Atuahene-Gima, K., & Evangelista, F. (2000). Cross-Functional Influence in New Product Development-...

Cross-Functional Influence in New Product Development: An Exploratory Study of Marketingand R&D PerspectivesAuthor(s): Kwaku Atuahene-Gima and Felicitas EvangelistaSource: Management Science, Vol. 46, No. 10 (Oct., 2000), pp. 1269-1284Published by: INFORMSStable URL: http://www.jstor.org/stable/2661647 .

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Cross-Functional Influence in New Product

Development: An Exploratory Study of

Marketing and R&D Perspectives

Kwaku Atuahene-Gima * Felicitas Evangelista Department of Management, City University of Hong Kong, 83 Tat Chee Avenue, Kowloon, Hong Kong

Department of Marketing, University of Western Sydney, Sydney, Australia [email protected] * [email protected]

previous research in new product development (NPD) has focused on the participation of marketing and R&D personnel, but little attention has been paid to their influence. This

study examined the effects of marketing's and R&D's influence and participation on new product performance and the differential effects of personal, new product, and organizational factors on their influence in the NPD process as seen from each other's perspective. The results suggest that marketing's and R&D's self-reported influence and their influence as reported by the other have a differential impact on new product performance. Unlike R&D's participation as perceived by marketing, marketing's participation as perceived by R&D affects new product performance only when its influence is high. The results also suggest that marketing's and R&D's influence in the NPD process is differentially affected by personal, new product, and organizational factors. (Marketing and R&D Interface; Cross-Functional Influence; New Product Development)

1. Introduction Extant research suggests that cross-functional participation or communication between marketing and R&D is one of the most important elements in new product development (NPD) success (Griffin and Hauser 1992, 1996, Gupta and Wilemon 1988, Moenaert and Souder 1990, Song and Parry 1992, Souder 1988). Although this research stream has advanced our understanding of marketing's and R&D's role in the NPD process, participation is not sufficient to explain their impact on new product performance. Participation refers to the extent to which marketing and R&D engage in information sharing or communication in the NPD process (cf. McQuiston and Dickson 1991). 1 In contrast, influence refers to the

1 In this study, the terms "marketing" and "R&D" refer to a marketing and R&D person in the NPD team, rather than the

degree to which information offered by participants in the NPD process leads to changes in behavior, atti- tudes, and/or actions of the recipient (cf. Kohli 1989). Scholars call into question the effect of participation on decision outcomes in NPD (Li and Atuahene-Gima 1996) and in organization studies (Wagner 1994), arguing that influence is a more critical factor. Influ- ence is germane in NPD because at its core NPD is about risk, ambiguity, and uncertainty, and is replete with functional conflicts caused by differences in

department as a whole. Hence, the level of analysis is the individual. As Ruekert and Walker (1987) argued, the individual is the appropriate level of analysis in interfunctional interactions because the flow of resources and information between individuals in different departments serves as the primary link between their departments.

0025-1909/00/4610/1269$05.00 MANAGEMENT SCIENCE ? 2000 INFORMS 1526-5501 electronic ISSN Vol. 46, No. 10, October2000 pp. 1269-1284



ATUAHENE-GIMA AND EVANGELISTA Cross-Functional Influence in New Product Development

perceptions and self-interests (Frost and Egri 1991, Ruekert and Walker 1987). Further, managers charged with formal responsibility for NPD may have limited authority to acquire information, resources, and support (Maute and Locander 1994). These observa- tions suggest that marketing and R&D are likely to have impact on the outcomes of the NPD process not by merely participating, but rather by the degree of influence they exercise. Yet, as Ruekert and Walker (1987) argue, extant research on cross-functional interaction ignores or assumes away the influence processes.

The purpose of this study is to examine the antecedents and outcomes of cross-functional influence in the marketing-R&D relationship. We make four primary contributions to the literature. First, we con- ceptually and empirically distinguish between marketing's and R&D's influence and their participation, and explore their effects on new product performance. Second, we respond to Maute and Locander's (1994) call for future research to "explore the relationships between influence ... and new product effectiveness" (p. 171). There is a longstanding view that marketing and R&D undervalue each other's contribution to the NPD effort (Gupta and Wilemon 1988, Souder 1988). Therefore, we extend the literature by investi- gating the differential effects of marketing's (R&D's) self-reported influence and marketing's (R&D's) influence as reported by R&D (marketing) on new product performance.

In comparison with marketing and R&D participation in NPD (see Griffin and Hauser 1996), we know little about the antecedents of their influence. As a third contribution, we investigate the personal, product, and organizational factors that affect their influence. Finally, extant research (e.g., Kohli 1989, Maute and Locander 1994, Yukl et al. 1996) suggests that participants in a decision-making process are likely to overstate the efficacy of their own influence. Con- sequently, we follow prior research (e.g., Kohli 1989, McQuiston and Dickson 1991, Yukl et al. 1996), and for the first time investigate marketing's and R&D's influence in NPD from each other's perspective. We believe that each function needs to know the conditions under which the other thinks it is likely to have influence in the NPD process. Such knowledge is

important if each part is to select appropriate conditions under which to exert influence.

2. Conceptual Framework and Hypotheses

Three perspectives generally underlie studies of the marketing and R&D interaction in NPD: information processing (IP), resource dependence (RD), and sociopolitics (SP). According to the IP perspective, NPD teams are information-processing subsystems of the organization designed to reduce customer, market, and technology uncertainty in the NPD process (Moenaert and Souder 1990). Such a system involves individuals or functions that create and disseminate information and act on shared meanings (Moorman 1995). This perspective, therefore, places participation at the center of the marketing-R&D interface and suggests that successful NPD outcomes require the participation of each function, particularly during the early stages of the process (Griffin and Hauser 1992, Moenaert and Souder 1990, Souder 1988).

