UNCERTAINTY HANDLING IN INTEGRATED PRODUCT DEVELOPMENT
Innovation projects have to face uncertainties resulting from lacking or imperfect information on market or technology-related issues. Common development process model do not fully support radical and thus uncertain development projects. The widely recognized integrated product development framework can be expanded through a flexible but direction setting process. The overall set-up is front-loaded, embeds options on the market and technology side, and stipulates an integrative work mode. Uncertainties are thus addressed using real options that support integrated decision making. Cases study research applied in radical innovation projects in the engineered goods sector demonstrates the positive impact of such a real options approach.