Interacting and Learning through Cross-Functional Product Development Teams: Driving New Product Creativity, Design Value, and Product Advantage: An Abstract

Success in new product development (NPD) is elusive. Going to the market with radically differentiated, superior quality products that capture the desires of many consumers is the goal of most companies, yet it is achieved by few. Despite the plethora of research that has considered the “radicalness” and product quality that result from cross-functional NPD interactions, and a lesser set that has considered the role of creativity in driving these outcomes, there has been a lack of research on how cross-functional NPD efforts drive both creativity and the emerging concept of design value to lead to desired product outcomes. This research explores these phenomena and tests our model using 401 responses collected from three countries: the United States, South Korea, and Japan. In considering the organizational dynamics of NPD, this study considers two factors, cross-functional integration (CFI, defined as the extent to which different functional groups can work effectively together, Song and Parry 1997) and superordinate identity (SI, defined as the extent to which organization members can identify with the team to which they belong, are committed to its overarching goals, and feel a stake in its success and failure, Mackie and Goethals 1987) as essential antecedents to drive desirable NPD outcomes. We expect these factors will influence two mediating factors—new product creativity and design value—which lead to traditional product outcomes. New product (NP) creativity is defined as, “the degree to which new products are perceived to represent unique differences from competitors’ products in ways that are meaningful to target customers” (Im and Workman 2004). Following Im and Workman (2004), we consider this construct as a combination of dimensions of NP novelty and NP meaningfulness. In addition to creativity, we also consider the design value generated by the cross-functional effort of the NPD team. As the value of design has not been studied effectively thus far, we adopt a distinction between functional and emotional design value (Kumar et al. 2014) in this study. We examine how the design value and new product creativity, driven by CFI and SI, eventually influence important product outcomes of product radicalness and product quality superiority. The results from maximum likelihood (ML) estimation in a structural equation model in AMOS suggest that CFI and SI must be managed as positive team factors to enhance different dimensions of NP creativity and design value in general which, in turn, differentially influence product competitive advantage. Our findings further suggest that product managers should look carefully at dual routes to gaining product competitive advantage—product radicalness and product quality superiority. Theoretically, we expand thinking in achieving new product success through product competitive advantage to incorporate a combined view of both creativity and design excellence as intertwined and necessary concepts, setting the stage for future work in the area.