Consistent with this perspective, the RD perspective considers information as an important resource and argues that marketing and R&D depend on each other for necessary resources to perform their activities (Emerson 1962). Under such conditions of interdependence, the central question involves determining the conditions under which marketing and R&D are able to obtain compliance with their demands in the NPD process (cf. Emerson 1962, Pfeffer and Salancik 1978). Hence, particular attention is given to expertise as the source of influence. Persons with expert knowledge increase others' dependence on them and thereby become more influential (Brass and Burkhardt 1993, Emerson 1962). Further, interdependence is critical in achieving goals for novel, important, and complex NPD projects (cf. Adler 1995, Pfeffer and Salancik 1978). For this reason, the RD perspective suggests that these new product characteristics should have implications for influence because they increase the uncertainty, resource, and power distribution associated with the NPD project (Adler 1995, Moenaert and Souder 1996). With respect to organizational factors, both the IP and RD perspectives suggest that formalization and department membership affect

1270 MANAGEMENT SCIENCE/Vol. 46, No. 10, October 2000




influence because they not only enhance specializa- tion and, therefore, information flow (Gresov and Stephens 1993), but they also ensure one's centrality in the information network (Moenaert and Souder 1990, Ruekert and Walker 1987). As Pfeffer (1981) argues, intraorganizational influence is first and foremost a structural phenomenon. Although the IP and RD theoretical perspectives provide some insights, they have been criticized for being rationalistic and ignoring the political nature of NPD.

Unlike the two preceding perspectives, SP theory holds that NPD is a political process fraught with self- interests and struggles for power (Frost and Egri 1991, Markham 1998, Maute and Locander 1994). It suggests that participation is unlikely to enhance one's impact on the outcomes of decision making without an accom- panying influence (Frost and Egri 1991). With respect to antecedents of influence, the SP perspective suggests several factors. First, self-interest or stake in the NPD outcomes seems an important factor because NPD participants face personal risks in undertaking NPD projects. To the extent that the outcomes affect their interests, they attempt to influence the process (Frost and Egri 1991). Another factor is the power imbalance between NPD participants, which is likely to lead one party to use influence attempt as countervailing power. From the SP perspective, we believe that influence attempt is likely to be used as a countervailing power source, thus moderating the linkages between power imbalance and influence. Finally, SP theory suggests that organizational contexts that strengthen or hinder the role of specific functions also affect influence (Philips 1997). For example, technology orientation culture tends to strengthen R&D's influence at the expense of marketing's (Workman 1993).

Based on the discussion of the three theoretical research perspectives, Figure 1 presents the theoretical framework of the study. Note that the antecedent factors may affect both participation and influence. How- ever, we focus on influence as the main gap identified in extant research.

2.1. Effect of Influence on New Product Performance

New product performance describes the degree to which a NPD project's objectives involving profit, sales, sales

growth, and market share have been achieved. From the IP and RD perspectives, we argue that marketing's and R&D's influence should have positive effects on new product performance. A justifica- tion for this proposition is that both functions require information and other resources from each other to enhance their collective effort in NPD. Marketing's influence should enable the NPD team to take account of market opportunities and threats and to enhance its understanding of the new product's commercial- ization strategy (Moenaert and Souder 1990, Ruekert and Walker 1987). Likewise, R&D's influence should provide signals about environmental and technological changes that ensure an effective NPD process (Moenaert and Souder 1990, 1996). Because we examine self- and other-reported influence, we posit that:

HYPOTHESIS 1A. Marketing's influence, as reported by marketing, is related positively to new product performance.

HYPOTHESIS 1B. Marketing's influence, as reported by R&D, is related positively to new product performance.

HYPOTHESIS 2A. R&D's influence, as reported by R&D, is related positively to new product performance.

HYPOTHESIS 2B. R&D's influence, as reported by marketing, is related positively to new product performance.

It is well recognized that marketing and R&D undervalue each other's importance and roles in the NPD process (Gupta and Wilemon 1988, Souder 1988, Workman 1993). R&D's dissatisfaction with marketing stems from the perceived lack of credibility and the lack of knowledge of technical requirements and commercial applications of R&D ideas (Gupta and Wilemon 1988). Similarly, marketing believes that R&D is generally out of touch with customer needs and market imperatives and is too technology oriented. These different evaluations of each other's contributions to the NPD project reflect the political nature of the process (Frost and Egri 1991). Hence, from the SP perspective, we argue that the effects of marketing's and R&D's self- reported influence on new product performance will

MANAGEMENT SCIENCE/Vol. 46, No. 10, October 2000 1271




Figure 1 Conceptual Model

[Influence Attempt

Personal Antecedents

*Expert power . . *R&D department power_ *Stake in NPD outcomes, -v

< , _ ~~~~~~~~Marketing/R&D n , ~~~~Influence in NPD

NPD Project Antecedents New Prouc ? Product innovativeness Performac * New product complexity *Importance of new product < o ~~~~~~~~~Marketing/R&D

...................... ... Participation in NPD

eOrganizational Antecedents) ? Technology orientation of

the firm ? Formalization of NPD

activity

Note: Relationships marked -- Fare not the focus of the study

be stronger than the effect of other-reported influence. Hence,

HYPOTHESIS 3A. The effect of marketing's influence, as reported by marketing, on new product performance will be stronger than the effect of marketing's influence, as reported by R&D.

HYPOTHESIS 3B. The effect of R&D's influence, as reported by R&D, on new product performance will be stronger than the effect of R&D's influence, as reported by marketing.

2.2. Effect of Participation on New Product Performance-Moderating Role of Influence

Participation describes only the potential capacity of marketing or R&D to affect the outcomes of the NPD process. Not surprisingly, empirical evidence for the participation-performance linkage appears to be weak (e.g., Song and Parry 1992) or nonexistent (Wagner 1994). The SP perspective suggests that the extent to which marketing's and R&D's participation affect the NPD outcomes depends on their degree of influence. The logic is that participation affects the outcomes of the NPD process only when the received information

is used and leads to changes in behavior or action by the recipient (Frost and Egri 1991, Li and Atuahene- Gima 1996). In a low-influence condition, participation is unlikely to lead to higher new product performance since the influence target may ignore the information given by the influence source. Hence, we hypoth- esize that participation affects new product performance when marketing or R&D has high degree of influence. 2

HYPOTHESIS 4A. The positive relationship between marketing's participation and new product performance is stronger when its influence is high rather than low.

