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This study aims to examine new product development (NPD) performance to identify effective knowledge update strategies and assess the impact of environmental uncertainty on these dynamics. It aims to understand how different knowledge potentials and organizational routines interact to enhance product outcomes. The specific subsidiary context enriches understanding by identifying challenges and opportunities that are not typically visible in broader organizational studies.

A survey of 310 business managers was conducted to measure their knowledge potential and organizational routine updating. The hypotheses were tested using hierarchical regression analysis to determine the optimal combinations of knowledge and practice updates for NPD performance.

Results indicate that both knowledge potential and organizational routine updating significantly enhance subsidiary performance. Specifically, knowledge accumulation paired with routine creation and knowledge difference paired with routine revision optimally boosts product development. Moreover, this study reveals an inverted U-shaped relationship between environmental uncertainty and the effectiveness of these combinations, suggesting a complex interplay that affects NPD performance.

This study enhances understanding of NPD performance by integrating resource concordance theory with empirical analysis of knowledge and organizational strategy adaptations. It underscores the moderating role of environmental uncertainty, offering new theoretical insights into enhancing product development performance. Although the focus on subsidiaries limits broader applicability, it provides valuable insights into the nuanced NPD dynamics in these specific entities, suggesting avenues for future research to expand this study’s findings across different organizational types.