Innovation Strategy And Sanctioned Conflict

jjjj

Innovation Strategy and Sanctioned Conflict: A New Edge in Innovation? Barbara Dyer and X. Michael Song

Teamwork and harmony are worthy objectives, but a healthy dose of conflict also plays an important role in fostering innovation. In their pursuit of teamwork and harmony, companies run the risk of suppressing the creative tension that brings vitality to new-product development (NPD) efforts. Furthermore, a firm’s choice of innovation strategy may have a significant effect on the organization’s capability for managing conflict. Using results from a survey of 290 marketing and R&D managers from U.S. firms in the electronics industries, Barbara Dyer and X. Michael Song explore the link between strategy and conflict, and the effect this link has on NPD success. Their study examines the following issues: the influence of business strategy on specific conflict-handling behaviors; the relationship between those conflicthandling behaviors and positive conflict outcomes; and the relationship between constructive conflict and new-product success. The study classifies firms predominantly pursuing a more aggressive NPD strategy as prospectors and less aggressive firms as defenders. Three conflict-handling mechanisms are identified: integrating behaviors, forcing behaviors, and avoiding behaviors. Compared to the prospector firms, the defender firms in this study perceived significantly higher levels of conflict in their organizations. In handling conflict, the prospector firms perceived a higher level of integrative behavior than the defender firms. The defenders perceived higher levels of forcing and avoiding conflict behaviors. The study identifies a strong, positive relationship between integrative behaviors and constructive conflict. Positive relationships are also identified between constructive conflict and the success of cross-functional relationships, as well as between constructive conflict and NPD business success. For the firms in this study, the results indicate that strategy is associated with the conflict-handling mechanisms the firm uses. For example, the results suggest that an NPD manager in a prospector firm will encounter high use of integrative behaviors, a high number of complex conflicts, a relatively low level of perceived conflict, a high level of formalization, and frequent exchanges of written and verbal communication among the firm’s personnel. The results suggest that managers may help to create an environment conducive to NPD success by assessing their firms’ strategies, emphasizing integrative conflict-handling behaviors, and employing formalization of organizational procedures. © 1998 Elsevier Science Inc. J PROD INNOV MANAG 1998;15:505–519 © 1998 Elsevier Science Inc. All rights reserved. 655 Avenue of the Americas, New York, NY 10010

0737-6782/98/$19.00 PII S0737-6782(98)00032-0

506

J PROD INNOV MANAG 1998;15:505–519

Introduction

R

ichard Pascale [38], p. 263] has observed that, “Creativity and adaptation are born of tension, passion, and conflict”—a fact well illustrated by the new product development (NPD) process, where new ideas, new products, and new processes depend on organization members challenging the status quo. Thus, it is hardly surprising that few processes

Address correspondence to X. Michael Song, Department of Marketing and Supply Chain Management, The Eli Broad Graduate School of Management, Michigan State University, N334 North Business Complex, East Lansing, MI 48824-1112.

BIOGRAPHICAL SKETCHES Barbara Dyer is Assistant Professor of Marketing, Scott Fetzer Faculty Fellow, and Director of The Sales Centre at Ohio University. She earned her Ph.D. in Marketing and Strategic Management at the University of Tennessee and her B.S. and M.S. with honors from the University of North Carolina at Greensboro. Her business background includes over a decade of retail management and buying for companies such as Allied Corporation and Crown Corporation. Dr. Dyer’s research interests include relationship issues in new product development, especially in the international arena, and in professional sales. Her articles appear in the Journal of Product Innovation Management, IEEE Transactions on Engineering Management, the Journal of International Business Studies, ResearchTechnology Management, and various conference proceedings, including the American Marketing Association, the Academy of Marketing Science, and the International Trade and Finance Association. She also teaches in the Ohio University MBA Without Boundaries. X. Michael Song is Associate Professor of Marketing and Product Innovation in the Eli Broad Graduate School of Management, Michigan State University. He received an MS from Cornell University, an MBA and Ph.D. in Business Administration from the Darden School at University of Virginia. Dr. Song received three Best Paper Awards from the Product Development and Management Association. He was a winner in the 1992 Marketing Science Institute Research Competition on Enhancing New Product Development Process. His primary research interests include global new product management and joint venture management. His current research projects include a nine-country comparative study of best practices in managing cross-functional development teams and improving the new product development process. Based on a data set consisting of over 3,000 new products recently developed and commercialized by major corporations from nine countries, he has developed several global “benchmark models” of new product development management. His research articles have appeared in the Journal of Product Innovation Management, the Journal of Marketing Research, Marketing Science, the Journal of Marketing, the Journal of International Business Studies, the Journal of the Academy of Marketing Science, Industrial Marketing Management, the Journal of International Marketing, IEEE Transactions on Engineering Management, and Research-Technology Management.

B. DYER AND X.M. SONG

in the firm take as much of managers’ time or have as profound an effect on the NPD process as conflict [18,47,48]. As Takeo Fujisawa, one of the founders of Honda, has noted, “...you never want too much harmony. One must cultivate a taste for finding harmony within discord, or you will drift away from the forces that keep a company alive” [38, p. 256]. Or, as Souder’s “too-good friends” clearly demonstrates, too much harmony inhibits challenges among team members and results in overlooked information and observations vital to successful innovation [49]. What may come as a surprise, however, is that the firm’s choice of strategy may have a profound influence on its ability to handle discord and disagreement effectively. As Mitchell and Hustad [34, p. 143] state, “New product decisions are often highly strategic.” Today, the competitive nature of the marketplace makes innovation even more important strategically, as businesses increasingly turn to NPD for their survival amid rapid market changes. It is important to note that strategic decisions inherently involve a process of negotiation, because they suggest the consideration of change in response to environmental shifts [22, p. 59]. Put simply, just as innovation links to conflict, strategy and strategic decision-making also link to conflict. Today’s business environment further emphasizes the strategy/conflict relationship. The old corporate hierarchical structure has given way in many instances to project teams, task forces, and other work groups [27]. Specifically in the new product environment, Pinto and Pinto [40, p. 200] state, “...organizations are turning to project management and relying to a greater degree on project teams for the development and implementation of new products and programs.” Significantly, recent research has shown that the effectiveness of teams depends on how well they manage conflict [2]. Mensch and Ramanujam [32, p. 22] concur, stating that it is “...imperative that we understand conditions under which team processes exert a favorable influence on innovation outcomes, and conditions under which they lead to conflict,” because teams are central to successful innovation. Many companies today are reconsidering a historically negative view of conflict and sanctioning conflict to invigorate, change, and gain a competitive advantage in innovation [38]. Honda Motor Corporation exemplifies a company that has proactively and successfully sanctioned conflict, developing and using waigaya, a contention management system [38] (Exhibit 1). For example, in the 1980s, waigaya led to the

