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Technovation 27 (2007) 605–615

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Cross-functionality and charged behavior of the new productdevelopment teams in Taiwan’s information technology industries

Chuan Lee, Wen-Jung Chen�

Graduate School of Management, Ming Chuan University, 250 Chung Shan North Road, Section 5, Taipei 11120, Taiwan, ROC.

Abstract

This paper examines how cross-functionality and charged behavior influence new product development (NPD) project performance of

product development teams. Through literature review and questionnaires completed by 133 NPD teams at information technology (IT)

firms in Taiwan, this paper determined that NPD project performance is positively correlated with cross-functionality and charged

behavior, and the relationship between charged behavior and project performance is positively moderated by innovation degree.

Additionally, cross-functionality is negatively correlated with charged behavior. This paper contributes to team innovation literature by

examining the effect of cross-functionality on charged behavior at a team level revealing that when innovation is enhanced, the effect of

employee attitudes and behaviors on development performance is stronger than the effect of functional diversity. This indicates that

senior managers and team leaders must manage effectively personal communication that is useful for recognizing and reconciling their

different perspectives and understanding each other to generate a sense of commitment, joy, excitement, and cooperative behavior. We

recommend that future research utilize different data sources (e.g., team members, external managers, and even customers) and other

‘‘objective’’ measures of performance, including profits, to examine the effects of cross-functionality and charged behavior on new service

development performance. This is then used to assist scholars and IT industries in developing innovation management strategies.

r 2007 Elsevier Ltd. All rights reserved.

Keywords: Cross-functionality; Charged behavior; Innovation degree; NPD project performance

1. Introduction

Cooper (1996) determined that an absence of innova-tiveness (i.e., product benefits that are unique to a givenproduct and perceived as meaningful by customers) is asignificant determinant of new product failure. Numerousstudies argued that product uniqueness is a determinant ofmarket success (Kratzer et al., 2006; Lovelace et al., 2001;Sethi et al., 2001); however, other studies utilized superiorproduct quality as the primary indicator of new productdevelopment (NPD) performance (Olson et al., 2001; Valleand Avella, 2003), particularly in the contexts of newproduct projects and teamwork. Thus, this paper arguesthat quality is the primary indicator for NPD performance.

Companies increasingly rely on cross-functional teamsconsisting of members from Research & Development(R&D), marketing, manufacturing, and sales that are

e front matter r 2007 Elsevier Ltd. All rights reserved.

chnovation.2007.02.012

ing author. Tel.: +886 922533951 (mobile).

ess: eileen515@seed.net.tw (W.-J. Chen).

responsible for acquiring information regarding the needsof markets, technologies, competitors, and resources. Thisinformation is converted into powerful and effectiveproducts that are profitable and valuable to customers.In this sense, cross-functionality has become a character-istic fundamental to NPD teams (Valle and Avella, 2003).Fredericks (2005) argued that cross-functional involve-ment, which resembles cross-functionality, encompassesthe degree of participation in meeting a series of pre-projectmeetings, project review sessions, and a formalized NPDprocess, in addition to assessing market opportunities,identifying potential major customers, and establishingcommercial directions for the NPD team (Song et al.,2000). Ulrich and Eppinger (1995) defined cross-functionalproduct development teams (CFPDTs) as groups ofindividuals from different functional specialties or depart-ments who are brought together to generate and refine newproducts. This paper, defines cross-functionality as thenumber of functional areas represented in a team whosemembers are fully involved in NPD, such as participating

ARTICLE IN PRESSC. Lee, W.-J. Chen / Technovation 27 (2007) 605–615606

in meetings, evaluating market opportunities, and deter-mining the most cost efficient when creating and refiningnew products. Cross-functional NPD teams are believed tofacilitate product development—these teams bring togetheremployees from different departments and functions withthe required expertise and knowledge regarding a proposedinnovation (Kanter, 1988), thereby decreasing uncertaintyand equivocation inherent in the NPD process (Fredericks,2005). However, team functional diversity does not alwayspositively impact performance. Bettenhausen (1991) deter-mined that the overall effect of diversity on developmentperformance is negative, especially in contexts of crisis orrapid change, as the advantages provided by multipleperspectives are frequently offset by problems generatedattempting to attain team consensus. Ancona and Caldwell(1992) proposed that manager ratings of team innovative-ness were negatively correlated with new product teamdiversity. Lovelace et al. (2001) recently noted that thedegree of functional diversity of a team was strongly andnegatively correlated with the degree of innovativeness of ateam.

Furthermore, despite an increasing number of studiesfocusing on cross-functional teams in product develop-ment, some studies argued that the processes result inteams that excel are richer and more complex thancooperation and integration (Leavitt, 1996). SuccessfulNPD is a multidisciplinary process. Sethi and Nicholson(2001) argued the concept of charged behavior—which isdefined as the extent to which NPD teams are enthusiasticand driven to develop superior new products—to captureprocesses that result in exceptional development perfor-mance. They identified that highly charged teams are likelyto develop successful new products. Based on thesefindings, we argue that charged behavior in NPD is arelatively new area of research, and that the debatesregarding significance of cross-functional diversity. Thispaper attempts to examine how cross-functionality andcharged behavior affect NPD project performance.

