New product development portfolio management : a systematic literature review

Product innovation is a key driver of any company’s growth. The biggest challenge in managing product innovation is in determining the most promising new product development (NPD) projects from the many ideas generated, known as portfolio management. In practice, NPD portfolio management still bears some problematic issues, including focusing mainly on portfolio selection rather than managing the entire process, the vague links between the process and business strategy, and a lack of formal process. Therefore, a study that looks at NPD portfolio management through different perspectives is required. NPD portfolio management deals with dynamic decision-making processes, involving not only selection decisions, but also decisions to delay, continue or even terminate projects. To understand this integrative process, a systematic literature review that explored four knowledge domains, i.e., NPD portfolio management, decision- making, strategy and organisational routines, was carried out. It involved 40 articles published from 1981-2012. The review focused on revealing how decision-making processes in NPD portfolio management are conducted and how they relate to the strategy process and organisational routines. The key findings show that decisions in the NPD portfolio management process are made through interaction between cognitive and political factors, overlooking the organisational factors in the process. Furthermore, the extant literature does not explicitly explain how to link the NPD portfolio management process to the strategy process. Also, the findings indicate that the concept of organisational routines had not been used when investigating NPD portfolio management. These are the research gaps that led to the three research questions: 1) How are organisational factors involved with the cognitive and political factors in the decision-making processes in NPD portfolio management?; 2) How do the decision-making processes in NPD portfolio management link to the business strategy?; and 3) To what extent are organisational routines related to the decision-making processes in NPD portfolio management?