Spurring Cross‐Functional Integration for Higher New Product Performance: A Group Effectiveness Perspective*

Spurring integration among functional specialists so they collectively create successful, or high‐performing, new products is a central interest of innovation practitioners and researchers. Firms are increasingly assembling cross‐functional new product development (NPD) teams for this purpose. However, integration of team members' divergent orientations and expertise is notoriously difficult to achieve. Individuals from distinct functions such as design, marketing, manufacturing, and research and development (R&D) are often assigned to NPD teams but have contrasting backgrounds, priorities, and thought worlds. If not well managed, this diversity can yield unproductive conflict and chaos rather than successful new products. Firms are thus looking for avenues of integrating the varied expertise and orientations within these cross‐functional teams. The aim of this study is to address two important and not fully resolved questions: (1) does cross‐functional integration in NPD teams actually improve new product performance; and if so, (2) what are ways to strengthen integration? The study began by developing a model of cross‐functional integration from the perspective of the group effectiveness theory. The theory has been used to explain the performance of a wide range of small, complex work groups; this study is the first application of the theory to NPD teams. The model developed from this theory was then tested by conducting a survey of dual informants in 206 NPD teams in an array of U.S. high‐technology companies. In answer to the first research question, the findings show that cross‐functional integration indeed contributes to new product performance as long conjectured. This finding is important in that it highlights that bringing together the skills, efforts, and knowledge of differing functions in an NPD team has a clear and coveted payoff: high‐performing new products. In answer to the second question, the findings indicate that both intra‐ (or internal) and extra‐ (or external) team factors contribute and codetermine cross‐functional integration. Specifically, social cohesion and superordinate identity as internal team factors and market‐oriented reward system, planning process formalization, and managerial encouragement to take risks as external team factors foster integration. These findings underscore that spurring integration requires addressing the conditions inside as well as outside NPD teams. These specialized work groups operate as organizations within organizations; recognition of this in situ arrangement is the first step toward better managing and ensuring rewards from team integration. Based on these findings, managerial and research implications were drawn for team integration and new product performance.     

Managing Knowledge for Innovation: The Case of Business‐to‐Business Services*

The present study builds a typology of organizational knowledge in business services and empirically examines the effects of knowledge on innovation performance. It is suggested that firms differ with respect to their knowledge creation approaches and that these approaches have implications for firms' innovation activities. A conceptual framework of knowledge assets with degrees of tacitness and collectiveness as the principal axes is used to ground the empirical analysis. The organizational knowledge framework is empirically operationalized using survey data from 167 business service firms and supplementary case study evidence from 16 other firms. It is found that business service improvements and new service introductions are significantly associated with collectively held knowledge, such as codified service solutions or team‐based competences and procedures. In contrast, relying solely on tacit knowledge held by individuals may hamper innovation. The results also suggest that tacit collective knowledge is more closely associated with new service introductions, whereas explicit collective knowledge is associated with service improvements. Tacit collective knowledge is thus conducive. A managerial implication is that new service introductions necessitate team competences and routines, whereas incremental service improvements are more likely if procedures are in place to codify services into explicit solutions or technologies. Thus, the knowledge management approach should depend on the strategic orientation of the service firm toward continuous improvement of existing services or development of completely new services.     

Cross‐constituency Organizing in Canadian Unions

This article explores cross‐constituency organizing inside three Canadian unions that involves dual, parallel and integrated structures. It assesses these approaches with reference to the conceptual frame of intersectional political practice. In particular, this study highlights the institutionalization of intersectionality through constitutional, organizational and representational intersectionality. The paradigm of autonomy and integration is used to identify effective mechanisms for cross‐constituency vehicles. Cross‐constituency organizing is a form of coalition‐building inside unions It is a vehicle for building solidarities across identities and advancing equity organizing in Canadian unions that supports, at one and the same time, union revitalization and the union equity project.     

Collective Bargaining,Inter‐Sectoral Heterogeneity and Competitiveness: A Cross‐National Comparison of Macroeconomic Performance

Research on the performance effects of bargaining remains inconclusive. One reason for this is neglect of heterogeneity of the bargainers, namely differences in exposure to world markets and their implications for international competitiveness. Since the effects of bargaining on competitiveness depend on coping with productivity differentials between the exposed and sheltered sector, we discuss how distinct bargaining structures interact with these differentials. Exposed‐sector pattern setting is predicted to be the only bargaining structure that is sensitive to productivity differentials. The findings from time series cross‐sectional analysis corroborate the expected impact on labour costs and the current balance, whereas no employment effects are discernible.     