INNOVATION STRATEGY AND SANCTIONED CONFLICT

development of the Honda City automobile, a huge hit in the Japanese domestic market. Among the first disagreements the project team faced was top management’s objection to initial design ideas because they were too ordinary [38]. However, Honda’s contention management system, through skillful management of diverse opinions, led to a very successful new product. Where disagreement is not well managed, however, the results can be devastating for the NPD process. In NPD, research and development (R&D) and marketing historically have experienced significant disagreements [21,47– 49]. For example, marketing can create conflict by pushing R&D for quick product changes to support short-term marketing decisions such as pricing, distribution, or advertising. R&D, on the other hand, can create conflict by pushing for technological product improvements that market research has indicated may not be important to customers. Either can generate conflict by speaking jargon that can’t be understood by the other. Souder [48] found that, due to differences in such things as jargon, time sense, motives, goals, allegiances, and senses of responsibility, almost 60% of the new product projects he studied experienced significant interface conflict. Where a severe disharmony state prevailed, 68% of the new product projects failed, compared to 23% under a mild

Exhibit 1: Honda’s Contention Management System Definition: ● Waigaya, a set of conflict management skills and protocols at Honda, provides a forum that supports the creative expression of employee ideas without regard for rank. Protocol: ● Waigaya sessions can be requested by either seniors or subordinates. Within these sessions employees question, challenge, and disagree directly with superiors, co-workers, or subordinates. The company encourages active listening, rationale support for arguments, and polite behavior during the disagreement process. A facilitator is often present to help shape thoughts and feelings into constructive suggestions. Outcomes: ● Ideas coming of these sessions are melded by management into a single plan of action. This provides Honda with a learning system “that is rare even by Japanese standards”[38].

J PROD INNOV MANAG 1998;15:505–519

507

disharmony state and only 13% under a state of harmony [48]. Research offers a number of possible benefits for academic and managerial understanding of the strategy/conflict relationship. First, most firms want and need guidance to improve their NPD because of extreme competitive pressures [9,23]. Also, previous research on general disharmony in NPD offers managers little help with the specific behaviors and mechanisms needed to manage conflict. Because conflict management is a controllable managerial variable (possible to teach and learn), organizational learning resulting from sanctioned conflict may represent a possible sustainable competitive advantage [44]. Furthermore, research on the strategy/conflict link in NPD helps to fill a gap, because research about implementation and control of the marketing function is still limited [24]. Finally, and most importantly for managers, the data from such research may help to improve new product performance. The purpose of this study is to pursue much needed research about the relationship of strategy and conflict within the NPD process. To do so, we conducted a survey of 290 R&D and marketing managers in the electronic industries in the U.S. We addressed the following issues: (1) the influence of business strategy on specific conflict handling behaviors; (2) the relationship of those conflict handling behaviors to positive conflict outcomes, that is, constructive conflict; and (3) the relationship of constructive conflict to new product success. The results indicate that both NPD researchers and managers can benefit by better understanding the relationship between strategy and conflict behaviors in the NPD process.

Brief Literature Overview Conflict research began with studies on the general theories of organizational conflict, the general process of conflict episodes, and the general behavioral approaches to conflict [10,41,50] (See references [29] and [53] for recent in-depth reviews of the conflict literature). More recently, researchers have focused on how organizations handle conflict and how they can improve their conflict management skills [35,51]. Across all research topics, the sum total of conflict research is huge, notwithstanding a relatively narrow range of topics and disciplinary areas, that is, business, economics, psychology, and sociology [29]. However, despite substantial research and widespread accep-

508

J PROD INNOV MANAG 1998;15:505–519

tance of its importance, organizational conflict remains poorly understood [16]. Relatively few studies have explored the relationship of strategy and conflict, and those studies have covered a wide variety of contexts [1,15,16,33,44]. Amason [1] approached the paradox of conflict in top management team strategic decision-making, where conflict can improve the quality of decisions but at the same time hurt group consensus and acceptance. Dyer and Song [15] compared conflict behaviors of Japanese and U.S. firms following different strategic approaches. Eisenhardt and Zbaracki [16] explored how conflict affects general strategic decision-making, while Miles and Snow’s [33] multiple industry/multiple company studies looked at the conflict behaviors associated with particular strategic types. Ruekert and Walker [44, p. 234] focused on implementation issues, stating that variations in the nature of interactions between R&D and marketing based on strategic position “may have important implications for the effective implementation of those strategies.” More research is needed, however, on the issue of the strategy/conflict relationship in general. It is especially needed within the context of NPD, because conflict plays such a critical role in strategic decisionmaking and the innovation process. While each of the above studies has addressed an important aspect of strategy and conflict, only Dyer and Song [15] and Ruekert and Walker [44] have done their research in the context of the NPD process.

Hypotheses Development Strategy and Conflict This study looks at the relationship between innovation strategy, defined as the new product and market development plans of the firm, and task conflict, defined as non-personal disagreements over work goals, objectives, and methods. In order to study this relationship, we chose the Miles and Snow typology to assess strategic position, because it classifies firm strategy based on the firm’s approach to innovation and adaptation to market changes. Furthermore, Miles and Snow [33] also observed that firms pursuing different innovation strategies used different conflict handling methods, possibly because of the different personnel selection criteria used, the different market environments faced, the different functional goals pursued, the different skills and abilities needed, or the different structures used by each strategy. Their typol-

B. DYER AND X.M. SONG

ogy has been successfully used in previous crossfunctional interface studies [31,33,44,46]. The Miles and Snow [33] typology classifies firms into one of four strategic types: (1) prospectors, that move quickly to seize opportunities in the market place through new products, new markets, and new technologies; (2) defenders, that find and keep secure niches in a stable product or service area, not looking beyond their current product domain; (3) analyzers, that mix an aggressive new product and domain approach in one business with a stable approach in a second business; and (4) reactors, that lack a true strategic perspective and allow themselves to be buffeted by environmental elements. In sum, Miles and Snow [33] depicted two “polar” strategic types, prospectors that choose aggressive market development and defenders that pursue non-aggressive market development. In this study, reactors, because they are a-strategic, that is, reactive instead of proactive, and fail to link to a proactive strategy, have been dropped from further discussion and data analyses. Also, for purposes of clarity we present the hypotheses in terms of the polar strategic positions. Miles and Snow’s [33] descriptions suggest that prospectors should have higher levels of conflict than defenders, due to environmental complexity and structural differences. On the other hand, based on research of the social perception of conflict approaches, the described hierarchical structure of defender firms could be perceived as conducive to high levels of conflict [5,52]. The limited research done on this question has had mixed results. For example, Ruekert and Walker [44] using an American sample predicted and found prospectors to have higher levels of conflict. Dyer and Song [14], using a Japanese sample, found defenders to have higher conflict levels. Thus, we hypothesize that: H1: The perceived level of conflict between R&D and marketing will be greater in defender firms than in prospector firms.

