A mid-range theory of interfunctional integration, its antecedents and outcomes

Abstract

Abstract This work explores the importance of barriers to, and means of facilitating, interfunctional integration in design and the commercialization of innovation. Critical barriers include the distinct frames of reference in seperate functional areas, power and political processes. Firms may use loose coupling, integrator, cross-functional appointments/training, multifunctional teams and cultural indoctrination to promote interfunctional integration. It is hypothesized that effective interfunctional integration may be directly-related to value appropriation in commercializing innovations and indirectly related through effects on time-to-market and design and demand uncertainty. Interfunctional integration promotes reciprocal information flow among functions vital to the development, design and implementation of innovations. Therefore, it is a resource that can produce competitive advantage through the creation of value. Furthermore, such integration is very difficult to accomplish, and, therefore, its rarity and difficulty of imitation by competitors adds to competitive advantage. However, effective management of interfunctional integration is crucial or its costs may exceed its benefits. Theoretical propositions and suggestions for further research are presented.