Cross-functionality and innovation in new product development teams: A dilemmatic structure and its consequences for the management of diversity

Abstract

The ubiquitous hope among managers of new product development (NPD) teams that a cross-functional team composition may be a royal road to enhancing team innovations appears to be an illusion. Empirical analyses show positive as well as negative or nonsignificant relationships between cross-functionality and team innovations. In this article, we integrate the extant literature and develop a process model that explains the contradictory empirical findings. We propose that introducing specific mediators and moderators enables improved predictions of the effects of cross-functionality on team innovations. In developing our model, which is primarily based on a conflict-theoretical perspective, we address theories of social categorization, identity and self verification, information/decision making, group problem solving, and innovativeness, respectively. Our process model explicates how (i.e., via what mediators) and when (i.e., in the presence of what moderators) cross-functionality enhances or impedes synergistic communication among team members, which in turn fosters team innovations. On the basis of this new model we discuss strategies for managing cross-functionality in NPD teams.