The Journal of Product Innovation Management 18 (2001) 258 –271

Patterns of cooperation during new product development among

marketing, operations and R&D: Implications for project performance
Eric M. Olsona,*, Orville C. Walker Jr.b, Robert W. Ruekertc, Joseph M. Bonnerd
a
Professor and Chairman of the Marketing, Strategy, and International Business Department, College of Business, University of Colorado at Colorado
Springs, 1420 Austin Bluffs Parkway, Colorado Springs, CO 80933
b
James D. Watkins Professor of Marketing, Carlson School of Management at the University of Minnesota
c
Professor of Marketing and Associate Dean in the Carlson School of Management at the University of Minnesota
d
Assistant Professor of Marketing and Supply Chain Management in the Eli Broad College of Business at Michigan State University

Abstract
Successful new product development is fundamentally a multidisciplinary process. While this view has helped lead management to the
wide-spread adoption of cross-functional new product development teams, in this study we question whether simply increasing the level of
functional integration is truly a guarantee for enhancing the performance of new products. To assess this we examined patterns of
cooperation between marketing, R&D, and operations at both early and late stages of the new product development process for 34 recently
developed products whose level of innovativeness ranged from high to low. A unique feature of this study is that data were collected from
four sources for each project. This included personal interviews with a project leader and written surveys from marketing, operations, and
R&D personnel on each project.
Findings from this study reveal that: (1) functional cooperation typically increases as the process moves from early to late stages; (2)
cooperation between marketing and R&D is highest during early stages of the process, but for marketing and operations, and for R&D and
operations, cooperation typically increases as the process moves from early to late stages; (3) higher project performance – irrespective of
the level of project innovation – is demonstrated when cooperation between marketing and R&D, and cooperation between operations and
R&D is high during early stages; (4) late stage cooperation between marketing and operations, and R&D and operations is a key determinant
in project performance for innovative products but not for noninnovative products, and; (5) that early stage cooperation between marketing
and operations is associated with superior performance for low innovation projects but is also associated with poor performance for
innovative projects.
Findings from this study demonstrate that the importance of cooperation between specific functional dyads (i.e., marketing - R&D; R&D
- operations; operations - marketing) indeed varies by time (i.e., early vs. late stages), and by the level of innovativeness (i.e.,
new-to-the-world vs. modifications) associated with the new product being developed. © 2001 Elsevier Science Inc. All rights reserved.

1. Introduction action and integration during the new product development

The creation of successful new products is fundamen-
tally a multidisciplinary process. And it seems reasonable to
assume that factors like rapid technological change, flexible
production processes, and global competition are making
close collaboration across functions even more crucial for
the introduction of profitable and timely new products.
Consequently, firms are embracing coordination mecha-
nisms (e.g., Quality Functional Deployment procedures)
and organizational structures (e.g., cross-functional teams)
aimed explicitly at increasing the level of functional inter-
* Corresponding author. Tel.: ⫹1-719-262-3345.
E-mail address: eolson@mail.uccs.edu (E.M. Olson).
(NPD) process [8,14,41]. For instance, one extensive survey
found that cross-functional teams are employed in about
two thirds of all NPD projects, and that their use increases
to 85% in projects aimed at developing highly innovative
products or services [12].
1.1. Some unanswered questions
A large number of past studies appear to demonstrate the
positive effects of cross-functional integration on NPD suc-
cess across a variety of cultural contexts. [9,15,18,22,32,34,
35] However, broad and generalizable conclusions may not
be warranted. A recent meta-analysis of the product devel-
opment literature found that the mean correlation between
functional integration and NPD success – based on a total of

0737-6782/01/$ – see front matter © 2001 Elsevier Science Inc. All rights reserved.
PII: S 0 7 3 7 - 6 7 8 2 ( 0 1 ) 0 0 0 9 1 - 1
 E.M. Olson et al. / The Journal of Product Innovation Management 18 (2001) 258 –271
41 reported correlations – is not statistically significant after
adjusting the individual correlations for sampling error and
variance in measurement reliability. [17 p.22] As Henard
and Szymanski point out, simply increasing the level of
functional integration may not be sufficient to improve new
product success; the quality, focus and timing of that inte-
gration may be critical. [17 p.28] This suggests that a
number of important questions remain to be explored.
For one thing, much of the existing research on the
effects of functional cooperation have not included all the
functions likely to have a major impact on NPD success.
With a few exceptions [9,13,19,25,35,36], past studies have
focused solely on the interface between marketing and R&D
[6,15,32,33,37]. But while both R&D and marketing often
play critical roles in product development, many important
issues relevant to the technical and market success of a new
product clearly fall within the domain of operations, such as
the sourcing of components and materials, the production of
prototypes, and the design of efficient production processes
and quality control procedures. Therefore, as Song, et.al.
argue, “. . . an accurate representation of cross-functional
relationships in NPD must include all three functional per-
spectives: R&D, marketing and manufacturing.” [35 p.37]
Examining cooperation levels across all three pairs of func-
tions would also enable a search for possible differential
effects. Perhaps cooperation between particular pairs of
functions at particular times in the development process is
especially crucial to project performance and timeliness.
Another shortcoming of most of the existing studies
concerns their level of analysis. Few studies examine dif-
ferences in interaction or cooperation between individual
team members representing different functional areas, or
how such differences affect the outcomes of individual NPD
projects. Instead, they relate aggregate levels of interaction
or integration between entire functional departments to
summary measures of the firm or business unit’s overall
performance in new product development. This aggregated
level of analysis is problematic for two reasons. First, the
amount of uncertainty and the technical challenges facing a
particular functional department may vary across different
kinds of development projects [11,16,25,29,38]. In particu-
lar, the complexity and the innovativeness of the project
(e.g., line extensions vs. new-to-the-world products) may
influence the magnitude of the technical, operational, and/or
marketing challenges that confront the firm. The relative
importance and tractability of those challenges, in turn,
likely moderate the impact of each department’s inputs on
the project’s ultimate outcomes.
A second reason why a project-level analysis might en-
hance our understanding of the effects of functional coop-
eration on NPD performance is because development
projects typically proceed through a variety of stages: op-
portunity identification, concept development, product de-
sign, and so forth – as detailed in Urban & Hauser [39], and
others. Each stage presents a different set of uncertainties
and challenges [2,21]. This raises the question of whether a
259
particular function might play a more crucial role – and
whether interactions with that function might therefore be
more important – at some stages in the development process
than at others. R&D, for instance, may have more to con-
tribute during a project’s early concept development and
product design phases than during the later commercializa-
tion stage. Such variations in the importance of interactions
with a given function across stages of NPD projects might
have important implications for choosing permanent versus
ad hoc members of the development team and for designing
appropriate mechanisms for stimulating cooperation and
resolving functional conflicts at different points in the de-
velopment process.
2. Purpose
The research reported here seeks insights relevant to the
above questions by analyzing patterns of cooperation
among marketing, operations, and R&D participants on 34
different product development projects across a variety of
industries. Information about the performance outcomes of
those projects is also examined to determine how patterns of
cross-functional cooperation relate to the success of the
products developed. Specifically, this study addresses the
following issues:
Y Do levels of cooperation among representatives of the
marketing, operations, and R&D functions change
from the early to the later stages of new product
development projects?
