Cross-Functional Integration and New Product Success: An Empirical Investigation of the Findings
Published 11/1/2008
Author: Lisa C. Troy, Tanawat Hirunyawipada, & Audhesh K. Paswan
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Executive Summary
Recognized advantages of cross-functional integration include increased information flow in the organization, flexibility in workforce and capital resources, and enhanced utilization of organizational resources—all of which facilitate the development of successful new products. As a result, a majority of U.S. firms now employ some form of cross-functional integration when pursuing new product development activities. However, cross-functional integration can also increase decision complexity and confusion; can be more time consuming and less efficient than more centralized and bureaucratic processes; and can generate conflict over resources, technical issues, pay, and personnel assignments. Furthermore, there is a great deal of diversity in terms of how cross-functional integration is implemented across firms. For example, integration can be project specific, with members temporarily assigned to the new product team from the various functions, or functions can be partly integrated or even entirely integrated at all levels of the organization. Finally, cross-functional integration can affect various types of new product success, including new product outcomes (e.g., competitive advantage, quality, uniqueness), market-based outcomes (e.g., market share, profit), and productivity-related outcomes (e.g., cycle time, production superiority).
By analyzing the findings from 25 cross-functional integration studies from the past 15 years, the authors provide insights into the complex nature of the impact of integration on new product success. The findings indicate that though integration positively affects new product success, the relationship is more complicated. Instead, the combination of integration with other key factors may be more important to consider. Furthermore, several of the factors found in the analysis that positively enhance the functional integration–new product success relationship are either managerially controlled or industry specific, suggesting that managers can capitalize on their own knowledge of their products, firms, and external environments to structure a new product development team that can maximize success.
Biography
Lisa C. Troy earned her MBA and PhD in Marketing from Texas A&M University and is currently Visiting Associate Professor of Marketing at Texas A&M. Before that, she was Assistant Professor of Marketing at both Utah State University the University of North Texas. Lisa also worked as a senior financial analyst for the Exxon Company in Houston. Her research interests include new product development and strategy, and she has published articles in Journal of Marketing and Journal of the Academy of Marketing Science on topics such as product idea generation, new product first mover advantages, and new product buying decisions. She is past vice president of programming for the Dallas–Fort Worth chapter of the Product Development and Management Association.
Tanawat Hirunyawipada (PhD, University of North Texas) is Assistant Professor of Marketing at the University of Houston, Victoria. His primary research areas are new product development, return on innovation investment, and consumer innovativeness. He has published in Journal of Consumer Marketing, as well as several conference proceedings of the American Marketing Association, the Academy of Marketing Science, and Product Development Management Association.
Audhesh K. Paswan earned his PhD in Marketing from the University of Mississippi. He is currently Associate Professor of Marketing at the University of North Texas and was at the University of South Dakota before that. Before obtaining his PhD, Audhesh worked in the advertising industry (account planning) and the fast-moving consumer goods industry (brand management) in India. His research interests include product management, channels, franchising, services marketing, and global marketing. His research has appeared in journals, such as Journal of Retailing, Journal of Public Policy & Marketing, Journal of Business Research, and Journal of Services Marketing. He is also the doctoral program coordinator in the department of Marketing and Logistics at the University of North Texas.
Journal of Marketing, Volume 72, Number 6, November 2008
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