Strategy and Conflict Handling Mechanisms Research has identified two major approaches to conflict handling, behavioral and structural [43]. The most recognized and respected behavioral measures of conflict handling are based on the tradeoff managers make between self-interest and interest in others [10,42,52]. This study defines the three fundamental approaches to handling conflict (integrating, avoiding, and forcing behaviors) in the following fashion: (1) integrating

INNOVATION STRATEGY AND SANCTIONED CONFLICT

behavior reflects a significant interest in considering the needs of the other party; (2) forcing behavior reflects low interest in others and high interest in self (one party maximizes his own concern at the expense of the other party); and (3) avoiding behavior reflects low interest in self as well as others (both parties involved in the conflict fail to address anyone’s concerns). Miles and Snow [33] in their studies found that, during conflict, prospectors engage in high levels of interaction in response to frequent cross-functional contact in multiple, complex situations, that is, they use an integrative approach. Defenders interact infrequently and on a routinized basis, seeking timely and simple conflict resolution, that is, they use a nonintegrative approach. Prospector emphasis on multiple functional areas, cooperative behavior, and high levels of interaction is indicative of a high level of interest in others, as well as in self, or an integrating conflict handling behavior approach. Defender emphasis on minimal interaction, reduced time investment, increased efficiency, and hierarchy is indicative of high interest in self, or a forcing or avoiding conflict handling behavior approach. Therefore, we predict that: H2: In conflict situations between R&D and marketing, prospector firms will use integrating conflict handling behaviors more than defender firms. H3: In conflict situations between R&D and marketing, defender firms will use forcing and avoiding conflict handling behaviors more than prospector firms.

Organizations use two structural methods to reduce the chance of conflict and to facilitate resolution: formalization and centralization [30,44,45]. This study defines formalization as the codification of organizational procedures, that is, the written policies, procedures, standards, and processes of the firm. Formalization reduces complexity, uncertainty, and role ambiguity, thereby reducing conflict. The study defines centralization as hierarchical authority, or whether decisions must be approved by superiors before being carried out. Centralization simplifies and speeds conflict handling by providing a known process for conflict resolution. It also acts to suppress conflict through the exercise of authority. Miles and Snow [33] clearly state that defenders have high levels of formalization and centralization, while prospectors have low levels of formalization and decentralized structures. However, the support for Hypothesis 2 suggests that formalization may be more needed, and therefore seen more, in prospector firms because of their complex

J PROD INNOV MANAG 1998;15:505–519

509

nature and high interaction across functional boundaries. Given this and the fact that previous empirical work has not entirely supported Miles and Snow’s [33] claims about formalization and centralization of the strategic types [14,44], we expect that: H4: In conflict situations between R&D and marketing, prospector firms will rely on formalization more than defender firms. H5: In conflict situations between R&D and marketing, prospector firms will rely on centralization more than defender firms.

If managers are to handle conflict situations skillfully, they need to understand the relationships among conflict handling methods, constructive conflict outcomes, and performance. In this study, constructive conflict is defined as personnel working harder, feeling energized by the conflict exchange, and seeing positive change. Performance is defined in two ways, as both the quality of cross-functional relationships and business performance, that is, overall marketplace performance and new product program success. Thomas and Kilmann [52] found that conflict behavior styles have a distinct social desirability ranking. The ranking in descending order is integrating, forcing, and avoiding. Based on this ranking, people in organizations respond more favorably to cooperative conflict behavior (other-oriented) than non-cooperative (or self-oriented) conflict behavior. In examining interdepartmental conflict, Lawrence and Lorsch [28] and Burke [11] found that the more collaborative styles of conflict behavior produced positive, functional results. Also, Barker et al [5] found that positive outcomes of conflict correlate with new product project success. It should be noted that these positive outcomes are not to be mistaken for the “too-good friends” situation in which surface harmony glosses over and suppresses disagreement, effectively forestalling true conflict resolution [49]. This suggests that: H6: In conflict situations between R&D and marketing, a positive relationship will be found between integrating conflict handling behaviors and constructive conflict. H7: In conflict situations between R&D and marketing, a negative relationship will be found between forcing and avoiding conflict handling behaviors and constructive conflict. H8: In conflict situations between R&D and marketing, a positive relationship will be found between constructive conflict and NPD success.

510

J PROD INNOV MANAG 1998;15:505–519

Methodology Research Instrument Development We developed our measurement scales using a fourphase iterative procedure [17]. First, scales designed to measure the constructs of interest were drawn from the literature, and an initial research instrument was developed using standard psychometric techniques [36]. Second, we conducted 16 group interviews in nine companies to identified unique subsets of measures that possessed “different shades of meaning” to informants [17]. Third, we submitted a list of constructs and corresponding measurement items to a panel of academic experts for evaluation of clarity, specificity, and representativeness, requesting appropriate additional measures. Fourth, based on the first three phases, we prepared a new draft of the questionnaire and pretested it with five Ph.D. students in a measurement and research doctoral seminar from a well-regarded U.S. business school. Based on feedback from these interviews, the instrument was modified and professionally drafted. To further test the questionnaire, we administered the questionnaire to 26 employees and conducted focus group interviews using a semi-structured format in four companies. We also pretested the final questionnaire with 82 marketing, R&D, and engineering personnel from two major chemical companies and a computer company. We conducted exploratory factor analysis to analyze the pretest data and computed coefficient alpha to assess the reliability. The results indicated that all scales exceeded .70 (the minimum level recommended by Nunnally), except the avoiding and forcing conflict behaviors scales. Consequently, six additional items of “equal kind and quality” were added to these scales [26]. The final version of the questionnaire reflected the necessary modifications suggested by the analyses. Appendix A contains the details of the measures. Most measures used a seven-point Likert-type agree– disagree rating scale, where 1 is “strongly disagree” and 7 is “strongly agree.”

Sample Design and Response Rate Our sampling frame included member firms listed in the Electronic Industries Association’s 1994 Trade Directory and Membership List. Random selection from this list resulted in 800 firms in the U.S. that

B. DYER AND X.M. SONG

satisfied the study’s desired criteria: (1) firms producing physical products; and (2) firms with departmentalization of the marketing and R&D functions. Because information was incomplete in the trade association listing for 631 of these firms, pre-survey calls were made to these companies to verify address, location of manufacturing, existence of both a marketing and R&D department, and/or the name of the marketing director as the contact person for the study. Adjusted for company mortality, personnel attrition, incorrect or unusable addresses, and subsequent failure to meet the study criteria, the final sample frame included personnel from 727 eligible member companies of the Electronic Industries Association (EIA). In administering the mail survey, we followed the Total Design Method recommended by Dillman [13]. The questionnaires were sent to both R&D and marketing managers in the 727 firms. After the initial mailing and three follow-ups, 176 companies returned a single survey, 52 companies returned both surveys, and one company returned a single survey without functional area identification. Totally, 290 usable responses were received from 229 companies, resulting in a 31% response rate at the company level. To test for possible non-response bias, a multivariate analysis of variance analysis (MANOVA) of the first- and second-wave respondents was performed on all variables used in this study [3]. No significant differences were found at a 5 .05 for all variables, suggesting that non-response biases did not pose a major problem for subsequent analyses. Measures Innovation strategy was measured using an 11-item scale adapted from Conant et al’s [12] Miles and Snow typology scale. The study classifies firms predominantly pursuing a more aggressive NPD strategy as prospectors and those firms predominantly pursuing a less aggressive NPD strategy as defenders. A 12-item scale was used to measure conflict levels consisting of five items from the market orientation study by Jaworski and Kohli [23], five items from the business strategy study by Ruekert and Walker [44], and two new items suggested by pre-test focus group interviews. All of the items used to measure conflict behavior came from scales developed by Rahim [42]. The fiveitem formalization scale and the five-item centralization scale used in this research come from a study by Hage and Aiken [20] and have been used by many cross-functional interface studies, for example, Gupta

INNOVATION STRATEGY AND SANCTIONED CONFLICT

et al [19] and Song and Parry [46]. Constructive conflict was measured by a five-item scale developed by Barker et al [5]. Quality of cross-functional relationships was measured with a six-item scale adapted from organizational measurement scales developed by Barker et al [5]. The business performance scale measured the overall marketplace performance and new product program success, using a ten-item scale developed from the pre-test interviews and a review of the PIMS studies [46] (see Table 1 for a sample of measurement items or Appendices A and B for the complete scale items used in the study).