Y Are differences in the pattern of cooperation among
functional departments at different stages in the de-
velopment process related to differences in perfor-
mance outcomes across projects?
Y Are relationships between cooperation patterns and
performance outcomes moderated by the innovative-
ness of the project?
In the following section we first define what we mean by
cross-functional cooperation and then draw on resource
dependency theory and previous work in the marketing,
product development, and operations literatures to develop
testable research propositions. We then describe our re-
search methods and measures, analyze our results, and dis-
cuss our findings. In the last section of the article we point
out some of the limitations of this study, as well as its
implications for future research and for managers charged
with overseeing or participating in product development
activities within their companies.
3. Conceptual framework and propositions
3.1. Defining cross-functional cooperation
While many researchers have attempted to understand
the impact of cross-functional integration on NPD perfor-
260 E.M. Olson et al. / The Journal of Product Innovation Management 18 (2001) 258 –271
mance, they have seldom agreed on what functional inte-
gration means or how it might best be measured. They have
employed a variety of operational definitions, ranging from
simple measures of the frequency of interaction between
two departments to multidimensional measures of collabo-
rative behaviors and attitudes. (See Kahn 18, pp.138 –140
for a more extensive review).
At one extreme, some early studies focused largely on
the frequency or amount of communication between the
members of different departments [for example, 13,29]; the
rationale being that frequent interaction is necessary for
effective functional integration [40]. The fact that two func-
tions communicate frequently, however, does not guarantee
they will exchange any useful information, and subsequent
research suggests that the frequency of functional interac-
tion, by itself, does not bear a significant relationship to
NPD outcomes [18]. Thus, frequent interaction may be a
necessary but not a sufficient condition for functional inte-
gration.
Therefore, a number of researchers have tried to gauge
the substantive content – as well as the amount – of inter-
action between functions in order to assess the degree of
constructive cooperation or teamwork inherent in their re-
lationship [7,15,32,33]. For example, Song, et.al. define
functional cooperation as the amount of “. . . interdepen-
dency and information sharing between the various organi-
zational units.” [35 p.37] For the most part, measures of this
“cooperation” construct are behavioral; focusing on the na-
ture and frequency of cooperative or conflicting actions
undertaken between functional departments.
At the other end of the continuum, some recent studies
employ more complex, multidimensional measures which
attempt to assess both the behavioral and attitudinal nature
of relationships across functions [18,19]. Kahn labels this
broader construct “collaboration,” and defines it as “. . . an
affective, volitional, mutual/shared process where two or
more departments work together, have mutual understand-
ing, have a common vision, share resources, and achieve
collective goals.” [18 p.139] In other words, it represents the
affective, unstructured nature of functional relationships as
well as the substantive actions engaged in by the partici-
pants.
There are some advantages to examining both the behav-
ioral and attitudinal dimensions of functional integration.
The two dimensions may have different effects on NPD
project performance and carry different management impli-
cations. In this study, however, we focus solely on the
behavioral dimension of functional integration, which –
consistent with the terminology of Song, et.al [35]. and
others – we label “cooperation.” Our operational definition
of cooperation includes both the frequency of interaction
and the amount of information and resources shared be-
tween a pair of functions involved in an NPD project:
marketing - R&D, marketing - operations, and R&D - op-
erations.
We chose to focus on the behavioral construct of coop-
eration rather than the attitudinal construct of collaboration
for two reasons. First, behaviors are easier for management
to quantify, influence, and change than attitudes. For in-
stance, the frequency of interaction can be shaped by the
organizational structure (e.g., the creation and composition
of NPD teams), formal policies, and investments in com-
munications infrastructure. Similarly, the amount of infor-
mation and resource sharing between functions can be in-
fluenced by the adoption of clearly defined development
processes, procedures, and reward systems. [22] On the
other hand, interdepartmental attitudes and emotions are
more intangible and difficult for management to regulate or
change. [18 p.139] Thus, our focus on the behavioral di-
mensions of cooperation across functions should help make
participants’ responses somewhat more objective, and the
managerial implications of the findings more clear-cut.
A second advantage of our focus on behavioral cooper-
ation is that it ensures a relatively conservative test of our
conceptual propositions. Any relationships observed be-
tween behavioral cooperation and project performance
would likely be further strengthened by attitudinal affinities
across departments, such as a shared vision, common val-
ues, and collective goals [18].
3.2. The relationship between functional dependence and
cooperation
The classic studies of Burns and Stalker [5], Lawrence
and Lorsch [20], and others suggest that the greater the
environmental uncertainty an organization faces, the greater
the functional specialization it is likely to incorporate within
its internal structure. Such specialization enables the firm to
segment uncertainty by function and to charge groups of
specialists with resolving – or buffering the rest of the
organization from – uncertainties related to a specific func-
tional domain. Thus, R&D specialists can focus on resolv-
ing problems related to newly emerging technologies, while
marketers deal with uncertainties concerning customer pref-
erences and market demand.
Resource dependency theory goes on to suggest that the
locus or content of the uncertainty an organization faces
also influences the relative importance of each functional
specialist’s role in resolving that uncertainty. This, in turn,
helps shape the pattern of interfunctional dependence – as
well as interaction and power – within the firm. [3,26]. For
instance, R&D specialists are likely to play a more active
and influential role in shaping a firm’s strategic decisions
when it operates in a turbulent and evolving technical en-
vironment. On the other hand, operations specialists are
likely to be more influential in firms pursuing value-driven
competitive strategies that place a premium on finding ways
to improve operating efficiency and customer value.
As Ruekert, et.al. [29], Gupta, et.al [16], and others point
out, however, functional specialization and departmental-
ization also creates coordination difficulties. Thus, they ar-
gue that as a firm’s functional specialization increases in
 E.M. Olson et al. / The Journal of Product Innovation Management 18 (2001) 258 –271
response to greater environmental uncertainty, the need for
integration and cooperation across functional departments
also increases. When applied to a specific NPD project, the
above resource dependency arguments suggest that team
members from other functions will perceive themselves to
be more dependent upon the R&D department – and there-
fore have greater motivation to interact and foster cooper-
ation with R&D – when the project involves relatively high
levels of uncertainty concerning technological issues sur-
rounding the product’s design and performance. Note, too,
that the level of such technical uncertainty may vary both
across projects (e.g., a highly innovative product with new-
to-the-world technology vs. a modification of an existing
product or core technology) and across stages within a given
project.
Similarly, team members should interact and cooperate
more intensively with marketing and sales representatives
when uncertainty concerning customer preferences, levels
of demand, or competitor reactions in the marketplace is
high. Finally, dependence upon and cooperation with oper-
ations will probably be greatest when there are major con-
cerns about process technology or the firm’s ability to meet
production schedules, cost parameters, or desired quality
levels.