This paper investigates the impact of cross-functionalteams on the success of the NPD processes in Taiwan’sinformation technology (IT) industry. It first proposes thatdevelopment project performance is affected by cross-functionality and charged behavior via empirical analysisof cross-functional teams. It also examines the moderatingeffect of innovative degree on relationships between cross-functionality, charged behavior, and project performance.Increasing competition generated by market globalizationand rapidly changing technologies has engendered the needfor businesses to continuously develop new products andprocesses that achieve success. This paper adopts the ITindustries located in a science-based industrial park as theresearch subject, and analyzes the relationship betweencross-functional teams and project development perfor-mance.

This empirical paper also adopts the construct ofcharged behavior, which has been largely ignored by teamliterature. Furthermore, a literature review identified few

studies that have examined directly the relationshipbetween team characteristics (such as cross-functionality)and charged behavior. Thus, this paper contributes to teaminnovation literature by assessing the effect of cross-functionality on charged behavior at a team level. More-over, this paper reveals that when innovation is enhanced,the influence of employee attitudes and behaviors orfunctional diversity on development performance is stron-ger. This is then utilized to supply a draft to scholarsconducting research into IT firms developing innovationmanagement strategies.The remainder of this paper is organized as follows. The

following section provides the theoretical background anddevelops the hypotheses. Next, the sample, data, andstatistical procedures are discussed. The conclusion offers adiscussion of hypothesis test results, implications forpractitioners and scholars, study limitations, and avenuesfor future research.

2. Literature review and hypotheses

2.1. Cross-functionality and NPD project performance

Developing new products is a very complex process thatrequires participation of different functional areas in afirm, typically consisting of engineering, manufacturing,marketing, and sales departments. Functional areasrepresented in a cross-functional team vary from one firmto another and from industry to industry (Henke et al.,1993); however, each member must have an equal stake inthe project, and must be accountable for the entire process(Cooper, 1999). Fredericks (2005) identified the importanceof cross-functional involvement during product develop-ment. He determined that cross-functional involvementencompasses the degree of participation in meetings suchas pre-project meetings, project review sessions, and aformalized NPD process, in addition to analyzing market-ing opportunities, visiting potential major customers, andestablishing commercial directions for a team (Song et al.,2000). Ulrich and Eppinger (1995) referred to CFPDTs asgroups of individuals drawn from different functionalspecialties or departments who are brought together for thecommon purpose of producing and refining new products.Cross-functional teams can be viewed in terms of their(1) physical composition and (2) psychological character-istics (i.e., how members of a team identify with the team).This paper focuses on the physical composition of cross-functional teams. Cross-functionality refers to the numberof functional areas represented in a team whose membersare fully involved in an NPD project, such as participatingin meetings, analyzing market opportunities, and determin-ing the most cost efficient, with the goal of creating andmodifying new products.As the number of functional areas in a team increases,

the diversity of ideas and perspectives brought to the teamincreases. Sethi et al. (2001) noted that the likelihood ofproducing innovative ideas improves as the diversity of

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input brought to bear on a problem increases. Sarin andMahajan (2001) concluded that the use of cross-functionalNPD teams is associated with reduced development cost,fast speed to market, improved innovation, and superiorproduct design and quality. Fredericks (2005) argued thatin a cross-functional team structure, information can beshared between multiple departments, and informationsharing and cooperation among team members is corre-lated with efficient product development (Gupta et al.,1986, 1987). Some studies also determined that firms usingcross-functional teams achieve effective NPD performance(Olson et al., 2001; Valle and Avella, 2003). Although alarge variation of functional perspectives is typically viewedas a favorable team characteristic; such diversity canincrease decision-making difficulty and can be detrimentalto creativity (Ancona and Caldwell, 1992; Milliken andMartins, 1996). When teams cannot recognize andreconcile different perspectives, they cannot be successful(Lovelace et al., 2001).

A large number of studies concluded that when firms usecross-functional NPD teams, they obtain improved devel-opment times and project performance (Olson et al., 2001;Sarin and Mahajan, 2001; Valle and Avella, 2003).However, other authors have determined that increasedlevels of functional diversity are negatively associated witha teams’ development performance (Ancona and Caldwell,1992; Lovelace et al., 2001; Milliken and Martins, 1996).Based on the debates regarding the relationships betweencross-functional diversity and development performance,we suggest that there is a nonlinear relationship betweencross-functionality and development performance; that is,when cross-functionality increases from low to moderate,so does performance; however, when cross-functionalityincreases beyond moderate level, performance declines.This inverted-U relationship between cross-functionalityand NPD performance was also proposed by Sethi et al.(2001). However, they found that no relationship existsbetween functionality and performance, and concludedthat this level of functionality generally does not reacha level of dysfunctionality. That is, this relationshipbetween functionality and performance is worthy ofinvestigation, particularly with a wide range of functionaldiversity.