Analysis and Results Measurement Validation We conducted a series of statistical analyses to validate the measurement model. First, we performed exploratory factor analysis to assess the construct validity of the scales used in the study [26]. The results validated all scales, but suggested that a single scale for integrative conflict behaviors was superior to using a separate scale for each of the different levels of integrative behaviors. Furthermore, this supported the

J PROD INNOV MANAG 1998;15:505–519

study focus of contrasting the three conceptually distinct conflict behaviors, integrative, forcing, and avoiding. Thus, a 13-item scale measuring integrating conflict handling behavior was developed and used to test those hypotheses addressing integrative conflict handling behaviors. Second, we conducted confirmatory factor analyses (CFA) through LISREL to assure unidimensionality, convergent validity, and discriminant validity using the covariance matrix of the remaining items as input [25]. The overall fit of the measurement models is excellent, with the normed fit index (NFI), nonnormed fit index (NNFI), and comparative fit indices (CFI) [7,8] for the model exceeding the critical level (.90) cited by Bearden et al [6]. In addition, all items had a significant loading to their respective constructs and all loadings were significant (p , .05), demonstrating that the scales for the constructs have convergent validity. Examination of the Phi matrix further indicates that the correlation between constructs is significantly different from one, establishing discriminant validity. Third, we classified the responses into the dominant strategic type (prospectors or defenders) using SAS’s FASTCLUS procedure. As an additional check, a

Table 1. Sample of Measurement Itemsa Construct Conflict level

Integrating behavior

Avoiding behavior

Forcing behavior

Formalization Centralization Constructive conflict

Cross-functional relationship quality

Business performance a

511

Items When R&D and Marketing work together . . . there is little or no interdepartmental conflict. People conflict on how to proceed on tasks. When Conflicts Arise Between R&D and Marketing, Generally We . . . try to bring all issues into the open in order to resolve them in the best way. Encourage others to express their feelings and views fully. When Conflicts Arise Between R&D and Marketing, Generally We . . . believe it is better to keep feelings to ourselves rather than create hard feelings. Try to smooth over conflicts by trying to ignore them. When Conflicts Arise Between R&D and Marketing, Generally We . . . tenaciously argue the merit of initial positions when disagreements occur. Want the other to make concessions, but don’t want to make concessions ourselves. Written procedures and guidelines are available for most work situations. Formal communication channels have been established. There is little action taken here until a supervisor approves a decision. Even small matters have to be referred to someone higher up for a final answer. When Conflicts Arise Between R&D and Marketing, Generally We . . . know each other better because of the way conflicts are handled. Are more sensitive to one another because of the way that conflicts are handled. In general . . . all things considered, we feel highly pleased with the way in which we work together on a new product development. We have a high degree of trust in each other. Compared to our major competitiors, our overall new product program is far more successful. Our overall performance of our new product program has met our objectives.

Responses were on a seven-point Likert-type agree–disagree rating scale, where 1 5 “strongly disagree” and 7 5 “strongly agree.”

512

J PROD INNOV MANAG 1998;15:505–519

B. DYER AND X.M. SONG

MANOVA analysis was performed using all 11 strategy measures to confirm the appropriateness of the classification. Fourth, we computed construct reliability using coefficient alpha. The results indicated that the coefficient alphas for the study’s constructs ranged from .77 to .94, exceeding the .70 level considered acceptable for studies of this nature [36,39]. Examination of the patterns of item-to-item correlations and item-to-total correlations indicated that there were no deviations from the internal consistency and external consistency criteria. Hypothesis Testing Following McKee et al [31] and Song and Dyer [45], this study tests hypotheses H1 through H5 using MANOVA and Duncan’s multiple range test. The Duncan method, one of the oldest multiple-stage tests in current use, controls for the Type I comparisonwise error rate and provides greater power than Tukey’s. Hypotheses were accepted or rejected at significance level a 5 .05 for both the F-tests and Duncan tests. Wilks’ Lambda, Pillai’s Trace, and Hotelling-Lawley’s Trace also were used to test the relationship between strategic types and the variables of interest. Hypotheses 6, 7, and 8 predicted simple associations between two interval, continuous, and linear variables and were tested using Pearson product-moment correlation. Results Tables 2 and 3 present the mean responses of prospector and defender firms, the associated F-statistics,

and the results of the Duncan multiple range test for all hypotheses. The data support all of the predictions of the study, with the exception of Hypothesis 5, which predicted that prospector firms would rely on centralization more than defender firms. Conflict level. Defender firms were found to perceive significantly higher levels of conflict in their organizations than prospector firms (p , .01; 4.21 for Ds and 3.62 for Ps). This finding contradicts both the findings of Miles and Snow [33] and Ruekert and Walker [44]. One explanation might be that behavior during conflict episodes affects perceptions of conflict more than the number of conflict episodes experienced. If this is the case, it might be good news for the firm, because controlling the number of conflict situations may be far less doable than controlling the ways that firm members behave once disagreements arise. An alternative explanation might be that, in defender firms, which focus more on technology according to Miles and Snow [33], R&D has more influence in the organization than marketing, leading to conflict based on power struggles between the two areas. Further research is needed to clarify the relationship explored by this research question. Behavioral conflict handling. As predicted in Hypotheses 2 and 3, prospector firms perceived a higher level of integrative behavior in conflict handling than defender firms (p , .01, 5.29 for Ps and 4.69 for Ds), and defender firms perceived higher levels of forcing and avoiding conflict behavior than prospector firms (p , .01, 3.93 for Ds and 3.46 for Ps; 3.46 for Ds and 3.03 for Ps). These findings support previous research in other conflict contexts. It is difficult to

Table 2. Hypothesis Testing Results: H1–H5 Conflict Level and Conflict Handling Mechanisms Mean Value by Strategy Type Hypothesis H1: Ds will have a higher perceived level of conflict than Ps. H2: Ps will use integrating conflict handling behaviors more than Ds. H3: Ds will use forcing conflict behaviors more than Ps (a). H3: Ds will use avoiding conflict behaviors more than Ps (b). H4: Ps will rely on formalization more than Ds. H5: Ps will rely on centralization more than Ds. a