Creating University Spin‐Offs: A Science‐Based Design Perspective*

Academic entrepreneurship by means of university spin‐offs commercializes technological breakthroughs, which may otherwise remain unexploited. However, many universities face difficulties in creating spin‐offs. This article adopts a science‐based design approach to connect scholarly research with the pragmatics of effectively creating university spin‐offs. This approach serves to link the practice of university spin‐off creation, via design principles, to the scholarly knowledge in this area. As such, science‐based design promotes the interplay between emergent and deliberate design processes. This framework is used to develop a set of design principles that are practice based as well as grounded in the existing body of research on university spin‐offs. A case‐study of spin‐off creation at a Dutch university illustrates the interplay between initial processes characterized by emergent design and the subsequent process that was more deliberate in nature. This case study also suggests there are two fundamentally different phases in building capacity for university spin‐off creation. First, an infrastructure for spin‐off creation (including a collaborative network of investors, managers and advisors) is developed that then enables support activities to individual spin‐off ventures. This study concludes that to build and increase capacity for creating spin‐offs, universities should do the following: (1) create university‐wide awareness of entrepreneurship opportunities, stimulate the development of entrepreneurial ideas, and subsequently screen entrepreneurs and ideas by programs targeted at students and academic staff; (2) support start‐up teams in composing and learning the right mix of venturing skills and knowledge by providing access to advice, coaching, and training; (3) help starters in obtaining access to resources and developing their social capital by creating a collaborative network organization of investors, managers, and advisors; (4) set clear and supportive rules and procedures that regulate the university spin‐off process, enhance fair treatment of involved parties, and separate spin‐off processes from academic research and teaching; and (5) shape a university culture that reinforces academic entrepreneurship by creating norms and exemplars that motivate entrepreneurial behavior. These and other results of this study illustrate how science‐based design can connect scholarly research to the pragmatics of actually creating spin‐offs in academic institutions.     

Accounting for Cross‐Country Differences in Employee Involvement Practices: Comparative Case Studies in Germany,Brazil and China

Employee involvement is a contested concept in organizations. While the mainstream of the research debate has focused on measuring the strength of employee involvement (EI), this article emphasizes the existence of very different forms of EI. It draws on case studies of the German, Brazilian and Chinese plants of a German automobile manufacturer to analyse forms of EI and to investigate their societal determinants. The article reveals considerable differences in the design of employee involvement between the self‐organization model and the competition/social involvement model. It shows how industrial relations and cultural factors lead to these very different approaches.     

Cross‐Cultural Creativity: Conceptualization and Propositions for Global New Product Development

In today's global business environment, where multinational companies are pressed to increase revenues in order to survive, creativity may hold the key to ensuring their new product development (NPD) efforts lead to innovations with worldwide appeal, such as Apple's iPad and Gillette's Fusion Razor. To leverage creativity for effective global NPD, businesses want to know how cultures differ in their concepts of creativity and the impact of those differences on approaches to developing new products. Because global new products are increasingly developed in, by, and for multiple cultures, a particular need is for a culturally reflective understanding, or conceptualization, of creativity. While creativity is believed to be culturally tied, the dominant framework of creativity used in business and management assumes that creativity is culturally indifferent or insensitive. This knowledge gap is addressed by studying the role of creativity in NPD practices in a cross‐cultural or global context. The study begins by first developing a culturally anchored conceptualization of creativity. Called cross‐cultural creativity, the concept draws on creativity insights from the field of art and aesthetics. The concept specifies two modes of creativity, neither of which is superior to the other, called the spontaneous or S route and the divergent or D route. The S route emphasizes adaptiveness, processes, intuitiveness, and metamorphism, while the D route focuses on disruptiveness, results, rationality, and literalism. Next, this new concept is applied to NPD by positing how creativity in distinct cultures may shape NPD practices, as illustrated by Japanese and U.S. firms. Research propositions are formulated to capture these patterns, and thereafter, theoretical and practical implications of the framework and propositions are discussed. The implications center on global NPD, which is a complex enterprise involving typically more than one culture to design and develop new products for several geographic markets. The study is of interest to researchers needing a globally situated, culturally attached framework of creativity for international NPD studies, and managers seeking to exploit creativity in multinational and multicultural innovation projects.     