3.3. Patterns of functional dependence and cooperation
across project stages
Development projects progress through a series of
stages, such as opportunity identification, concept develop-
ment, product design, process design, and commercializa-
tion [11,28,39]. Each stage presents a different set of func-
tional uncertainties and challenges [2]. Therefore, a given
functional department is likely to play a more crucial role in
reducing or resolving uncertainty surrounding its particular
area of expertise during some stages of a project than others.
Consequently, levels of dependence on a particular function
– and the level of interaction and cooperation with that
function – may also shift across the stages of an NPD
project.
Patterns of dependence and cooperation among functions
probably vary at every stage in a development project. To
help make data collection more tractable and to more clearly
focus our discussion of research propositions and results,
however, we have condensed the five or six stages found in
most existing models of the NPD process down to two:
early stages versus later stages. Operationally, early stages
encompass activities concerned with product conceptualiza-
tion and evaluation, such as idea generation, concept devel-
opment, and business assessment. Later stages involve ac-
tivities related to the production and commercialization of
the new product, such as prototype design and development,
process design, product testing, and market introduction.
This two-stage perspective makes sense theoretically since
the shift from conceptualization activities to the physical
production and commercialization of a new product repre-
261
sents a major “go-no go” decision point in most projects and
brings with it major changes in the kinds of issues and
decisions faced by the development team [39].
3.3a. Overall levels of cooperation across stages. While
there is no published evidence to draw upon, it seems likely
that the total frequency of interaction and level of cooper-
ation across the various functions involved in a NPD project
increase as the project moves from early to later stages in
the development process. As the conceptual parameters of
the new product are worked out during the early stages, the
decisions made impose constraints which the various func-
tions must embrace and adapt to in the later stages as they
attempt to convert those parameters into a physical product
that can be efficiently manufactured and effectively mar-
keted. Thus, their mutual interdependence increases as does
their need for information sharing and coordination of their
activities. Also, as the project moves from concept to phys-
ical product there are more opportunities for evaluation and
feedback concerning the product’s technical performance,
manufacturability, and customer appeal. As additional in-
formation is gained from the testing of prototypes, pilot
production runs, beta sites, and other evaluation activities in
a project’s later stages, the need for the various functions to
share and adapt to that information also increases. Conse-
quently:
H1: The overall level of cooperation among representa-
tives of the R&D, marketing and operations functions is
significantly higher in the later stages of a NPD project
than in its early stages.
3.3b. Levels of cooperation between pairs of functions. As
mentioned, the types of uncertainty faced by members of a
NPD project team – and therefore their dependence upon
and likely cooperation with a given functional department –
can vary across stages of the project. Therefore, while the
overall level of functional cooperation may increase from
early to later stages, the relative level of cooperation be-
tween specific pairs of functions may follow different pat-
terns.
Specifically, representatives of the marketing department
should have knowledge or access to information about cus-
tomer preferences and competitive offerings that are partic-
ularly relevant for resolving design and positioning issues in
the early stages of a project. Similarly, because R&D or
product engineering bears primary responsibility for trans-
lating available technology into a viable design with work-
able features and desirable performance attributes, it medi-
ates knowledge and information resources that are
important for resolving design issues during a project’s
early stages. On the other hand, such competencies and
resources may be less relevant for solving the kinds of
operational problems that arise during pilot production and
commercialization. Consequently:
262 E.M. Olson et al. / The Journal of Product Innovation Management 18 (2001) 258 –271
H2: The level of cooperation between marketing and
R&D, relative to the level between other pairs of func-
tions, is significantly greater during the early stages of
NPD projects than during the later stages.
While marketing has much expertise relevant to resolv-
ing design and positioning issues in the early stages of a
project, it is also likely to have primary responsibility for
developing an effective marketing program during the later
stages to communicate product benefits to the target market,
stimulate demand, and achieve adequate distribution. Sim-
ilarly, operations typically has primary responsibility for –
and the expertise to solve – process engineering and pro-
duction problems. Thus, it usually plays a crucial role in
producing prototypes, developing production methods, and
achieving desired quality and output levels for commercial-
ization. While operations may be asked for advice on the
producibility of alternative designs, relative costs, and so
forth during earlier conceptualization stages, its competen-
cies may be seen as less relevant for resolving early design
and positioning issues. Consequently:
H3: The level of cooperation between marketing and
operations, relative to the level between other pairs of
functions, is significantly greater during the later stages
of NPD projects than during the earlier stages.
Finally, the above arguments suggest that R&D and
operations representatives are likely to interact and share
information and advice relatively more frequently during
the later stages of a project when conceptual designs from
the lab must be transformed into workable and producible
products. Thus:
H4: The level of cooperation between R&D and opera-
tions, relative to the level between other pairs of func-
tions, is significantly greater during the later stages of
NPD projects than during the earlier stages.
3.4. Functional cooperation and performance outcomes
While observing the patterns of cooperation between
various functions at different project stages may provide
some insights into how NPD teams work, the really inter-
esting question is whether and how particular patterns of
functional cooperation are related to a project’s subsequent
performance outcomes. Before we can address this ques-
tion, however, we must first specify the performance dimen-
sions on which a NPD project might be evaluated.
3.4a. Performance dimensions. Existing research has exam-
ined the impact of functional interaction and cooperation on
a number of dimensions of a firm’s NPD performance [25].
These measures can be considered in terms of effectiveness
and efficiency. Measures of project effectiveness are con-
cerned with the quality of the resulting product and its
ultimate success in the marketplace. Therefore, we exam-
ined the relationships between patterns of functional coop-
eration and (1) the new product’s quality relative to other
products developed by the firm (2), management’s satisfac-
tion with its technical design and functional performance,
and (3) the degree to which it achieves its sales objectives.
Efficiency measures are concerned with the amount of re-
sources required to complete the project. Money and time
are certainly among the most constrained – and therefore
important – resources necessary for developing new prod-
ucts. Therefore, we also examined the relationships between
patterns of functional cooperation and (4) the project team’s
adherence to its budget, and (5) the project’s cycle time.
While these measures were initially addressed as sepa-
rate items in this study, subsequent tests of dimensionality
and reliability revealed that they were indeed highly inter-
related. Consequently, we follow the lead of other research
in marketing strategy and new product development and
consider performance at the aggregate level [14,17,26,31,
33,34].
Recall that we drew upon the tenets of resource depen-
dency theory to formulate hypotheses about expected pat-
terns of cooperation between pairs of functions over the
course of a NPD project. But what if the expected patterns
do not hold within a given project team? Suppose team
members misperceive the relevance of a particular func-
tional area for helping them to resolve the uncertainties they
face at a particular stage, or that structural or procedural
constraints make it difficult for them to attain the desired
level of cooperation with a particular function. Will the
effectiveness of such a team be compromised? Resource
dependency theory suggests that the answer is most likely
yes. We expect, therefore, that project teams whose patterns
of functional cooperation best conform to the amount and
locus of uncertainty they are likely to experience at different
project stages, will also generate the most effective and
efficient outcomes. Specifically:
H5a: The level of cooperation between marketing and
R&D during the early stages of a NPD project is posi-
tively related to project performance.