HYPOTHESIS 4B. The positive relationship between R&D's participation and new product performance is stronger when its influence is high rather than low.

2 A competing hypothesis may be that participation moderates the linkage between influence and new product performance. However, the evidence for our hypothesis appears stronger given the weak relationship found between participation and performance outcomes both in NPD (Song and Parry 1992) and organization science (Wagner 1994). We are unaware of any study questioning the linkage between influence and performance outcomes.





2.3. Antecedents of Marketings's and R&D's Influence

2.3.1. Personal Antecedents. Expert power refers to the degree to which an individual is regarded as having expert knowledge about relevant issues in the NPD process. Expertise is an important source of power because it ensures control over information in exchange relationships (Pfeffer 1981). In general, marketing is perceived as possessing expert power with respect to marketing issues in the NPD process, whereas R&D possesses power with respect to technological issues (Gupta and Wilemon 1988, Moenaert and Souder 1990). Expert power, therefore, enhances influence because it provides confidence to the NPD team members about the use- fulness of information from marketing or R&D. Such confidence leads to greater commitment and willing- ness of recipients to demonstrate effort in carrying out the requests (Falbe and Yukl 1992). As found by Yukl et al. (1996), an influence target complies with demands of an expert influence source because the target perceives that such compliance will lead to higher decision quality and successful outcomes. Therefore,

HYPOTHESIS 5A. Perceived marketing's expert power is related positively to its influence.

HYPOTHESIS 5B. Perceived R&D's expert power is related positively to its influence.

R&D's department power describes the degree to which it is perceived to be more powerful than other departments such as marketing. We focus on power imbalance in favor of R&D because, in the context of our study (high-technology firms), R&D's power is the major hindrance to the influence of marketing in the NPD process (Workman 1993). SP theory suggests that an individual's influence resides in the power of his or her department (Pfeffer 1981). It follows that where the R&D department is more powerful than marketing, R&D personnel are likely to be more influential in the NPD process. It could be argued, however, that given their differential functions the perceived power of one department needs not reduce the power of the other, raising the possibility of symmetrical power, and thus

shared influence. Yet, empirical evidence (e.g., Work- man 1993) suggests that where R&D is more powerful, it tends to develop marketing knowledge to deal directly with customers in order to reduce their dependence on marketing. In the process, R&D further erodes the power marketing (cf. Emerson 1962). Hence,

HYPOTHESIS 6A. R&D's department power is related negatively to marketing's influence.

HYPOTHESIS 6B. R&D's department power is related positively to R&D's influence.

Stake in the NPD outcomes refers to the degree to which marketing and R&D are affected by the outcomes of the NPD process (Dawes et al. 1998, McQuiston and Dickson 1991). Stakehold- ers are those most at risk in the NPD process, either because they are affected most or because they are held accountable for the outcomes of the process. Dawes et al. (1998) argue that stakeholding has a direct effect on influence because organizational norms evolve in which people with less stake in the outcomes of a decision tend to give more influence latitude to stakeholders. Nonstakeholders defer to the wishes and demands of stakeholders in the knowledge of reciprocal behavior in future decisions, where they would be more affected when they would need the support of others. Further, stakeholders tend to assume central positions in the information network of decision making, as nonstakeholders have less motivation to devote time and effort to communi- cating with other participants (cf. Brass and Burkhardt 1993). Hence,

HYPOTHESIS 7A. Marketing's stake in the NPD project outcome is related positively to its influence.

HYPOTHESIS 7B. R&D's stake in the NPD project outcome is related positively to its influence.

2.3.1.1. The Moderating Role of Influence At- tempts. Influence attempt refers to the degree of effort or pressure that an individual exerts to ensure that his or her information and other demands are accepted and used. Influence attempt implies increased effort





and persistence at persuading the influence target and is more likely to result in the target's commitment to the source's requests (Falbe and Yukl 1992, Yukl et al. 1996). Individuals use influence attempt as countervailing power, such that it moderates the linkages between certain power sources and influence (Gresov and Stephens 1993, Kohli 1989). We expect influence attempt to attenuate the positive relationship between expert power and influence. The logic is that an influence target's acceptance and use of information from an expert source is largely based on his or her belief in its quality and credibility. These qualities are likely to be lost when expert power is accompanied by stronger influence attempt. Consis- tent with this reasoning, Kohli (1989) finds that expert power leads to high influence when influence attempt is weak. Therefore,

HYPOTHESIS 8A. The positive effect of marketing's expert power on its influence is weaker when its influence attempt is high rather than low.

HYPOTHESIS 8B. The positive effect of R&D 's expert power on its influence is weaker when its influence attempt is high rather than low.

From the SP perspective, the use of influence attempt implies that the formal power or personal resources of the participant are low, suggesting that intense pressure and strong consultation are necessary to achieve influence (cf. Brass and Burkhardt 1993, Gresov and Stephens 1993). Where power is unbalanced, communication frequency is reduced as the powerful mem- ber ignores requests and ideas from the weaker one, and merely dictates its ideas (Mohr and Nevin 1990). Therefore, RD theory suggests that where R&D power is high, marketing should become concerned about the extent to which resources (e.g., information) from R&D are sufficient, possess the necessary characteristics for usability, and are available in a timely fash- ion (Moenaert and Souder 1996). In such a situation, marketing is likely to bolster its influence through influence attempts to ameliorate the negative impact of R&D's power. The SP perspective also implies that, in an asymmetrical power condition, the less powerful person may feel reluctant to communicate directly

with the more powerful person. He or she may even actively withhold information to counter the power of the more powerful person (Mohr and Nevin 1990). Hence, we argue that where R&D is perceived to be more powerful, it would also need stronger influence attempts to achieve influence. These arguments suggest the following hypotheses.