Significant at a level of .01. Means of behavioral mechanisms. c Means of structural mechanisms. b

Prospectors (P)

Defenders (D)

ANOVA F-Statistic

Conflict level

3.62

4.21

25.21a

Integrating behavior

5.29b

4.69b

32.62a

Forcing behavior

3.46b

3.93b

18.02a

Avoiding behavior Formalization Centralization

3.03b 4.41c c 2.47

3.46b 3.89c 3.01c

12.90a 11.83a 24.88a

Construct

INNOVATION STRATEGY AND SANCTIONED CONFLICT

J PROD INNOV MANAG 1998;15:505–519

513

Table 3. Hypothesis Testing Results: H6 –H8 Conflict Handling Mechanisms, Constructive Conflict, and NPD Success Hypothesis

Construct

Correlation

Probability

H6: A positive association will be found between integrating conflict handling behaviors and constructive conflict. H7: A negative association will be found between forcing conflict behaviors and constructive conflict. H7: A negative association will be found between avoiding conflict behaviors and constructive conflict. H8: A positive association will be found between constructive conflict and new product development success. H8: A positive association wil be found between constructive conflict and new product development success.

Integrating/constructive conflict Forcing/constructive conflict

.54 2.35

.0001 .0001

Avoiding/constructive conflict Constructive/cross-functional success

2.28

.0001

.53

.0001

Constructive conflict/market success

.26

.0001

compare these findings, however, to those of the Ruekert and Walker [44] study because their Proposition 4 linked avoidance and integrative behaviors. Because these constructs differ diametrically, as shown by Rahim [42] and by factor analysis in this study, the results of Ruekert and Walker’s Proposition 4 are uninterpretable. This study, then, provides a new data point. Structural conflict handling. The results on structural forms of conflict management were mixed. While Hypothesis 4 is supported, the data did not support Hypothesis 5. Prospector firms do perceive higher use of formalized organization structure than defender firms (p , .01, 4.41 for Ps and 3.89 for Ds). However, counter to the stated hypothesis, defenders exhibit a higher level of centralization than prospectors (p , .01, 3.01 for Ds and 2.47 for Ps). The Ruekert and Walker [44] study predicted higher formalization in defenders, but found the differences between strategic types practically nil, with the results not significant. Song and Dyer’s [45] results on formalization, based on a Japanese sample, support the results found in this study. When Ruekert and Walker [44] proposed that defenders would use centralization more than prospectors as a conflict handling mechanism, their finding was statistically significant, but with the means reversed—that is, prospectors used centralization more than defenders. Dyer and Song [14] found the same, concluding that the higher complexity of prospector NPD demands multiple methods of conflict management. Thus, given the extant findings on this construct in the NPD conflict literature, the results for Hypothesis 5 are surprising. Certainly, it appears that the use of centralization as a conflict handling mechanism

varies with context beyond the difference of strategic type. The finding may be unique to the electronic industries, for example, heavily impacted by an industry characteristic such as environmental volatility. This can only be settled by further research. Performance. The data support all of the outcome hypotheses (H6, H7, and H8). Integrating behaviors were found to have a strong, positive correlation with constructive conflict (p , .01, .54), substantiating Ruekert and Walker’s [44] results. Forcing was found to have a negative correlation with constructive conflict (p , .01, 2.35), and avoiding was found to have a negative correlation with constructive conflict (p , .01, 2.28). Constructive conflict was found to have a strong, positive correlation with cross-functional relationship success (p , .01, .53). Constructive conflict was also found to have a positive correlation with NPD business success (p , .01, .26). The data show that the association of conflict handling behaviors with constructive conflict within firms is strong. In the interest of comparison to prior studies, we have provided the means by strategic type for the business performance variable in Table 4. As will be noted, the means of the prospectors are higher than the means of the defenders.

Table 4. Business Performance Results by Strategic Type Performance Variable

Prospector (m)

Defender (m)

Quality of cross-functional relationships Business performance

5.12 4.78

4.15a 3.97a

a

Prospector and defender means significantly different at a 5 .05.

514

J PROD INNOV MANAG 1998;15:505–519

Discussion Implications Although managers today understand that the firm’s strategy molds an NPD approach, few consider that strategy may also mold a conflict handling climate that affects new product success. Two decades ago, Souder [47– 49] began a series of important studies dealing with the effect of general conflict, or disharmony, on the NPD process. A decade ago, Ruekert and Walker [44] investigated the relationship between strategy and specific conflict mechanisms in the NPD process using three divisions of a single Fortune 500 company. Ruekert and Walker [44] predicated their hypotheses upon the strategic descriptions developed by Miles and Snow [33]. Since that time, little has been done in the NPD area to verify or challenge earlier findings, despite the importance of the strategy/conflict link to successful innovation [5,18]. This study provides important data that represents 290 new product managers across the U.S. electronics industries and ties the strategy/conflict relationship to new product performance. Our results suggest that strategy is associated with the conflict handling mechanisms used by the firm, providing an opportunity for managers to generate a baseline for understanding those mechanisms. As indicated by our findings and in some instances on Miles and Snow’s [33], an NPD manager in a prospector firm, for example, will likely find a baseline that includes high use of integrative conflict handling behaviors, a relatively high number of complex conflicts, a relatively low level of perceived conflict, high formalization, and personnel that exchange verbal and written communication frequently. This suggests that managers in prospector firms should go with their firms’ strengths in integrative behaviors and in formalization, because these are strongly associated with constructive outcomes and, therefore, with new product success. However, because formalization may not be a mandated part of organization structure for these firms [33], new product managers may want to make special efforts to ensure effective formalized rules and communications within the NPD process. Also, although prospector firms frequently interact, managers still must work to assure the quality of those interactions. While a prospector strategy appears to encourage good conflict management habits, prospector firms must never forget that they also have greater need and greater risk. Without open forums for differ-

B. DYER AND X.M. SONG

ent thoughts and ways of doing things, the creative process in these firms may suffer irrevocable damage. An NPD manager in a defender firm, on the other hand, based on Miles and Snow [33] and this study, will likely find a baseline including high use of forcing and avoiding conflict handling behaviors, a relatively low number of conflicts, a relatively high level of perceived conflict, high centralization, and less frequent cross-functional interaction involving verbal communication and written communication. On the positive side, these less aggressive new product developers need fewer conflict handling mechanisms and have efficient mechanisms built into their firm structure [33]. On the negative side, based on our results, centralization, forcing, and avoiding have negative associations with constructive conflict. Because constructive conflict has a positive association with performance, although forcing and avoiding may be appropriate behaviors in other decision areas of the firm, these behaviors may not be appropriate in all instances in the inherently cross-functional atmosphere of NPD. Managers raised in the school of scientific management may never have considered that “forcing through” solutions can lead to negative results in terms of conflict handling and new product success. They often see their actions as “getting things done.” Yet, the use of force (which is frequently sanctioned) may have a very negative impact on new product success. Another concern for some firms may be the desire to change their innovation strategy from defender to prospector. Miles and Snow [33] suggest that either strategy can be successful if the firm remains consistent in carrying out the correct engineering and administrative support. While both prospectors and defenders may be successful, our results show that prospectors perceive higher levels of both the quality of cross-functional relationships and new product success. Furthermore, our results indicate that strategy changes would likely be associated with changes in the ways firms handle their disagreements. Our understanding of empirical findings in this area of research, however, depends on some basic underlying assumptions. Miles and Snow [33] conceptualize innovation strategy from a quantitative perspective, that is, numbers of new product projects and numbers of markets. The conflict handling approaches described in the typology support those goals. The relationships among innovation strategy, conflict handling, and the quality of new product efforts and outcomes needs to be more fully explored. If the relationships differ based on changed assumptions, then managers might have to