Getting More from Cross‐Functional Fairness and Product Innovativeness: Contingency Effects of Internal Resource and Conflict Management

This research investigates how organizations' internal resource and conflict management influence the relationship between cross‐functional fairness and product innovativeness. It considers two contextual dimensions of both internal resource management (job rotation and internal rivalry) and conflict‐handling mechanisms (integrating and avoiding) as key components of the firm's ability to convert fair interactions, across departments, into product innovativeness. The tests of the study's hypotheses, based on a sample of more than 200 Canadian‐based firms, confirm that the cross‐functional fairness–product innovativeness relationship is amplified at higher levels of job rotation and integrative conflict handling but suppressed at higher levels of internal rivalry and avoidance of conflict handling. The authors discuss the study's implications and future research directions.     

Determinants of the Level of Knowledge Application: A Knowledge‐Based and Information‐Processing Perspective*

Knowledge application is of key importance in the development of successful new products. Knowledge application refers to an organization's timely response to technological change by utilizing the knowledge and technology generated into new products and processes. This study uses the knowledge‐based theory of the firm and considers its roots in the information‐processing approach to organization theory to identify and structure potential antecedents of knowledge application. This study develops four hypotheses concerning antecedents of knowledge application. The hypotheses are tested using data collected from 277 high‐technology firms. Empirical results indicate that a long‐term orientation supported by a research and development (R&D) budget, formal rewards, and information technology directly increases the level of knowledge application, while R&D co‐location indirectly increases the level of knowledge application. It is surprising to find that an increase in the level of organizational redundancy reduces the level of knowledge application. The findings also suggest that information technologies, lead‐user, and supplier networks do not appear to significantly influence organizational redundancy.     

The Effects of Competition in Short Product Life‐Cycle Markets: The Case of Motion Pictures*

It is critically important to understand the relationship between new product launch strategies and their interaction with the competitive environment, which results in the successful introduction of new products. Deciding when to launch new products is among the most significant issues facing managers when formulating new products strategy, especially for products with short product life cycles. However, little extant research has focused on the interaction of product launch timing and the competitive market environment. This study explores the effects of four types of competitive threats on the market performance of short product life‐cycle products. Threats from new products and incumbents are possible. Also, products in the same category and those in related product categories exert competitive pressures. In this paper, a framework of competitive threats is developed, and research questions are constructed and empirically tested using the motion pictures industry as the focus of this research. A set of simultaneous equations was estimated using a sample of 2,948 movies introduced in the U.S. market between 1997 and 2004. The results show that all competition types have negative direct, indirect (as mediated by distribution intensity), and total effects on the performance of a new product. For a focal product, incumbent products exert a greater negative impact on performance than new entrants. Surprisingly, products in different, but related, categories are more harmful to the performance of products than products in the same category. The results have important implications for launch timing and new product performance.     

Bargaining Theory Meets Interest‐Based Negotiations: A Case Study1

This is a case study of the 2005 national contract negotiations between Kaiser Permanente and the Coalition of Kaiser Permanente Unions. Given the scale and complexity of these negotiations, their successful completion provides an exemplar for collective bargaining in this country. In 1997 Kaiser Permanente and the Coalition of Kaiser Permanente Unions formed a labor management partnership, and negotiations were structured around the principles of interest‐based negotiation (IBN). Drawing on direct observation of all parts of the bargaining process, interviews with individuals from Kaiser and the Coalition of Unions, and surveys we conducted after bargaining was completed, we conclude that the parties employed a mix of interest‐based and traditional negotiation processes across an array of integrative and distributive issues. We find that IBN techniques were used extensively and successfully to reach mutually satisfying agreements when the parties shared interests. When interests were in greater conflict, the parties resorted to more traditional, positional tactics to reach resolution. Strong intraorganizational conflicts limited the use of IBN and favored the use of more traditional positional bargaining. While a high level of trust enabled and supported the use of IBN, tensions that developed limited the use of IBN and required surfacing and release before either IBN or more traditional positional processes could proceed effectively. The use of IBN tools helped the parties apply the principles underlying the partnership in which these negotiations were embedded. We conclude that IBN served as a way of applying or operationalizing integrative bargaining and affected the process dynamics in ways the Walton and McKersie theory predicted. As such we see IBN as techniques that neither displace nor render obsolete other aspects of bargaining theory or practice but that show considerable promise for helping collective bargaining to address the complex issues and challenges found in contemporary employment relationships.     