HYPOTHESIS 9A. The negative effect of R&D department power on marketing's influence is weaker when marketing's influence attempt is high rather than low.

HYPOTHESIS 9B. The positive effect of R&D's department power on R&D's influence is stronger when R&D's influence attempt is high rather than low.

2.3.2. NPD Project Antecedents. Product innovativeness refers to the extent to which the product is new to the firm and/or to the market. It reflects the degree of experience the firm has with the NPD project. In other words, innovativeness pertains to the number of ex- ceptions with respect to the organization's experience with NPD problems (Adler 1995). In contrast, new product complexity taps the degree of task difficulty and vari- ability inherent in the NPD process such as the search for an acceptable solution to a given project problem. Adler (1995) argues that a greater degree of innovativeness creates uncertainty by making the choice of NPD decisions more sensitive to the respective resources provided by NPD participants. Similarly, a high degree of complexity creates uncertainty by impeding the res- olution of problems in the NPD process. This suggests that innovative and complex products engender influence because they engender greater need for information sharing in the NPD team (Adler 1995). Similarly, Frost and Egri (1991) contend that the development of a complex or innovative product engenders fun- damental challenges for marketing and R&D. It often leads to questions about habitual practices and greater amount of disputes over authority relationships. This provokes influence because of the interdependence between marketing and R&D (cf. Emerson 1962, Pfeffer and Salancik 1978). Therefore,

HYPOTHESIS 10A. Product innovativeness is related positively to marketing's influence.





HYPOTHESIS 1OB. Product innovativeness is related positively to R&D's influence.

HYPOTHESIS 11A. New product complexity is related positively to marketing's influence.

HYPOTHESIS 11B. New product complexity is related positively to R&D's influence.

Importance of a new product refers to the degree to which it is perceived to have great significance for the firm's profitability and productivity. Project importance leads to increased risk and uncertainty, which make participants with information more influential. Further, interdependency in the exchange relationship is directly proportional to the importance of the item of exchange (Pfeffer 1981, Pfeffer and Salancik 1978). Hence, where the NPD project is considered important to the firm, it is likely that participants will be more proactive in seek- ing and using information from each other. In addi- tion, influence behavior is provoked when the NPD project is deemed important because such a project requires greater resources and may lead to a realign- ment of power in the organization (Frost and Egri 1991). Finally, prior research argues that task importance leads to commitment and enthusiasm on the part of the influence target to comply with demands of an influence source (Falbe and Yukl 1992, Yukl et al. 1996). Hence,

HYPOTHESIS 12A. New product importance is related positively to marketing's influence.

HYPOTHESIS 12B. New product importance is related positively to R&D's influence.

2.3.3. Organizational Antecedents. The last antecedents of influence investigated are technology orientation culture and formalization of NPD activity. Technology orientation refers to a firm's value system that promotes technology in new products at the expense of customer needs or market orientation. A pro- technology culture is likely to lead to the promotion of innovative behavior that neglects or undervalues marketing's input while enhancing the value of R&D's

input (Workman 1993). In such a culture, marketing is perceived to lack the credibility to provide the necessary input into NPD. Further, targeted customers of high-technology firms are likely to be technically sophisticated and aware of their needs. Hence, R&D is likely to deal directly with these customers, further enhancing its influence at the expense of marketing's influence. Hence,

HYPOTHESIS 13A. Technology orientation culture is related negatively to marketing's influence.

HYPOTHESIS 13B. Technology orientation culture is related positively to R&D's influence.

Formalization of NPD activity refers to the extent to which an organization emphasizes rules and regula- tions in the performance of specific jobs by marketing and R&D. The IP perspective argues that formalization enhances information flow in the marketing-R&D interface and improves the favorableness of information reception (Moenaert and Souder 1990); hence, it leads to greater influence of marketing and R&D because it allows greater clarification of responsibilities, recognition, and acceptance of the importance of the role of each function in the NPD project (cf. Ruekert and Walker 1987). The RD perspective suggests that formalization engenders a sense of autonomy among individuals, which makes interdependence critical for achieving organizational goals. In this sense, formalization creates structural power that enhances the influence of members of functional units (Pfeffer 1981, Pfeffer and Salancik 1978). Hence,

HYPOTHESIS 14A. Formalization of NPD project activities is related positively to marketing's influence.

HYPOTHESIS 14B. Formalization of NPD project activities is related positively to R&D's influence.

2.3.4. Controls. In testing our predictions about new product performance, we controlled for several factors such as expert power and pertinent NPD project characteristics. Likewise, we controlled for NPD team size when testing the antecedents of influence because an individual's opportunity to influence





others diminishes with increased team size, as there are fewer quality interactions between members. We also controlled for marketing's and R&D's own self- reported influence because it affects the degree of influence they would ascribe to each other (cf. Kohli 1989).

3. Research Method 3.1. Sample and Data Collection A commercial mailing list of 591 marketing managers from high-technology firms in industries such as information technology, electronics, and electri- cal and scientific instruments in Australia was our sample frame. We successfully delivered 531 questionnaires and received 93 usable questionnaires after two follow-ups by letter and phone. This represents a response rate of 18%(93/531). We ob- tained our R&D sample from our marketing respondents. We successfully delivered 472 of 531 R&D man- ager questionnaires and received 94 for a response rate of 20%(94/472). A t test of the study variables between early and late respondents revealed no significant differences, suggesting that nonresponse bias was not a problem.

Marketing and R&D respondents received identical questionnaires. A marketing (R&D) informant was in- structed to assess an R&D (marketing) person with whom he or she had interacted frequently during the NPD process on all constructs. He or she was also in- structed to evaluate his or her own influence in the NPD process. To prevent selection bias, informants were asked to select the most recent new product in- troduced into the market for a minimum of 12 months as a referent for the study (see Moorman 1995). The products selected had an average market duration of 22.9 months for the marketing sample and 28.5 months for the R&D sample.

