Product Development and Failures in Learning from Best Practices in U.S. Auto: A Supplier Perspective

Despite decades of imitation and apparent convergence, there are still major differences in product development practices between Japanese automakers and their North American counterparts. Through an in-depth investigation of product development practices at the project level, we study two firms-Toyota and a major North American automaker-that possess very different approaches to product development. We take the perspective of a major supplier to both automakers. Adopting a grounded theory approach and by selecting similar projects performed by the same supplier for different original equipment manufacturer (OEM) customers, we hold constant variables such as product, supplier, and period of observation. We find that the lack of best practice proliferation in product development can be explained by a lack of organizational culture that sustains and facilitates best practices. We view our results through the lens of cultural frameworks offered in the literature and derive a model linking organizational culture to product development effectiveness.