Cross-functionality and innovation in new product development teams : a dilemmatic structure and its consequences for the management of diversity

Abstract

The ubiquitous hope among managers of new product development (NPD) teams that a cross-functional team composition may be a royal road to enhancing team innovations appears to be an illusion. Empirical analyses show positive as well as negative or nonsignificant relationships between crossfunctionality and team innovations. In this article, we integrate the extant literature and develop a process model that explains the contradictory empirical findings. We propose that introducing specific mediators and moderators enables improved predictions of the effects of cross-functionality on team innovations. In developing our model, which is primarily based on a conflict-theoretical perspective, we address theories of social categorization, identity and self verification, information/decision making, group problem solving, and innovativeness, respectively. Our process model explicates how (i.e., via what mediators) and when (i.e., in the presence of what moderators) cross-functionality enhances or impedes synergistic communication among team members, which in turn fosters team innovations. On the basis of this new model we discuss strategies for managing cross-functionality in NPD teams.