3.2. Measurement Prior research suggests that compared with the implementation stage, the initiation stage of the NPD process (idea generation and screening, concept design and testing) is of greater importance for new product success (Cooper 1988). For this reason and

the need to reduce respondent burden, we asked respondents to consider only the initiation stage for the purposes of the study. Measures for most of the constructs were adapted from Kohli (1989) and eval- uated in a pretest with 10 marketing and 10 R&D managers.

New product performance was measured by five items reflecting the extent to which the new product had achieved its market share, customer acceptance and satisfaction, sales growth, and profit objectives. Mar- keting's influence (from R&D's perspective) was measured by seven items taping the weight that the team members gave to marketing's input. Similarly, R&D's influence (from marketing's perspective) reflected the same seven items asking about the weight that NPD team members gave to R&D's input. Self-reported influence was measured by five items reflecting the degree of influence of marketing and R&D in the NPD process. Participation was measured by six items describ- ing the amount of information shared between marketing and R&D in the NPD team.

Expert power was measured by four items reflecting the degree to which marketing or R&D was perceived to have the knowledge and skills pertinent to the NPD process. R&D's departmental power was measured by four items that reflected the degree to which R&D was seen as relatively more important and powerful than marketing and other departments. Influence attempt was measured by four items reflecting the degree of effort that marketing or R&D exerted in the NPD process to achieve its objectives. Stake in NPD outcome was measured by five items, two taken from the work of Kohli (1989) and three from McQuiston and Dickson's (1991) study. They reflected effect of the NPD outcome on the career, recognition, and status of marketing and R&D.

To measure product innovativeness, respondents were asked to assign the new product selected to one of four categories: (1) new to the world, (2) new to the com- pany (coded as 1), (3) line extension, and (4) product modification/improvement (coded as 0). New product complexity was measured by six items reflecting the degree of complexity of the product, its technology, and its development relative to previous new product projects undertaken by the firm. The importance of the new product was measured by four items reflecting





its criticality for the firm's profitability (cf. McQuiston 1989). Technology orientation of the firm was measured by three items that reflected the extent to which top management and R&D emphasized that a technology focus in NPD was more important than a customer focus. Formalization of NPD activity was measured by four items. They tapped the extent to which clear bound- aries and policies existed in the firm with respect to the activities that marketing and R&D performed in the NPD process. Team size was measured by asking the marketing and R&D respondents how many people worked in the NPD team.

3.3. Scale Validity and Reliability The measures were subjected to confirmatory factor analysis (CFA) to assess their validity. Because of sample size restrictions, three separate tests were performed for each of the marketing and R&D samples involving the most similar constructs (see Moorman 1995). The first CFA contained 27 items measuring influence (as reported by the other party), self- reported influence, participation, influence attempts, and new product performance. After deleting four items, the results indicated an acceptable fit in both samples as indicated by the following indices: marketing (X2 = 169.31, p = 0.01; GFI = 0.83; RMSEA = 0.05; CFI = 0.95) and R&D (X2 = 177.82, p = 0.002; GFI = 0.83; RMSEA = 0.06; CFI= 0.93). The second CFA model included 13 items measuring expert power, R&D department power, and stake in NPD outcomes. Two items were excluded. The revised model produced a good fit in both samples as follows: marketing (X2 = 59.69,p = 0.03; GFI = 0.90;RMSEA = 0.07; CFI = 0.93) and R&D (X2 = 45.82,p = 0.29; GFI = 0.92; RMSEA = 0.03; CFI = 0.99). The third model had 16 items measuring four constructs: new product complexity, product importance, technology orientation culture, and formalization of NPD activity. Two items were deleted to enhance reliability. This model also produced acceptable fit with the data: marketing (X2 2 141.65, p 0.49; GFI =0.87; RMSEA 0.01; CFI = 1.00) and R&D (X2 = 178.72, p = 0.01; GFI = 0.84; RMSEA = 0.06; CFI = 0.87). In each model the standardized factor loadings were large and significant at the 0.05 level (t >2.0). Discriminant validity is indicated

because in every case the construct intercorrelation was less than 1 (p <0.001). 3

Table 1 presents the correlation matrices, descrip- tive statistics, and alpha coefficients for the constructs. As the table indicates, Cronbach's alpha for multi- item scales ranged from 0.63 to 0.90, thus meeting the requirements suggested for exploratory research. A mean of all constructs measured with multiple scales was used for subsequent analyses.

4. Analysis and Results Moderated regression analysis was used to test the hypotheses. To minimize and check for the presence of multicollinearity, we mean-centered all the independent and moderator variables following the recom- mendations of Aiken and West (1991). We also calcu- lated the variance inflation factors (VIF), all of which were well below the acceptable cutoff of 10 (Neter et al. 1990). Tables 2 and 3 present the results regarding new product performance and influence, respectively.

4.1. Marketing Influence and New Product Performance-R&D Perspective

Hypothesis lA, which predicted a positive relationship between marketing influence (as reported by marketing) and new product performance, was supported ( = 0.31, p <0.01). Hypothesis lB posited a similar relationship between marketing influence (reported by R&D) and new product performance. This hypothesis was refuted (P = - 0.20, p < 0.05). These results suggest that, first, marketing's impact on new product performance is perceived negatively by R&D, whereas marketing perceives its own influence as positively related to new product performance. A comparison of the beta coefficients suggests that the effect of marketing influence (reported by marketing) (13 = 0.31) is relatively stronger than the effect of marketing's influence (reported by R&D) (f = - 0.20) (F = 4.22, p <0.001). Hence, Hypothesis 3a is supported.

