قدرت در اتحادیه نهفته است: شایستگی همکاری در توسعه محصول جدید و اثرات عملکرد آن

It is widely recognized that new product development (NPD) is a highly interdependent process, yet efforts to empirically model the interdependence and examine its effect on firm performance are scarce. Our study addresses this research gap. We model firms’ abilities to collectively collaborate with suppliers, customers, and internal employee teams in NPD as collaborative competence and examine its impact on project and market performance. Using responses collected from 189 NPD managers, we find empirical evidence for collaborative competence and its differential impact on project and market performance. Specifically, we find that collaborative competence has a direct impact on project performance, but its impact on market performance is indirect, mediated through project performance. The results have significant managerial implications; achieving superior market performance from inter- and intra-organizational involvement is contingent on achieving superior project performance, and companies that fail to achieve desired project performance outcomes will also fail in achieving market performance goals.

New product development (NPD) is a key source of competitive advantage for individual firms (Verona, 1999). Successful NPD requires firms to develop routines and practices to collaborate with suppliers, customers, and internal cross-functional employee teams. While some firms are able to involve key suppliers in their NPD endeavors, others are more effective in collaborating with customers. Still others develop expertise in leveraging advantages garnered from involving their own employees in product development teams. Few firms, however, develop the competence to engage suppliers, customers, and internal employees simultaneously in their NPD projects. We believe that the ability to simultaneously collaborate with suppliers, customers, and cross-functional teams in NPD is a valuable – yet rare – firm level capability. We label it collaborative competence in this study. The notion that focal firms need to integrate externally with their suppliers and customers and internally across different functions to achieve NPD success is not a new idea; it has a rich history in the organizational strategy (Bajaj et al., 2004, Grant, 1996, Bensaou and Venkatraman, 1995 and Kogut and Zander, 1992) and supply chain literature (Frohlich and Westbrook, 2001 and Hammel and Kopczak, 1993). Frohlich and Westbrook (2001) demonstrate empirically that firms with the widest arc of integration (i.e., firms that integrate both suppliers and customers into the activities of the focal firm) have the strongest association with performance improvement as compared to firms that integrate only suppliers or only customers. The practitioner literature also highlights the superior performance benefits of simultaneously involving multiple stakeholders in the NPD process (e.g., Carlile, 2004 and Orlikowski, 2002). Despite the increased attention to collaboration in academic and practitioner literature, there is relatively little rigorous empirical research identifying the managerial actions and mechanisms that underlie collaborative competence. In this study, we define collaborative competence as the ability to simultaneously involve key stakeholders in the NPD process and examine its effect on performance. We begin by developing a conceptual foundation for the underlying dimensional structure of collaborative competence by identifying three sets of collaborative practices related to suppliers, customers, and internal cross-functional employee teams. Following this, we empirically examine whether the three sets of collaborative practices indeed constitute collaborative competence in an NPD context. To quantify the performance benefits associated with collaborative competence, we operationalize performance as project performance and market performance. We investigate direct effects of collaborative competence on project and market performance and also test for the mediating role of project performance between collaborative competence and market performance. Complementarity theory and resource-based view (RBV) provide the theoretical grounding for our investigation. We use project level data collected from 189 manufacturing plants in three industries and six countries to test our conceptual framework linking collaborative competence with project and market performance. Our results make three contributions to the literature. First, by empirically modeling the interdependencies among collaborative practices, we accurately replicate the highly interdependent nature of the product development process. Our second contribution lies in demonstrating that collaborative competence has a different impact on project and market performance measures; our results indicate that collaborative competence has a strong direct effect on project performance and an indirect effect on market performance, mediated by project performance. A third contribution of our research is related to the generalizability of empirical results obtained from using a multi-industry, multi-country sample. As a set, our results extend our understanding of the role of collaboration in NPD process and its specific links with performance. The rest of the paper is organized in the following manner. In Sections 2 and 3, we review the existing NPD literature related to collaborative practices and present three research hypotheses. In Section 4, we describe the research design and measures. Section 5 outlines the empirical methods we use to evaluate the hypotheses and results followed by Section 6, in which we discuss our findings and their implications for research and practice. Finally, limitations and future research ideas are outlined in Section 7.

