Organizing Cross-Functional New Product Development Projects (eBook)

Dr. Tobias Huth promovierte bei Prof. Dr. Joachim Büschken am Lehrstuhl für Marketing und Absatzwirtschaft an der Katholischen Universität Eichstätt-Ingolstadt. Er ist als Manager Business Evaluation bei der BASF AG in Ludwigshafen tätig.

Foreword 6
Preface 8
Table of contents 10
List of Tables 14
List of Figures 16
Abbreviations 18
1 Introduction 19
1.1 Phase-Specific Organizational Infrastructures for Cross-Functional New Product Development Projects 19
1.2 Research Goal 20
1.3 Outline of the Investigation 23
2 Cross-Functional Teams in New Product Development 25
2.1 Emergence of the Concept and Related Challenges 25
2.1.1 Theoretical Background for the Need to Integrate Functions 25
2.1.2 From Functional Lines to Cross-functional Teams 26
2.1.3 Cross-Functional Teams and New Product Success – Empirical Evidence 30
2.1.4 Challenges Concerning the Use of Cross-Functional Teams 31
2.2 Literature Review on the Success Factors of Cross-Functional Teams 36
2.2.1 Modelling Group Effectiveness 38
2.2.2 Framework of the Content Analysis 41
2.2.3 Organizational Context 42
2.2.4 Behavioral Processes and Psychosocial Traits 57
2.2.5 Additional Success Factors 61
2.2.6 Summary of the Literature Review and Research Gaps 62
2.3 Scope of this Study and Addressed Research Gaps 64
3 Theoretical Framework for the Phase-specific Effects of Organizational Antecedents in Cross- Functional New Product Development 67
3.1 Theory of Mechanistic and Organic Organizations 67
3.2 The Innovation Process – The Characteristics of the Early and the Late Stage 69
3.3 Differing Information Requirements and Levels of Uncertainty During the Early and Late Stages of the Innovation Process 70
3.4 Phase-specific Organization Structures for Innovation Projects 71
3.5 Boundary Management As a Continuous Requirement for Successful Innovation Projects 73
3.6 Interim Conclusion: Research Questions and Further Proceeding. 74
3.7 Conceptual Models and Hypothesis 76
3.7.1 The Phase-specific Effects of Creativity and Efficiency (Model I) 76
3.7.2 The Effects of Organizational Antecedents in the Early Project Stage (Model II) 81
3.7.3 The Effects of Organizational Antecedents in the Late Project Stage (Model III) 89
4 Research Methodology and Results 96
4.1 Survey Development and Data Collection 96
4.2 Sample Description 99
4.3 Measures 102
4.3.1 Performance Measures 102
4.3.2 Organizational Antecedents 103
4.3.3 Control Variables 104
4.4 Choice of PLS as Research Method 109
4.5 General Steps in the Assessment of PLS-models 112
4.5.1 Assessment of Validity and Reliability of the Measurement Model 112
4.5.2 Evaluation of the Structural Relationships 114
4.6 The Phase-specific Effects of Creativity and Efficiency (Model I) 116
4.6.1 Assessments of Validity and Reliability of the Measurement Variables 116
4.6.2 Analysis and Results 118
4.7 The Effects of Organizational Antecedents in the Early Project Stage (Model II) 121
4.7.1 Measurement and Validation of Constructs 121
4.7.2 Analysis and Results 125
4.8 The Effects of Organizational Antecedents in the Late Project Stage (Model III) 129
4.8.1 Measurement and Validation of Constructs 129
4.8.2 Analysis and Results 133
4.9 Summary of the Results 136
4.9.1 Model I - The Phase-specific Effects of Creativity and Efficiency. 138
4.9.2 Model II/ III – The Phase-specific Effects of Organizational Antecedents 141
5 Discussion 147
5.1 Theoretical Implications 147
5.2 Managerial Implications 150
5.3 Future Research 152
5.4 Limitations 153
5.5 Conclusion 154
6 Appendix 155
I Boundary Management Activities, Organic and Mechanistic Structures within the Context of this Study 156
II Questionnaire and Instructions 158
III Testing for Common Method Bias - Harman’s Single-Factor Test 164
III.1 Model I 164
III.2 Model II 165
III.3 Model III 166
IV Testing for Non-Response-Bias - T-Tests Early vs. Late Respondents
IV.1 Group Statistics 167
IV.2 Independent Samples Test 169
V Testing for Sample Selection Bias - T-Tests BITKOM/CEBIT vs. OpenBC
V.1 Group Statistics 174
V.2 Independent Samples Test 176
VI Tests of Normality 181
VII Simple Regression - Financial Performance (Model I) 182
VIII Early vs. Late Use of Antecedents, T-Tests 183
7 References 185

2 Cross-Functional Teams in New Product Development (p. 7)

2.1 Emergence of the Concept and Related Challenges

2.1.1 Theoretical Background for the Need to Integrate Functions

The scientific analysis of the cooperation between organizational subsystems is rooted in Lawrence &, Lorsch’s (1967, p. 3), theory of integration and differentiation. According to this theory, organizations are effective when they build specialized functional units and integrate them. By establishing specialized functions, the organization adapts to the uncertainties of specific sub-environments, e.g. the R&,D department adapts to the scientific/ technological environment. It focuses on resolving problems related to newly emerging and competitive technologies.

The marketing department adapts to the market environment and deals with uncertainties concerning market demand, preferences and competition (Lawrence &, Lorsch 1967, pp. 8-9, Olson et al. 2001, p. 260, Souder &, Moenaert 1992, p. 490). Such specialization enables the firm to segment uncertainty. This process is called "differentiation". At the same time, differentiation bears the danger of isolation and it ignores the interdependencies between functions in terms of resources, information and tasks (McCann &, Galbraith 1981, p. 63). Accordingly, there is need to integrate these differentiated subsystems. Lawrence &, Lorsch (1967, p. 4) define integration as "The process of achieving unity of effort among the various subsystems in the accomplishment of the organization’s task".

The need for integration across functions can also be theoretically established from a resource dependency perspective (Pfeffer 1982, Pfeffer &, Salancik 1978). This view has been widely recognized to explain interactions between functional units and organizations (Gupta et al. 1986, Ruekert &, Walker 1987, Stock 2006). It assumes that when employees have less relevant experience to draw on when developing innovative new products, they depend more on other functional competencies, information and resources in order to arrive at a creative, feasible, and successful solution.

Thus, the lack of self-sufficiency creates potential functional dependencies on the parties from which critical inputs are obtained (Stock 2006). Hence, resourcedependency theory provides an additional theoretical explanation as to why cross-functional diversity may increase new product development performance.

2.1.2 From Functional Lines to Cross-functional Teams

Cross-functional project teams have not always been the organizational approach of choice when developing new products (Larson &, Gobeli 1988), and not all companies use crossfunctional teams for new product development (Huizenga 2004, p. 134). A survey by McDonough (2000, p. 229) reveals that 97% of the companies in the USA have used CFTs, and that 33% use them 100% of the time. Griffin (1997, p. 431) demonstrates that over 84% of the more innovative projects are using CFTs, and 40-50% of the surveyed companies use CFTs for less-innovative projects. However, the identified best practice companies report a more extensive use of CFTs for less-innovative projects (50-60%).