Finding Commercially Attractive User Innovations: A Test of Lead‐User Theory*

Firms and governments are increasingly interested in learning to exploit the value of lead‐user innovations for commercial advantage. Improvements to lead‐user theory are needed to inform and to guide these efforts. The present study empirically tests and confirms the basic tenets of lead‐user theory. It also uncovers some new refinements and related practical applications. Using a sample of users and user–innovators drawn from the extreme sport of kite surfing, an analysis was made of the relationship between the commercial attractiveness of innovations developed by users and the intensity of the lead‐user characteristics those users display. A first empirical analysis is provided of the independent effects of its two key component variables. In the empirical study of user modifications to kite‐surfing equipment, it was found that both components independently contribute to identifying commercially attractive user innovations. Component 1, the high expected‐benefits dimension, predicts innovation likelihood, and component 2, the ahead of the trend dimension, predicts both the commercial attractiveness of a given set of user‐developed innovations and innovation likelihood due to a newly proposed innovation supply side effect. It was concluded that the component variables in the lead‐user definition are indeed independent dimensions, so neither can be dropped without loss of information—an important matter for lead‐user theory. It also was found that adding measures of users' local resources can improve the ability of the lead‐user construct to identify commercially attractive innovations under some conditions. The findings reported here have practical as well as theoretical import. Product modification and development has been found to be a relatively common user behavior in many fields. Thus, from 10 to nearly 40 percent of users report having modified or developed a product for in‐house use in the case of industrial products or for personal use in the case of consumer products in fields sampled to date. As a practical matter, therefore, it is important to find ways to selectively identify the user innovations that manufacturers will find to be the basis for commercially attractive products in the collectivity of user‐developed innovations. The implications of these findings for theory as well as for practical applications of the lead‐user construct are discussed—that is, how variables used in lead‐user studies can profitably be adapted to fit specific study contexts and purposes.     

Work in Britain's Informal Economy: Learning from Road‐Side Hand Car Washes

The United Kingdom has over 10,000 hand car washes (HCWs). This article examines two research questions: what do HCWs reveal about the informalization of employment? and what is the prospect of regulation of them? Setting HCWs in a theoretical framework shows that they are part of a growing industry which is becoming an increasingly familiar and visible part of the economy, where control of labour costs is a key factor. Employers make a strategic choice to engage precarious and vulnerable, usually migrant, labour securing further competitive advantage at the cost of pronounced labour exploitation and long hours — the tendency towards informalization. Therein a low‐cost business model disciplines competition to usurp higher productivity mechanized car washing.     

Learning to Reduce Interorganizational Learning: An Analysis of Architectural Product Innovation in Strategic Alliances*

There is wide agreement in analyses of strategic alliances that, regardless of the purpose of the alliance, members of the partner organizations should engage in intensive mutual learning to make the alliance a success. In contrast to this view, the present article shows that in strategic alliances aimed at product innovations by recombining partners' extant technologies, learning between specialists can be reduced considerably without jeopardizing success. This is made possible through four interconnected mechanisms integrated into the concept of transactive organizational learning (TOL): (1) modularization, which allows specialists of different domains to develop modules to a large extent independently of each other and to concentrate communication between themselves on the design of interfaces between modules; (2) storing of knowledge in artifacts instead of in organizational members' memories; (3) localization of knowledge not present in the project team but for which a need has arisen through transactive memory; and (4) knowledge integration by prototyping (i.e., by repeated testing of modules and of interactions between modules until a satisfactorily working end product is achieved). Although these four mechanisms reduce the need for cross‐learning between specialists of different domains, some common knowledge and some cross‐learning between the partners' specialists is still required. Case studies on four of SAP's strategic alliances for product innovation with different partners lend empirical support to this study's concept. The article concludes with implications for practice: Companies should find out whether the TOL mechanisms that reduce time to market are present, to what extent their potential is exploited, and how well they work together.     

