Who knows what in NPD teams: Communication context, mode, and task contingencies

The use of cross-functional teams in new product development (NPD) benefits firms in many ways. One benefit is the diverse knowledge team members bring to the project, but that benefit can only be appreciated if team members fully utilize and integrate the differentiated expertise of members. As reliance on cross-functional NPD teams grows, however, firms struggle to exploit the full potential of functionally diverse groups, the biggest obstacle being integrating team members' varied knowledge, expertise, and abilities. Therefore, understanding how information is integrated and used is a primary concern for both practitioners and researchers. Databases and other forms of hard data are methods team members can use to effectively share and integrate knowledge; another method based on social cognition is transactive memory systems (TMS). TMS indicates who will learn what and from whom. The notion is that knowledge is distributed among people in the group, and to make effective use of it, individuals need to know who knows what and who knows who knows what. Grounded in the knowledge-based theory of the firm, this study investigates the influence of different communication contexts and modes on TMS under different NPD task environments (i.e., exploitation and exploration) in crossfunctional NPD teams. A theoretical model is developed and empirically tested using data collected from 272 ongoing NPD teams of 128 Chinese high-tech companies. Findings suggest that when teams face tasks defined by exploration, informal communication and face-to-face communication are positively associated with TMS, whereas for tasks defined by exploitation, formal communication and computer-mediated communication are positively related with TMS. Additionally, this study found that TMS is positively related to NPD performance both in terms of project performance and in terms of market performance. Based on these findings, theoretical and managerial implications are drawn regarding resource deployment that encourages the development of effective TMS leading to successful NPD projects.