Some authors have used product quality to assess NPDperformance (Olson et al., 2001; Valle and Avella, 2003).Many related studies have recognized that the effectivenessof the NPD process is determined based on developmentcosts and speed to market. Therefore, we argue thatquality, cost, and development time are indictors of NPDperformance. Based on literature review findings, wepropose the following hypothesis:

H1. The NPD project performance will peak under amoderate level of cross-functionality.

Many studies frequently failed to determine whetherinnovation degree is a moderator of the relationshipbetween cross-functionality and NPD performance. Many

studies have suggested that the notion of ‘‘novel’’ is thefoundation of a definition for innovation degree (Andrewsand Smith, 1996; Jackson and Messick, 1965; Sethi et al.,2001). Jackson and Messick (1965) determined that noveltyrefers to the extent to which a concept, idea, or objectdiffers from conventional practice within a domain ofinterest. Thus, in this paper, innovation degree refers to theextent to which a new product is perceived as novelcompared with competing products and planned objec-tives. Although this relationship remains unclear, it is likelythat firms that improve quality through continuousimprovement of existing products may discourage suchdiversity of perspectives provided by team members, as thisis detrimental to efficiency. The functional diversity ofdevelopment teams can assist team members in producinga variety of perspectives quickly, who are consideredessential to the emergence of creative outcomes; that is, it ishelpful in the pursuit of strange innovation. Consequently,we propose the following hypothesis:

H2. The highest level of NPD performance at a moderatelevel of cross-functionality is enhanced as innovationdegree increases.

2.2. Charged behavior and NPD project performance

Increasing attention in social psychological research hasbeen devoted to group performance (Bettenhausen, 1991;Cohen and Bailey, 1997), especially in the area of newproduct development; however, few authors have investi-gated the behaviors that lead teams to success. Numerousauthors have focused on certain important interfunctionalprocesses such as integration (Griffin and Hauser, 1996;Kahn, 1996; Moenaert and Souder, 1990) and cooperation(Pinto et al., 1993). However, integration and cooperationare only two aspects of within-team processes in a teamperforming at a high level. Processes that cause teams toperform at a high level are likely to be much rich (Sethi andNicholson, 2001).Leavitt (1996) and Leavitt and Lipman-Blumen (1995)

studied groups that are highly driven and performexceptionally across a number of corporations, such asthe highly motivated team at Apple Computer thatdesigned the Macintosh. They determined that such teamswith members who are intensively involved in their tasksstrongly believe that they are working toward a superior orsignificant goal. Such teams openly exchange ideas, debateand challenge ideas, with a great sense of joy andexcitement. Numerous authors determined that when teammembers enjoy their tasks, they have high degree ofcommitment (Pierce et al., 1992; Amabile, 1983) andcooperation, and freely challenge and exchange ideas(Nonaka and Takeuchi, 1995). Additionally, team mem-bers are likely to do what is favorable for teamperformance. We argue that members who enjoy theirwork express a high degree of commitment to projects,communicate and exchange their ideas, and cooperate,

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enhance team performance. However, such teams aredifficult to measure from a practical perspective.

Therefore, this paper utilizes the concept of chargedbehavior introduced by Sethi and Nicholson (2001) tocapture the processes that cause teams to achieve excellentperformance during NPD. Charged behavior, the extent towhich NPD teams are enthusiastic and driven to developsuperior products, encompasses a number of componentdimensions that have been identified as enjoyment,commitment, open information sharing, challenging ideas,and cooperation.

Therefore, charged behavior captures the drive, commit-ment, sense of joy and excitement, and members’ beha-viors. The construct is a higher-order variable. Nonaka andTakeuchi (1995) proposed that when members in a chargedteam are highly cooperative and freely challenge eachother’s ideas, they are likely to generate a diverse body ofknowledge. This process can help teams discover superiorsolutions that satisfy consumer needs. Additionally, a highdegree of commitment to a project exhibited by membersof charged teams—and when team members have fun andenjoy their work—members do what is favorable for teamperformance, such as designing superior new products(Pierce et al., 1992; Amabile, 1983). Caloghirou et al.(2004) proposed that information sharing is importantwhen improving innovative performance. Sethi and Ni-cholson (2001) determined that charged behaviors have asignificant impact on performance in NPD; that is, highlycharged teams produce more successful new products thanteams that are less charged. Thus, we propose the followinghypothesis:

H3. The extent of charged behavior in a cross-functionalteam is positively associated with NPD project perfor-mance.

Fig. 1. Concep

Charged behavior in NPD is a relatively new researcharea. Little has been done to identify the conditionsthat moderate the relationship between charged behaviorand NPD project performance. When members in acharged team are very cooperative and freely challengeeach other’s ideas, they are likely to generate a diversity ofknowledge that can help a team discover superior solutionsto satisfy consumer needs (Nonaka and Takeuchi, 1995).The firms that are searching for superior new products viastrange innovativeness can implicitly encourage chargedbehaviors, as these behaviors are likely to prove helpfulwhen pursuing the development of unique products. Thus,we propose the following hypothesis:

H4. The positive effect of charged team behavior on thelevel of NPD project performance is enhanced as the degreeof innovation increases.

