the main disadvantagesassociated with virtual teaming.Table 1: some of the main advantages associatedwith virtual teaming.
Advantages ReferenceReducing relocation time and costs, reduced travel costs[1, 21-25] Reducing time-to-market [Time also hasan almost 1:1 correlation with cost, socost will likewise be reduced if the time-to market is quicker [26]] [19, 20,25, 27-31] Able to tap selectively into center of excellence, using the best talentregardless of location[1, 24, 32,33]Greater productivity, shorter developmenttimes[21, 31]Producing better outcomes and attractbetter employees[12, 22] Provide organizations with unprecedentedlevel of flexibility and responsiveness[14, 27,34]Self-assessed performance and highperformance.[13, 35]The extent of informal exchange of information is minimal[36]Respond quickly to changing businessenvironments[23, 31]Sharing knowledge, experiences [18, 37]Enable organizations to respond faster toincreased competition[34, 38]Better team outcomes (quality,productivity, and satisfaction)[39, 40]Most effective in making decisions [41]Higher team effectiveness and efficiency [19, 42]
Table 2: some of the main disadvantages associatedwith virtual teaming.
Disadvantages referencesFace-to-Face collaboration (FFC) appearsto be better developing a conceptualunderstanding of a problem (lack of physical interaction) [22][1,25, 41]Decrease monitoring and control of activities[36]Challenges of managing conflict [43, 44]Cultural and functional diversity in virtualteams lead to differences in the members’thought processes. Develop trust amongthe members are challenging[25, 35,45]
Importance of Research and Development(R&D):
Around the world innovation is nowrecognized as a prime source of nationalcompetitive advantage [46]. R&D is a strategy fordeveloping technologies that can becommercialized under independent intellectualproperty rights. R&D enables firms to create newtechnologies and/or to build on existingtechnologies obtained through technology transfer[47]. Research and development (R&D) andtechnology as a result of it, have tremendously
 Asia Pacific Conference on Management of Technology and Technology Entrepreneurship Melaka , 29-30 October 2008 
improved our quality of life over the last fivedecades [48].Large amounts of money are spent all over theworld on R&D, in order to ensure futuresustainability [49]. Research is an investment, notan expense, invest in commercial R&D is usuallyinvolve a high-risk investment with a deferredpayoff although like the other high-risk investments, return can be extremely attractive[50]. From different point of view the increasingcomplexity and inter-disciplinary nature of theR&D process in turn has increased the cost of research therefore research become less attractivewithout partners to share the cost [51].
 R&D and Distributed Team:
Research and development are subject todifferent location drivers[52]. Many firms started toacquire their knowledge from external sources [53].Trends over the last decade have seen China andIndia emerge as attractive R&D destinations forU.S. Changes in telecommunications and dataprocessing capabilities make it possible tocoordinate research, marketing and productionoperation around the world [54]
Hegde and Hicks[46] noted that overseas R&D sites are auxiliaryoutposts, subservient to home R&D laboratories.“corporate growth and positioning” and“knowledge sourcing” are two forces which resultin companies having a more global R&D,[55].Technological change is a highly dynamic processthat may quickly relocate to take advantage of optimum conditions for growth [46]. For mostR&D teams, being virtual are a matter of degree[7].
Small and Medium Enterprises (SME):
 Importance of SMEs
:Small and medium sized enterprises (SMEs)are a major part of the industrial economies [56, 57]in that they serve a very critical function of Creating new jobs and reducing unemployment[58-60]. Their survival and growth has thereforebeen a prominent issue. Beck et al.[61] explores therelationship between the relative size of the Smalland Medium Enterprise (SME) sector, economicgrowth, and poverty alleviation using a sample of 45 countries, and found that a strong, positiveassociation between the importance of SMEs andGDP per capita growth.SMEs in the beginning of R&D activitiesalways face capital shortage and need technologicalassistance. In most countries, SMEs dominate theindustrial and commercial infrastructure [62]
Manyeconomists believe that the wealth of nations andthe growth of their economies strongly dependupon their SMEs’ performance [63]. In manydeveloped and developing countries, small andmedium-sized enterprises (SMEs) are the unsungheroes that bring stability to the national economy.They help buffer the shocks that come with theboom and bust of economic cycles. SMEs alsoserve as the key engine behind equalizing incomedisparity among workers [64]
China’s recent rapidgrowth is also linked to the emergence of manynew small firms in village townships and in coastalareas, often in new industries [65]
SMEs and Virtual Teams:
SMEs seem to be appropriate units to behavelike network nodes because of their lean structure,adaptability to market evolution, activeinvolvement of versatile human resources, ability toestablish sub-contracting relations and goodtechnological level of their products [66]
In light of the above
SMEs have advantages in terms of flexibility, reaction time, and innovation capacitythat make them central actors in the new economy[67]
The traditional independence of small firms isbeing replaced by a network environment[68].Hanna and Walsh [68] found that if smallfirms want to make a step change in theirtechnological and innovation base they may have torethink their approach to cooperation. SMEs needto focus on core competences for efficiencymatters; they need to cooperate with externalpartners to compensate for other competences andresources. This is especially the case in the field of new product development , where SMEs facespecific problems compared to large firms [69].Most firms today do not operate alone; they arenetworked vertically with many value-chainpartners [70]. The typical Taiwanese productionsystem is a cooperative network of SMEs that areextremely flexible and respond quickly thoughunder-capitalized and sensitive to market demandand highly integrated in the global economy [71]
 Gassmann and Keupp [72]found that managers of SMEs should invest less in tangible assets, butmore in those areas that will directly generate theirfuture competitive advantage (e.g., in R&D togenerate knowledge, and in their employees’creativity to stimulate incremental innovations inalready existing technologies).
SMEs Readiness for Virtual teams working:
Lin et al.[73] found that although almost allsenior executives and managers were committed tothe IT investments in enterprise during theimplementation stage, most of these organizationsdid not manage user resistance effectively.Zhouying [47] pointed out in China e-commerce isdeveloping very slowly amongst SMEs, whichaccount for 60 per cent of the total value of industrial production, and 98 per cent of the totalpopulation of enterprises. The SMEs are one of thesectors that have a strong potential to benefit fromadvances in ICTs and the adaptation of new

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