Troy, L. Hirunyawipada, T. & Paswan, A. (2008). Cross-Functional Integration and New Product Success: An Empirical Investigation of the Findings. American Marketing Association, 72, 132-146.

Format: Peer-reviewed article

Type: Research — Non-experimental

Experience level of reader: Advanced

Annotation: The authors used 25 previous studies to analyze the impact of cross-functional integration on New Product Development (NPD), with the goal of identifying variables which produce the strongest relationship between cross-functional integration and NPD success. They found nine conditions which appeared to be optimal for cross-functional integration to benefit NPD. They were: integration at a team or project level, shared customer information, a maximum of 2 functions integrated, information sharing only as opposed to cooperative climate, operating in non-western countries, producing high-tech products, and producing services. It was also found that the way in which researchers measure NPD success will influence the relationship to cross-functional integration. Objective measures such as sales or profits show more positive results than the subjective measures such as manager’s perceptions. Also, when reviewing product success, there is a stronger correlation between NPD success and integration when product effectiveness is measured as opposed to productivity or market performance. A summary of these findings can be found in a conference presentation made in 2005 by the second author and colleagues.

Knowledge user level addressed by the literature: Organization

This article uses the Commercial Devices and Services version of the NtK Model

• Share customer information at all times
  Meta-analysis. β = .212, p < .05

• Environments should foster information sharing as opposed to a co-operative climate
  Meta-analysis. β = -.146, p < .05

• When measuring the success of NPD, use objective measures, such as sales or profits, instead of subjective measures
  Meta-analysis. β = -.381, p < .01 (see Table 2 –H9)
  Occurrence of finding within the model: Stage 2, Stage 1, Step 1.4, Step 1.3, Step 1.2, Step 1.1, Step 9.3

• Must be aware that examining product effectiveness as compared to productivity outcomes or marketplace performance will correlate higher with NPD success and cross functional integration
  Meta-analysis. β = .185, p < .01
  Occurrence of finding within the model: Stage 2, Stage 1, Step 1.4, Step 1.3, Step 1.2, Step 1.1, Step 9.3

• Industry consideration (high tech vs. low tech): Consider that high tech (versus low tech) products accrue more benefits from cross functional integration.
  Meta-analysis. Significant moderating effect of high tech products (vs. low tech products) on CFI-product success relationship.
  Occurrence of finding within the model: Step 3.1, Step 2.2

• Consider that service products benefit more strongly from CFI than goods.
  Meta-analysis. Significant moderating effect on CFI-product success relationship when Services are produced (vs. for goods)
  Occurrence of finding within the model: Stage 1, Stage 2, Step 1.4, Step 1.3, Step 1.2, Step 1.1

• Cross functional integration pools resources and skills from different functions, providing flexibility in the workforce and capital resources and enhancing the utilization of organizational resources (Ford and Randolph, 1992)

• Information integration in the cross functional structure helps employees achieve a common understanding about the product and enhances consistency among decisions made throughout the NPD process (Sethi, 2000)

• Informal communication and successful project teams are characteristics of high levels of cooperation across functions (Pinto and Pinto, 1991)

• Cross functional integration increases communication frequency and the amount of information flow in the organization (Randolf and Posner, 1992)

• PDMA’s best practice survey found that 60% of US companies use cross-functional integration to develop new products. (Griffin 1997)

• Degree of CFI (interaction, communication, info-sharing, coordination) is key driver of new product success (Griffin and Hauser, 1992, 1996; Gupta, Raj and Wilemon, 1986)
  Occurrence of finding within the model: Step 3.1, Step 4.1, Step 4.6, Step 3.3

• Informal communication patterns, participative decision making, and consensual conflict resolution in cross functional integration can be more time consuming and less efficient than more centralized and bureaucratic processes

• Consideration of quality/features/benefits of products (Heynard and Szymanski, 2001; Montoya — Weiss ad Caklantone, 1994)
  Occurrence of finding within the model: Step 3.1, Step 4.1, Step 4.6, Step 3.3

• Organizational strength (strategy, skills, culture) as driver of new product success (Heynard and Szymanski, 2001; Montoya — Weiss ad Caklantone, 1994)
  Occurrence of finding within the model: Step 4.9, Step 3.1, Step 4.10, Step 4.1, Step 4.7, Step 4.6, Step 2.2, Step 1.1

• Consideration of Industry context as external driver (competitive rivalry, environmental turbulence) of new product success (Heynard and Szymanski, 2001; Montoya — Weiss ad Caklantone, 1994)
  Occurrence of finding within the model: Step 1.1

• Functional diversity can increase decision complexity and confusion (Sethi, 2000)