The Effectiveness of Different Mechanisms for Integrating Marketing and R&D

Mark Leenders and Berend Wierenga

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: The integration of marketing and R&D is a major concern for companies that want to improve their new product performance (NPP). In order to integrate, companies are using mechanisms such as physical proximity, cross-functional teams, and job rotation. This study examines the relative effectiveness of these mechanisms by developing a model that distinguishes between indirect effects of mechanisms on NPP (i.e., through a higher level of integration) and direct effects. The model is tested with data collected from 148 pharmaceutical companies. By simultaneously studying a broad range of integrating mechanisms, we found that housing marketing and R&D closer to each other and using an influential cross-functional phase review board are highly effective mechanisms to increase integration. Using information and communication technology (ICT) more intensively, having equal remuneration and career opportunities for marketing and R&D and using more cross functional teams are also effective in producing more integration, although to a somewhat lesser extent. The effectiveness of personnel movement and informal social group events is rather low. Interestingly, ICT appears to be a very effective tool for enhancing NPP. ICT not only fosters integration, but in addition it has an independent direct positive effect on NPP, possibly through knowledge creation within marketing and R&D. We also found a direct effect on NPP of another mechanism: cross functional phase review boards. However, for this mechanism the direct effect is negative. So, notwithstanding its strong positive effect on integration, a price is paid in terms of NPP. This may be related to the amount of formalization and complexity accompanying this mechanism.

Keywords: farmaceutische industrie; interfaces; interne organisatie; marketing; productontwikkeling (search for similar items in EconPapers)
JEL-codes: C44 M M31 O32 (search for similar items in EconPapers)
Date: 2001-04-12
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