organizational structuring and project team structuring in integrated product development project

Int. J. Production Economics 135 (2012) 939–952

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Int. J. Production Economics

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Organizational structuring and project team structuring in integratedproduct development project

Rupak Rauniar a,n, Greg Rawski b,1

a Department of Management, School of Business, University of Houston-Victoria, 3007 North Ben Wilson, Victoria, TX 77901, USAb Department of Management, Schroeder Family School of Business, University of Evansville, 1800 Lincoln Ave., Evansville, IN 47722, USA

a r t i c l e i n f o

Article history:

Received 17 May 2011

Accepted 10 November 2011Available online 20 November 2011

Keywords:

Organizational structuring

Project structuring

Cross-functional team

Heavyweight manager

Product design glitches

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ail addresses: [email protected] (R. Rauniar),

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a b s t r a c t

For a superior project result, integrated product development (IPD) project need to have stage-specific

management approaches where the front-end structuring supports and strengthens the management

of the project and the team during the execution stages. In the current study we focus on relationships

on the organizational level variable during the front-end stage of the project, organizational structuring,

with a project execution level variable, project team structuring to study the impact on product design

glitches and project performance in the concurrent project environment. We hypothesize that

managing the overall product development projects with integrated organizational structuring at the

front stage and project team structuring during the development and project implementation stages

can lead to reduced product glitches which can enhance the overall IPD project performance. We test

our hypothetical model using data collected from the US automotive industry. Our data supports all the

three proposed hypotheses. Discussion and implication of the empirical results, limitations of the

current study, and recommendations for future studies are also provided.

& 2011 Elsevier B.V. All rights reserved.

1. Introduction

Compared to the sequential approach, concurrent engineeringhas become a popular method to speed up new product devel-opment projects and help manufacturing firms seek competitiveadvantages (Hayes et al., 1988; Meyer, 1993; Patterson, 1993).In such projects various stages and activities are executedsimultaneously and are generally facilitated by cross-functionalteams (Jayaram and Malhotra, 2010; Koufteros et al., 2010). Tofind creative and innovative solutions to the engineering designproblems in such cross-functional environments, experts fromvarious disciplines work together in concurrent or parallel stages(Olson et al., 1995). Many researchers have theorized suchdynamic, and complex, project environments as integrated product

development or IPD (Krishnan and Ulrich, 2001; Gerwin andBarrowman, 2002; Rauniar et al., 2008b).

The IPD project’s initial stage, also referred to as the front end

stage, include activities such as assessments of competition,market, and technology, idea generation, project justification,action plan, etc. which are generally strategic and conceptual innature (Khurana and Rosenthal, 1998). According to the authors,

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the front end stage requires organizational level analysis, plan-ning and initiatives. Once the organization validates the newproduct concept to be congruent with organizational strategicagenda, the project enters into subsequent stages of developmentand implementation. These stages involve executing concurrentactivities of detailed functional and technical design of parts andcomponents, prototype developments, internal and external test-ing of components, system testing, manufacturing process designand development, etc. (Bingham and Quigley, 1990).

Despite its advantages, managing IPD projects is proven to bevery challenging (Wheelwright and Clark, 1992), especially forcomplex products such as automobiles, which involves thousandsof engineers and non-engineers of the developmental firm, client,and suppliers who spend years of designing, testing, and integrat-ing hundreds of thousands of parts (Gokpinkar et al., 2010).Several recommendations at the individual level, team level, andorganizational levels have been provided in the extant literaturesin regard to the effective management and critical drivers of suchcomplex project. For example, Backhouse and Brookes (1996) havesuggested that project implementation can be improved through agood fit of the development firm’s process and structure alongwith management focus, change, and proficiency. Koufteros et al.(2010) stressed the need of systematic and structured integrationof the cross-functional team with suppliers and customers forsuperior project performance. Hart (1995) grouped the determi-nants of new product development performance into strategic and

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project level variables. Strategic level determinants includedorganizational culture, organizational strategy, organizationalstructure, and top management involvement and orientation.Project level determinants included uniqueness of the project,overall product development process, project structure, coopera-tion between departments, and the involvement of suppliers innew product development process. The meta-analysis of Henardand Szymanski (2001) identified four main groups of antecedentsof new product development performance: firm strategy charac-teristics, firm process characteristics, product characteristics, andmarketplace characteristics. Similarly, other important considera-tions in existing literature include attention to organizationalissues (Bailey, 1999), team member selection (Gerwin andMoffat, 1997); individual member’s characteristics (King andMajchrzak, 1996), information sharing and decision making(Rauniar et al., 2008b). Overall, past literatures have separatelyidentified and addressed these critical issues at an individual level,team level, and organizational level, while little research work hasbeen conducted to examine the integrated impact of these variouslevels on product development project performance, such asglitches in product development.

During concurrent detail design and developmental stages ofthe IPD project, team leaders and members are involved inintensive problem solving and decision making process. Thesedesign, development, and tradeoff decisions made across thevarious stages by different teams and at different point of timeneeds to be consistent and coherent with the needs of organiza-tion, the project purpose and its targeted customers’ needs.However, past studies (Rauniar et al., 2008a, 2008b) have pointedout that maintaining and managing consistent and integratedcross-functional decisions across the project is a dauntingtask. Conflicting and inconsistent decisions to the engineeringdesign solutions at different concurrent stages of the IPD projectcan lead to design and development of product plagued withproblems, or glitches that can have substantial impact on projectperformance, such as re-work, scrap, poor resource utilization,cost-overruns, poor quality of design, poor quality of confor-mance, etc. Importance of quality issues of a product andfirm performance has long been recognized in managementliteratures. Studies in quality management have identified designand conformance quality (Garvin, 1987; Cusumano and Nobeoka,1992) as critical quality related issues during design and devel-opment of a new product. The extent of product design glitchesfrom the knowledge management perspective in IPD projects havebeen reported by Rauniar et al. (2008b). Similarly the study ofKoufteros et al. (2010) on product glitches highlights the importanceof supplier and customer integration with the project team.

To drive superior project performance, an IPD project, fromearly on, needs to have a well structured management approachthat aligns and promotes the downstream design and develop-ment effort with the upstream strategic planning stage. InBorenstein (2008), Associated Press writer Seth Bornesteinreported that a nine month delay in project selection processamong the two proposals submitted to NASA cost the agency anadditional $10 million and 2 year delay for the Mars mission. Thisreport further stated that the conflict of interest created by theseproject proposals also led NASA to disband its original boardformed to pick the project, and had to create a new panel to selectthe project that would avoid any conflict of interest. Such conflictof interest and alignment issues between organizational objec-tives and project objectives can tax both the project and organi-zations in terms of money, time, and customer satisfaction. Intheir meta-study, Henard and Szymanski’s (2001) points thatproduct development literature has generally directed attentionat capturing the effect of project process characteristics, andthereby, ignoring the organizational level variables. Our current

study is directed toward improving IPD project performance bysimultaneously addressing management issues of an IPD projectat the organizational level during the front end stage and theproject team level characteristics at the project’s developmentand implementation stages.

