Business-to-Business Projects, Task Configuration, and Innovation

Abstract

Many new products and processes originate from projects. In two studies, the authors consider how a project's organizational design, as captured by its particular task configuration, impacts its ability to promote product and process innovation. Study 1 involves an analysis of panel data spanning 2001 through 2015 and involving 429 business-to-business projects in the construction industry. The authors test hypotheses regarding the role of project size, subcontractor diversity, and task configuration on product and process innovation. Their empirical tests show a pattern of nuanced effects on the two innovation types. A project's task configuration, as reflected in the general contractor's participation in project tasks, plays a coordination role that helps unlock a positive effect of project size on product innovation. At the same time, such participation impedes process innovation due to subcontractor concerns about information leakage. Study 2 bolsters the first study through a survey of 230 subcontractors in the U.S. construction industry to show how leakage concerns arise, their outcomes, and how they are mitigated. The authors also bolster their central study through (1) interviews with professional construction managers and (2) survey evidence across five industries. They draw on their findings to develop implications for innovation management, business-to-business marketing, and marketing organization.