The goal of this study was to investigate the performance benefits of simultaneously involving suppliers, customers, and cross-functional teams in the NPD process. We use the resource-based view and the complementarity theory to conceptualize synergies that arise from involving suppliers, customers, and cross-functional internal teams in the NPD process as a second order factor and label it “collaborative competence.” Using multi-country, multi-industry, project level data from 189 manufacturing plants, we empirically validate the second order factor structure. We then assess the performance effects of collaborative competence on project and market-based performance. We discuss theoretical, empirical, and managerial contributions below. Theoretically, this study overcomes weaknesses observed in prior NPD research. Most previous NPD studies focus on limited aspects of involvement and examine sources of synergy obtained from these domains in an isolated manner. Such fragmented conceptualization does not represent the product development process in practice because it ignores the “interdependencies” (Krishnan and Ulrich, 2001) and the “shared product concept” (Leonard-Barton, 1995) that exist among suppliers, customers, and cross-functional teams. To better represent these interdependencies, our study conceptualized collaborative competence as the synergy resulting from simultaneous involvement of the three key groups associated with the NPD process. Further, while the resource-based view recognizes that the separate involvement of supplier, customer, or cross-functional teams are each valuable and create supplier involvement synergies, customer involvement synergies, and cross-functional involvement synergies respectively, it does not recognize the super-additive synergies arising from involving all three groups (suppliers, customers, and cross-functional teams) in the product development process. Our use of the complementarity theory in this study is an effort toward presenting a more nuanced and realistic picture of collaborative product development. With its second order, multi-dimensional conceptualization of collaborative competence, this study captures both the synergies arising from the independent involvement of supplier, customer, and cross-functional teams and the super-additive value of synergies arising from the complementarity of different types of involvement. As the rich literature stream on the relationship between inter- and intra-organizational involvement and firm performance indicates, conceptualizing individual dimensions of a multi-dimensional construct as independent and examining their performance effects separately may lead to inconsistent and ambiguous results. We make three empirical contributions to the existing literature. First, we establish that the collective pursuit of collaborative practices such as supplier involvement, customer involvement, and cross-functional involvement underlies the higher order collaborative competence. Although the usefulness of each of the three collaborative practices has been cited in previous literature (Gerwin and Barrowman, 2002 and Krishnan and Ulrich, 2001), they have not been modeled together. The superiority of the second order factor model (Model 4) compared to the three correlated factors model (Model 3) confirms that multiple manifestations of involvement are all driven by a cohesive, yet unobservable, underlying competence. Further, our analysis shows that the complementarity model (Model 7), compared to the direct effects model (Model 8), yields statistically stronger and practically valid results. Specifically, the extent of variation in project performance explained by the second order latent construct is higher than that produced by separately analyzing the three sets of collaborative practices. Overall, our efforts to present a parsimonious representation of interdependencies among collaborative practices using a second order latent construct is both conceptually and methodologically a step toward providing a nuanced perspective on the integrated nature of the product development process. Our second contribution consists in demonstrating that collaborative competence impacts project and market performance differently. While collaborative competence has a positive and significant impact on project performance, its impact on market performance is insignificant. We also find a significant positive link between project and market performance. As a set, the results associated with H2 and H3 suggest that the link between collaborative competence and market performance is indirect, mediated through project performance. We use the Sobel test to examine the significance of the mediation effect, an approach advocated by Baron and Kenny (1986). The Sobel test statistic equals 2.83 and is significant (p-value < 0.01). The analyses show that the link between collaborative competence and market performance becomes insignificant when project performance is added to the model, suggesting a complete mediation relationship between collaborative competence and market performance (Venkatraman, 1989). An insignificant direct link between collaborative competence and market performance is surprising given that customer involvement in NPD projects forms a key component of this competence. The primary objective that drives firms to involve customers in their product development efforts is to understand customer requirements and market trends so that superior market performance can be achieved. What, then, explains our finding? We believe that there are two potential explanations for the insignificant direct link between collaborative competence and market performance. One is that project execution holds the key to market success and that achieving superior market performance from inter- and intra-organizational involvement necessitates excellence on project performance metrics. Specifically, companies that fail to achieve their desired project performance outcomes will also fail in achieving market performance goals. This interpretation puts significant pressure on firms to excel on operational level metrics as a precondition to excelling in the market. In general, this pattern of results, where an operational level variable is found to have an impact on operational level performance but not on market or financial measures of performance, is similar to that observed in supply chain and information technology literature. For instance, Vickery et al. (2003, p. 535) found that coordination of value-added activities has a direct impact on competitive performance, but not on the financial performance of the firm. Similarly, information technology researchers have called the general failure of studies to show a direct positive relationship between information technology investment and measures of overall financial performance profitability a paradox (Dedrick et al., 2003, p. 23). Barua et al. (1995) argue that the impact of operational variables on overall firm performance should be easier to detect through intermediate measures of operational performance. A second explanation for the insignificant effects of collaborative competence on market performance could be that perhaps the collaboration items used in our study (particularly, the customer involvement scale) lack sufficient variation to capture the true impact of collaborative competence on market performance. This is plausible, given that the collaboration scales used in our study have been derived primarily from existing studies, where they have gradually evolved and been optimized toward measuring operational performance benefits rather than market or financial performance metrics. Our third contribution derives from the increased generalizability of our findings due to the broad scope of the sample. Our multi-industry, multi-country sample stands in sharp contrast to many empirical studies in the NPD literature wherein the sample of companies used is simply either a set of Japanese companies or U.S. companies based in the electronics or the computer industry (Balachandra and Friar, 1997). As such, the generalizability of previous empirical findings is primarily restricted to high performing firms in a single highly competitive industry and does not portray the true state of affairs across the whole landscape of product development efforts in various industries and countries. Although the conceptual framework in our study examines the performance impact of simultaneously involving suppliers, customer, and cross-functional teams in the NPD process, its implications are not restricted only to projects requiring both inter- and intra-organizational collaboration. For example, NPD projects that are completely internal to a firm may involve multiple stakeholders (e.g., in-house IT projects which involve coordination between the internal software team and multiple departments). In these cases, harnessing the knowledge complementarities across multiple stakeholders by jointly involving them in the project is likely to lead to enhanced performance outcomes. Our study also has important managerial implications. While managers must continue to involve a diverse group of stakeholders in their product development process to achieve superior performance, the real operational benefits of collaboration are derived when efforts are made to synchronize localized capabilities and strengths into jointly produced knowledge that transcends local interests and enables early resolution of problems during the NPD process. Further, achieving superior market performance impact from competence in involving these diverse groups is contingent on how the competence affects intermediate operational level performance. Thus, product development managers must continue to focus on ensuring that efficiency at the operational level is achieved, because it constitutes the first step toward improvement in overall firm performance. These managerial implications can also be extended beyond the NPD process and into any context that involves alliances or firms engaging in an outsourcing/offshoring relationship with a vendor firm. While potential savings from economies of scope or labor arbitrage are certainly a key reason for firms to engage in such relationships, it is unlikely that such benefits will accrue unless operational performance first improves. As a recent AT Kearney (2007) study on offshoring indicates, that the best performing companies in their survey “focus less on saving money and more on improving operational performance, and in doing so they save more money” (p. 11). That is, the surveyed companies that focused on improving operational metrics achieved the largest cost savings.