Fostering Innovation in Complex Product Development Settings: The Role of Team Member Identity and Interteam Interdependence*

Abstract

Much of the existing research on innovation has concentrated on the study of individuals in small group settings. However, projects marked by multiple teams, high task interdependence, long duration, and large scale have become increasingly common in practice. Very little is known about how extant research findings related to innovation may generalize to such complex settings. Taking a multilevel theoretical approach, individuals' propensity to innovate is hypothesized as the product of individuals' relationship with their work team (team member identification) and their team's relationship to other teams within the organizational system (interteam interdependence). A large, diversified manufacturing firm engaged in a multibillion dollar project that involved the development of a technologically intense, highly innovative, new product served as the research site. Based on archival and survey data (n=118), five hypotheses were tested. The findings indicate that individuals' strong team identification and their perceptions of high interteam interdependence each had positive main effects on individuals' intentions to innovate. However, these two variables also interacted negatively to significantly decrease innovation intentions. Therefore, high identification with team may lead individuals to view interdependence with another team as a threat deflecting attention from innovation. The finding related to the role of identity, although consistent with work linking identity to other team behaviors, usefully broadens the reach of identification theories to demonstrate their impact on innovation. Additionally, this study is the first to demonstrate the impact of interteam interdependence on innovation. The alternative operationalizations of interdependence used in this paper highlight the fact that it must be strongly perceived and experienced by individuals to affect their innovation attitudes. The findings of this study also have implications for managerial practice in complex project settings. Since team identification has a direct effect on innovation, managers might employ strategies related to the creation of social bonds to complement task related connections among team members. Further, managers should configure staffing and incentive mechanisms to reinforce team identification. Finally, the results suggest that managers need to carefully attend to individuals' perceptions of each team's interdependence with other teams. Although perceptual interdependence can be an enabler of innovation, it can also be a disabler, through its interaction with team identification. Recognizing this potential for negative effects, managers might emphasize the benefits that can come from cooperating across teams, thus encouraging team members to identify not only at the team level but at the overall project level as well. Such actions might deflect negative identity threats that can derail positive innovation intentions.