As the level of cross-functionality increases, so does thevariety of ideas and perspectives brought to a team.Numerous studies suggested that functional diversity ofdevelopment teams increases the quantity and varietyof information available when designing new productsand helps members understand design processes andimprove processes performance quickly (Valle and Avella,2003). However, the diversity of perspectives can produceinformation overload, making it difficult to resolvedifferent perspectives (Olson et al., 1995). Such a situationis detrimental to creativity. Furthermore, the level ofcross-functionality can increase the difficulty communicat-ing and interacting, especially during crises or periodsof rapid change (Bettenhausen, 1991). In these scenarios,teams are unable to recognize and reconcile theirdifferent perspectives and are unable to produce asense of commitment, joy, and excitement, and generate

tual model.

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cooperative behavior. Thus, we propose the followinghypothesis:

H5. The level of cross-functionality is negatively correlatedwith the extent of charged behavior.

In summary, this paper investigates how cross-function-ality and charged behavior affect NPD project perfor-mance, and how these relationships are affected byinnovation degree. Fig. 1 presents the proposed modelgenerating using the proposed hypotheses.

3. Method

3.1. Sample and procedure

This paper conducted a pretest to assess response biasusing the procedure described by Armstrong and Overton(1977). A new product development team with 18 membersat a computer and peripheral product company notoperating at a science-based industrial park, and a teamwith 22 members in the same industry operating there wereasked to complete the survey. Pretest results identify nosignificant source of response bias. Therefore, this paperadopts IT industries at a science-based industrial park asthe research objects.

R&D activity is typically executed in a project-manage-ment-like approach, and the organizational nucleus is theteam (Griffin, 1997; Van Engelen et al., 2001). Therefore,this paper adopts a team as the data collection and analysisunit. Following other similar studies, such as Sethi andNicholson (2001), this paper discovered during pretestingthat other members were not sufficiently aware to discusshighly sensitive team characteristics like team performance.Therefore, in accordance with its conceptual model, thispaper mailed surveys to project managers who would likelybe very knowledgeable about NPD team events andpractices at IT firms at a science-based industrial park.The sampling frame was a list of new products introducedwithin 2 years before this survey to understand the currentsituation of companies promoting cross-functional teamsand new product development.

To increase questionnaire retrieval rate, this paper firstcontacted high-level managers in companies by telephoneand explained the goals and content of this study. Theserepresentatives were asked to participate. Those companiesthat were willing to take part were personally givenquestionnaires by interviewers. The time limitations forreturning questionnaires by mail were enclosed in leatherenvelops. Gifts were personally presented to marketingexecutives and company secretaries, and they wererequested to return the completed questionnaires by mailor to the interviewers.

According to the data on the science park website, up tothe end of 2005 there were 613 companies in the ITindustry. When completing the questionnaires, respondentswere asked to focus on the most recent NPD projectthat utilized a cross-functional team. In October 2005,

questionnaires were sent to 230 project managers. Thesemanagers were contacted by telephone when the ques-tionnaires were not returned within 20 days. When thequestionnaires were lost or not complete, the mangers weresent replacement questionnaires. In total, 133 completedquestionnaires were collected (57.8% response rate) byDecember 2005; the survey took 3 months.To assess the internal validity of the survey, which

requires that the requested information be obtained froman appropriate source, the person in charge of the NPDteam or with knowledge of the questionnaire was selected.Most managers were, on average, in the firm for 412years, and held their current position for 45 years;therefore, their experience and knowledge confirmed theinternal validity of this questionnaire. Of these managers,58.4% were aged 36–45 years. Their education levels werepredominately vocational school (31.6%) and university(37%), and over 20% had attended graduate school. Thus,the companies at a science-based industrial park generallyhad well-educated employees.

3.2. Measurement

When possible, existing measurement constructs wereutilized. All multi-item constructs were measured using aseven-point Likert-type scale with 1 for ‘‘strongly disagree’’to 7 for ‘‘strongly agree’’. All items are listed in AppendixA. The questionnaire was administered in Mandarin. First,an editor was hired to transform the items into adescriptive style. A pretest was then conducted using aproduct development team with 21 members at a wafermanufacturing and mask company, and professors specia-lized in the management and innovation fields. Followingthis pretest, the wording of some items was refined.This paper chooses new product quality, cost, and

development time as NPD project performance variables.Some studies analyzed the effects of using cross-functionalteams on variables that measure effectiveness achievedduring the NPD process (e.g., internal success, develop-ment cost and time) and variables that measure success ofthis development process in the marketplace (e.g., externalsuccess: percentage of new products that are successful inthe market). However, the degree of effect of cross-functionality on internal success indicators of NPD isstronger than the influence of cross-functionality onexternal success indicators of NPD, except for that inmarketing (e.g., Valle and Avella, 2003). Moreover, manystudies chose internal success indicators as NPD projectperformance variables (e.g., Hoegl and Gemuenden, 2001;Kahn, 2001; Lovelace et al., 2001; Olson et al., 2001;Syamil et al., 2004). This paper considers numerous factorsthat can influence the success of new products in themarketplace, such as market competition, sales efforts, andcustomer impact, and adopts internal indicators of NPDproject performance. The NPD project performance isoperationalized as the extent to which a new product’squality, cost, and development time exceed or fall short of

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objectives. The instrument is a slight modification of thescale used by Syamil et al. (2004) and has three items. Theaverage number of project performance in this paper was4.91. Cross-functionality is operationalized as the numberof functional areas represented in a team whose membersare fully involved in the NPD project, such as participatingin meetings, analyzing market opportunities, and determin-ing the most cost efficient (Brown and Eisenhardt, 1995).The average number of functional areas in this paper was4.7 and number of team members was 7.64.