H5b: The level of cooperation between marketing and
R&D during the later stages of a NPD project is not
significantly related to project performance.
H6a: The level of cooperation between marketing and
operations during the early stages of a NPD project is not
significantly related to project performance.
H6b: The level of cooperation between marketing and
operations during the later stages of a NPD project is
positively related to project performance.
H7a: The level of cooperation between R&D and oper-
ations during the early stages of a NPD project is not
significantly related to project performance.
H7b: The level of cooperation between R&D and oper-
ations during the later stages of a NPD project is posi-
tively related to project performance.
 E.M. Olson et al. / The Journal of Product Innovation Management 18 (2001) 258 –271
3.5. The moderating effects of project innovativeness
By definition, projects involving the development of in-
novative products or services are likely to involve substan-
tial amounts of uncertainty concerning a variety of func-
tional issues [11]. And the firm’s personnel usually have
little relevant experience or prior learning to draw on when
resolving those functional uncertainties. This combination
of high uncertainty and lack of relevant experience tends to
increase the amount of interdependence – and therefore the
need to share information, expertise, and other resources –
across functions [16,25,29].
Greater functional cooperation should improve the qual-
ity of the new product and improve its chances for success
in the marketplace regardless of how innovative the product
is and how much experience the firm can draw upon in its
development. However, uncertainty, functional interdepen-
dence, and the need for cooperation are likely to be greatest
for the most innovative projects. Therefore, we anticipate
that when a project team has little past experience to draw
upon (i.e., the development of highly innovative products)
the need for functional cooperation will be greater. Simi-
larly, the amount of relevant experience the project team can
bring to bear should also moderate the efficiency of the
project. In projects requiring innovative problem solving
where the team has little relevant experience, high levels of
interaction and functional cooperation throughout the
project may actually decrease total cycle time and develop-
ment costs. The reason is that frequent sharing and feedback
of information, analyses, opinions, and advice may help the
various functions avoid incompatible decisions that lead to
later conflicts and problems, and reduce the subsequent time
and expense necessary to revisit and rework those decisions.
On the other hand, in projects involving relatively mod-
est changes to existing products where team members have
a great deal of relevant past experience to rely upon, the risk
of uninformed decisions leading to costly and time consum-
ing subsequent revisions and recriminations are probably
lower. Therefore, the large expenditures of time and effort
required for high levels of functional cooperation early in
the project are less likely to be recouped via reduced rework
and recycling later.
The above arguments are summarized in our hypotheses.
Namely:
H8a: The positive impact on project performance from
high levels of cooperation between marketing-R&D dur-
ing early stages of the product development process (as
hypothesized in H5a) will be greater for innovative
projects than for less innovative projects.
H8b: The positive impact on project performance from
high levels of cooperation between marketing-operations
during later stages of the product development process
(as hypothesized in H6b) will be greater for innovative
projects than for less innovative projects.
263
H8c: The positive impact on project performance from
high levels of cooperation between R&D-operations dur-
ing later stages of the product development process (as
hypothesized in H7b) will be greater for innovative
projects than for less innovative projects.
In hypotheses 8ac we predict that higher levels of coop-
eration between marketing and R&D at early stages of the
product development process, and between marketing and
operations, and R&D and operations at the later stages of
the product development process will result in higher prod-
uct performance levels for highly innovative new products
than for new products of low innovation. However, this then
begs the question, what about the other side of the equation?
What should we expect the impact on product performance
to be with regard to high levels of cooperation between
marketing-R&D during later stages of the product develop-
ment process and between marketing-operations, and R&D-
operations during the earlier stages of the product develop-
ment process when considered in terms of new product
innovation levels?
It has been generally accepted that teamwork leads to
the development of better products. However, at least one
study has demonstrated that this is not always the case
[25]. This finding suggests that higher levels of cooper-
ation may not always be beneficial, and may under some
circumstances prove detrimental. However, there is little
specific evidence or theory upon which to build an argu-
ment that high levels of cooperation between functional
dyads at specific points in the new product development
process might actually prove detrimental to the project’s
success. Therefore, we anticipate that higher levels of
cooperation between marketing-R&D during later stages
of the process, and between marketing-operations, and
R&D-operations during the earlier stages of the process
will generate no greater performance impact on the de-
velopment of high innovative products when compared
with the development of low innovations products. As
such, we have adopted the null position in our final
hypotheses. Namely:
H9a: The level of cooperation between marketing-R&D
during later stages of the product development process
(as predicted in H5b) will have no greater impact on
innovative projects than for less innovative projects.
H9b: The level of cooperation between marketing-oper-
ations during early stages of the product development
process (as predicted in H6a) will have no greater impact
on innovative projects than for less innovative projects.
H9c: The level of cooperation between R&D-operations
during early stages of the product development process
(as predicted in H7a) will have no greater impact on
innovative projects than for less innovative projects.
264 E.M. Olson et al. / The Journal of Product Innovation Management 18 (2001) 258 –271
4. The study
4.1. Multiple respondents
The primary focus of this study is on the processes and
outcomes associated with individual NPD projects rather
than on the aggregate product development performance of
an entire firm or division. However, within each project we
were interested in examining variables that cut across two
different levels of analysis. Many of our variables, such as
the performance outcomes generated by the new product
and the amount of relevant experience team members could
bring to bear during its development, do reside at the project
level. But the study also focuses on the amount of cooper-
ation between pairs of functions over the course of a project;
a dyadic construct which operates at the interdepartmental
level.
We adapted our research approach to the demands of
these multiple levels of analysis by obtaining data from two
types of informants for each project. First, we collected
information about the project’s innovativeness, the relevant
experience each function brought to the project, and its
ultimate performance outcomes from a “project manager”
or “team leader” identified by upper management as the
person with the most direct responsibility for the project.
These project managers were personally interviewed by one
of the authors using a structured questionnaire. They were
also asked to identify project team members from R&D,
marketing, and operations. Those team members were then
sent written questionnaires asking for information about the
perceived dependence and level of cooperation between
their department and each of the other two functions at both
early and late stages of the project. To encourage participa-
tion, all of the informants were assured that their responses
would be confidential and not shared with management or
other team members in disaggregated form, and they were
promised an advanced copy of the study’s results.
4.2. The sample
Given the number of informants and the sensitivity of
some of the data we sought, we solicited participation via
personal contact with top management. Nine firms – mostly
members of the Fortune 500 – agreed to participate. A
diverse array of industries were represented, including both
consumer and industrial products, such as electronic mea-
surement equipment, commercial food products, women’s
fashions, commercial small engine appliances and equip-
ment, high tech glass products, consumer health and beauty
products, industrial water and filtration systems, office prod-
ucts, and medical supplies. The firms ranged in age from 12
to over 100 years, with annual revenues from $50 million to
more than $10 billion.
In order to increase the diversity of projects in the study
and help maintain the anonymity of the respondents, we
asked each participating firm for access to multiple NPD
projects. We specifically requested projects that differed in
terms of their innovativeness, and which had been com-
pleted within the past six to twelve months. A total of 34
project teams ultimately provided usable data from both the
project leader and team members from all three functions.
