1.1. The Importance of New Product Quality
Product quality has received increasing attention in both practice and research (Menon, Jaworski & Kohli, 1997), as evidenced by the growing number of firms instituting quality programs, and the abundance of coverage in both business-oriented periodicals (Byrne, 1994;
Calonius, 1991; Jacob, 1993) and research-based academic literature (Aaker & Jacobson, 1994;
Curry, 1985; Fornell, 1992; Phillips, Chang & Buzzell, 1983; Shetty, 1987). The main reason for this increased attention is that product quality delivers superior customer value, which is the cornerstone of a firm’s competitive advantage in the marketplace (Day & Wensley, 1988). As such, new product quality has been found to have a major influence on the market success and profitability of a new product. This concept has been widely recognized by domestic enterprises since Japanese products began capturing a major share of the market in one industry around the world in the 1980s (Bounds, Yorks, Adams, & Ranney, 1994; Clark & Fujimoto, 1991; Garvin, 1988).
In order to enhance the quality of their new products, a number of firms in Taiwan have introduced different quality-improvement techniques, such as quality control circles (QCC) and total quality management (TQM) in different phases. The use of these techniques is believed to have helped Japanese companies improve new product quality (Bounds et al., 1994; Clark &
Fujimoto, 1991). One of the five TQM interventions prescribed by Juran, Ishikawa, and Deming is the use of cross-functional teams to identify and solve quality problems (Hackman &
Wageman, 1995). As a result, giving the product development task to cross-functional teams is rapidly increasing. These teams are composed of individuals from a variety of functional areas, such as manufacturing, engineering, marketing, research and development, and purchasing.
Cross-functional teams are thought to better link upstream and downstream organizational activity (so that, for example, manufacturing considerations can be designed into a product rather than being discovered after prototypes already exist), to push decision making down to those who have the necessary expertise, and to enhance speed and coordination (Ancona, Kochan, Scully, Maanen, & Westney, 1996).
1.2. The Importance of New Product Development Teams
Previous studies have suggested that the diverse backgrounds of cross-functional team members can increase the amount and variety of information available to design products, thereby improving design process efficiency and product development performance (Brown &
Eisenhardt, 1995; Chang, Hu, & White, 2002; Clark & Fujimoto, 1991; Iansiti, 1993;
McDonough III, 2000; Sarin & Mahajan 2001). Few would argue however, that the mere formation of such teams is sufficient to meaningfully enhance new product quality (Bounds et al., 1994; Sethi, 2000a; Sethi, 2000b; Webber 2002; Wheelwright & Clark, 1992). However, in spite of the critical role of quality in influencing the success of a new product and the growing popularity of cross-functional product development teams, there has been little research on how these teams affect new product quality (Menon, Jaworski, & Kohli, 1997).
Over the past twenty years, research about quality has been published, but most of it is either descriptive or prescriptive in nature and relies heavily on anecdotes rather than on appropriate research designs (Hackman & Wageman, 1995). There exists some recent firm-level research on the determinants of product quality (Clark & Fujimoto, 1991; Menon, Jaworski, &
Kohli, 1997; Morgan & Piercy, 1998; Song, Souder, & Dyer, 1997); however, these studies have mainly concentrated on the effects of macro- or firm-level variables, such as structural and cultural factors, rather than on the influence of micro- or team-level factors on new product
quality. Further, firm-level research has usually focused on aggregate outcomes (e.g., the quality of a firm's products in general, instead of on how the quality of a new product is affected by the team). The knowledge generated by these firm-level studies, though certainly useful, may not be effective in explaining variations in team-level outcomes (Sethi, 2000a).
Research on product development teams also provides valuable insights into the effects of teams on outcomes such as market performance of the new product, cycle time, and efficiency in developing innovations (Ancona & Caldwell, 1992; Barczak & Wilemon, 1992; Eisenhardt &
Tabrizi, 1995; Thamhain, 1990). Such insights do not directly address how teams influence a different outcome such as new product quality. Later we address the idea that team-related factors that help one type of product outcome may not necessarily facilitate other outcomes and may even harm them.