Charged behavior was operationalized as the extent towhich new product development teams are enthusiasticand jointly driven to develop superior products, and iscomprised of a number of component dimensions such asenjoyment, commitment, open information sharing, chal-lenging ideas, and cooperation. Respondents were asked torate the mean extent to which a team exhibits a feeling offun and enjoyment, commitment to superior projectperformance, a willingness to openly exchange perspectivesto generate new ideas, is free to challenge differentperspectives, and cooperate to achieve goals. This averagemethod and perspective was incorporated in many studies,such as those by Sethi and Nicholson (2001) and Janssen(2005). They asked project managers to rate team memberbehavior to analyze the relationships between teamcomposition (such as ability and personality), team process(such as team member behaviors), and team outcomes(such as team viability and team performance) to eliminatenonmethod bias. The instrument used is the scale devel-oped by Sethi and Nicholson (2001) and has five items.Innovation degree was operationalized as the extent towhich a new product is perceived to be novel comparedwith competing products and planned objectives. Thismeasurement, which is a slight modification of the scaleused by Sethi et al. (2001) and Sethi and Nicholson (2001),has two items.

3.3. Analysis

The phrasing of all questions focused on the team as theunit of analysis. Before proceeding with analysis, items ofeach construct rated by individuals were averaged to forma single-scale score; for instance, project performance wasrated by each employee, and scores were averaged for eachconstruct within the same team, such as the average scorefor project performance rated by each team. Then, thevariables (including cross-functionality, innovation degree,and project performance) were recoded such that the teamsare divided into two groups: those below a median value(we value 0) and those above the median (we value 1). Totest the relationships hypothesized in the model, severalanalyses were performed. First, this paper used multipleregression analysis to test each main effect hypothesis andmoderator hypotheses. Then, cluster analysis was appliedto analyze the existence of different groups of teamsdepending on the level of cross-functionality and chargedbehavior of NPD teams. Finally, the Mann–Whitney test

was utilized to examine the existence of significantdifferences between these groups for NPD project perfor-mance.

4. Results

4.1. Reliability of measures

Table 1 presents descriptive statistics and reliabilityvalues for each measurement and correlations amongmeasures. These analytical results allow us to draw relevantconclusions. Cross-functionality is significantly and posi-tively correlated with innovation degree (r ¼ .21, po.05),NPD project performance (r ¼ .26, po.01), and negativelycorrelated with charged behavior (r ¼ �.32, po.01).Charged behavior is significantly and positively correlatedwith NPD project performance (r ¼ .35, po.01), andnegatively correlated with cross-functionality (r ¼ �.32,po.01).To confirm the dimensionality and reliability of research

constructs, a purification process comprising factor analy-sis, item to total correlation analysis, and Cronbach’s aanalysis were conducted. The a value for each variable andeach structural aspect in this paper were all 4.80 (.87 forcharged behavior, .81 for innovation degree, and .84 forproject performance) (Table 1). This conforms to Cron-bach’s (1951) determination norms, demonstrating that thequestionnaire has considerable internal consistency.

4.2. Hypotheses testing

Hypotheses 1 and 3 point the effects of cross-function-ality and charged behavior on NPD project performance,respectively. Through the analysis of correlation andregression, we find that cross-functionality is positivelycorrelated with NPD project performance (R2

¼ .39,r ¼ .26, b ¼ .45, po.01) and charged behavior is positivelyrelated to NPD project performance. Thus, H1 is notsupported; however, H3 is supported. Hypothesis 5addresses the effects of cross-functionality on chargedteam behavior. Cross-functionality is negatively correlatedwith charged behavior (R2

¼ .32, r ¼ �.32, b ¼ �.16,po.1). Thus, Hypothesis 5 is supported.Table 2 presents the results of moderated regression

analysis. Hypotheses 2 and 4 refer to the innovation degreemoderated by the effects of cross-functionality and chargedteam behavior on NPD project performance. Consistentwith H4, the positive effects of charged behavior on NPDproject performance (R2

¼ .39, b ¼ .40, po.01) are en-hanced by innovation degree. Thus, H2 is not supported—the coefficients of interaction between cross-functionalityand innovation degree are not significant. Table 3 listssupported and unsupported hypotheses.To examine the existence of different groups in firms,

depending the level of cross-functionality and chargedbehavior of NPD teams used, this paper applied clusteranalysis. Moreover, almost no correlation (r ¼ .07) exists