4.3. Measures
As mentioned, project managers were asked to assess
their project’s performance on effectiveness and efficiency
dimensions, and the amount of relevant past experience the
firm could draw upon in developing and commercializing
the new product. Project performance was assessed by five
items where the final product was rated on a 7-point Likert
scale. Effectiveness measures included: (1) the new prod-
uct’s quality relative to that of other products recently de-
veloped by the firm (2), management’s satisfaction with the
product’s design and performance, and (3) the degree to
which sales objectives were reached. Project efficiency was
examined on both financial and temporal dimensions. First,
managers were asked to assess on a 7-point Likert scale the
degree to which the project came in under or over its budget.
They also assessed the project’s temporal efficiency by
evaluating the time required to complete the project relative
to the anticipated time frame for both (1) the early stages of
the development process, including idea generation, concept
testing, and business assessment; and (2) the later stages of
the process, including prototype development, product test-
ing, and commercialization. These two items were com-
bined and used as an overall assessment of the project’s
cycle speed. While these items were originally envisioned
as separate measures for new product effectiveness and
efficiency, subsequent analyses of dimensionality and reli-
ability revealed they were highly correlated. As a conse-
quence, we followed the lead of other researchers in this
area [14,17,26,31,33,34] and merged these individual mea-
sures into a single aggregate measure of project perfor-
mance.
Project managers were also asked to evaluate the inno-
vativeness of their projects by estimating the amount of
experience their firms had with products similar to the ones
being developed. They were asked to rate their firm’s level
of relevant prior experience in terms of: (1) marketing and
sales activities (2), manufacturing methods and activities,
and (3) technology and R&D/engineering activities on a set
of 7-point Likert scales. Because these experience measures
were highly correlated across all three functional areas [as
discussed in footnote #1 and shown in Table 1], the three
items were combined into a single measure of relevant prior
experience.
The three functional representatives on each team were
asked to provide an assessment of the amount of coopera-
tion between their function and each of the other two de-
partments during both the early and later stages of the
project. Cooperation at each stage was measured with three
7-point Likert scales concerning: (1) the frequency of com-
 E.M. Olson et al. / The Journal of Product Innovation Management 18 (2001) 258 –271 265

Table 1 Table 2
Multi-item scale reliability estimates and descriptive statistics Differences in informant perceptions of cooperation between pairs of
functions
Measure Items Coeffcient Mean Standard
alpha deviation Marketing Operations R&D
manager manager manager
Relevant prior experience 3 .97 3.95 2.23
Project performance 5 .88 4.11 .93 Marketing/operations—early 3.01 3.24
Dyadic cooperation measures Marketing/operations—late 3.94 4.19
Marketing/operations—early 3 .76 3.01 .78 Marketing/R&D—early 4.65 3.92*
Marketing/operations—late 3 .70 3.94 .80 Marketing/R&D—late 4.37 4.25
Marketing/R&D—early 3 .87 4.65 1.09 Operations/R&D—early 4.45 3.95*
Marketing/R&D—late 3 .79 4.37 .89 Operations/R&D—late 5.27 5.35
Operations/marketing—early 3 .83 3.24 .78
Operations/marketing—late 3 .87 4.19 .88 * Significant difference in means at the p ⬍ .05 level; n ⫽ 34.
Operations/R&D—early 3 .79 4.45 .82
Operations/R&D—late 3 .81 5.27 .75
R&D/marketing—early 3 .89 3.92 .85 factors was constrained to unity, and, in the other model, the
R&D/marketing—late 3 .80 4.25 .77 correlation between factors was freed 4. The results showed
R&D/operations—early 3 .87 3.95 .90 no significant difference between the ␹2 statistics (␹2 dif-
R&D/operations—late 3 .88 5.35 .92
ference ⫽ 0.03). Therefore, the results of both the explor-
atory and confirmatory factor analyses suggest that the
project performance measure exhibits unidimensionality.
munication between the two departments (2), the amount of
information, advice, and technical assistance they ex- 5.2. Consistency across respondents
changed, and (3) the level of work (e.g., raw materials,
specifications, and other resources) transferred. Given that we used multiple respondents to examine
cooperation levels between functions, an obvious question
is whether those respondents’ perceptions were consistent
5. Results with one another. As Table 2 indicates, there was strong
agreement, on average, between the members of each dyad
5.1. Reliability of the measures concerning their cooperation levels, with two exceptions:
marketing and operations respondents both perceived their
The summary measure of relevant prior experience, the functions’ cooperation with R&D during early project
measures of cooperation between functions, and the mea- stages to be significantly greater than did the R&D repre-
sure of project performance were all multi-item measures. sentatives. This suggests that R&D departments may per-
Coefficient Alpha was used to assess their internal reliabil- ceive themselves to be more independent and self-contained
ity. These coefficients – together with the mean and stan- during the early stages of NPD projects – with less need to
dard deviation for each measure – are shown in Table 1. For share information, advice, or assistance with other functions
most of our measures alpha exceeded 0.80, and all sur- – than either of the other two departments. This finding was
passed the minimum threshold of 0.70 recommended by even more surprising in view of the fact that relevant ex-
Nunnally [23]. perience levels were highly correlated across the three func-
In addition, a test of the unidimensionality of the project tions. In other words, R&D had no more (or less) experience
performance measure was performed. Since the measure to draw upon or share than did the other functions.
consisted of items that may be more indicative of a project’s
In spite of these two differences in the magnitude of
effectiveness, such as sales and product quality, and other
cooperation perceived by R&D representatives versus ev-
items that may be more indicative of the project’s effi-
erybody else when those perceptions were averaged across
ciency, such as timeliness and budget adherence, this test
all projects, correlations of cooperation scores among the
was deemed necessary. First, we performed an exploratory
factor analysis with all the project performance items. The individual members of each project team were positive and
results indicated only a single factor with an eigen value statistically significant. The correlations were 0.45 (p ⬍ .01)
greater than 1. Second, using LISREL, we compared the between marketing and R&D team members, 0.41 (p ⬍ .05)
results of two 2-factor confirmatory factor analyses. One between marketing and operations, and 0.53 (p ⬍ .01)
factor consisted of the effectiveness items: quality relative between R&D and operations. Thus, for analytical parsi-
to that of other products, management’s satisfaction with the mony and clarity of discussion, cooperation scores from
product’s design and performance, and achievement of sales each pair of functional respondents on a team were averaged
objectives. The second factor consisted of the efficiency to produce a single cooperation measure for the dyad. Such
items: under or over project budget, and time required to measures were calculated for both early and late project
complete project. In one model, the correlation between the stages.
