428 Part 3: Strategic Actions: Strategy Implementation
and skills of different functional areas to maximize innovation.^92 Teams must help to
make decisions about which projects to continue supporting and which to terminate.
Emotional commitments sometimes increase the difficulty of deciding to terminate an
innovation-based project.13-6a Cross-Functional Product Development Teams
Cross-functional product development teams facilitate efforts to integrate activities
associated with different organizational functions, such as design, manufacturing, and
marketing. Among the team members are research scientists who have the technological
content knowledge to bring to the group development decisions.^93 These teams may also
include people from major suppliers because they have knowledge that can meaningfully
inform a firm’s innovation processes.^94 In addition, new product development processes
can be completed more quickly and the products can be more easily commercialized
when cross-functional teams work collaboratively.^95 Using cross-functional teams, product
development stages are grouped into parallel processes so that the firm can tailor its prod-
uct development efforts to its unique core competencies and to the needs of the market.
Horizontal organizational structures support cross-functional teams in their efforts to
integrate innovation-based activities across organizational functions.^96 Therefore, instead
of being designed around vertical hierarchical functions or departments, the organization
is built around core horizontal processes that are used to produce and manage innova-
tions. Some of the horizontal processes that are critical to innovation efforts are formal
and are defined and documented as procedures and practices. More commonly, however,
these important processes are informal and are supported properly through horizon-
tal organizational structures—structures that typically find individuals communicating
frequently on a face-to-face basis.
Team members’ independent frames of reference and organizational politics are two
barriers with the potential to prevent effective use of cross-functional teams to integrate
the activities of different organizational functions.^97 Team members working within a dis-
tinct specialization (e.g., a particular organizational function) may have an independent
frame of reference typically based on common backgrounds and experiences. They are
likely to use the same decision criteria to evaluate issues, such as product development
efforts, when making decisions within their functional units.
Research suggests that functional departments vary along four dimensions: time ori-
entation, interpersonal orientation, goal orientation, and formality of structure.^98 Thus,
individuals from different functional departments having different orientations in terms
of these dimensions can be expected to perceive innovation-related activities differently.
For example, a design engineer may consider the characteristics that make a product
functional and workable to be the most important of its characteristics. Alternatively,
a person from the marketing function may judge characteristics that satisfy customer
needs to be most important. These different orientations can create barriers to effective
communication across functions and may even generate intra-team conflict as different
parts of the firm try to work together to innovate.^99
Some organizations experience a considerable amount of political activity (called
organizational politics). How resources will be allocated to different functions is a key
source of such activity. This means that inter-unit conflict may result from aggressive
competition for resources among those representing different organizational functions.
This type of conflict between functions creates a barrier to cross-functional integration
efforts. Those trying to form effective cross-functional product development teams seek
ways to mitigate the damaging effects of organizational politics. Emphasizing the critical
role each function plays in the firm’s overall efforts to innovate is a method used in many
firms to help individuals see the value of inter-unit collaborations.