The scope of our current study is conceptually outlined in Fig. 1.There are primarily two objectives of our current paper in the areaof IPD projects. First, it integrates the impact of organizational-levelmanagement decisions at the front stage of a project to the projectlevel variables of the project execution stages. In the current studywe focus on the organizational level variable of front end stage of aproject, organizational structuring, with the IPD project executionlevel variable, project team structuring. We hypothesize that mana-ging IPD projects with organizational structuring and project teamstructuring can lead to reduced product glitches which, in turn, canenhance the overall IPD project performance in terms of projectcost, time, and customer satisfaction. We define organizationalstructuring of the IPD project to the extent to which the IPD projecthas strategic alignment and the upfront appointment of the heavy-weight product manager to lead the project. Similarly, we defineproject team structuring of IPD projects to the extent to which thecross-functional teams of IPD projects have a shared projectmission, are integrated, and have clarity of key project targettradeoffs. As illustrated in Fig. 1, we focus organizational structuringat the front end stage of the project, while we focus project teamstructuring issues at the development and implementations stages.

The second contribution is that we study the extent of projectteam structuring on product glitches from the perspective of workintegration internal to a project. Product glitches are the designrelated problems and bugs in the new product developmentprocess because of poor team structuring. According to Petersenet al. (2005), the mechanisms that coordinate product designswith manufacturing are inherently complex issues that deservefurther study. A past study has identified that knowledge integra-tion of product development teams can minimize product designglitches (Rauniar et al., 2008b). In the current study we analyzethe cause and effect of product design glitches from a workintegration perspective that involves a cross-functional team ledby a heavyweight manager. In studying the IPD project perfor-mance, we focus on the negative consequence of product designglitches on overall IPD project performance.

2. Literature review

In order to achieve competitive performance, proper fit betweenan organization’s strategy and structure is essential (Chandler,1962). This classical theory in strategic management regardingstrategy–structure–performance has also been extended in theareas of innovation and development (Teece, 1998) which are tiedto long term performance of an organization. Our current studyextends this thinking of strategic alignment with structure toexplain superior management and performance of an IPD project.We identify two separate structural issues surrounding the IPDproject based on the hierarchical distinction between the organiza-tional and IPD project level factors. To develop our theory, wedivide the IPD project process into two distinct phases. The first islocated upstream, which is the front end stage where organizationallevel decisions are made in regard to a specific project. The secondis the detailed development and implementation stages where, weposit, team and project level factors are more important.

2.1. Organizational structuring at front end stage

The initial, front end stage of IPD projects includes all activitiesfrom the time the opportunity for a new product idea is identified,

Front End: idea generation, concept development, product/ project Planning

Stage A

Stage B

Stage C

IPD Strategic Fit

Glitches

Heavyweight Product Manager

Shared Mission

Clear Project Target Tradeoffs

Cross-functional Integration

Organizational Structuring Project Team Structuring

IPD Performance

Development and ImplementationStages

Fig. 1. Conceptual framework of organizational structuring and project team structuring in IPD environment.

R. Rauniar, G. Rawski / Int. J. Production Economics 135 (2012) 939–952 941

until the final decision to finance and commit organizationalresources to the project is made by the organizational executives(Khurana and Rosenthal, 1998; Kim and Wilemon, 2002;Biyalogorsky et al., 2006). According to Williams and Samset(2010), during the early stage of the project information availableto the team is at its lowest while the consequences of decisionsfor the project are the highest. Similarly, Khurana and Rosenthal(1998) cautions that poor management of the front end stage canhave a negative impact on the downstream activities of theproject and on the overall organizational performances. Manage-ment issues at the front end stage of the project generally includeproduct strategy, goals, project milestones, a powerful projectleader, and the initiation of cross-functional team (Jassawalla andSashittal, 2000). To be effective, the management team needs tohave a clear understanding of the business’s strategic intent andthe market’s needs, and the relationship between the two. This isthe stage where the concept of design-of-quality (Garvin, 1987;Deming, 1986) plays a detrimental role in defining productsuccess. Importance of quality at entry in the developmentalproject has been emphasized in many studies, as noted by Morris(2009) and Miller and Lessard (2001). Such a quality basedapproach to serve the targeted customers better and requires aclear understanding of the developmental firm’s capabilities,priorities, and customer’s needs.

In any organization, top management is primarily responsiblefor providing necessary support and resources needed for aproject. Shortage of top management engagement and lack oforganizational attention at the early stage of the project is tied topoor performance (Sosa et al., 2007). Past studies on the archi-tectural and technical designs in new product development(Henderson and Clark, 1990; Brown and Eisenhardt, 1995) havealso supported the theory on the importance of management and

organizational engagement in the early stages of the project.While we recognize the complexity and uncertainty surroundingthe early stages of the project, our study posits that managementneeds to pay attention to two important issues. The first is toestablish and ensure the strategic fit of the project. The second isto utilize a heavyweight product manager to provide leadershipto the project. These two variables are conceptualized to consti-tute the importance of organizational structuring for managingthe front end stage of IPD project.

2.2. Strategic fit

Strategic fit is the extent to which a firm’s overall business,product, and technology guide the product development contentand processes (Wheelwright and Clark, 1992). New productstrategy has been widely recognized as a vital business priorityby high performing businesses (Jayaram and Malhotra, 2010;Koufteros et al., 2010). The new product strategy should clearlyestablish the strategic need and fit of the IPD project with theoverall organizational strategy. Such a strategic view of newproduct development is consistent with the widely acceptedprinciples of project value management which advocate a sharedprocess to examine the function within the organization-widecontext and optimize new design solutions to meet specificproject objectives (Neasbey et al., 1999).

It is widely accepted that product development projects arerisky and entail large capital expenditures by the developmentalfirm. Thus, there is clearly a need for the management to examinehow the definition of the current proposed project fits thebusiness strategy and needs. A strategically important IPD projectthat is well communicated from the team members from theearly stages of the project can provide an umbrella of legitimacy


and credibility. The project has a better chance of being selected(i.e. it moves faster), accepted (i.e. better team coordination) andexecuted (i.e. less cost) among the team members (Song andParry, 1997). Such a strategically aligned project helps the teamdeal with management hurdles (Van de Ven and Poole, 1995) andresource constraints (Brown and Eisenhardt, 1995). Further,Samset (2009) suggests the concept of strategic failure when theproject may have been successfully executed, yet the choice ofdesign concept turned out to be the wrong one. Cooke-Davies(2009) looked into the front end alignment of the project andconcluded that it is essential to identify explicitly the strategy ofthe company and ensure that the new product developmentproject contributes to the overall corporate goals.

2.3. Heavyweight product manager

According to Wheelwright and Clark (1992), a key dimensionto differentiate the different types of lightweight, heavyweight,and autonomous teams is the role of team leader. Compared tothe lightweight leader, who functions more as a coordinator thana leader, the heavyweight team leader is directly responsible tosenior management for all the work done by the product devel-opment team (Wheelwright and Clark, 1992). In their study, Clarkand Fujimoto (1990) found that the key to product integrity isleadership from heavyweight managers who focus on devisingprocesses to create powerful product concepts and making surethat the concepts are translated into design and manufacturingprocess details. They are generally the chief engineers withsubstantial expertise and have both formal and informal influencein product development projects (Schilling and Hill, 1998).Fujimoto et al. (1996) reported that heavyweight managers helporganizations to formulate product concepts and implement themcoherently across organizational functions.