266 E.M. Olson et al. / The Journal of Product Innovation Management 18 (2001) 258 –271
Table 3
Patterns of functional cooperation across project stages
I. Cooperation across all functions (n ⫽ 102)
Average cooperation score: Average cooperation score:
early stages late stages
3.87 4.57
II. Proportion of total cooperation accounted for by each pair of
functions
% of total % of total
cooperation score: cooperation score:
early stages late stages
Marketing—R&D .37 .31
Marketing—operations .27 .30
R&D—operations .36 .39
** ⫽ p ⬍ .001.
5.3. Patterns of functional cooperation
Overall cooperation across stages. As expected, average
levels of cooperation across the three functions increased as
NPD projects moved from the early concept development
stages to the more information-rich production and com-
mercialization stages. The top section of Table 3 indicates
that average cooperation scores increased from 3.87 in the
early project stages to 4.57 in later stages (t ⫽ 10.31;
p ⬍ .001), providing support for H1.
Cooperation between pairs of functions. As anticipated,
overall levels of functional cooperation increased from early
to later project stages. However, we predicted that the rel-
ative amount of cooperation between different pairs of func-
tions would differ across stages. In other words, different
functions are expected to play a role in resolving different
kinds of uncertainty at different stages of an NPD project.
Thus, the dependence of one functional department on an-
other, and its motivation to cooperate with that other de-
partment, are likely to vary across stages.
The second section of Table 3 displays the relative pro-
portion of total functional cooperation accounted for by
each pair of functions at both early and later project stages.
As expected, marketing-R&D accounted for a larger pro-
portion of total cooperation in the early stages than in the
later stages. On the other hand, marketing-operations and
R&D-operations both accounted for a larger proportion of
the functional cooperation that occurred during later stages
than earlier in the project. These findings support the pre-
dictions of H2, H3, and H4.
5.4. Patterns of functional cooperation and project
performance
To examine whether different patterns of cooperation
between pairs of functions are related to project perfor-
mance, we conducted a series of step-wise regressions treat-
ing cooperation scores for each pair of functions at both
Table 4
The influence of functional cooperation and project performance:
Step-wise regression analysis
(t-value beta coefficients shown with (p-values)):
t-Value
Cooperation between: Project performance
Marketing/R&D—early 3.20 (.003)
10.31**
Marketing/R&D—late *
Marketing/operations—early *
Marketing/operations—late 2.16 (.039)
t-Value R&D/operations—early 2.05 (.049)
R&D/operations—late *
Adjusted R2 .55
* Insignificant coefficient estimates at the p ⬍ .05 level.
⫺7.71**
3.56**
3.69**
early and late project stages as independent variables, and
project performance as the dependent variable. The results
of this analysis across all 34 projects are shown in Table 4.
5.4a. Cooperation between marketing and R&D. We pre-
dicted in H5a that high levels of cooperation between mar-
keting and R&D during the early stages of a project would
be positively related to project performance. On the other
hand, H5b argued that marketing-R&D cooperation levels
during later project stages would be unrelated to project
effectiveness. The data in Table 4 strongly support both sets
of predictions.
5.4b. Cooperation between marketing and operations.
Based on the assumption that the competencies and exper-
tise of operations personnel would be most relevant for
resolving uncertainties arising during the later stages of
NPD projects, we predicted (H6b) that cooperation levels
between marketing and operations during those later stages
would be significantly related to project performance, but
(H6a) that cooperation during the earlier stages would bear
no relationship to project performance. As indicated in
Table 4, both hypotheses were supported.
5.4c. Cooperation between R&D and operations. For rea-
sons similar to those outlined in the previous section, we
predicted (H7b) that cooperation levels between R&D and
operations during the later project stages would be signifi-
cantly related to project performance, but (H7a) that their
cooperation during the earlier stages would bear no rela-
tionship to project performance. As indicated in Table 4,
neither hypothesis was supported. Counter to our prediction,
higher levels of cooperation between R&D and operations
during early stages of the development process proved to be
significantly related to project performance.
5.5. The moderating effects of project innovativeness
While high levels of cooperation between marketing -
R&D and operations - R&D during early project stages
were positively related to project performance, the unan-
 E.M. Olson et al. / The Journal of Product Innovation Management 18 (2001) 258 –271 267

Table 5 Table 6
The influence of the interaction between project innovativeness and The influence of cooperation on project performance at low and high
functional cooperation on project performance levels of project innovativeness
(t-value beta coefficient estimates shown): (simple slope coefficient estimates at one standard deviation above and
below mean of project innovativeness)
Cooperation variables Project performance
Cooperation variables High project Low project
Full Reduced
innovativeness innovativeness
interaction interaction
t-values t-value
model I model II
Marketing/operations—early ⫺2.177* 2.923**
Project innovativeness ⫺2.092* ⫺2.007*
Marketing/operations—late 3.394** ⫺.58
Mktg.-R&D (early) 2.059* 3.135**
R&D/operations—late 4.395** ⫺.873
Mktg.-R&D (late) .338
Adjusted R2 .747 .747
Mktg.–ops. (early) ⫺.13 ⫺.928
Mktg.-ops. (late) 1.266 1.873 The results from six separate regressions following the Aiken and West
R&D-ops. (early) ⫺.069 (1991) procedure for each of the three significant interactions from Table
R&D-ops. (late) 2.586* 2.947** 5 at low and high levels of project innovativeness.
Project innovativeness ⫻ Mktg-R&D (early) .145 * p ⬍ .05.
Project innovativeness ⫻ Mktg-R&D (late) .46 * p ⬍ .01.
Project innovativeness ⫻ Mktg.-ops (early) ⫺1.627 ⫺3.281**
Project innovativeness ⫻ Mktg.-ops (late) 2.254* 2.802**
Project innovativeness ⫻ R&D-ops (early) ⫺.268 5.5a. Cooperation between marketing and R&D. We argue
Project innovativeness ⫻ R&D-ops (late) 2.596* 4.046** that the increased uncertainty and functional interdepen-
Adjusted R2 .708 .747 dence associated with innovative NPD projects where firms
* p ⬍ .05. have little relevant prior experience to draw upon will likely
** p ⬍ .01. strengthen the impact of cooperation between pairs of func-
tions during the most crucial project stages. In the case of
marketing and R&D, we predicted in H8a that cooperation
swered question is whether those relationships are moder- between the two functions during early project stages would
ated by an individual project’s characteristics; particularly be more positively related to project performance in rela-
by the project’s innovativeness. To answer this question, we tively innovative projects than in less innovative ones. The
tested for the interaction effects of cooperation and project results reported in Table 5 fail to support this prediction.
innovativeness on project performance. More specifically, Early-stage cooperation between marketing and R&D is not
we first regressed the project performance variable on the significantly more important for highly innovative projects
cooperation variables plus all of the six interactions vari- than for less innovative projects. However, as predicted in
ables formed by multiplying the cooperation variables by H9a, marketing-R&D cooperation during later project
the project innovativeness variable. The results of this re- stages is not related to project performance for either inno-
gression are shown in Table 5 under the full interaction vative or noninnovative projects.