INNOVATION STRATEGY AND SANCTIONED CONFLICT

make tradeoffs in their conflict handling methods, depending on whether the amount or the quality of innovation matter more to the firm. Finally, this study suggests that a constructive conflict goal provides a necessary frame of reference to help managers move away from a negative view of conflict. Managers may need to promote a planned sanctioning of certain types of conflict and of certain conflict handling mechanisms to promote positive outcomes for cross-functional relationships and NPD success. In a business world buffeted by uncontrollable, changing conditions, conflict management represents a controllable factor that should be viewed as a proactive tool. Thus, managers using appropriate conflict handling approaches may gain constructive conflict outcomes resulting in improved new product success and an important edge in innovation [38]. Limitations The limitations of our research should be weighed when interpreting its results. The study does not pretend to address all of the pertinent questions about the influence of innovation strategy on conflict management issues. It focuses only on the question of strategy’s association with the firm’s behavioral and structural conflict handling mechanisms and their relationship with performance. Also, the respondents in this study are corporate managers. It is important to note that leaders of functional areas tend to exhibit role behavior reflecting the position of their groups and should give an accurate group perspective in this type of research [4]. Nonetheless, caution is advised in interpreting results and care should be taken in generalizing these results to other employees. As Olson et al [37] point out, the use of subjective measures of performance raises the possibility of common method bias. Our study reduced this risk by obtaining responses from highly qualified personnel who routinely deal with precise quantitative data on their firms’ general and new product performance. Future researchers, however, may wish to include objective measures of firm performance. Finally, the analyses used in this study are correlational and cannot verify causal relationships. Future Research There are many future research possibilities. An important next step would be to explore the mechanisms through which prospector/defender strategies might

J PROD INNOV MANAG 1998;15:505–519

515

influence the handling of conflict within firms. Future researchers might want to pursue the points on which Ruekert and Walker’s [44] study and this one diverge. There is more to learn, also, about the factors leading to constructive conflict, the causes of conflict situations, the issue of conflict history, the consistency of conflict handling approaches, and the cognitive frames brought to conflict situations. Fine research could be done in the area of conflict and speed to market. A key goal for conflict researchers might also be the development of an empirically valid instrument to measure the constructive conflict climate of the NPD process. Such an instrument could establish a quick and accurate baseline, as well as appropriate goals, for organizations desiring to implement sanctioned conflict training to improve their NPD process. Research on market orientation has briefly touched on the issue of conflict, indicating a need in that area to expand our understanding of the relationship among market orientation, conflict, and performance. Finally, as business goes global, researchers will need to explore cross-cultural conflict issues to help firms maximize their innovation efforts in the increasingly diverse and, consequently, highly conflictful work environment of the future.

References 1. Amason, Allen C. Distinguishing the effects of functional and dysfunctional conflict on strategic decision making: Resolving a paradox for top management teams. Academy of Management Journal 39(1): 123–148 (1996). 2. Amason, Allen C. and Hochwarter, Wayne A. Conflict: An important dimension in successful management teams. Organizational Dynamics 24:20–35 (1995). 3. Armstrong, J. Scott and Overton, Terry S. Estimating nonresponse bias in mail surveys. Journal of Marketing Research 14:396–402 (1977). 4. Barclay, Donald W. Interdepartmental conflict in organizational buying: The impact of the organizational context. Journal of Marketing Research 28:145–159 (May 1991). 5. Barker, J., Tjosvold, Dean and Andrews, I. R. Conflict approaches of effective and ineffective project managers: A field study in a matrix organization. Journal of Management Studies 2:167–178 (1988). 6. Bearden, William O., Sharma, Subhash and Teel, Jesse E. Sample size effects of chi square and other statistics used in evaluating causal models. Journal of Marketing Research 14:396–402 (1982). 7. Bentler, Peter M. Multivariate analysis with latent variables: Causal modeling. Annual Review of Psychology 31:419–456 (1980). 8. Bentler, Peter M. and Bonett, D. G. Significance tests and goodness of fit tests in the analysis of covariance structures. Psychological Bulletin 88:588–606 (1980). 9. Bitner, Mary Jo. Evaluating service encounters: The effects of physical surroundings and employee responses. Journal of Marketing 54:69–82 (1990). 10. Blake, R. R. and Mouton, J. S. The Managerial Grid. Houston, TX: Gulf Publishing, 1964. 11. Burke, R. J. Methods for resolving superior-superordinate conflict:

516

12.

13. 14.

15.

16. 17.

18. 19.

20. 21. 22. 23. 24.

25. 26. 27.

28. 29.

30. 31.

32.