In support of Hypothesis 4A, the cross product of marketing's influence and participation has a positive and significant effect on new product performance

3 Detailed results of these analyses are available on request.





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Table 2 Regression Analysis of Effects of Participation and Influence on New Product Performance (Standardized Regression Co- efficients)

New Product Performance

Marketing R&D

Control variables Size of new product team 0.22* -0.09 Self-reported influence 0.31** 0.34**** Expert power 0.08 -0.32** Influence attempts 0.12 -0.10 Product innovativeness -0.03 0.10 New product complexity 0.11 -0.28** Importance of new product 0.23* 0.38**** Technology orientation of firm -0.28** -0.17* Formalization of NPD activity 0.08 -0.09 Independent variables Participation 0.11 0.33**** Influencea -0.20* 0.21 Interaction variable Participation x Influence 0.24* 0.07

R 2 0.45 0.41 Adjusted R2 0.35 0.31 F value 4.69 4.20 Significance of F value 0.0001 0.0001 N 81 86

a Influence as reported by other party. Directional hypotheses: *p <0.05. **p<0.01. ***p< 0.10. ****p< 0.001

(one-tailed).

(P = 0.24, p < 0.05). Marketing's participation has an in- significant direct effect on new product performance. This result suggests that, from the perspective of R&D, the effect of marketing's participation on new product performance depends on the degree of marketing's influence. This result is consistent with the view that the mere provision of information or demands does not necessarily mean they will be used.

4.2. R&D Influence and New Product Performance-Marketing Perspective

Hypothesis 2A iS supported since R&D's self-reported influence is positive and significantly related to new product performance ( =0.34, p < 0.001). The data also support Hypothesis 2B, suggesting that R&D's influence, as reported by marketing, is significantly related to new product performance ( =0.21, p <0.10). These results, along with those pertaining to marketing's self-

Table 3 Regression Analysis of Antecedents of Marketing and R&D Influence in NPD (Standardized Regression Coefficients)

Influencea

Marketing R&D

Control variables Size of new product team 0.19* -0.03 Self-reported influence 0.13*** 0.04 Personal antecedents Expert power 0.39**** 0.52**** Departmental power of R&D -0.13 0.03 Stake in NPD outcomes 0.19* 0.26* Influence attempt 0.16*** 0.14*** New product antecedents Product innovativeness -0.09 -0.18* New product complexity 0.09 0.19*** Importance of new product -0.17*** -0.13*** Organizational antecedents Technology orientation of firm -0.18* -0.04 Formalization of NPD activity -0.16*** -0.02 Relevant interactions Expert power x Influence Attempts -0.06 -0.12*** Departmental power of R&D x 0.21 * -0.03 Influence Attempt

R 2 0.50 0.60 Adjusted R2 0.40 0.53 F value 5.11 8.31 Significance of F value 0.0001 0.0001 N 80 85

a Influence as reported by other party. Directional hypotheses: *p<0.05. **p<0.01. ***p<0.10. ****p<0.001

(one-tailed).

reported influence reported earlier, support the central hypothesis of this research, that influence is a more critical factor affecting new product performance. In support of Hypothesis 3B, a comparison of the beta coefficients suggests that the effect of R&D's influence, as perceived by R&D, on new product performance is relatively stronger (I = 0.34) than the effect of R&D's influence as perceived by marketing (1 = 0.21) (F =3.86, p <0.001). Hypothesis 4B is not supported. It appears that unlike marketing, R&D's participation has a significant direct relationship with new product performance (p = 0.33, p < 0.001). Beyond these results, Table 2 indicates that as marketing sees it, R&D's expert power is negatively related to new product performance (P = - 0.32, p <0.01), whereas R&D sees marketing's expert power as unrelated to new product





Table 4 Summary of Study Hypotheses and Empirical Conclusions

Hypotheses Empirical Conclusion

H1A. Marketing's influence, as reported by marketing, is related positively to new product performance. Supported Hi B. Marketing's influence, as reported by R&D, is related positively to new product performance. Refuted H2A. R&D's influence, as reported by R&D, is related positively to new product performance. Supported H2B. R&D's influence, as reported by marketing, is related positively to new product performance. Supported H3A: Effect of marketing's influence reported by marketing on new product performance will be

stronger than the effect of marketing's influence reported by R&D. Supported H3B: Effect of R&D's influence reported by R&D on new product performance will be stronger

than the effect of R&D's influence reported by marketing. Supported H4A. The positive relationship between marketing's participation and new product performance is

stronger when its influence is high rather than low. Supported H4B. The positive relationship between R&D's participation and new product performance is

stronger when its influence is high rather than low. Not supported H5A. Perceived marketing's expert power is related positively to its influence. Supported H5B. Perceived R&D's expert power is related positively to its influence. Supported H6A. R&D's department power is related negatively to marketing's influence. Not supported H6B. R&D's department power is related positively to R&D's influence. Not supported H7A. Marketing's stake in the NPD project outcome is related positively to its influence. Supported H7B. R&D's stake in the NPD project outcome is related positively to its influence. Supported H8A. The positive effect of marketing's expert power on its influence is weaker when its influence

attempt is high rather than low. Not supported H8B. The positive effect of R&D's expert power on its influence is weaker when its influence attempt is

high rather than low. Supported H9A. The negative effect of R&D's department power on marketing's influence is weaker when

marketing's influence attempt is high rather than low. Supported H9B. The positive effect of R&D's department power on R&D influence is stronger when R&D's influence

attempt is high rather than low. Not supported H1OA/B. Product innovativeness is related positively to marketing's R&D's influence. Not supported/Refuted H llA/B. New product complexity is related positively to marketing's R&D's influence. Not supported/Supported H12A/B. New product importance is related positively to marketing's R&D's influence. Refuted/Refuted H13A/B. Technology orientation culture is related negatively/positively to marketing's R&D's influence. Supported/Not Supported H14A/B. Formalization of NPD project activities is related positively to marketing's R&D's influence. Refuted/Not supported

performance. This result is consistent with the view that marketing and R&D perceive each other as having little expertise in NPD.