In general, the importance of leadership in corporate endea-vors has been widely studied and researched. The innovationliterature emphasizes the importance of a ‘‘promotion’’ leaderwho is knowledgeable about the organization’s needs and sup-ports the innovation process (Hauschildt and Kirchmann, 2001).Benefits of a heavyweight manger include product innovation(Koufteros and Marcoulides, 2006); internal coordination, productplanning, concept development (Zhang and Doll, 2001), customerand supplier integration with the development team (Koufteroset al., 2010) and reduced ambiguity and uncertainty (Koufteroset al., 2005). Such IPD project leaders provide objective adviceabout emergent questions, interpret needs, balance differentpoints of view, and arbitrate when conflicts of interest arise(Topalian, 2000). They become the guardian of the concept andnot only react and respond to the interests of others, but also seethat the choices made across the concurrent processes areconsistent and in harmony with the basic design concept(Wheelwright and Clark, 1992).

2.4. Project team structuring at development and implementation

stages

In project-based activities, teams are the prevalent structuresthat fulfill organizational goals (Edmondson and Nembhard,2009). Once the organizational level decisions are made to moveforward with a particular product concept, the IPD project entersinto the subsequent stages of detailed product design, develop-ment and implementation where different cross-functional teamsstart executing concurrent project activities. Theories on teamcoordination and integration (for example, Thompson, 1967; Vande Ven and Koenig, 1976) argue that cross-functional interactionacross distinct temporal phases (planning, development, andmanufacturing) requires unique integration mechanisms. The

concurrent project execution requires ongoing problem solving,decision making, and information sharing about partial or com-plete solutions. As each concurrent stage progresses, cross-func-tional teams exchange their respective status with others. Basedon such coordination, the team updates their assumptions anditerate in parallel until no one sees any further need to change itssolutions (Mihm et al., 2010). At each design iteration, re-config-uration, or change to the product design (Eisenhardt and Tabrizi,1995), the development teams face important tradeoff decisionsamong competing cost, quality, and time considerations that areessential to maintain the internal and external product integrity(Clark and Fujimoto, 1990).

According to the Brown and Eisenhardt (1995) and Miller andHobbs (2009), the structural conditions of the project and teamaffect the cross-functional team dynamics and project outcomes. Aproperly structured IPD project process can ensure that properproject process and methods will positively influence team mem-bers’ functional behavior and performance via the IPD workenvironment (Porter and Lilly, 1996). Such a positive workenvironment and functional behavior seems to be a pre-requisitefor any problem solving and decision making activities. A struc-tured IPD project team can help team members to synthesize theirdiverse thought worlds interactively and iteratively, collaboratingand coordinating readily with one another, and coping withorganizational barriers (Dougherty and Heller, 1994). Structuralmechanisms elevate the team’s information sharing and collabora-tion and promote cross-functional integration (Slotegraaf andAtuahene-Gima, 2011). Based on these studies and others, weconceptualize IPD project team structuring is the extent to whichIPD teams integrate the decisions and activities readily with oneanother through a shared understanding of the overall IPD projectmission and clarity of key target tradeoff decisions.

2.5. Shared project mission

Crawford (2002) and Clark and Wheelwright (1992) argue thatthe project mission is captured in an explicit, measurable projectcharter and is usually articulated even before the team is selected.Shared project mission refers to the extent of the acceptance ofthe IPD project mission by the cross-functional team (Rauniaret al., 2008a). A shared sense of organizational identity isemphasized by Ouchi’s (1979) thought on ‘‘clan control’’ in termsof a high degree of shared goals, visions, values, and beliefs. Oncethe IPD project has been strategically justified, the overall projectmission of a specific IPD project needs to be communicated,articulated, and rationalized so that it can provide the IPD cross-functional team members with an identity and overall directionof the project. This should take place early on at the developmentstage in order to mitigate the cross-functional team member’scompeting social identities and loyalties (Holland et al., 2000).

Cross-functional team members should be provided with cleardirection for product development programs. Atuahene-Gima(2003) suggest that team members with a shared common goaltend to develop a larger pool of high quality ideas and informa-tion by being more open to one another’s diverse perspectives.A shared IPD project mission provides the team with an under-standing and appreciation of its fundamental reasons for existing.This can help during resolving conflicting priorities and decisionsthat are typical in a cross-functional team environment, therebypromoting a sense of community characterized by cooperationand collaboration needed for successful project execution.

2.6. Clear project target tradeoffs

The extent of a clear understanding among cross-functionalteam members about project target specifications in terms of cost,


quality and time can be referred to as clarity of project targetstradeoffs (Rauniar et al., 2008a). While a shared mission estab-lishes the common road map for the cross-functional team, clarityof IPD targets establishes the stepping stones to fulfill the overallIPD shared mission. Clarity of project target tradeoffs can not onlyhelp in identifying the best solution for design problems, but canalso help to identify new opportunities (Enright, 2001). Each teamneeds to ensure that the design and development decisions madeat various concurrent stages are consistent with the past deci-sions made and the future decisions to meet the overall projectand customer requirements. Clear understanding of project tar-gets can ensure that no functional goals and objectives takeprecedence over the overall IPD project’s needs. Clarity of projecttargets requires unambiguous definition, rich communication,and a common understanding of project targets among teammembers (Marquardt and Reynolds, 1996). Murmann (1994)argues that having clear targets from the early stage of the projectmay be critical in improving cycle time (i.e. time to market), teamwork, and overall process productivity because it enables mem-bers to focus resources faster and more effectively. Lack of cleardecisions can lead to several problems for the cross functionalteam, including lack of engagement (Katzenbach, 1998), difficultyin resolving conflicts (Amason, 1996), lack of commitment(Wooldridge and Floyd, 1990), and difficulty in reaching closurein a timely fashion (Harrison, 1996). Larson and LaFasto (1989)found that every effectively functioning team had a clear under-standing of its objectives. The research of Gupta et al. (1992)revealed how R&D, marketing, and manufacturing managers inproduct development projects make tradeoff decisions amongclearly specified critical project measures.

The relationship between the team members in a concurrentprocess can become the source of unpredictable behavior as eachmember may have web of incentives, constraints and connectionsthat impacts project performance (Groak, 1992). Hoegl andWeinkauf (2005) state that given the intense task interdependen-cies, the success of any one team is dependent on how well itswork and design solutions integrates with that of related teams.They need to clarify goals and find mutually acceptable solutionsfor the design problems (Levitt et al., 1999) because the solutionsnot only have to meet a set of requirements, but also theinteractions between these requirements (De Vries, 1994).