J PROD INNOV MANAG 1998;15:505–519

The constructive use of subordinate differences and disagreements. Organizational Behavior and Human Performance 5:393–411 (1970). Conant, J. S., Mokwa, M. P. and Varadarajan, P. R. Strategic types, distinctive marketing competencies and organizational performance: A multiple measures-based study. Strategic Management Journal 11: 365–383 (1990). Dillman, D.A. Mail and Telephone Surveys: The Total Design Method. New York: John Wiley & Sons, 1978. Dyer, Barbara and Song, X. Michael. The relationship between strategy and conflict management: A Japanese perspective. Developments in Marketing Science (Proceedings of the Annual Conference of the Academy of Marketing Science) 18:126–132 (1995). Dyer, Barbara and Song, X. Michael. The impact of strategy on conflict: A cross-national comparative study of U.S. and Japanese firms. Journal of International Business Studies 28:467–493 (1997). Eisenhardt, Kathleen M. and Zbaracki, M. J. Strategic decision making. Strategic Management Journal 13:17–37 (1992). Gerbing, David W. and Anderson, James C. An updated paradigm for scale development incorporating unidimensionality and its assessment. Journal of Marketing Research 25:186–192 (1988). Gray, J. L. and Starke, F. A. Organizational Behavior: Concepts and Applications. Columbus, OH: Merrill Publishing, 1988. Gupta, Ashok, Raj, S. P. and Wilemon, David. A model for studying R&D-marketing interface in the product innovation process. Journal of Marketing 50:7–17 (1986). Hage, J. and Aiken, M. Social Change in Complex Organizations. New York: Random House, 1967. Hall, Richard H. Organizations: Structures, Processes, and Outcomes. Englewood Cliffs, NJ: Prentice-Hall, Inc., 1991. Hustad, Thomas P. and Mitchell, Ted J. Creative market planning in a partisan environment. Business Horizons April-May:58–65 (1982). Jaworski, Bernard J. and Kohli, Ajay K. Market orientation: Antecedents and consequences. Journal of Marketing 57:53–70 (1993). Hustad, Thomas P., Stathakopoulos, Vlasis and Krishnan, H. Shanker. Control combinations in marketing: Conceptual framework and empirical evidence. Journal of Marketing 57:57–69 (1993). Joreskog, Karl G. and Sorbom, Dag. LISREL 7, A Guide to the Program and Applications, 2nd Edition. Chicago: SPSS, Inc., 1989. Kerlinger, F. N. Foundations of Behavioral Research. New York: Holt, Rinehart, and Winston, 1986. Kolb, Deborah M. and Putnam, Linda L. The multiple faces of conflict in organizations. Journal of Organizational Behavior 13:311–324 (1992). Lawrence, P. R. and Lorsch, Jay W. Organization and Environment. Cambridge, MA: Harvard University Press, 1967. Lewicki, Roy J., Weiss, Stephen E. and Lewin, David. Models of conflict, negotiation and third party intervention: A review and synthesis. Journal of Organizational Behavior 13:209–252 (1992). McCann, J. and Galbraith, J. R. Interdepartmental Relations: Handbook of Organizational Design 2, 1981. McKee, D. O., Varadarajan, R. P., and Pride, William M. Strategic adaptability and firm performance: A market-contingent perspective. Journal of Marketing 53:21–35 (1989). Mensch, Gerhard O. and Ramanujam, Vasudevan. A diagnostic tool for identifying disharmonies within corporate innovation networks. Journal of Product Innovation Management 1:19–31 (1986).

B. DYER AND X.M. SONG

33. Miles, Raymond and Snow, Charles C. Organizational Strategy, Structure, and Process. New York: McGraw-Hill Book Company, 1978. 34. Mitchell, Theodore J. and Hustad, Thomas P. The analysis of options approach to new product screening. In: Research in Marketing. Jagdish Sheth (ed.). 1981, pp. 143–179. 35. Morrill, C. The management of managers: Disputing in an executive hierarchy. Sociological Forum 4:387–407 (1989). 36. Nunnally, Jum C. Psychometric Theory. New York: McGraw-Hill Publishing Company, 1978. 37. Olson, Eric M., Walker Jr, Orville C. and Ruekert, Robert W. Organizing for effective new product development: The moderating role of product innovativeness. Journal of Marketing 59:48–62 (1995). 38. Pascale, Richard T. Managing on the Edge: How the Smartest Companies Use Conflict to Stay Ahead. New York: Simon and Schuster, 1990. 39. Peter, J. Paul. Reliability: A review of psychometric basics and recent marketing practices. Journal of Marketing Research 16:6–17 (1979). 40. Pinto, Mary Beth and Pinto, Jeffrey K. Project team communication and cross-functional cooperation in new program development. Journal of Product Innovation Management 7:200–212 (1990). 41. Pondy, Louis R. Organizational conflict: Concepts and models. Administrative Science Quarterly 12:296–320 (1967). 42. Rahim, Afzalur. A measure of styles of handling interpersonal conflict. Academy of Management Journal 26:368–376 (1983). 43. Rajim, Afzalur and Bonoma, Thomas V. Managing organizational conflict: A model for diagnosis and intervention. Psychological Reports 44:1323–1344 (1979). 44. Ruekert, Robert W., and Walker Jr, Orville C. Interactions between marketing and R&D departments in implementing different business strategies. Strategic Management Journal 8:233–248 (1987). 45. Song, X. Michael and Dyer, Barbara. Innovation strategy and the R&D-marketing interface in Japanese firms: A contingency perspective. IEEE Transactions on Engineering Management 42(4):360–371 (1995). 46. Song, X. Michael and Parry, Mark E. R&D-marketing integration in Japanese high-technology firms: Hypotheses and empirical evidence. Journal of the Academy of Marketing Science 21(2):125–133 (1993). 47. Souder, William. Disharmony between R&D and marketing. Industrial Marketing Management 10:67–73 (1981). 48. Souder, William. Managing New Product Innovation. Lexington, MA: Lexington Books, 1987. 49. Souder, William. Managing relations between R&D and marketing in new product development projects. Journal of Product Innovation Management 5:6–19 (1988). 50. Thomas, Kenneth W. Conflict and conflict management. In: Handbook of Industrial and Organizational Psychology. M. D. Dunnette (ed.). Palo Alto, CA: Consulting Psychologists Press, 1976, pp. 889–935. 51. Thomas, Kenneth W. Conflict and negotiation processes in organizations. In: Handbook of Industrial and Organizational Psychology, M. D. Dunnette and L.M. Hough (eds.). Palo Alto, CA: Consulting Psychologists Press, 1992, pp. 651–717. 52. Thomas, Kenneth W. and Kilmann, R. H. Social desirability variable in organizational research: Alternative explanation for reported findings. Academy of Management Journal 18:741–52 (1975). 53. Wall Jr, James A. Conflict and its management. Journal of Management 21:515–558 (1995).

INNOVATION STRATEGY AND SANCTIONED CONFLICT

J PROD INNOV MANAG 1998;15:505–519

517

Appendix A. Measurement Items and Measurement Validation Using LISREL Item Construct Conflict Level: (Reliability 5 .87) When R&D and Marketing Work Together . . . There is little or no interdepartmental conflict.* The objectives pursued by the marketing department are incompatible with those of the R&D department. We get along well with each other.* People in one department generally dislike interacting with those from the other department. Employees from the two departments feel that the goals of their respective departments are in harmony with each other.* People conflict on how to proceed on tasks. People differ on basic goals the two areas should pursue. People differ on the best way to accomplish new product goals. Employees agree on which tasks are urgent.* People conflict over how they should carry out their work. Employees from the two departments share the same values.* People in the two areas rate the importance of decisions in the same way.* Integrating Behavior: (Reliability 5 .91) When Conflicts Arise Between R&D and Marketing, Generally We . . . Try to bring all issues into the open in order to resolve them in the best way. Encourage others to express their feelings and views fully. Try to investigate an issue in order to find a solution agreeable to us both. Work hard to thoroughly, jointly learn about the issues. Exchange complete and accurate information in order to help solve problems. Openly share concerns and issues. Stress the importance of “give and take.” Look for middle ground to resolve disagreements. Negotiate to achieve goals. Arrive at compromises that both areas can accept. Propose compromises in order to end deadlocks. Go the “extra mile” to get along with each other. Try to meet each others’ schedules whenever we can. Avoiding Behavior: (Reliability 5 .84) When Conflicts Arise Between R&D and Marketing, Generally We . . . Try to keep differences of opinion quiet. Avoid openly discussing disputed issues. Try not to get mixed up in conflict. Believe it is better to keep feelings to ourselves rather than create hard feelings. Try to smooth over conflicts by trying to ignore them. Look for ways to bypass unpleasant exchanges. Avoid being put “on the spot” by keeping conflict to ourselves. Try to stay away from disagreements. Forcing Behavior: (Reliability 5 .81) When Conflicts Arise Between R&D and Marketing, Generally We . . . Try to put a single area’s needs first. Stick to initial positions to get each other to compromise. Tenaciously argue the merit of initial positions when disagreements occur. Want the other to make concessions, but don’t want to make concessions ourselves. Look for faults in each other’s initial positions. Treat issues in conflict as a win–lose contest. Enjoy winning an argument. Overstate our needs and positions in order to get our way. Are firm in purusing one side of an issue.

