Integration of Finance with Marketing and R&D in New Product Development: The Role of Project Stage

Abstract

While the interfaces of marketing, research and development (R&D), and manufacturing in product development have been extensively studied, no large‐scale empirical study has focused on finance's role in the product development team. The present research investigates the role of finance in cross‐functional product development teams, thereby extending existing research on cross‐functional integration in product development. A set of hypotheses is tested with a survey of 389 project team leaders and top management team members from companies in the United States, Australia, New Zealand, Germany, and Austria. The findings suggest that the integration of finance in cross‐functional teams positively impacts project performance and that the importance of the finance interface depends on the project development stage and the innovativeness of the product developed. The results indicate that the R&D–finance interface is most critical at the early stage of a project, while the marketing–finance interface is most important at the late stage, and that the integration between R&D and finance is especially useful in the development of less innovative products.