2.7. Cross-functional team integration

In our current study, we define cross-functional team integra-tion as the extent to which product development team that iscomposed of members representing various relevant functionaldisciplines are collectively engaged in executing concurrentactivities of the IPD project. Henke et al. (1993) and Burke et al.(2006) reminds us that the most often cited barriers of aneffective product development team is when there is a misman-agement of the internal dynamics of the team. Development,changes, improvements, and new design solutions in such ahighly interdependent environment of an IPD project requiretimely coordination and integration. March and Simon (1958)contend that such collaborative behavior of the team requiresvery frequent intra-team problem-solving and communication. Ascross-functional teams engage in concurrent activities, the issueof conflict resolution and collaboration (Pinto et al., 1993), andcommunication (Ancona and Caldwell, 1992) behavior of theteam can have a tremendous influence on the IPD performance.

Project performance should improve when the entire projectrelated tasks and interdependencies among the team membersare coordinated. An integrated team facilitates team learning andshared knowledge through joint problem solving and informationsharing. In a well integrated team, where information is easily

exchanged, the team becomes an important source of learning.The team improves identification of expertise (Bunderson, 2003),aides in the transfer of knowledge among the team members(Szulanski, 1996), and helps individuals to successfully applynewly acquired knowledge (Lewis et al., 2005) to solve designand development related problems in the concurrent activities.Further, Jassawalla and Sashittal (2000) suggest that team inte-gration in a new product development project is indicative ofgeneral integrative and supportive interpersonal cooperationamong team members.

2.8. Product glitches

In the concurrent and iterative processes of IPD projects, anychanges, redesign, or updates in a concurrent activity needs to becoordinated in a timely manner in order to preserve the overallintegrity of the product being developed. Typically, such changesor correction to the parts or components during the develop-mental stage require an issuance of engineering change order(Gokpinkar et al., 2010). Past studies (for example, Loch andTerwiesch, 1999; Koufteros et al., 2010; Gokpinkar et al., 2010)cite some of the major reasons for engineering change orderswhich includes: changes related to part designs, individual part orcomponent failure to meet the design specification, or interfaceproblems of parts and components. Product design glitches, or theproblems, mistakes, or bugs in the design and development ofnew products, are problematic because the design fails to meetthe requirements for a particular constituent group(s) such ascustomers, part suppliers, and/or manufacturers. Glitches in anew product development project can be design related (Hoopes,2001) or production related (Hendricks and Singhal, 2003). Suchclassifications of product related problems that are popular inquality circles are rooted into the concepts of poor qualityof design and conformance. In this study, we focus primarily onthe problems stemming from product design related issues as it isthe most relevant to our current research topic. A well managedIPD project that minimizes design glitches can provide morebenefits to the project and organization than a project that isplagued with design glitches across various concurrent stages ofthe project.

Glitches are costly mistakes or blunders that could be avoidedif the parties, including customers and suppliers (Koufteros et al.,2010), involved in a specific process share the knowledge held byother participants (Hoopes and Postrel, 1999; Rauniar et al.,2008b). When solutions are creatively developed by a wellintegrated project team, there is a lower risk of redesign thatotherwise would exceed project cost and time requirements. AsVon Hippel (1990) emphasizes, to carry out a design processefficiently there is a need for interactive problem solving by theteam members which requires proper team structuring as identi-fied in this study. Lack of interactive problem solving could leadto a project hampered with glitches and errors across concurrentstages of the IPD project.

2.9. IPD project performance

In order to assess the impact of our recommendations oforganizational structuring, project team structuring and reducedglitches in IPD projects, we define IPD project performance in termsof shortened product development time, reduced product cost, andhigh customer satisfaction. This is consistent with Griffin’s (1997)widely accepted recommendation of product development perfor-mance in terms of schedule, cost, and quality measures. Product costis the total cost associated with the IPD project to develop andmanufacture new products. Product cost includes materials, labor(e.g. fabrication and assembly cost) and overhead (e.g. development


cost, equipment cost) (Garrison and Noreen, 1997). An effectiveproduct development team reduces the costs of material and laborthrough simplifying the manufacturing processes and reducing thenumbers of component parts (Clark and Fujimoto, 1991). Paststudies on concurrent engineering have reported the benefits oflowering product costs, achieving improvements in quality(Takeuchi and Nonaka, 1986), and also lowering time to market(Clark and Fujimoto, 1991).

Product development time is the time required from productconcept to product introduction (Clark and Fujimoto, 1991).Customer satisfaction measures the satisfaction of the customerfor a product designed for a certain target market (Cooper andKleinschmidt, 1987). Target customers of a new product benefitwhen cross-functional team members avoid possible misunder-standings and exchange resources and critical knowledge in theproject freely (Tsai and Ghoshal, 1998).

3. Research framework

Organizational structuring through strategic alignment andthe presence of a heavyweight product manager at the onset ofthe project can contribute to better cross-functional teamdynamics during the downstream activities through shared pro-ject mission, clear project target tradeoffs, and cross-functionalteam integration in several ways. According to McDonough andGriffin (2000), firms with consistent, high new product develop-ment performance established a strategy and made sure to clearlyarticulate that strategy to team members so that they understoodit. Knowing and understanding their firm’s new product strategyas a part of organizational structuring, enables the cross-func-tional team members to see how their task, roles, and behaviorsfit into the organization and how they can contribute to the IPDproject success by working with other members. A clearly definedand articulated new product strategy serves as a feed-forwardcontrol mechanism (McDonough and Leifer, 1986) during projectimplementation, which is an essential component to the disci-plined problem solving, especially in a concurrent environment.A strategically important IPD project, if clearly articulated andcommunicated, can provide boundaries for behavior necessary fortask and information coordination and decision making. Asdevelopmental activities iterate, more insight is gained and theinterdependent, concurrent activities need to be re-aligned toreflect any changes. To assess and accept such changes, a teamneeds to clearly understand the contribution of such changes tothe overall project targets and overall organizational and projectmission. When there is a common and mutually aligned goal,agreements to the decisions are made more readily (Leenderset al., 2003).

Project leaders are primarily responsible for defining teamgoals and for developing and structuring the team to accomplishmissions (Zaccaro et al., 2001). They are the ones who cantransform the team’s assigned mission into a workable plan toaccomplish several objectives for the team (Hackman and Walton,1986). In cross-functional teams the leader is often in the uniqueposition of being able to see the whole picture and understandhow different sources of expertise fit together (Wheelwright andClark, 1992). A positive influence of the team manager on teameffectiveness and consequently on IPD performance is expectedbecause such individuals effectively facilitate the problem-solvingcommunication from ‘outside’. Leaders instill in team membersan understanding of the team’s mission, the action steps neces-sary to complete the mission and the role requirements for eachmember for collective performance (Zaccaro et al., 2001). Apply-ing the path-goal theory of Locke and Latham (2002), manage-ment can initiate and facilitate a positive cross-functional project

environment by providing the project with a heavyweight pro-duct manager and strategic fit of the project at the front endstage. The goals and strategic agenda have to be clearly formu-lated and communicated to the team members; by doing so, astructure is provided in which the objectives can be achieved(Sarin and McDermott, 2003). Therefore we offer followinghypothesis:

H1. Organizational structuring through strategic fit and a heavy-weight product manager is positively related to IPD project teamstructuring.