4.3. Antecedents of Marketing Influence-R&D Perspective

With respect to antecedents of marketing influence, the data in Table 3 show that 6 out of the 10 relationships are significant. The data indicate that two factors are positively related to marketing influence as follows: marketing's expert power (p = 0.39, p < 0.001) (Hypoth- esis 5A), and marketing's stake in the outcome of the NPD process (p = 0.19, p < 0.05) (Hypothesis 7A). Con- sistent with Hypothesis 9A, the data also show that, as R&D sees it, stronger marketing influence attempt

in situations of high R&D power leads to greater marketing influence ( = 0.21, p < 0.05). This result is note- worthy, as the R&D department power is likely to hinder the influence of marketing (p= - 0.13, ns) (Hy- pothesis 6A). The data refute Hypothesis 12A suggesting that from R&D's perspective the importance of the new product is related negatively to marketing's influence (p =- 0.17, p < 0.10). In support of Hypothe- sis 13A technology orientation of the firm is inversely related to marketing's influence (p= -0.18, p <0.05), suggesting that, as R&D sees it, such an orientation stifles marketing's influence in NPD. Contrary to Hypothesis 14A as R&D sees it, formalization of NPD activity is negatively related to marketing's influence

(D= - 0.16, p<0.10).





4.4. Antecedents of R&D Influence-Marketing Perspective

The data in Table 3 indicate that 7 of the 10 expected antecedent effects relating to R&D's influence are significant. Supporting Hypothesis 5B, marketing's perception of R&D's expert power is positively related to R&D's influence (P = 0.52, p <0.001). Similarly, its perception of R&D's stake in the outcome of the NPD process is positively related to R&D's influence (p = 0.26, p < 0.01) (Hypothesis 7B). Consistent with Hy- pothesis 8B, as marketing sees it, R&D's expert power, combined with high influence attempts, yields lower influence in the NPD process (p = -0.12, p < 0.10). The data refute Hypothesis 1OB. In the eyes of marketing, product innovativeness is related negatively to R&D's influence (p= - 0.18, p <0.05). However, Hypothesis 11B is supported, as marketing respondents believe that complexity of a new product has a positive relationship with R&D's influence (1=0.19, p<0.05). It may be that R&D tends to exert influence in such projects given its expertise in dealing with technical uncertainties that are involved in complex new product projects. Similar to R&D, marketing believes that the degree of importance of the new product is related negatively to R&D 's influence ( =-0.13, p <0.10) (Hypothesis 12B). Table 4 provides a summary of the hypotheses and empirical conclusions.

5. Discussion and Implications This study first examined the outcomes of marketing's and R&D's influence in NPD from each other's perspective. The results suggest that, first, both marketing and R&D personnel have significantly different perceptions of the effect of each other's influence on new product performance. Whereas each believes its own influence leads to higher new product performance, marketing sees R&D's influence as related positively to new product performance, whereas R&D sees marketing's influence as having a negative effect. This result supports the lack of mutual appreciation between marketing and R&D in the NPD process (Gupta and Wilemon 1988, Souder 1988). Second, for both marketing and R&D, self-reported influence has a stronger effect on new product performance than the effect of their influence as reported by the other

party. This result is troubling for two reasons. First, given the reported high level of interaction between marketing and R&D, IP and RD perspectives predict that one should expect a positive evaluation of each other's influence in the NPD process. Second, in this sample, both marketing and R&D respondents ex- pressed a high degree of knowledge of each other's role in the NPD process. Hence, one would expect a certain degree of correspondence in potency between the effect of self-reported and other-reported influence on new product performance. Clearly, the discrepancy is traced to the political nature of the NPD process. Marketing's and R&D's evaluation of each other's role may be so colored by competition for power and influence that they undervalue each other's contribution to the outcomes of the NPD process.

These results suggest that marketing and R&D personnel need to do a much better job at self-assessment of their influence in NPD. Such assessments need to be tempered by a reasonable perception of how the other party evaluates its role. This point is important because, as our results suggest, marketing and R&D may not be doing a better job at selling each other on the value of their role in the NPD process. This insight is significant for theory development and empirical research in the marketing-R&D interface. Had we examined influence from only the rationalistic IP and RD theoretical perspectives, and with only self- reported data, we would have ignored other-reported influence and thus missed these insights. The impli- cation is that a multilens theoretical perspective offers a greater chance of gaining a better understanding of the complex interface between marketing and R&D in the NPD process.

Unlike R&D, whose participation is directly related to new product performance, marketing's participation appears to affect new product performance only when it has higher influence. The result appears to support the SP assertion that participation matters only when an individual has influence (see Li and Atuahene-Gima 1996, Frost and Egri 1991). However, we did not find support for this assertion in the case of R&D's participation as perceived by marketing. The result suggests that, as marketing sees it, R&D does not require influence to enhance the performance effects of its participation in the NPD process. This contrasts





with what R&D perceives-that marketing requires influence to bolster the effect of its participation on new product performance. A plausible explanation for these discrepant results is that R&D's participation, relative to marketing's, is at such a high level that its demands are accepted without it having to exert any influence. This interpretation is given added credence by the fact that marketing informants in this sample ascribed a significantly high level of participation to R&D (m= 3.54), whereas R&D ascribed a relatively low level of participation to marketing (m= 2.80) (t = 4.11, p < 0.001).

A more speculative interpretation is that in the high- technology context, marketing acquiesces or defers to R&D, making it unnecessary for R&D to use influence attempts to bolster the impact of its participation. This interpretation appears to be consistent with what Phillips (1997, p. 44) calls non-decision-making power, which allows an individual to suppress alternatives or issues in a decision-making process by invoking procedures or routines that ensure that particular outcomes are achieved without the exercise of influence. It would appear that through its high participation in NPD projects, R&D is able to manipulate the process to enhance its impact on new product performance without a direct application of influence attempts.

With respect to the antecedents, we found that marketing's and R&D's perception of each other's expert power and stake in the outcome of the NPD process are positively associated with their influence. These results are consistent with the results of prior studies in other areas of interfunctional decision making (cf. Dawes et al. 1998, Kohli 1989) and SP theory. The latter result suggests that the potential consequences of the NPD outcomes for individuals energize them to increase their influence in the NPD process. Further, nonstakeholders may acquiesce to the wishes of stakeholders (cf. Dawes et al. 1998, McQuiston and Dickson 1991). To enhance its influence, the pattern of results suggests that marketing may be well advised to improve R&D's perception of its expertise and an appreciation of its stake in the NPD outcomes, and vice versa.