model column (Model I). We then removed insignificant
interaction and direct cooperation variables, and ran a sec- 5.5b. Cooperation between marketing and operations. In
ond regression. The results are shown in Table 5 under the the case of marketing and operations, we predicted in H8b
reduced interaction model column (Model II). Note that the that cooperation between these two functions during the
insignificant marketing-operations (early) cooperation vari- later project stage would be more positively related to
able was not removed from the reduced regression model project performance in relatively innovative projects than in
because there was a significant interaction found between less innovative ones. The results reported in Table 6 provide
this variable and project innovativeness. Leaving the direct support for this prediction. At high levels of project inno-
effects term in the regression model strengthens the test of vativeness, late-stage cooperation between marketing and
the interaction term coefficient. operations is positively related to project performance (␤ ⫽
In addition to testing for interaction significance, we also 3.39; p ⬍ .01), and, at low levels of project innovativeness,
performed the Aiken and West [1] procedure to test the late-stage cooperation was not related to project perfor-
effects of cooperation on project performance at high and mance. Therefore, H8b is supported. Surprisingly, while we
low levels of project performance. This was done for each predicted in H9b that cooperation between marketing and
of the three significant interactions found in the reduced operations during the early project stages was not related to
model regression results. This procedure entails testing for project performance for either innovative or noninnovative
the significance of the coefficient of the cooperation vari- projects, the data indicate that cooperation is actually neg-
ables at both one standard deviation above the mean of atively related to project performance (␤ ⫽ ⫺2.18; p ⬍ .05)
project innovativeness, and at one standard deviation below for innovative projects. However, for noninnovative
the mean of project innovativeness. The results of this series projects, cooperation between marketing and operations
of regressions are reported in Table 6, and will be related to early in the project was found to be positively related to
the hypotheses in the following sections. (␤ ⫽ 2.92; p ⬍ .01) project performance.
268 E.M. Olson et al. / The Journal of Product Innovation Management 18 (2001) 258 –271
5.5c. Cooperation between R&D and operations. We pre-
dicted in H8c that cooperation between R&D and operations
during the later project stages would be more positively
related to project performance in innovative projects than in
less innovative ones. The results in Table 6 indeed indicate
that late-stage cooperation between R&D and operations in
innovative projects is positively related to project perfor-
mance (␤ ⫽ 4.395; p ⬍ .01) while the relationship between
late-stage cooperation in noninnovative projects was not
significant. Therefore, H8c is supported. We also predicted
in H9c that cooperation between R&D and operations dur-
ing the early project stages would have no greater effect on
project performance in innovative projects than in low in-
novation projects. This hypothesis was also supported.
6. Discussion and implications
The most obvious conclusion to be drawn from this
study’s findings is that the relationship between cross-func-
tional cooperation and NPD project performance is more
complex than the simple “more is better” prescription found
in most previous studies. Instead, the impact of cooperation
on performance depends on which functions cooperate, at
what stage in the development process they cooperate, and
on the innovativeness of the project itself.
6.1. Patterns of functional cooperation
Across all projects, patterns of functional cooperation
largely conform to what one would expect based on the
tenets of resource dependency theory. For one thing, overall
levels of functional inter dependence – and therefore cross-
functional cooperation – increase as a project moves from
its conceptual early phases to more concrete later stages
where there is a greater need for information sharing, feed-
back, and coordination of activities and decisions across
functions.
More interestingly, the relative amount of cooperation
between specific pairs of functions changes as a project
evolves and different kinds of information and expertise are
needed to resolve the various types of uncertainty that
emerge. Given that marketing and R&D tend to be reposi-
tories of customer, competitor, and technical information
and expertise that are particularly germane during the early
conceptual stages of a development project, those two func-
tions account for a relatively large portion of functional
cooperation during those stages. On the other hand, both
marketing and R&D depend on operations for expertise
relevant for resolving the process engineering, product qual-
ity, and production cost and volume issues typically en-
countered later in a project. And as expected, relative co-
operation levels between operations and the other two
functions increased significantly during later project stages.
6.2. Functional cooperation and performance outcomes
While average cooperation patterns across pairs of func-
tions largely conformed to the expectations of resource
dependence theory, those patterns did not always bear the
expected relationship to performance of a given NPD
project. As we predicted, substantial cooperation between
marketing and R&D during the early stages is strongly
associated with positive project performance. Counter to
our expectations, substantial cooperation between R&D and
operations during the early stages is also positively related
to project performance. When examined across all projects,
the data suggest that higher levels of cooperation between
functions generates stronger new product performance than
does lower levels of cooperation. However, there are certain
times when cooperation between specific functions is more
critical to the project’s ultimate performance than other
times.
6.3. The moderating effect of project innovativeness
Another conclusion that can be drawn from this study’s
findings – one that has both conceptual and managerial
implications – is that the innovativeness of a given project,
and thus the amount of relevant past experience the firm can
draw upon, influences the relationship between particular
patterns of cross-functional cooperation and project perfor-
mance. While our detailed hypotheses concerning the mod-
erating effects of project innovativeness received only par-
tial support, we nonetheless observed substantial
differences between innovative and less innovative projects.
6.3a. Patterns of cooperation and performance in innova-
tive projects. The importance of when and the degree to
which functional groups involved in the development of a
new product cooperate appears to be impacted by the degree
of innovation in the new product being developed. How-
ever, not necessarily in the ways we might have expected.
Indeed, high levels of cooperation between marketing and
R&D, and between operations and R&D at early stages, and
between marketing and R&D at late stages of the product
development process proved no more important in deter-
mining project performance for high innovation projects
than they did for low innovation projects. Of course this
does not mean that high levels of cooperation are not im-
portant in high innovation projects, just that they appear to
not be more so than in low innovation projects.
However, that dynamic changes during the later stages of
the process as greater levels of cooperation between mar-
keting and operations, and between R&D and operations
appears to be a critical factor in determining project perfor-
mance in high innovation projects. Once again, this does not
mean that cooperation between members of these dyadic
pairs is not without some importance in low innovation
projects, only that it is not as critical a determining factor in
project performance as it is for high innovation projects.
 E.M. Olson et al. / The Journal of Product Innovation Management 18 (2001) 258 –271
Perhaps the most surprising finding of this study is the
observation that high levels of cooperation between market-
ing and operations during early stages of the product devel-
opment process were actually associated with significantly
lower levels of project performance in high innovative
projects and, in marked contrast, significantly higher levels
of project performance for low innovation projects. This
finding suggests that in low innovation projects it is very
important for marketing and operations personnel to get
together at the outset of the development process in order to
determine the most efficient way to produce the desired
modifications and then, as the project progress to later
stages, to get out of each other’s way. In contrast, it appears
that during the development of a high innovation projects it
is best to let marketing and R&D determine the market’s
latent needs and the basic technology required to address
these needs before operations becomes enmeshed in the
details of how to actually produce such a product. Once
product parameters have been set it becomes very important
for R&D and marketing to cooperate with operations.
While our data do not provide a definitive explanation as
to why these different dyadic patterns of functional coop-
eration are related to superior performance in innovative
projects, one possibility is that paying too much attention to
operational concerns and practicalities early in a project
may constrain the conceptual flexibility and creativity of the
project team. Such constraints, in turn, may result in a
product which is less technologically advanced and/or less
responsive to customer needs than it could have been.