Sharp et al. (2000) propose that shared mission, purpose, goalsand direction are among the key characteristics of a high-performance team. Providing teams with clear, consistent targetscan be ways to create boundaries for the cross-functional team sothat the team is not continually defining its direction (Bowenet al., 1994) and wasting valuable project resources. An IPD teamwith a shared project mission and clear project target tradeoffswould be able to readily identify and establish the new productsolutions, concurrent task needs, requirements and interdepen-dencies. Such a shared project mission and clear project targetsprovides an ‘‘enabling performance situation for task performancestrategies that are appropriate to the work, and to the setting inwhich it is performed’’ (Hackman and Walton, 1986). Recently,Gokpinkar et al. (2010) study on organizational structure andproduct architecture has developed a coordination deficit metricto quantify the mismatches on product quality. Our current studyprovides an extension to this study as we tend to focus on thedesign and development related problem, or glitch, stemmingfrom poor or lack of project team structuring, i.e. poor teamintegration, lack of shared mission, and unclear project targettradeoff decisions. We argue that, in a poorly structured IPDenvironment, cross-functional team members will tend tooptimize a ‘‘local’’ performance measure, specific to their taskand process. But concurrent interdependence of material, workoutputs, design, and information requires coordination and com-munication process among other team members (Mihm et al.,2003).

Timely communication of solutions to other interdependentteam members enables understandings on the coordinationrequirements among the concurrent activities. A poorly struc-tured team can be engaged in myopic, selfish behavior andsacrifice too many solution qualities during problem-solvingactivities as they fail to perceive and take into consideration ofeach other’s views (Mihm et al., 2003). Failure of cross-functionalcoordination can lead to frequent, inconsistent, and, at times,even conflicting solutions that can contribute to poor quality ofthe product. On the other hand, project team structuring throughshared project mission, clear project targets, and integrated cross-functional teams can encourage team members to share pro-blems, create a learning environment within the team (Sarin andMcDermott, 2003), engage in functional conflict resolutions(Antonioni, 1996), and work cooperatively toward the commonoverarching goal (McDonough, 2000). Overall, such team char-acteristics should encourage and help in collectively addressingand reducing glitches. Therefore, we propose:

H2. Project team structuring is negatively related to productdesign glitches.

Design-manufacturing integration has been identified as animportant characteristic of successful concurrency as it involvescoordination of design with manufacturing (Jayaram andMalhotra, 2010). Hauptman and Hirji (1996) found that over-lapping of problem solving pertaining to upstream and down-stream decisions was strongly associated with new product

Organizational Structuring:

-Project Strategic Fit

-Heavyweight Product Manager

Project Team Structuring:

-Shared Project Mission

-Clear Project Target Tradeoffs

-Team Integration

Design

Glitches

IPD

Performance:

-Development Time

-Development Cost

-Customer Satisfaction

H1: + H2: - H3: -

Fig. 2. Proposed research model.


development success. In a loosely coordinated IPD team, indivi-dual members may not know what other members of the teamknow or are doing and are likely to rely on partial, incorrect, oruntimely information. Such noisy communication among theteams can lead to poor decisions resulting into product withquality related problems.

The negative consequences of glitches in overlapped stages areamplified when glitches go undetected to a later stage of theproject. In order to fix the glitch, the IPD team may have to revisitvarious interdependent stages of the IPD process to investigatethe cause(s) and effect(s) of a particular glitch for the remedy.These changes, if observed late in the developmental projects, canhave ‘‘snowball’’ effects from one component to another, in somecases in cycles, causing long resolution times (Terwiesch andLoch, 1999. Corrective actions to fix glitches can tax a project withdelays and additional development costs.

Greater variations lead to cost and schedule overruns (Deming,1986). These corrective actions to fix glitches contribute to re-work while successive stages have to wait till such glitches arefixed. From a performance perspective, a glitch translates intore-work, wastage, project delay, and inefficient usage of resourcesincluding valuable engineering hours of the IPD projects. If notidentified or resolved during the product design and develop-ment, glitches can lead to inaccurate forecasting, poor planning,parts shortage, quality problems, capacity shortfall, or operationalconstraints (Fisher and Raman, 1996). Overall, product glitcheshave been reported to affect a firm’s short- and long-term profit-ability (Hendricks and Singhal, 2003). Therefore, we propose:

H3. Product glitches are negatively related to IPD projectperformance.

Fig. 2 represents our hypothetical model that identifies therelationships between organizational structuring, project teamstructuring, product glitches, and IPD project performance.

4. Research methods and results

Based on our literature review, the research model proposed inFig. 2 provides the foundation for the empirical research for thisstudy. An extensive literature review, case studies (Rauniar, 2005;Rauniar et al., 2008a, 2008b) and structured interviews withproduct development professionals (managers and team-mem-bers) from a leading USA based auto manufacturer and academi-cians helped to define the domain of constructs and facilitateditem generation. Items generated for each construct in theproposed research model are presented in Appendix A. Asdiscussed earlier, organizational structuring and project teamstructuring was conceptualized as a second order construct ofproject strategic fit, heavyweight product manager(organizational

structuring) and shared project missions, clear project targets,and team integration. (project team structuring). Similarly, IPDproject performance is a second order construct of developmenttime, cost, and customer satisfaction. Project strategic fit, heavy-weight product manager, shared project mission, clear projecttargets, cross-functional team integration, design glitch tradeoffs,development time, development cost, and customer satisfactionwere coded as SF, HWM, PM, CPT, CFT, DG, PDT, PDC, and CS,respectively, for the data analyses.

Three items were identified to measure SF and four to measureHWM. Items for SF were designed to measure whether or not thestrategic fit of the IPD project with the overall business strategyguided the project (Rauniar, 2005). The items for the HWM wereconstructed to measure both the formal influence (for example,control over budget) and informal influence (technical expertise)influence on the team and broader organization context (Rauniaret al., 2008a). Collectively, SF and HWM have been theorized inour current study to measure organizational structuring. Similarlywe had four items to measure PM, three for CPT, and five items tomeasure CFT. Items for PM and CPT were selected to mea-sure whether the two constructs were specified, communicated,and if the team had understanding of these constructs (Rauniar,2005). Similarly items for CFT included measures to representcross-functional diversity of the team and concurrency of theproject activities (Koufteros et al., 2010). These three factorsrepresented project team structuring. In the current study wefocus the extent of project team structuring on two constructs:product design glitches and overall IPD performance. Four itemswere finalized to measure DG, five for PDT, five for PDC, andfour to measure CS. Items for DG represented the extent ofdesign failure to meet the requirements of customers, suppliers,manufacturers, and assemblers. The theoretical basis for devel-oping these items could be found in the study of Hoopesand Postrel (1999). Items for PDT provided aggregate measuresof the ‘‘time’’ factor of the project in terms of developmenttime and market introduction time (Rauniar, 2005). Similarly,items for PDC measured the total cost associated with the NPDproject to develop and manufacture new products (Rauniar,2005). Finally, items for CS reflected measures of customer andmarket satisfaction derived from the new product introduced(Rauniar, 2005). Item descriptions for all the variables are pro-vided in Appendix A.