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Table 1

Description of variables and correlation between the study variables

Measurements Mean S.D. Alpha 1 2 2.1 2.2 2.3 2.4 2.5 3 4

Cross-functionality 4.70 .62 – 1.00

Charged behaviors 4.13 .83 .87 �.32*** 1.00

Enjoyment 4.04 .68 – �.25** .31*** 1.00

Commitment 3.97 .89 – .05 .37*** .25** 1.00

Open information sharing 4.41 .79 – �.12* .20** .17* .25*** 1.00

Challenging ideas 3.77 .81 – .09 .27*** .05 .29*** .20** 1.00

Cooperation 4.38 .82 – �.33*** .30*** .32*** .27*** .25*** .10 1.00

Innovation degree 4.21 .86 .81 .21** .09 .05 .10 .06 .13* .21** 1.00

Project performance 4.91 .86 .84 .26*** .35*** .22*** .25*** .19* .14* .37*** .07 1.00

*po.1; **po.05; ***po.01.

Table 2

Results of multiple regression analyses: standardized beta coefficients

Predictor variable Project performance

H2 H4

Cross-functionality .49***

Cross-functionality� innovation degree .14

Charged behavior .28***

Charged behavior� innovation degree .40***

R2 .33 .39

F 22.71*** 19.12***

*po.1; **po.05; ***po.01.

Table 3

Results of hypotheses testing

Hypotheses Testing results

H1: NPD project performance will

be highest at a moderate level of

cross-functionality

H1 is not supported, because cross-

functionality is positively associated

with project performance

H2: The highest level of NPD

performance at a moderate level of

cross-functionality will be enhanced

as innovation degree increases

H2 is not supported, because the

coefficients of the interaction

between cross-functionality and

innovation degree are not significant

H3: The extent of charged behavior

in a cross-functional team is

positively associated with NPD

project performance

H3 is supported

H4: The positive effect of charged

team behavior on the level of NPD

project performance will be

enhanced as innovation degree

increases

H4 is supported

H5: The level of cross-functionality

is negatively associated with the

extent of charged team behavior

H5 is supported

C. Lee, W.-J. Chen / Technovation 27 (2007) 605–615 611

between innovation degree and project performance(Table 1), to verify the moderating effects of innovationdegree on relationships between cross-functionality,

charged behavior, and project performance, this paperapplied cluster analysis to the relationship between cross-functionality and innovation degree, and that betweencharged behavior and innovation degree. Through clusteranalysis of cross-functionality and innovation degree, fourteam groups were obtained. Cluster 1, with 46 teams, hashigh cross-functionality and innovation degree. Cluster 2,with 39 teams, has high cross-functionality and lowinnovation degree. Cluster 3, with 33 teams, has lowcross-functionality and high innovation degree. Cluster 4,with 15 teams, has low cross-functionality and innovationdegree. To confirm the existence of significant differencesfor NPD project performance between these four groups,the Mann–Whitney test was applied. Table 4 presents theanalytical results. There is no significant difference betweenthe four groups of teams identified for NPD projectperformance.Cluster analysis—depending on charged behavior and

innovation degree—obtained four team groups. Cluster 1,with 68 teams, has high charged behavior and innovationdegree. Cluster 2, with 25 teams, has high charged behaviorand low innovation degree. Cluster 3, with 11 teams,has low charged behavior and high innovation degree.Cluster 4, with 29 teams, has low charged behavior and lowinnovation degree. The Mann–Whitney test identified asignificant difference between the four groups of teams forNPD project performance (w2 ¼ 25.97, po.01). Moreover,results also indicate that teams with high charged behaviorand innovation degree have excellent project performance(mean value ¼ 5.89), and teams with low charged behaviorand innovation degree have poor project performance(mean value ¼ 2.78). Furthermore, we conclude that wheninnovation degree is high, the team using more chargedbehavior results in better NPD project performance thanthe teams using less charged behavior. We also concludethat teams with a high degree of charged behavior andinnovation degree generate high product quality, withreduced costs and short development times, and therebyachieve a high level of project performance. This resultalso verifies that although almost no correlation existsbetween innovation degree and project performance(Table 1), innovation degree has a moderating effect on

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Table 4

Differences with respect to NPD project performance considering cross-functionality and charged behavior

Cluster No. of teams NPD performance

Minimum Maximum Mean value S.D. w2

I (1) High cross-functionality and high innovation degree 46 4.97 5.86 5.51 .79 19.29

(2) High cross-functionality and low innovation degree 39 4.72 5.54 5.14 .75

(3) Low cross-functionality and high innovation degree 33 3.08 4.62 3.30 .87

(4) Low cross-functionality and low innovation degree 15 3.24 4.75 3.77 .88

II (1) High charged behavior and high innovation degree 68 4.57 6.76 5.89 .86 25.97***

(2) High charged behavior and low innovation degree 25 3.75 5.89 4.33 .83

(3) Low charged behavior and high innovation degree 11 3.76 6.02 4.44 .89

(4) Low charged behavior and low innovation degree 29 2.18 4.05 2.78 .88

*po.1; **po.05; ***po.01.

