Edited by Fernando Jaramillo and Jay P. Mulki
Gloria Barczak and Abbie Griffin
Previous research has investigated portfolio decisions as individually discrete decisions. In this research, however, we find that portfolio decision-making can only be adequately addressed if it is considered as an integrated system of processes. Using data from four diverse cases, we develop a general framework for how new product development portfolio decisions are made in firms. According to the findings from these cases, the objective of a firm’s portfolio decision-making processes should be to achieve a portfolio mindset to focus effort on the right projects, and to be agile in decision-making about the portfolio. On the one hand, three domain-based decision input generating processes lead to evidence-based portfolio decision-making. In addition, organizational politics may result in power-based portfolio decision-making while managerial intuition may lead to opinion-based decision-making. Firm cultural factors, including trust, collective ambition, and leadership style, influence how these evidence-, power-, and opinion-based processes are combined into a whole, and whether the firm’s processes are more rational and objectively made, or more politically and intuitively made.