For most items, a five-point Likert scale was used; where1¼strongly disagree, and 5¼strongly agree. A different scale wasused for the general demographic questions. These items werepresented to two product development managers, three productdevelopment team members, and three academicians for theirfeedback. Items were added, modified, deleted and finalized onthe basis of their qualitative feedback. For our research, theSociety of Automotive Engineers (SAE) provided mailing list of


3000 members that included professionals involved in IPD pro-jects. A survey was administered for the large-scale sample toempirically investigate the proposed research model of Fig. 2. Outof 3000 surveys administered, a total of 220 responses wereobtained from the two waves of mail conducted in 2 weeks apart.Out of 220 responses received, 191 were usable resulting in aresponse rate of 6.3% (191/3000). Such response rate is relativelylow and yet not unusual among the busy product developmentprofessionals (Rauniar et al., 2008b).

Of the total responses received 28% of the respondents workedfor companies with up to 499 employees, 8% with companieshaving 500–999 employees, 24% with companies having 1000–4999 employees, 12% with companies between 5000 and 9999employees and 27% with companies having over 10,000 employ-ees. These respondents represented manufacturing firms thatdeveloped and produced diverse product categories for the auto-motive industry. In addition, about 67% represented suppliercompanies out of which 78% belonged to first-tier suppliers. It isa common practice to include members of supplier and customersin the integrated product development project in automotiveindustry (Koufteros et al., 2010). Responses to questionnaire inthe demographic questions indicated that the respondents hadworked on separate IPD projects.

Statistical analysis of our large-scale data included tests forreliability, factorial validity, and test for discriminant validity. Wethen used structural equation modeling to test our measurementand structural model to investigate our hypothesized model ofFig. 2.

4.1. Item purification and exploratory factor analysis

For our empirical analyses, we had a total of 37 itemsrepresenting a total nine variables. With the limited responsesize of 191, we followed the recommendation of Rauniar et al.(2008b) to conduct two separate factor analyses using principalcomponent analysis and oblimin rotation. In our first factoranalysis, we used items representing two variables of organiza-tional structuring (i.e. SF and HWM) and three variables of projectteam structuring (i.e. PM, CPT, and CFT).

Factor analysis of all the variables SF, HWM, PM, CPT, and CFTresulted in five separate factors for each variables under investi-gation with no cross loadings among the factors. The result of the

Table 1Composite factor reliability, average variance extracted, correlation, and chi-square dif

HW SF PM

CF reliability¼0.82HW AVE¼0.53

Correlation¼0.40 0.83SF Chi sq. difference¼33.0 0.63

0.31 0.47 0.92PM 62.30 65.60 0.74

0.36 0.49 0.42

CPT 33.60 36.70 67.20

0.43 0.42 0.52

CFT 53.80 73.70 95.90

�0.34 �0.25 �0.22

DG 37.20 147.00 139.00

0.38 0.53 0.35

CS 52.20 56.30 107.40

0.34 0.39 0.33

PDC 52.10 65.00 80.10

0.39 0.33 0.46

PDT 27.20 45.80 58.10

Mean 3.37 3.86 4.11

Standard deviation 1.12 0.93 0.78

first factor analysis is presented in Table A1. All items loadingswere 0.61 or above. Overall, the factor analysis demonstrated thefactorial validity of our instruments representing organizationalstructuring and project team structuring. Similarly, the remainingitems in our study were subjected to a second factor analysis.The result from this second factorial analysis, Table A2, resultedinto four different factors representing DG, CS, PDT, and PDCwithout any cross loadings. The item loadings ranged from 0.699to 0.922. Results of the factorial validity are presented in theTable A2. Next, we tested the reliability of each construct usingCronbach’s a. The composite reliabilities of SF, HWM, PM, CPT,CFT, DG, CS, PDT, and PDC were 0.83, 0.82, 0.92, 0.85, 0.82, 0.85,0.88, 0.93, and 0.89, respectively. All reliability estimatesexceeded customary acceptable levels of 0.80 (see Tables A1and A2 or Table 1).

4.2. Discriminant validity, correlation matrix, and descriptive

statistics

Discriminant validity is demonstrated when a measure doesnot correlate very highly with another measure from which itshould differ. To assess discriminant validity, the recommenda-tions made by Segars (1997) was followed. According to thismethod, establishing discriminant validity requires that averagevariance extracted for each construct should be greater than thesquared correlation between constructs. Such results suggest thatthe items share more common variance with their respectiveconstructs than any variance the construct shares with otherconstructs (Fornell and Larcker, 1981). Table 1 reports the crossfactor reliability, average variance extracted (AVE), correlation,and w2difference between restricted and freely estimated models.As our result shows, all composite factor reliability compositescores were above the 0.70 cutoff, suggesting that the underlyingitems are sufficiently representative of their respective con-structs. Also, all AVE, except work integration (0.48) exceededthe suggested value of 0.50 implying that the variance capturedby the construct was significantly greater than that attributable toerror. Additionally, AVE measures for all constructs are muchlarger than the square of the correlation between them; providingevidence of discriminant validity. To further establish discrimi-nant validity, a model which constrained the correlation betweenthe factors was estimated. The w2 difference of the restricted and

ference.

CPT CFT DG CS PDC PDT

0.850.650.46 0.8268.60 0.48�0.31 �0.46 0.85154.70 222.30 0.580.32 0.49 �0.32 0.8877.30 94.90 167.60 0.650.45 0.41 �0.38 0.32 0.8958.10 95.40 199.00 98.70 0.630.41 0.51 �0.31 0.60 0.57 0.9338.00 58.50 154.00 45.30 41.20 0.733.65 3.72 2.08 3.73 3.57 3.51

1.02 1.06 0.95 0.93 0.97 1.04


freely estimated models for each comparison resulted in a highlysignificant difference in w2. This suggested to us that the con-structs are distinct and that their underlying scales exhibit theproperty of discriminant validity. The mean for these constructsranged from 2.08 (DG) to 4.11(PM) whereas the correlation wasfound to be in the range of 0.78 (PM) to 1.06 (CFT).

4.3. Structural equation modeling

AMOS 5.0 was used to analyze the measurement and struc-tural models. Following Anderson and Gerbing’s (1988) paradigmon model testing, the measurement model was tested first,followed by tests of the structural model. This was done in orderto avoid possible interactions between the measurement andstructural models.

We assess the overall fit of the first order measurement modelusing all the items related to various first-order construct of projectstrategic fit, heavyweight product manager, shared project mission,clear project target, team integration, product design glitches,development time, development cost, and customer satisfaction.Using recommendations from Shah and Goldstein’s (2006), Hu andBentler’s (1999), and Yang et al. (2011), multiple fit indices—

the incremental fit index (IFI)¼0.939, comparative fit index(CFI)¼0.938, root mean square approximation (RMSEA)¼0.048,and the chi-square/degrees of freedom¼1.443—are above theacceptable fit and with multiple values indicating good fit.

Convergent validity may be assessed by checking the signifi-cance of the loading for an item on its posited underlyingconstruct (Anderson and Gerbing, 1988). The loadings for thefirst order measurement model indicate that all items loadsignificantly on their posted constructs indicating convergentvalidity. Further, the item loadings are similar between the firstand second-order measurement models indicating that the mea-surement is robust when specifying the second-order construct ofproject team structuring and IPD performance. The second orderconstruct of organizational structuring contains only two vari-ables, project strategic fit and heavyweight product manager, forwhich no true statistics tests exists to test the robustness of asecond order model. However this relationship is theory driven asdiscussed earlier in this paper. A correlation of 0.40 betweenthese variables demonstrates that these variables are related andcan be used in a second order construct.