The implications of these findings for improving the
management of innovative NPD projects are also not en-
tirely clear. Operations – like the marketing and R&D func-
tions – embodies knowledge and expertise that is clearly
essential to the ultimate success of any NPD project and
should therefore be represented on the core project team.
But when a project is highly innovative, our results suggest
that either: (1) such representation should not begin until the
conceptual direction of the project is fairly well established,
or (2) the team’s decision processes should be managed in
some way such that cooperation between operations and the
other functions – and the amount of decision influence
wielded by operations – begin at relatively low levels but
expand over the course of the project. One way in which this
might be accomplished is to employ a modified stage-gate
procedure which includes fewer operations-related criteria –
or assigns such criteria lower weights – for winning ap-
proval for the project to advance through the early “gates,”
but which increases the number or weight of such criteria at
later decision points. Of course, certain industries may rely
significantly on innovations from manufacturing, and, as a
result, these suggestions should be tempered in such cases.
An interesting follow-on research study might look at fac-
tors that might increase the need for stronger manufacturing
involvement in early stages of innovative projects.
269
7. Limitations and future research directions
As is usually the case with survey research, this study has
several limitations. First, our sample – though diverse in the
types of products and firms represented – is relatively small.
This was in part a consequence of our determination to
include only projects for which we were able to obtain
completed questionnaires from all three functional respon-
dents as well as from the project manager. We felt that this
was an acceptable trade-off, however, given (1) that the full
range of functions was seldom represented in previous re-
search, and (2) our desire to minimize perceptual bias in the
data.
The use of a cross-sectional methodology to examine a
process which evolves through multiple stages over time is
another obvious limitation which constrained our ability to
infer the direction of causality. Similarly, asking respon-
dents to provide retrospective evaluations introduced the
possibility of both the simple forgetting of relevant infor-
mation as well as the possible posthoc justification for either
project success or failure. However, as mentioned, we at-
tempted to reduce the possibility of perceptual bias by using
multiple respondents from each project, and by collecting
performance data from different respondents than the data
on functional cooperation. Nevertheless, our understanding
of how and why different temporal patterns of functional
cooperation affect NPD effectiveness and efficiency would
clearly benefit from future research employing larger sam-
ples and longitudinal methods.
7.1. Future research
This study also raised more interesting questions than it
was able to answer. First, while this research focused on the
overall level of cooperation among functions during the
NPD process, it tells us little about the nature or behavioral
content of that cooperation. Given the recent emphasis on
market-oriented management and the development of
“learning” organizations [10,30,31], it might be particularly
useful for future research to examine the role of each func-
tion in tying the NPD team to interested parties and sources
of expertise – such as customers, suppliers, or distributors –
outside the boundaries of the firm, as well as across internal
departments. In other words, cooperation might profitably
be extended beyond the members of a project team and the
functional departments they represent to include other ex-
ternal constituents with whom a function has strong ties.
Thus, functional representatives may play important roles as
gatekeepers and coordinators of knowledge flows among –
as well as within – organizations [2,24].
More critically, while this study provides some prelimi-
nary insights into the patterns of functional cooperation
associated with the performance of different types of NPD
projects, it says nothing about how managers might best
encourage or stimulate the desired patterns of cooperation.
While our results suggest that increased cooperation be-
270 E.M. Olson et al. / The Journal of Product Innovation Management 18 (2001) 258 –271
tween marketing and operations representatives during the
earliest stages of relatively incremental, noninnovative
projects is strongly related to superior project performance,
they offer no clues concerning the ways in which managers
might improve upon the currently very low levels of coop-
eration between those two functions in such projects. What
is needed, then, is research focused on how different coor-
dination mechanisms, management interventions, tracking
and assessment procedures, and reward and incentive poli-
cies impact the frequency, timing and content of coopera-
tion between particular functions at particular stages in the
development process.
Finally, the construct of project innovativeness – and the
closely related notion of relevant prior experience – were
shown to have a moderating effect on how functional co-
operation was related to project outcomes. It would there-
fore be useful to have a more comprehensive understanding
of the domain of “relevant” experience for each function,
and of which aspects of those domains most strongly impact
cooperation patterns and project outcomes. How is experi-
ence and expertise shared and processed by development
teams? How is such information stored within organizations
for use in future projects, and how is it judged to be relevant
or useless for resolving particular issues on those projects?
Such questions are central to improving our understanding
of how innovation happens and how it may be helped or
hindered by cooperation among functional specialists.
Notes
1. The following discussion implicitly assumes that all
three functions have similar amounts of relevant
knowledge, and experience to bring to bear on a given
NPD project. Thus, projects that are innovative, and
unusual in a technical sense are expected to present
new challenges, and uncertainties not only to the R&D
function but to the operations, and marketing people
as well. Similarly, products that are simple modifica-
tions or improvements on an established technological
platform are not expected to be seen as very innova-
tive or challenging from an operations or marketing
perspective either. This assumption was empirically
validated by examining the correlation among the
“relevant prior experience” scores for: (1) marketing
and sales activities, (2) manufacturing methods and
activities, and (3) technology and R&D activities. As
shown at the top of Table 1, the correlation among
these scores was .97. Note, too, that the projects we
studied were broadly distributed in terms of the
amount of relevant experience available within the
firm. On a 7-point scale the mean experience score
was near 4, with a standard deviation slightly over 2.
Acknowledgment
The authors gratefully thank the Marketing Science In-
stitute for its financial support of this project.
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Biographical Sketches
Eric M. Olson (Ph.D., University of Minnesota) is Professor and Chairman
of the Marketing, Strategy, and International Business Department at the
University of Colorado at Colorado Springs. His research has focused on
marketing strategy, functional interaction in new product development, and
design management. His research has been published in the Journal of
Marketing, Strategic Management Journal, Harvard Business Review,
Business Horizons, Design Management Journal, and Marketing Manage-
ment where he serves as the Case-In-Point section editor.
Orville C. Walker, Jr. (Ph.D., Ohio State University) is the James D.
Watkins Professor of Marketing and the Director of the Ph.D. program in
the Carlson School of Management at the University of Minnesota. His
research has focused on marketing strategy and sales force management
and has been published in the Journal of Marketing, Journal of Marketing
Research, and Strategic Management Journal among others. He has coau-
thored three books on these topics. He is the recipient of the Journal of
Marketing Research’s O’Dell award.
Robert W. Ruekert, (Ph.D., University of Wisconsin) is Professor of
Marketing and Associate Dean in the Carlson School of Management at the
University of Minnesota. His research has focused on issues of marketing
strategy and management and been published in the Journal of Marketing,
Journal of Marketing Research, and Strategic Management Journal among
others. Professor Ruekert and Professor Walker shared the 1987 Maynard
Award for outstanding theory development article in the Journal of Mar-
keting.
Joseph M. Bonner (Ph.D., University of Minnesota) is Assistant Professor
of Marketing and Supply Chain Management in the Eli Broad College of
Business at Michigan State University. In 1998 he was a recipient of a
Juran Fellowship at the University of Minnesota. His research emphasis is
in the area of new product development.