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the relationship between charged behavior and projectperformance. That is, innovation degree has an indirect,rather than a direct, effect on project performance.

5. Discussion

This paper adopts the IT industry at a science-basedindustrial park as its research subject. A questionnaire wasutilized to investigate the relationships between cross-functionality, charged behavior, innovation degree, andNPD project performance. Study findings indicate thatNPD project performance is positively correlated withcross-functionality and charged behavior. Cross-function-ality has a negative effect on charged behavior. Thepositive effects of charged behavior on NPD projectperformance are increased by innovation degree.

Charged behavior is the primary variable accounting forsignificant variance in NPD project performance. Thisanalytical result is consistent with research suggesting thatwhen team members cooperate, freely challenge eachother’s ideas, and are interested in and enjoy their work,they are likely to bring together diverse knowledge,discover superior solutions to problems, and, in turn,enhance team performance (Amabile, 1983; Nonaka andTakeuchi, 1995; Pierce et al., 1992).

Cross-functionality positively affects NPD project per-formance. This finding is consistent with research suggest-ing that firms using cross-functional teams achieve effectiveNPD performance (e.g., Fredericks, 2005; Olson et al.,2001; Sarin and Mahajan, 2001; Valle and Avella, 2003).However, contrary to expectations, no inverted U-shapedrelationship existed between cross-functionality and NPDperformance, as suggested by Sethi et al. (2001). Thus, weconclude that with an average of 4.7 functional areas in theteam in this paper, this level of cross-functionality may nothave reached a dysfunctional level. This analytical result isconsistent with that obtained by Sethi et al. (2001); neitherstudy identified an inverted U-shaped relationship; how-ever, this paper identified a positive relationship betweencross-functionality and NPD project performance. How-ever, we believe it is reasonable to expect that increased

levels of functional diversity are negatively correlated withteam development performance (e.g., Ancona and Cald-well, 1992; Lovelace et al., 2001; Milliken and Martins,1996); that is, diversity can increase decision-makingdifficulty which is detrimental to development perfor-mance, especially when teams cannot recognize andreconcile their differing perspectives. We recommend thatfurther research identify teams that have a wide range ofcross-functionality to examine the relationship betweenthese two variables.Cross-functionality has a negative effect on charged

behavior. This analytical result is consistent with studiesthat determined that the levels of cross-functionalityincrease the difficulties individuals have communicatingand interacting (Olson et al., 1995), particularly duringtimes of crisis or rapid change. Some studies determinedthat the overall effect of diversity on team performance isnegative, as the advantages provided by multiple perspec-tives are frequently offset by difficulty generating con-sensus (e.g., Ancona and Caldwell, 1992; Bettenhausen,1991; Dougherty, 1992; Simons et al., 1999). Ancona andCaldwell (1992) and Lovelace et al. (2001) concluded thatfunctional diversity likely results in teams that have littleflexibility, reduced capacity for teamwork, are more opento political and goal conflicts between functions, and haveextensive task disagreement. The team was not successfuland did not generate a sense of commitment, joy, andexcitement, and cooperative behavior, and, in turn,prevented teams from innovating. Thus, although cross-functionality positively affects NPD project performance,some critical determining factors influence the relationshipbetween cross-functionality and project performance. Forinstance, further studies can assume that the positive effectof cross-functionality on NPD performance will be strongfor teams that have little task disagreement. However,cross-functionality is not a critical factor when determiningwhether team members have charged behaviors. Effectivepersonal communication fostered by senior managers andteam leaders is useful when recognizing and reconcilingdifferent perspectives, and generates a sense of commit-ment, joy, and excitement, and cooperative behaviors.

ARTICLE IN PRESSC. Lee, W.-J. Chen / Technovation 27 (2007) 605–615 613

The positive relationship between charged behavior andNPD project performance is improved by innovationdegree, that is, when innovation degree is high, teamsusing more charged behavior results in greater NPDproject performance than that for teams using fewercharged behaviors. This analytical result is consistent withour suggestion that, as to date, little has been done toelucidate the conditions that likely moderate the relation-ship between charged behavior and NPD project perfor-mance. Moreover, this paper did not identify a moderatingeffect of innovation degree on the relationship betweencross-functionality and project performance; this analyticalresult is contrary to those obtained by Olson et al. (2001),indicating that the innovativeness of a given project affectsthe relationship between cross-functional cooperation andproject performance. Although data in this paper did notprovide a definitive explanation as to why innovationdegree has no moderating effect on the relationshipbetween cross-functionality and project performance, onepossibility is provided by Olson et al. (2001), who examinedthe moderating effect of stages of the NPD process (earlyand late stages) in which the effect of innovativeness rangedfrom high to low on the relationship between cross-functionality and project performance. This finding doesnot indicate that innovation degree is not necessary forproject performance rather that some critical determiningfactors influence the moderating effect of innovationdegree on the relationship between cross-functionalityand project performance.