Once the measurement model was analyzed, we tested thecomplete structural model. In AMOS, the structural model tests allthe path relationships between the constructs simultaneously.

Note: R= standardized regression weight, p*** = significant a

Organizational Structuring:

-Project Strategic Fit

-Heavyweight Product Manager

Project Team Structuring:

-Shared Project Mission

-Clear Project Targets

-Team Integration

H2: H1: R = +0.942, p***

Fig. 3. Results from structural model. Note: R¼standardized

The results of the structural model data analysis for our hypothe-tical research model are shown in Fig. 3. The model fit indices forthe complete structural model were reported as CMIN/df¼1.582,IFI¼0.916, CFI¼0.915, and RMSEA¼0.055. This indicates ade-quate model-data fit.

In Fig. 3, the standardized regression weight for each relation-ship is reported on the respective arrow. Our data analysis resultsindicate that all the hypotheses proposed in this research weresignificant at po0.001, which suggests support for all threehypotheses. The first hypothesis suggested that a positive rela-tionship exists between the second order constructs of orga-nizational structuring and project team structuring in an IPDproject environment. The standardized regression estimate of0.942 was found to be statistically significant at po0.001 indicat-ing a very strong relationship between these two constructs.The second hypothesis of a negative relationship betweenthe project team structuring and product design glitch wassupported by a standardized regression estimate of �0.532,which was also statistically significant at po0.001 level. Thus,our study suggests that project team structuring can help redu-cing the occurrences of product design glitches. Similarly, ourthird hypotheses stated a negative relationship between theproduct design glitches and overall IPD project performance interms of development time, cost, and customer satisfaction. Thestandardized regression of �0.464 was also found to be statisti-cally significant at po0.001 level indicating a support of our thirdhypothesis also.

5. Discussion

Product development projects are notoriously known forcomplexity and demand integrated solutions which are criticalto move projects in a timely manner. In the current study, weproposed that a careful management approach of IPD projectsrequires stage-specific careful and proper management structur-ing of the project. Our study breaks the entire developmentproject into two stages, the front-end and development andimplementation. All ideas and concepts related to new productduring the front end stage can be realized only when the businessand management have a methodological, efficient, and effectivestructured framework at the highest level of organization thatpromotes task accomplishment at the specific project level. Basedon our literature review relevant to this topic, we identify keymanagement decisions at the front end stages as organizational

t p<0.001 level

Design

Glitches

IPD Performance:

-Development Time

-Development Cost

-Customer Satisfaction

R = -0.532, p*** H3: R = -0.464, p***

CMIN/df = 1.582; IFI = 0.916; CFI = 0.915; RMSEA = 0.055

regression weight, p***¼significant at po0.001 level.


structuring of the IPD project through proper (a) strategic align-ment of the project and (b) upfront appointment of a heavyweightproduct manager who can provide, through formal and informalinfluence, the necessary leadership to the cross-functional teams.Such front end organizational structuring helps to shape thecontext for the IPD project in which the project gets executed.Based on the path-goal theory of leadership (House, 1971),organizational structuring can help a specific IPD project withproviding the necessary strategic legitimacy and to build con-fidence among the project team members because of the appoint-ment of influential project leader who is qualified to direct andmanage such a complex project environment.

Leadership literatures points out that project manager canprovide the team with proper direction and goals, providemotivational support, and help in resolving any interpersonaland organizational issues. Establishing heavyweight leadership atthe early stage of the project can help in project planning,determining and defining performance measures, identifyingkey project responsibilities, and identifying schedules. Thisensures that the cross-functional team deployed in IPD projectmaximizes progress and contributes significantly to overall pro-ject performance. However, in an IPD project, several teams maywork simultaneously across concurrent activities. This wouldrequire leadership to coordinate and synchronize decisions acrossseveral concurrent activities and teams. To enhance a leader’seffectiveness, we recommend that such managers should recog-nize the specific contingency factors of an IPD project that caneither be related to characteristics of the team members and/ornature of the concurrent task.

Besides leadership, another emphasis on the front end stage,that our current study points out is about establishing andcommunicating the strategic fit of a particular IPD project. Anearly recognition and understanding of strategic importance ofthe project can provide several benefits during the downstreamactivities. Extending goal-setting theory (Locke and Latham,2002), a strategically identified, defined, and sponsored IPDproject can (i) push the cross-functional team’s attention andeffort toward goal-relevant activities; (ii) energize the teammembers; (iii) influence collective persistence to develop com-mon solutions that is acceptable to every functional constituen-cies; and (iv) can lead to the cross-functional team’s arousal,discovery, and/or use of task-relevant knowledge and strategies.

The empirical part of the study has helped to develop theinstruments related to the two factors of organizational structur-ing and the subsequent data analysis has helped in establishingthe validity and reliability of our instruments related to theheavyweight product manager and strategic fit. While paststudies have focused on the importance of these two variablesseparately, our study, by incorporating it in a second-orderconstruct, presents a simpler construct that can serve as anexample to the future product development and project manage-ment related studies in regard to the importance of suchconstruct.

To bridge the gap between front end planning and develop-ment and implementation stages, we next direct management’sattention on project team structuring during the project execu-tion stage. In our current study, our first hypothesis points outthat the organizational structuring from the front end stage of anIPD project contributes to shaping a functional structure for theIPD team during project execution stages through shared projectmission, clear project target tradeoffs and cross-functional teamintegration. The empirical validity and reliability of our measure-ments should provide confidence to the future researchers forusing these instruments and constructs.

For practitioners in the areas of project and team management,our current study point out that effective team performance

depends upon the emergence of accurate shared mental models.A cross-functional team with a shared project mission enablesthe diverse team members to make decisions and work for acommon purpose and project goals. Managers should realize andappreciate that a shared mission can help team members toanticipate each other’s actions and reduce the amount of proces-sing and communication that is required during concurrentexecution of activities in an IPD project. A cross-functional teamthat lacks a common mission can be expected to operate in afragmented and separated manner and each member tends toidentify strongly with its own function. Barriers of communica-tion can exist and, complex problems may not get resolved in atimely and consistent manner. This can adversely impact IPDproject performance.

Another implication of project team structuring for practi-tioners is about the importance of clearly articulated and under-stood project target tradeoffs. With a clear understanding andknowledge of project targets from the early stages of the project,managers can expect that the cross-functional team members willtry to avoid possible misunderstandings, reduce conflicts, shareproject information with others, and reach closure in a timelymanner across the concurrent stages. An unambiguous projecttarget will provide opportunities to exchange ideas and resourcesmore freely among the team members leading to superior IPDproject performance. For further readings on project targets andtradeoffs in product development projects we recommend read-ing Rauniar et al. (2008a).

