Abstract
Current views on innovation management regard the prototype as just another stage in the engineering department's development work. It is more realistic, however, to view the prototype stage as a means by which all departments of a company can manage the risks associated with a new product. People judge risk in a very personal manner and different views can easily give rise to tensions which impede progress. The paper proposes methods for achieving concerted action by allowing for various risk perception problems. Particular attention is given to departments not directly responsible for the prototype to ensure that they too contribute constructively to the corporate risk assessment. An open and consistent approach to risk taking is particularly important in large companies if the spirit of innovation is not to succumb to the unavoidable bureaucracy of formal procedures.