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Date of Award
Industrial and Manufacturing Engineering
Ratna Babu Chinnam
AbstractDecision-making is fundamental to any business. Decision-making happens at all levels of the enterprise and in all parts of the organization. This research focusses on decision-making processes in the defense industry. The US defense industry has undergone over 2-decades of consolidations through acquisitions and mergers. Given over $100B in annual opportunities for product development, to succeed in this monopsony marketplace, portfolio managers within these enterprises must repeatedly make the right pursue-abandon decisions. One of the key differentiators for successful defense companies is how they execute Portfolio Management (PM) and New Product Development (NPD) processes. Product management is seen as both science and art and depends on the goals on hand. This research seeks to validate the researcher’s anecdotal multi-decade observations on portfolio-management decision-making practices in the defense industry, especially regarding new product development opportunities. The observations suggest a framework that ties market factors with decision-making processes and includes moderating and modifying effects due to organizational value propositions and risk tolerance. These concepts were vetted via an extensive literature survey that tracked major research streams to identify a decision-making framework, and then to follow evolution of these research ideas through the various citations that flowed from the benchmark papers, to seek correlation of the factors with business outcome. The major gaps in literature were that published literature mostly addressed commercial free-market situations, were often from an outsider’s point of view (ETIC), and rarely connected early pursue-abandon decisions with later-term production award business impact. To address these gaps, a modified Delphi methods study was designed to assess qualitatively (explorative) and quantitative (confirmatory) correlation between decision-making processes and later-term production awards. The qualitative research was conducted via face-to-face individual interviews with subject matter experts and industry middle-management decision makers engaged in portfolio management. These open-ended interviews were guided by the cue-words that were extracted from the literature review. The interviews yielded a set of closed-ended questions that helped create a wide-area survey instrument. The survey instrument was deployed across a broad cross-section of industry decision makers to assess quantitative correlation between early pursue-abandon decisions and later term production awards. The resultant data was analyzed for correlation between factors and decision outcome. After dimensionality reduction and regression analysis, the study was able to obtain R2 (adjusted) up to 44.8% to link the independent variables to the business outcome (the dependent variable). This is a significant advancement in the field that ties defense industry early phase pursue-abandon PM and NPD decision making with later-term (production phase) business outcome. For the first time, an attempted correlation of ‘how’ to ‘thus’ was attempted, with acceptable success. The results revealed that factors related to market conditions impact company’s decision processes, which are themselves moderated and mediated by value proposition factors and risk tolerance factors. The significance of this research extends to other low-velocity industries and can be a valuable governance guide for procurement reform within the customer community, and for bid-development best-practices within the industry participants.
Dixit, Rahul, "Correlating Middle Manager Recommendations In Portfolio Management Outcomes" (2022). Wayne State University Dissertations. 3567.