1.3. The Effects of Culture on Behavior in Teams
Although new product development teams play a critical role in influencing the success of a new product, they also pose a particular type of challenge in different countries as nationality has been shown to influence individual’s cognitive schema, values, and nonverbal behavior, all of which influence behavior in teams. In a study of value differences in 40 nations, Hofstede (1980) found that individualism-collectivism accounted for the greatest variance in work goal priorities of the dimensions he studied. Compared to individual cultures, collectivistic cultures place greater emphasis on the needs and goals of the group, social norms and duty, shared beliefs, and cooperation with group members (Triandis, 1989). Collectivists are more likely than individualists to sacrifice personal interests for the attainment of a group goal (Bond
& Wang, 1983) and are more likely to enjoy doing what the group expects of them (Bontempo, Lobel, & Triandis, 1990).
As Hill (1994) points out, there are cross-national differences on the individual-collective dimension (Erez & Earley, 1993). In individualist cultures such as the United States and the Netherlands people tend to use personal achievements to define themselves, view relationships as short-term, and value the individual more than the team. In collectivist cultures such as Taiwan and Japan, however, there is high commitment to, and identification with, the team, where group harmony, unity, and loyalty are valued more than individual gain (Hill, 1994).
Despite the apparent importance of national culture as it influences behavior in teams, it remains unclear whether team characteristics and contextual factors influence new product quality differently in collectivist cultures than in individualist cultures. Therefore, there is a need for research that examines the effects of cultural differences on the relationships between team characteristics, organization contextual factors and new product quality.
1.4. Research Questions
The problems facing new product development teams arise from differences in team characteristics, organization contextual factors and cultures, which cause difficulties in improving new product quality. These challenges are becoming increasingly acute as more firms use new product development teams to improve new product quality. This research examines how team characteristics and contextual influences affect new product quality, and how cultures influence their relationships. Therefore, based on the information previously presented on the positive results garnered from new product development teams and new product quality, two questions motivate this study:
1. What are the relationships between team characteristics and organization contextual factors and new product quality?
2. Do team characteristics and organization contextual factors affect new product quality
differently in collectivist cultures and in individualist cultures?
1.5. Research Objectives
To answer these questions, this research builds on previous work which showed the physical composition of new product development teams to have positive effects on team’s performance (Bounds et al., 1994; Clark & Fujimoto, 1991; Garvin, 1988), as well as research indicating that team process is positively related to new product quality (Clark & Fujimoto, 1991;
Garvin, 1988; Menon, Jaworski, & Kohli, 1997). It also draws on work by quality management theorists (Bounds et al., 1994) which suggested that the ability of a team to produce a high-quality outcome can also be affected by organization contextual influences on the team.
In addition, this research relies on earlier study which indicated that individualist and collectivist cultural values influence work-group composition, processes, and outcomes (Earley
& Gibson, 1998; Gibson, 1999), and collectivists perform better working in teams, when performing interdependent tasks, and sharing responsibility.
Therefore, there were two objectives in this study. The primary objective was to explore how various aspects of cross-functional teams and organizational context enhance or diminish new product quality. On the basis of previous literature, it can be suggested that the emergence of a quality outcome can be affected by two sets of factors: (a) the characteristics of the team and (b) the organizational context influences on the team. We therefore, examined variables related to these two sets of factors. First, team characteristics were defined by critical team processes and the physical composition of the team (i.e., the homogeneity of organization tenure and the mix of functional specialties). Second, the organizational context influences on the team: (a) the effects of the speed-to-market pressure, (b) the innovativeness of the product, (c) customers’
involvement in the product development process, (d) the suppliers’ involvement in the product
development process, and (e) the quality orientation of the firm were examined.
The secondary objective of this study was to examine the differences of how team characteristics and contextual influences affect new product quality in collectivist cultures and individualist cultures. To address this issue, this research was conducted in both the United States (individualism) and Taiwan (collectivism).
We begin with an overview of our proposed conceptual model and research hypotheses.
Then, we describe our research design and discuss the sample, measures, and data collection procedures. After reporting the study findings, we conclude with a discussion of the implications for practice and future research.