Pulling the Plug to Stop the New Product Drain
Journal Article (Journal Article)
Although an important aspect of managing new product introductions is to recognize and quickly take action when a product launch has failed (i.e., “pull the plug”), senior managers in a new product launch setting tend to remain committed to a losing course of action. The authors investigate this issue with controlled experiments, using senior level executives as subjects. Their results suggest a strong bias toward continued commitment to failing new products. Consequently, the authors devise and test the effectiveness of five decision aids aimed at reducing this bias. Improving the quality of the information environment does not greatly reduce bias, nor does precommitment (at time of launch) to self-specified decisions rules. The most effective methods of reducing commitment to a losing course of action appear to be either precommitment to a predetermined decision rule or introduction of a new decision maker at the time of the stop/no stop decision. Of these two methods, the latter produces marginally less commitment to a losing course of action. However, none of the tested decision procedures completely reduces commitment to a losing course of action relative to the control condition.
Full Text
Duke Authors
Cited Authors
- Boulding, W; Morgan, R; Staelin, R
Published Date
- February 1, 1997
Published In
Volume / Issue
- 34 / 1
Start / End Page
- 164 - 176
Electronic International Standard Serial Number (EISSN)
- 1547-7193
International Standard Serial Number (ISSN)
- 0022-2437
Digital Object Identifier (DOI)
- 10.1177/002224379703400114
Citation Source
- Scopus