The analytical results (Table 2) indicate that themoderating effect of innovation degree is positivelycorrelated with the relationship between charged behaviorand project performance, whereas the moderating effect ofinnovation degree on the relationship between cross-functionality and project performance is insignificant.The findings in this paper suggest that when innovationdegree is enhanced, the effect of employee attitudes andbehavior is stronger than the effect of functional diversityon team performance. This finding is significant for ITindustries focusing on attempting to improve innovation,and approaches for motivating their employees to co-operate, freely challenge each other’s ideas, and feelinterested in and enjoy their work.

6. Conclusion

This empirical study adopts the construct of chargedbehavior, a collaborative and interpersonally orientedbehavior that is crucial to team success as it supportssocial and motivational contexts in which teamwork isaccomplished. To date, charged behavior has been largelyignored in team literature. Additionally, the literaturereview identified few studies that have examined directlythe relationship between team characteristics (such ascross-functionality) and charged behavior. One notableexception is the study by Chattopadhyay (1999), whoexamined the effect of demographic characteristics on

organizational citizenship behavior—referring to memberswho volunteer for tasks, and help and cooperate withothers to achieve goals—a concept that is similar tocharged behavior. Thus, this paper contributes to teaminnovation literature by examining the effect of cross-functionality on charged behavior at the team level ofanalysis. Furthermore, analytical results indicate that wheninnovation is increased, the influence of employee attitudesand behaviors on project performance is stronger than thatby functional diversity. This empirical finding is particu-larly significant for IT industries that focus on improvinginnovation while not ignoring employee motivation tocooperate, freely challenge each other’s ideas, and feelinterested in and enjoy their work.Considering study limitations is important when inter-

preting analytical results. As the IT industry located in ascience-based industrial park was adopted as the researchsubject, numerous constructs may differ firm to firm, andindustry to industry. Consequently, we suggest that furtherresearch apply the proposed model and findings to otherindustries (e.g., the service industry). The analytical resultscan be applied to IT industries that focus on improvinginnovation and NPD rather than attempting to create astable environment. Additionally, this paper analyzed teammember behavior (charged behavior); consequently, em-pirical findings may apply to single-team projects in whichintrateam relationships among team members are stablethat team leaders can understand member attitudes andbehavior to complete the questionnaire.The study’s empirical findings have several implications

for managers. We conclude that cross-functionalityand charged behavior positively impact NPD projectperformance. Thus, how to best motivate team membersto express charged behaviors is a central question.Team leaders who clearly express NPD visions andperspectives are likely effective when attaining employeecommitment and satisfaction. Opinions and perspectivescan be communicated in meetings to inspire employees.When employees are familiar with a manager’s opinions,commitment and effort to serve customers well mayincrease. Additionally, new employee selection isanother significant issue. Selecting employees who haveinnovative ability and risk tasking enthusiasm is helpful forgenerating a sense of commitment, joy, and excitement,and fostering cooperative behaviors. Managers should alsoadopt policies and incentive plans that engender chargedbehaviors.Empirical results have several implications for future

research. Data for all items were self-reported, thus,innovation degree and NPD project performance may beoverestimated. We suggest that future research utilizedifferent data sources (e.g., team members, externalmanagers, and even customers) and use additional‘‘objective’’ measures of performance such as profit. Thispaper investigated a relatively dynamic and rapidlychanging industry; however, too many NPD studies havefocused on products. An increasing number of service

ARTICLE IN PRESSC. Lee, W.-J. Chen / Technovation 27 (2007) 605–615614

industries face rapidly changing and unpredictablemarkets. As limited empirical evidence exists regardinghow new services are developed, we suggest that furtherresearch examine the effects of cross-functionality andcharged behavior on new service development perfor-mance.

Appendix A

Multiple-item scales are listed in Table A1.

Table A1

Construct and factor Items

Cross-functionality The number of functional areas

represented in the team whose members

are fully involved in the NPD project

Charged behavior Five items totally

Enjoyment 1. Team members greatly enjoyed

working on this product

Commitment 2. Team members were very committed

to developing a superior product

Open information sharing 3. Exposure to the information and

perspectives of other departments helped

members to think of new ideas about the

product

Challenging ideas 4. Team members freely challenged the

assumptions underlying each others’

ideas and perspectives

Cooperation 5. Members were highly cooperative

with each other during the development

of this product

Innovation degree 1. The extent to which our products were

perceived to be novel was above or

below planned objectives

2. The extent to which our products were

perceived to be novel compared with

other competing products

Project performance Three items totally compared with our

planned objectives

1. Our products are more successful in

the quality performance

2. Our product development team

reduces development cost successfully

3. Our product development team

launches products to market faster

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Chuan Lee is professor of Graduate School of Management,

Ming Chuan University, Taiwan, ROC. He received his doctoral

degree in educational management from University of Southern

California. His research interests focus on knowledge manage-

ment and innovation. His research articles are accepted for

publication in the International Journal of Management, Tourism

Management (SSCI), and the Journal of Statistics & Management

Systems.

Wen-Jung Chen is a Ph.D. candidate of Graduate School of

Management, Ming Chuan University, Taiwan, ROC. Her

research interests focus on marketing and organizational

management. Her research articles are accepted for publication

in the International Journal of Management.