Investigating the Effects of Reward Interdependence and Nonfinancial Incentives on NPD Collaboration in Diverse Project Teams

Abstract

New product development (NPD) collaboration is an essential trigger for new product success. Many scholars have emphasized the reward system as an effective tool to manage NPD collaboration. Yet, our understanding about what types of rewards should be used for NPD collaboration is still unclear. This research examines the effects of reward interdependence and nonfinancial incentives on NPD collaboration, as well as the moderating roles of team size and deep-level heterogeneity. Findings from a field study involving 83 NPD project teams in China showed that both nonfinancial incentives and reward interdependence promoted NPD collaboration. Specifically, team size negatively moderated the relationships between incentive mechanisms and NPD collaboration. The reward interdependence–NPD collaboration relationship was negatively moderated by deep-level heterogeneity. Finally, suggestions for further research and project management practices are discussed.