- Managing risk tolerance and cross-functional integration for innovation success
- 14th International Conference on Information Systems Analysis and Synthesis (ISAS 2008), Orlando, FL, USA
- Book/source title
- The 12th World Multi-Conference on Systemics, Cybernetics and Informatics: June 29th - July 2nd, 2008, Orlando, Florida, USA: Jointly with the 14th International Conference on Information Systems Analysis and Synthesis: ISAS 2008: Proceedings
- Orlando, FL: International Institute of Informatics and Systemics (IIIS)
- Document type
- Conference contribution
- Faculty of Economics and Business (FEB)
- Amsterdam Business School Research Institute (ABS-RI)
In this study, our key premise is that -contrary to what is often assumed- to invest in cross-functional integration is not always a productive approach to increase new product development (NPD) success. We find that the effects of cross-functional integration on NPD success is conditional upon the type of market or technology opportunity a company is pursuing -as we hypothesized: if a company pursues an opportunity that is surrounded by much risk, high levels of cross-functional integration are warranted to increase NPD success, but this is not true for low-risk opportunities. In the current business context however, companies tend to decrease their risk tolerance (they become risk averse) and increase their cross-functional integration during periods of lagging NPD performance. Contrary to our expectations, we do not find evidence that cross-functional structures are particularly helpful in assimilating a high quantity of knowledge. These findings suggest a need to differentiate between the quantity and quality of the knowledge to be assimilated when assessing whether cross-functional integration enhances a NPD team’s information processing capabilities or not.
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