Loadings

T-Test

Source

.87

9.82

[23]

.67 .39

8.79 4.49

[23] [23]

.32

3.54

[23]

.86 .84 .67 .59 .63 .74 .92 .52

9.66 11.69 7.63 7.51 7.70 7.86 11.21 6.20

[23] [44] [44] [44] [44] [44] Focus group Focus group

.72 .64 .43 .60 .57 .58 .71 .63 .54 .70 .52 .55 .30

8.84 8.35 6.02 7.84 7.69 8.65 8.69 9.15 8.42 11.13 8.43 7.86 3.87

[42] [42] [42] [42] [42] [42] [42] [42] [42] [42] [42] [42] [42]

.66 .78 .49

7.87 9.36 5.47

[42] [42] [42]

.79 .78 .60 .62 .60

8.73 9.74 6.86 8.50 7.59

[42] [42] [42] [42] [42]

.60 .74 .80

6.30 9.08 9.14

[42] [42] [42]

.87 .27 .63 .18 .39 .29

11.07 3.07 8.04 1.96 4.59 3.99

[42] [42] [42] [42] [42] [42]

518

J PROD INNOV MANAG 1998;15:505–519

B. DYER AND X.M. SONG

Appendix A. (continued) Item Construct Formalization: (Reliability 5 .77) Written procedures and guidelines are available for most work situations. Formal communication channels have been established. Written documents, such as budgets, plans, and schedules, are an integral part of the job. Performance appraisals in our organization are based on written performance standards. Duties, authority, and accountability of personnel are documented in policies, procedures, or job descriptions. Centralization: (Reliability 5 .90) Any decision I make has to have my boss’ approval. There is little action taken here until a supervisor approves a decision. Even small matters have to be referred to someone higher up for a final answer. A person who wants to make his own decision would be quickly discouraged here. I have to ask my boss before I do almost anything. Constructive Conflict: (Reliability 5 .80) When R&D and Marketing Work Together, Generally We . . . See constructive changes occur on projects because of conflicts. Know each other better because of the way conflicts are handled. Are more sensitive to one another because of the way that conflicts are handled. Feel energized and ready to get down to work after a conflict. Feel hostile toward each other after a conflict.* Quality of Cross-Functional Relationships: (Reliability 5 .94) In General . . . We feel very satisfied in our work with each other. We feel a strong commitment to working with each other on new product development. We have a high degree of trust in each other. The way we work together inspires all of us to better job performance. We feel highly committed to joint work with each other on new product development. All things considered, we feel highly pleased with the way in which we work together on new product development. Business Performance: (Reliability5 .85) Overall, our company is one of the most successful in the industry. Our overall performance of our new product program has met our objectives. From an overall profitability standpoint, our new product development program has been successful. Compared to our major competitors, our overall new product program is far more successful. Compared to our major competitors, our new product development cycle time has been relatively less. Our product-line breadths are much broader than those of our competitors. The overall price of our new products is higher than that of our competitors. The timing of our product introduction is good. Our company has relatively high market shares. Our new product development costs generally stay within our budgeted costs. Overall Fit Indices: Normed Fit Index (NFI): .96 Non-Normed Fit Index (NNFI): .99 Comparative Fit Index (CFI): .99 Incremental Fit Index (IFI): .99 Relative Fit Index (RFI): .96 *Item reverse scored.

Loadings

T-Test

Source

1.15 .96

10.73 10.34

[20] [20]

.83

8.34

[20]

.48

4.32

[20]

.87

8.58

[20]

1.04 1.14

12.09 12.89

[20] [20]

1.15

13.80

[20]

.99 1.05

12.69 14.81

[20] [20]

.62 .75

8.03 10.91

[5] [5]

.86 .66 .42

11.22 7.67 5.01

[5] [5] [5]

.73

10.51

[5]

.74 .78 .72

11.56 10.84 11.11

[5] [5] [5]

.76

11.76

[5]

.99

14.24

[5]

1.21 1.07

13.50 13.17

[46] [46]

.89

10.49

[46]

1.28

15.35

[46]

.76 .86 .57 .69 1.03 .59

8.17 8.24 7.17 8.40 10.36 6.48

[46] [46] [46] [46] [46] [46]

INNOVATION STRATEGY AND SANCTIONED CONFLICT

J PROD INNOV MANAG 1998;15:505–519

519

Appendix B. Strategy Measurement Items In this section, we are interested in perceptions of firm strategy. The following statements describe how a firm might strategically approach new product development. To what extent do you disagree or agree with the following statements in reference to your firm? (Here: 1 5 “strongly disagree” and 7 5 “strongly agree”; and numbers between 1 and 7 indicate various degrees of agreement or disagreement). Item Construct Strategic Type: (Reliability: .88) In comparison to our competitors, the products we provide our customers are more innovative and continually changing. In contrast to our competitors, my organization has an image in the marketplace as a firm with a reputation for being innovative and creative. My firm spends significant amounts of time continuously monitoring the marketplace for changes and trends. In comparison to our competitors, the increases or losses in demand which we have experienced are due most probably to our practice of aggressively entering new markets with new types of products. One of this firm’s key goals relative to its competitors is availability of the people, resources, and equipment required to develop new products and markets. In contrast to our competitors, our managerial employees exhibit competencies (skills) that are broad, entrepreneurial, diverse, and flexible—enabling change to be created. The one thing that protects my organization from its competitors is that we are able to consistently develop new products and new markets. Our management staff concentrates on developing new products, new markets, and new market segments more than many of our competitors. In contrast to many competitors, my organization identifies marketplace trends and opportunities that can result in product offerings new to the industry or able to reach new markets. In comparison to our competitors, the structure of my organization is product or market oriented. Unlike our competitors, our company procedures to evaluate performance are decentralized and participatory, encouraging many company members to be involved. Overall Fit Indices: Normed Fit Index (NFI): .95 Non-Normed Fit Index (NNFI): .97 Comparative Fit Index (CFI): .97 Incremental Fit Index (IFI): .97 Relative Fit Index (RFI): .94

Loadings

T-Test

Source

1.07

13.08

[12]

1.05

12.12

[12]

1.03

10.78

[12]

.92

9.80

[12]

.89

9.92

[12]

1.06

11.83

[12]

1.22

15.49

[12]

1.30

16.07

[12]

1.04

12.21

[12]

.88

10.64

[12]

.63

6.71

[12]