First among Equals: The Effect of Team Leader Characteristics on the Internal Dynamics of Cross‐Functional Product Development Teams*

Abstract

Drawing on the path‐goal theory of leadership, the present study examines the effect of team leader characteristics on an array of conflict resolution behavior, collaboration, and communication patterns of cross‐functional new product development (NPD) teams. A hierarchical linear model analysis based on a survey of 246 members from 64 NPD teams suggests that participative management style and initiation of goal structure by the team leader exert the strongest influence on internal team dynamics. Both these leadership characteristics had a positive effect on functional conflict resolution, collaboration, and communication quality within the NPD team while discouraging dysfunctional conflict resolution and formal communications. Comparatively, team leader's consideration, initiation of process structure, and position had a surprisingly weak effect on internal team dynamics. Further, the findings underscore the differential effects on various dimensions of team dynamics, the importance of controlling for project and team characteristics, and the use of multilevel modeling for studying nested phenomena related to NPD teams. Implications of these findings are discussed.