Consistent with RD and SP arguments, as marketing sees it, a higher level of R&D's influence attempt in a situation where it is perceived by marketing to have expert power yields lower R&D influence. This

result supports the argument that increased effort and pressure by individuals perceived by others to have expertise in a decision-making process leads to less influence because such pressure mitigates the credibility associated with the received information (Kohli 1989, Yukl et al. 1996). The lesson for R&D (and for marketing) is that when it is perceived to have expert power, it is likely to jeopardize the efficacy of its influence if it uses stronger influence attempts. In contrast, we found that as R&D sees it, marketing needs stronger influence attempts to enhance its influence when R&D's department power is high. This result is in keeping with the view that a powerful individual is likely to ignore the requests and demands of a less powerful one (Mohr and Nevin 1990). Hence, the less powerful individual (i.e., marketing) needs stronger influence attempts to enhance its influence (Brass and Burkhardt 1993, Emerson 1962). Perhaps influence attempt, with its implied face-to-face communication, enhances the comprehensibility of marketing's viewpoints to facilitate their acceptance (Moenaert and Souder 1996).

Product innovativeness and complexity have differential effects on marketing's and R&D's influence. R&D sees both factors as unrelated to marketing's influence. However, as marketing sees it, product innovativeness is related negatively to R&D's influence. One plausible explanation for this result is that product innovativeness enhances the uncertainty of the NPD process, given its greater divergence from current mar- kets and operations of the firm. Such a product will require new information that may be perceived by R&D as having lower utility. As Moenaert and Souder (1996) suggest, novel information tends to have negative effects on perceived utility because it carries elements of surprise and challenges current beliefs and com- mitments in the NPD process. Novel information may also adversely affect existing R&D routines, and could lead to a not-invented-here syndrome, lowering enthusiasm for the project (Moenaert and Souder 1996). In contrast, marketing sees greater influence for R&D where the new product is complex, possibly because of the technical expertise of R&D to deal with difficul- ties that arise in such projects.

Both marketing and R&D perceive that the degree of product importance has negative effects on each other's influence in the NPD project. A plausible





rationale for this result can be traced to the SP theory prediction of the lack of mutual recognition of each other's role in the NPD process, which is likely to be strong for important NPD projects (cf. Frost and Egri 1991). The result suggests that, as R&D sees it, marketing may not have the skills to deal with issues involved in the development of important products. It may be that marketing and R&D exert influence on NPD projects that have important implications for their self-interests rather than in those that are important to the organization. It may also be that for more important new products, top management may set priorities and exercise greater control, thus giving little room for marketing and R&D in deciding the level of effort they would allocate to the project.4

Finally, with regard to organization antecedents, R&D perceives that technology orientation of the firm hinders marketing's influence. From marketing's viewpoint, formalization is unrelated to R&D's influence. However, from R&D's viewpoint, formalization hinders marketing's influence. Hence, marketing personnel may be more successful in influencing NPD outcomes through informal networks rather than through formal procedures. The insight from these differential effects is that marketing and R&D derive different benefits from formalization of NPD activity.

5.1. Limitations and Future Research Directions The results of the study need to be interpreted with some caveats. First, the sample sizes appear to be small, which raises concerns about power and generalizabil- ity. Second, we did not measure marketing's department power relative to R&D. Thus, we encourage future research to explore the effects of R&D's and marketing's departmental power on, and the conditions under which they enhance or hinder, their influence. Third, this study focused on influence at the initiation stage of the NPD process. The degree to which the results differ at the implementation stage is an important subject for future study.

Several other avenues for research may be identified. We examined the antecedents of marketing's and R&D's influence, yet these same factors may also

4 We thank an anonymous reviewer for this insight.

affect their participation. Indeed, in a posthoc analysis of antecedents of participation, we found that, from R&D's perspective, marketing's expert power (,B=0.43, p<0.001) and stake in the outcomes of the NPD process (B= 0.28, p <0.01) are positively related to its participation. In contrast, from marketing's viewpoint, R&D participation is affected positively by its expert power (p =0.42, p <0.001), new product complexity (,B0.36, p <0.001), and formalization of the process (pB0.27, p <0.01). Consistent with the results pertaining to influence, marketing perceived that R&D's participation is inversely related to product innovativeness (P = -0.20, p < 0.05) and its perceived importance to the firm (P= -0.17, p <0.05). These results reinforce our earlier arguments about the deleterious effects of the 'not-invented-here' syndrome on R&D in the NPD process. An interesting avenue for future research could be to examine the extent to which participation mediates the relationships between the antecedent factors and influence.

A key contribution of this research is the significant positive relationship found between perceived stake in the NPD process and influence in both samples. Previous research based on IP and RD perspectives has not examined this critical variable. Hence, a further research priority is to examine the factors that affect marketing's and R&D's stake in the NPD process. We found that influence attempt moderates the linkages between expert power and R&D's influence and R&D's department power and marketing's influence. Important questions that future research might pur- sue are what influence tactics do marketing and R&D use to enhance their influence in the NPD process and what factors moderate the relationships between influence tactics and new product performance.

5.2. Conclusion Clearly, if new products are to be successful, marketing and R&D need to play influential roles in their development. Hence, when and how marketing and R&D gain influence in the NPD process is critically important for both research and practice, yet our understanding of the conditions that lead to cross-functional influence in the process is rudimentary. The study results offer a complex portrait of marketing's and





R&D's behavior and influence in the NPD process. They represent a modest contribution to addressing this gap in the literature. We hope it stimulates further research into how and when cross-functional influence leads to effective NPD outcomes.3

3We are grateful to Ralph Katz and the anonymous review- ers for constructive comments on earlier drafts of this article. This research was supported by City University of Hong Kong Research Grant No. 7000457-520.

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Accepted by Ralph Katz; received June 1998. This paper was with the authors 6 months for 2 revisions.




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