A Research On The Effects Of Cross-functional Relationships On Product And Service Innovations

Product and service innovations are driving forces for manufacturing firms to gain competitive advantage.However,both product and service innovations can hardly be developed without knowledge and resource sharing across functions.Departments cooperate with each other to share both internal and external knowledge,meanwhile,cross-functional competition emerges as departments also scramble for limited resources.Besides,interpersonal relationships at different levels also exert distinct social capital effects on cross-functional interaction.In recent years,the impact of cross-functional relationships on firm innovation has gradually become a research hotspot.Prior studies mainly focus on the individual impact of cross-functional cooperation or competition.Few studies have considered the coexistence of cooperation and competition across functions and even neglected the interpersonal level.Moreover,empirical research on the impact of cross-functional relationships on service setting is still scarce.Building on the knowledge-based view and social capital theory,this study divided cross-functional relationships into interdepartmental and inter-member levels,considered the moderating role of market competition,established a theoretical model to study the effects of cross-functional relationships on product and service innovations,and proposed the hypotheses correspondingly.Results of the questionnaire survey and empirical analysis show that cross-functional coopetition at inter-departmental level hurts service innovation.With respect to the inter-member level,the interpersonal relationship among employees across functions(IR-E)has a stronger impact on product innovation than the interpersonal relationship among managers across functions(IR-M),but IR-M has a stronger impact on service innovation than IR-E.Moreover,market competition strengthens the effect of cross-functional coopetition on product innovation and the effect of IR-M on both product and service innovations,but it attenuates the effect of IR-E on service innovation.Based on the above conclusions,this study suggests that firms should pay attention to the importance and complexity of cross-functional relationships,highlight the distinction between product and service innovations,and hence,choose appropriate cross-functional relationships and maintenance strategies accordingly.It is also wise to strengthen the capability to acquire and process external information.This study extends the perspectives of cross-functional relationship research and reveals the mechanism how cross-functional relationships affect product and service innovations and the match between internal cross-functional relationships and external market competition,hence,enriches the cross-functional relationship and innovation literature.It also provides suggestions for firm practice to identify external market environment,adjust the maintenance strategies of cross-functional relationships,and improve different types of firm innovation.