UNIT 12:

Organizing For New Product

Development
Prepared By: John Loyd C. Booc

IT APPLICATION TOOLS IN BUSINESS

12:00 - 1:30 Tuesday, Thursday

 Learning Objectives:

• Why we need a • Structures for • Types of Structure

structure for Product and some key
Product Development elements needed in
Development the structure

2
 Why have a structure for Product Development
• product development is no longer associated with inventors or great men getting good
ideas. It has now become a scientific exercise.
- first understanding the requirements of the customer or his unfulfilled needs
and then;
- go about systematically creating a product that will meet this requirements
- along with this also help the company meet its business objectives like profit,
sales, market penetration, market share, etc.
• So we see that just a small spoken sentence needs a series of steps in order to
bring the tasks to fruition. Hence such planned efforts in product development needs a formal
structure. 3
 TYPES OF STRUCTURES
Functional Organization
-This type of organization structure is usually divided by function and each
function carries out a specialized functions. Most companies in the modern era rely
upon this functional model.

- Each job becomes the focus point. People performing similar functions and
specializations are put together in departments.

- If help is needed the request for assistance goes through the head of the unit to
the other head of the other unit from whom the information is sought.

- Product manager is added and it is he who coordinates the product

development. The main tasks of the product manager are: to collect information, to
solve conflicts and to facilitate achievement of overall project objectives.
DRAWBACK
BENEFITS
S

The de developm men

entt of profes ion
exp
expe tise attained professsio
errtis na
all
specciia
spe listtss in the by cluster
eriing
ng
alis pr esen
the pres entt funct
a ctiion
on as
a singl e unit
gle
The flo
flow of
of comm
syncch mmunication and
syn hrro
on iza
niz atitio n between functi Provvid
Pro ide
on onal ess an
an ea
easy pa
pathth for
de
depa rtments is compli
partm emplo
ployye ess to gro for the
the
compliccated
ated ee grow wi
witth in the
hin
organiza tio
iza n sidew the
ew ay s as
s as we
upwards in the or llll as
as
ganizational tre e
The decision mak
ing process is
bu
bure
reau
aucra
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Pro essssio na
and slo
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the
the different funct ants each of of
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The
e speed
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5
 Product Organization
-In this type of organization product development is treated as a project and structures
and information flows are designed in a manner that helps in the movement of people
and information expeditiously.

-Exists because of product oriented flows: project and teams.

-The project members move out of their functional departments and dedicate all their
time to the product development.

-The product team sits together in a separate location and work towards developing the
product.

- In these structures the project manager is usually more senior than the corresponding
person involved in product development in a functional structure.
 ADVANTAGES LIMITATIONS

allyy
optimall
Resources can be zation
gani ion
utilized in an or nizat

alllyy
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They can also be oject team
wi thi n th e pr
allocat
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ed

movve meen rosss

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am
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the organization Ind
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their
ma
may so
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their
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ket tradeoffs n.
all and mar
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Techni e quickly of the fun ct
functio io
can be evaluatedted mor
ore

7
 Matrix Organization
-Attempts to ensure satisfactory control of products while utilizing resources effectively
and efficiently.

- Functional managers are primarily responsible for managing their staff,

ensuring correct procedures and levels of quality are maintained, etc.

-Product managers are responsible for managing products, that is ensuring tasks are
completed on time, budgets are met, etc.

-Managers of departments and Products managers must co-operate.

 Alternative Classification of Structure
- An alternative way to classify organization structure is by one of the following
four categories:

• The product to be developed can be understood by one person.

• The product to be developed has a reasonably low complexity, but total amount of
work needed to complete the product is high.

• Ifpower
the product to be developed has of a lot of different parts, such as software, PCB,
supply and mechanical structure.

• The product is complex.

 Choosing An Organization Structure
In order to decide which structure to use the following questions must be answered:

Is speed of development a critical factor

Does the work involve a large amount of specialization?

Does the work involve a large amount of coordination amongst various functions?

Can an individual in a product organization be fully utilized for the duration of the project?
 Needs For Ideas
Ultimately an organization can only develop products from ideas.

Two Key Places

Customer- is the one who has to use the product

and it is the customer‘s needs that we need to fulfill
and so he is the best person to ask for what he wants. Within The Organization- The
company‘s employees know about the company‘s
Capture Information On These Several product in much more detail than any consumer, plus
Ways: they also know what the company‘s capabilities are
- Customer surveys and so what they can manufacture.
- Customer feedback from retail outlets
- Customer feedback from customer service
department
- Customer feedback received directly from a
customer writing to the company
- Customer clubs
 Protection of Product Innovation
After spending so
much time and
effort on a product
innovation some
competitor were to
come and copy the Thus in order to
product of the protect these
company. innovations
companies can use
the protection
offered by Intellectual Property
Intellectual Property is a term referring to
Right protection. a number of
different and unique
types of creations of
the mind for which
property rights are
recognized by law.
 Common Types of Intellectual Property :

• Copyrights- a set of exclusive rights granted to the author or creator of an

original work, including the right to copy, distribute and adapt the work.

• Trade Marks- is typically a name, word, phrase, logo, symbol, design,

image, or a combination of these elements.

• Patents- a set of exclusive rights granted by the government to an inventor

for a limited period of time in exchange for a public disclosure of an
invention.

• Industrial Design Rights- an intellectual property right that protects the

visual design of objects that are not purely utilitarian.
 Thanks!

Booc, John Loyd C. 14