New Product Development Decision‐Making Effectiveness: Comparing Individuals, Face‐To‐Face Teams, and Virtual Teams*

TLDR

A virtual team is a geographically and temporally dispersed and electronically communicating work group. The study examined the effectiveness of new product development project continuation decisions using 411 subjects in two decision‑making experiments. Study 1 compared individual and face‑to‑face team decision‑making effectiveness using escalation of commitment theory, while Study 2 extended the comparison to virtual teams that communicated asynchronously via groupware technology. Teams made more effective decisions than individuals, and virtual teams were the most effective.

Abstract

Abstract A total of 411 subjects participated in two decision‐making experiments in order to examine the effectiveness of new product development project continuation decisions. Using escalation of commitment theory, in Study 1, individual versus face‐to‐face team decision‐making effectiveness was compared. Study 2, an extension of Study 1, compared the new product development decision‐making effectiveness of individuals, face‐to‐face teams, and virtual teams. A virtual team is a geographically and temporally dispersed and electronically communicating work group. In Study 2, the virtual teams communicated asynchronously via groupware technology. Our findings suggest that teams make more effective decisions than individuals, and virtual teams make the most effective decisions.