The third factor identified for project team structuring is thecross-functional team integration, which has always been anissue important for project managers and researchers. Successfuland innovative product development solutions to emerging pro-blems in the concurrent stages are about integrating the newdecisions against common project targets. As our study suggests,leading an integrated team can ensure that the highly interde-pendent and concurrent activities are collaborated in a timelymanner. Integrated cross-functional teams adopt functional beha-vior that can eliminate waste, duplication and unnecessaryprocesses in the project. Managers should allow such teams tobe readily involved in joint problem solving activities and facil-itate them to find optimal design solutions acceptable to all.

Since an IPD project work is highly experimental and dynamic,we feel that it is important that project managers recognize thebalancing necessities of two countervailing aspects of IPD pro-jects: the need for standardizing project routines and, at the sametime, creating flexibility while handling non-routine activities. Toassist, our study collectively points out the importance of strate-gic fit, shared project mission and clarity of project targets thatheavyweight managers should promote using formal and infor-mal influences.

Our first hypothesis suggests that there is a positive linkagebetween organizational structuring and project team structuring.By empirically studying the two structuring mechanisms in thecontext of a cross-functional team and concurrent engineering,our study links the management issues of these two distinctstages. Our empirical analyses therefore advance the currentliterature on product development that has conceptually arguedon the importance and careful management of the front end stagein the project. A structured project and cross-functional team canensure the that information from the concept and design engi-neers to the others are released early and readily, so that thesuccessive concurrent phases of the IPD project can be initiatedwhile final designs are still evolving. Our study can be helpful tothe project manager to understand that a well structured teamand project can facilitate in creating a functional project context.This context is where a diverse, cross-functional team can acquirecrucial information on concurrent activities, exchange views,


interpret the concurrent task problems, resolve cross-functionalconflicts, and reach a mutual understanding for common solu-tions. Such understanding and cooperative behavior among theproject members enables one team member to avoid presentingunsolved problems to the other, that is, to avoid glitches. Ourhypothesis empirically validates our claim that reducing suchglitches or variation between what was expected or plannedversus what is developed, should positively impact project cost,schedule, and customer satisfaction.

However we would like to caution the readers on severallimitations of our model and overall study. The empirical evi-dence and the theoretical argument of our paper should not beinterpreted as the comprehensiveness of our research model ofFig. 1. Our objective in the current study was to highlight theimportant structural issues as they relate to the two stages of IPDprojects. There could be additional ways and additional factorsrelated to the structuring of the project, such as: rewards, projectprocess, communication technologies, etc. On the basis of ourliterature review on the topic, we also recommend that projectmanagers and business leaders recognize the organizationalspecific contextual differences that could be included in definingspecific organizational structuring and project team structuring.

Additionally, we recognize the danger of selective retention tothe research variables to suit our hypotheses and consider thatmore extensive studies will be required to identify criticalmanagement factors during the front end and the executionstages of the IPD project. The study directs its attention toproblem solving and the decision making aspect of team work.As an emerging model, it lacks the richness of multi-level modelsthat have been developed in other team and leadership relatedstudies (for example, see Amabile, 1996 or Woodman et al., 1993).Further adding to the limitations, our data represents the USAautomotive industry, where the practice of using a heavyweightproduct manager is common. As such, our empirical results maybe restrictive to the context of the US automotive industry only

Table A1Item description, factor loadings of first factor analysis (factor analysis I), and Cronbac

Item code Description

Factor 1

HWM1 Heavyweight manager were given real authority over p

HWM2 Heavyweight manager had enough influence to make t

HWM3 Heavyweight manager had a final say in product desig

HWM4 Heavyweight manager had broad influence across the

Cronbach’s a¼0.82Factor 2

SF1 Our firm’s overall technology strategy guided a setting

SF2 Project targets were consistent with our overall busine

SF3 Our firm’s overall product strategy guided a setting of


PM1 The project mission was well communicated to all team

PM2 The project mission was well defined for all team mem

PM3 The product development team had a well defined mis

PM4 The project mission was well understood by the entire


CPT1 The project target clearly specified tradeoffs between p

CPT2 The project target clearly specified tradeoffs between t

CPT3 The project target clearly specified tradeoffs between q


CFT1 Product development team members represented a va

CFT2 Various disciplines were involved in product developm

CFT3 The team consisted of cross-functional members of the

CFT4 The team simultaneously planned the product, process

CFT5 All necessary functions of the organization were repres

Cronbach’s a¼0.82

and may lack generalizability of our research findings. Futurestudy can enhance the current study to reflect other industryspecific variables relevant to the structuring of an IPD project.

6. Conclusion

In this article, we have conceptualized overall IPD manage-ment in terms of organizational structuring at the front end stage,and project team structuring at the project development andimplementation stages. In spite of vast literatures in both leader-ship and project cross-functional teams, there are few conceptualframeworks and empirical studies in the area of product devel-opment that distinctively identifies critical management issuesand techniques related to specific stages of the project. Accord-ingly, we have identified and empirically studied strategic fit andthe heavyweight product manager as important aspect of orga-nizational structuring driving the front end stage that can lead tosuperior project performance during project implementation.Similarly, we define important management issues during theproject development and implementation stages to includeshared project mission, clear project targets, and cross-functionalteam integration. Such project team structuring seems to have animpact on the project glitches which in turn leads to superiorproject performance. Failure to manage strategically importantIPD projects can limit the competitive growth of a business.As more and more product development projects are beingimplemented using the approaches of IPD, management issuesspecific to IPD projects needs to be studied and modeled in futurestudies.

Appendix A

See Tables A1 and A2 for more details.

h’s alpha.

Factor loadings

ersonnel 0.816

hings happen 0.795

n decisions 0.742

organization 0.776

of project targets 0.851

ss strategy 0.693

project targets 0.86

members 0.893

bers 0.752

sion 0.862

team 0.941

erformance and cost 0.839

ime and cost 0.796

uality and cost 0.877

riety of disciplines 0.814

ent from early stages 0.72

organization 0.612

, and manufacturing activities of the project 0.719

ented in the project team 0.683

Table A2Item description, factor loadings of second factor analysis (factor analysis II), and Cronbach’s alpha.

Itemcode

Description Factorloadings

Factor 1

DG1 The product design did not meet customer requirement(s) 0.773

DG2 The product design did not meet supplier requirement(s) 0.853

DG3 The product design did not meet manufacturing requirement(s) 0.854

DG4 The product design did not meet assembly requirement(s) 0.808


CS1 The new product fit target customers better 0.699

CS2 The new product has more loyal customers 0.917

CS3 The new product generated more new customers 0.871

CS4 The new product was more successful in the marketplace 0.808


PDT1 The team enabled our company to start volume production faster 0.909

PDT2 The team brought the product to the market before our competitors 0.907

PDT3 The team developed the product from concept to commercial

production faster

0.790

PDT4 The team made better progress in reducing total product development

time

0.851

PDT5 The team helped to launch the new product in the market faster 0.802


PDC1 The team reduced product costs successfully 0.794

PDC2 The team reduced material costs successfully 0.892

PDC3 The team successfully reduced assembly cost 0.813

PDC4 The team reduced equipment cost successfully 0.779

PDC5 The team reduced manufacturing cost successfully 0.922

Cronbach’s a¼0.89


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