In union lies strength: Collaborative competence in new product development and its performance effects

TLDR

New product development is highly interdependent, yet empirical studies on its interdependence and performance effects are scarce. The study aims to fill this research gap. The authors model collaborative competence—firms’ ability to collaborate with suppliers, customers, and internal teams—and assess its effect on project and market performance. Using data from 189 NPD managers, the study finds that collaborative competence directly improves project performance, and its impact on market performance is indirect, mediated through project performance, indicating that superior market outcomes depend on superior project outcomes.

Abstract

Abstract It is widely recognized that new product development (NPD) is a highly interdependent process, yet efforts to empirically model the interdependence and examine its effect on firm performance are scarce. Our study addresses this research gap. We model firms’ abilities to collectively collaborate with suppliers, customers, and internal employee teams in NPD as collaborative competence and examine its impact on project and market performance. Using responses collected from 189 NPD managers, we find empirical evidence for collaborative competence and its differential impact on project and market performance. Specifically, we find that collaborative competence has a direct impact on project performance, but its impact on market performance is indirect, mediated through project performance. The results have significant managerial implications; achieving superior market performance from inter‐ and intra‐organizational involvement is contingent on achieving superior project performance, and companies that fail to achieve desired project performance outcomes will also fail in achieving market performance goals.