Design Inertia: Designing for Life‐Cycle Flexibility in Internet‐Based Services*

Managing innovation in rapidly moving environments, such as Internet‐based services, is a major challenge in theory and in practice. Most of the existing literature focuses on the development process as the main area in which innovation takes place. However, in environments where the pace of change of technology and market needs is extremely high, managing service innovations means not only being able to design a good service but also, more importantly, continuously redesigning and adapting the service in order to deal with frequent exogenous changes and opportunities. A high number of innovations therefore must be introduced throughout the entire life cycle of a service. This capability of introducing incremental and radical innovations during the service life cycle (i.e., to adapt a service to contextual changes and opportunities after it has been first released onto the market) at low costs and in the shortest possible time is what is defined here as service life‐cycle flexibility. This process of service adaptation and upgrading implies significant challenges that can be traced back to when a service is first conceived and designed. In fact, many decisions made during the first design process (i.e., the choice of a given database environment) involve a low reversibility rate and may reduce the possibility of taking advantage of future unpredictable opportunities, creating what is called inertia toward innovation. In other words, service life‐cycle flexibility largely depends on how a service has been first designed. This article analyzes two in‐depth case studies of Italian online newspapers and identifies five possible inertia factors that may influence service life‐cycle flexibility, namely (1) technological inertia; (2) internal organizational inertia; (3) external organizational inertia; (4) customer inertia toward changes in the service package; and (5) customer inertia toward changes in the service interaction design. These inertia factors are traced back to the service development process in order to suggest design practices that may increase the service life‐cycle flexibility.     

Knowledge Acquisition in University–Industry Alliances: An Empirical Investigation from a Learning Theory Perspective*

A firm's technological knowledge base is the foundation on which internal product and process innovations are generated. However, technological knowledge is not accumulated solely through internal learning processes. Increasingly, firms are turning to external sources in the technology supply chain to acquire the technological knowledge they need to introduce product and process innovations. Thus, the successful structuring and executing of partnerships with external “technology source” organizations is often critical to competitive success in technologically dynamic environments. This study uses situated learning theory as a basis for explaining how factors inherent to the knowledge acquisition context may affect the successful transference of technological knowledge from universities to their industry partners. Data collected via a survey instrument from 104 industry managers were used to explore the effects of various organizational knowledge interface factors on knowledge acquisition success in university–industry alliances. The organizational knowledge interface factors hypothesized to affect knowledge acquisition success in the current research include partner trust, partner familiarity, technology familiarity, alliance experience, formal collaboration teams, and technology experts' communications. Results indicate that partner trust predicts the successful acquisition of tacit knowledge but not explicit knowledge. Both forms of knowledge are predicted by partner familiarity and communications between the partners' technology experts. These findings suggest three principal managerial implications. First, although the development of a trusting relationship between the knowledge source and knowledge‐seeking parties is generally advisable, firms that seek to acquire explicit technological knowledge from their alliance partners may successfully do so without having made significant time and energy investments designed to assure themselves that they can trust those partners. The relative observability and verifiability of explicit knowledge relative to tacit knowledge may enable knowledge‐seeking parties to have greater confidence that knowledge has been acquired when partner trust is in question or has not been deliberately developed. A second implication is that, other things being equal, a knowledge‐seeking party's interests may be best served through repeated exposures to particular alliance partners, particularly if those exposures facilitate mutual understandings on relevant process‐related matters. A third managerial implication is that ongoing, broad‐based communications between the partners' technology experts should be used to effect technology transfer. A key quality of the organizational knowledge interface that promotes the successful acquisition of technological knowledge, both tacit and explicit, is multipoint, real‐time contact between the technology experts of the partner organizations. Such communications potentially enable the knowledge‐seeking party to directly access desired information through the most knowledgeable individuals on an as‐needed basis.     

Explaining Employment Effects in Multipolar Value Chains: A Cross‐National Study on Soft Drinks and Dairy Manufacturing in Europe

The article develops an integrated framework that employs a dynamic perspective on interlinked levels of value chain governance in order to explain employment in value chains. It compares two multipolar chains in food and beverage manufacturing, in two different producer and consumer markets, Belgium and Germany. Analysis reveals that varied value capture dynamics in the food and beverage industries underpin distinct employment effects at specific inter‐firm nodes, as well as between labour and product markets. This reveals institutional and product variation explaining firms’ value capture trajectories. However, it also illustrates a concomitant transnational trend of deteriorating working conditions, stemming from overall chain governance.