Cross-functional integration and new product development performance: Assessing mediating role of customer-supplier involvement and moderating role of structural empowerment

Abstract

Under the open innovation paradigm, few empirical studies have addressed the value co-creation of the cross-functional and external integration, particularly the adverse effects of integration-induced structural empowerment on new product development (NPD). This study constructs a moderated mediation model grounded in value co-creation theory to investigate the interplay among cross-functional integration, customer-supplier involvement, structural empowerment, and NPD performance. Data from a survey of 294 high-performance manufacturing firms (machinery, electronics, and automobiles) worldwide, conducted during the fourth round of the High-Performance Manufacturing project, were analyzed. The empirical results indicate that cross-functional integration indirectly affects NPD performance through the mediating role of customer-supplier involvement. Moreover, the positive association between customer involvement and NPD performance is markedly diminished under conditions of high as opposed to low structural empowerment. However, structural empowerment does not significantly moderate the positive relationship between supplier involvement and NPD performance. This study contributes to the understanding of the value co-creation mechanisms associated with different integration strategies in NPD performance and reveals the potential drawbacks of excessive structural empowerment. Consequently, this study offers actionable insights for firms implementing integration strategies and structural empowerment.