Cross‐Functional Integration of R&D, Marketing, and Manufacturing in Radical and Incremental Product Innovations and Its Effects on Project Effectiveness and Efficiency

Abstract

Previous research commonly emphasizes the positive effects of cross‐functional integration on performance measures. However, cross‐functional integration is a highly complex phenomenon which does not allow general conclusions in terms of performance impacts. Therefore, the present study assesses the impact of integrating the R&D, marketing, and manufacturing functions on the effectiveness and efficiency of new product development (NPD) projects. A multi‐functional design is applied that considers three functions, including manufacturing, which has been often neglected in prior research on cross‐functional integration. Further, the study distinguishes between two phases of the NPD process, namely the development and commercialization phases. In building the sample care was particularly taken to include a sufficient number of highly innovative NPD projects to cover the full range in terms of project innovativeness. This allows assessing the moderating role of project innovativeness on the effects of cross‐functional integration on NPD performance. A research model incorporating these ideas is theoretically developed and empirically validated by means of survey data. One hundred and eighteen NPD project managers participated in the survey (50 incremental and 68 radical innovation projects). Structural equation modeling was used to estimate the research model. More concretely, partial least squares (PLS) was used as the most accepted variance‐based approach. Generally, the findings emphasize that the relationships between various facets of cross‐functional integration and performance measures are highly complex. The integration between R&D and marketing positively impacts efficiency, but not effectiveness across different types of projects. Further, the impact of integration between marketing and R&D depends on the process stage and the degree of innovativeness. Findings regarding the integration between R&D and manufacturing show a strong positive impact on efficiency in the development phase. With respect to the integration between marketing and manufacturing, no significant effects on the performance dimensions can be observed for radical NPD projects. Overall, a positive impact of integration between these departments on effectiveness in the commercialization phase emerges.