Final answer:
The function of management that involves decisions on new product development is 'planning'. It requires strategic decisions about the product design, market strategies, production processes, and coordination across multiple departments. Detailed design and effective cross-functional collaboration are essential for a successful product launch.
Step-by-step explanation:
The function of management that involves decisions regarding new product development is typically seen as the 'planning' function. When deciding on which products a firm should produce, management must consider various aspects, such as market demand, competition, production capabilities, and potential profitability.
New product development is a complex process that requires close cooperation among different departments within an organization, such as marketing, sales, and manufacturing. It is crucial for the success of a product that all these departments work together efficiently to make informed decisions regarding design, production processes, market strategies, and labor requirements. The entrepreneur or management team must also assess market structure, evaluate the firm's market power, and determine how similar the new product is to those of competitors to ensure market entry and competition can be navigated successfully.
In addition, the development of a detailed design is a significant step in the new product development process. A detailed design directly correlates with the ultimate success of a product; a poorly executed design can undermine an otherwise viable concept. As such, budgeting, engineering processes, and resource allocation for product development are critical management decisions that will shape the firm's offerings and competitiveness in the marketplace.