Information Technology, Organizational Structure, and New Product Development---The Mediating Effect of Cross-Functional Team Interaction

The main purpose of this study is to examine the relationships among information technology, organizational structure, cross-functional team interaction, and the performance of new product development (NPD). Regression analysis was used to test the hypotheses in a sample of 102 NPD cases. The findings suggest that the degree of investment and training on information technology is positively related to cross-functional team interaction; that when the organizational structure is more decentralized and less formalized, cross-functional team interaction is more favorable; and that cross-functional team interaction is positively related the performance of NPD. This study contributes to the theoretical development of a conceptual model in examining the mediating role of cross-functional team interaction between contextual variables and the outcome of NPD. The empirical evidences support the process-oriented view, and indicate that information technology and organizational structure can deliver a better performance of NPD but do so primarily through improving cross-functional team interaction. This study provides the theory building, explanatory variance, missing in the literature that did not look at the black box of relationships between information technology, organizational structure, and outcome of NPD. Managerial implications and future research directions are discussed.