Marketing Cross-Functional Relationship During Npd Essay Example

Marketing Cross-Functional Relationship During Npd Essay Marketing Cross-functional Relationship during NPD and collaborative capability for marketing managers Abstract In the era of hi-tech and rapid information development, the success of the enterprises mainly depends on the continuous NPD. It is discovered by a lot of research that the collaboration between the marketing and other departments is critical to the success of new products. The marketing can have better promotion performance through effective collaboration with RD and other departments. Adopting deep interview for a special case, this study elaborates the cross-functional relationship (CFR) management based on research findings and related theories. The study suggests the structural, social and individual ways to improve the interdepartmental collaboration. The main research conclusions are as follows. a. Chang Xin Company pays much attention to teamwork and cooperation between marketing and other departments in the whole process of NPD. In the project discussion phase, the departments carry on the project planning and market survey together. The marketing deals with the inquiries at promotion and the after-sale service with the help of RD, Investment Management and other departments. b. The relationship between marketing and other departments can be build through sharing resources, work turnover, mutual understanding and common goals. Chang Xin still has something to do to build information communication platform such as network system, information transmission and tracking system in order to get high efficiency of information exchange. c. We will write a custom essay sample on Marketing Cross-Functional Relationship During Npd specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Marketing Cross-Functional Relationship During Npd specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Marketing Cross-Functional Relationship During Npd specifically for you FOR ONLY $16.38 $13.9/page Hire Writer In addition to building the enterprise culture to value cross-functional communication, the company had better set up mutual promotion and reward system to give impact on the career development views of the managers. At the same time, the responsibilities of each department should be clearly specified. Contents 1 Introduction7 1. 1 Objective7 1. 2 Review of Chapters8 1. 3 Limitation of Study8 2 Literature Review10 2. 1 Definition10 2. 2 Cross-functional relationship in NPD11 2. 3 How to Achieve Cross-functional Collaboration13 2. 3. 1 Information communication13 . 3. 2 Integrating management structure15 2. 3. 3 Building Interpersonal Trust17 2. 4 Collaborative Capabilities of Marketing Managers18 2. 4. 1 Reputational Effectiveness Factors18 2. 4. 2 Marketing Manager’s Collaborative Skills20 3 Research Methodology22 3. 1 Case Study22 3. 2 Data Collection23 3. 3 Data Analysis24 4 Case Analysis: Chang Xin Asset Management26 4. 1 Company Background26 4. 2 Status of Cross-functiona l Collaboration in NPD26 4. 3. 1 Social Methods29 4. 3. 2 Structural Methods29 4. 3. 3 Integration of information/resource31 4. Collaborative Capability of Marketing Manager32 4. 5 Results34 5 Conclusion35 6 References36 7 Reflective Report39 1 Introduction 1. 1 Objective Deploying activities for total quality control and cost reduction to achieve good business performance are the main issues for a firm. In the process of new product development (NPD), the new products are often unstable quality and there are varying problems need to be fixed. The problems could be better solved by improving communication and information-sharing between different departments and their managers. Therefore, the interdepartmental collaboration is needed. Souder and Chakrabarti (1978, cited by Ye Youming, 2009) found out that 68% RD projects will fail in business performance completely and 21% will fail partially when there is serious management problems between the marketing and RD. This study will focus on the collaboration between the marketing department and other departments, especially in the NPD phase and find out the way to achieve the most effective cross-functional relationship (CFR). The main objectives are to explore important features of cross-functional working relationship during NPD and to gain further knowledge on the relative importance of collaborative capability for marketing managers. The questions raised on the topic are as below. How can marketing develop good collaborative relationship with other departments in the firm? How can the cross-functional collaboration be effective in NPD process? How can marketing managers develop skills to be successful in establishing multiple collaborative relationships? According to these questions, the discussion involves four parts: First, the features of CFR in the process of NPD. Second, the principles and critical factors for cross-functional collaboration. Third, the collaborate capabilities of marketing managers. Finally, the cross-functional collaboration in Chang Xin Asset Management Company, especially between Marketing Department and Investment Management Department in new mutual fund development process. 1. 2 Review of Chapters The dissertation is divided into five parts. In the introduction part, the background of CFR and its effect is introduced. The objectives and purpose of the study are listed. In the literature review part, the research results of CFR and managing methods in NPD are reviewed, some problems of the research are pointed out and the main topic of this study is raised. The research methods are introduced in the research methodology part. The research methods, investigation methods and interview design are examined. Part four is the case study on Chang Xin Asset Management Company. The investigation material and literature knowledge are combined to analyze the effectiveness of the cross-function relationship management. Later the role of marketing manager in the collaboration within the firm is discussed. In the last part, conclusion is drawn on how to have effective cross-functional collaboration within firms, especially in NPD process. 1. 3 Limitation of Study There are some limitations of the study. First, the research result on this area which the author can find is very limited, therefore the secondary data for this subject is limited. Second, the primary data from Chang Xin is limited. It is impossible to have questionnaire survey because the employee numbers in the company are not many, so the sample quantity can not meet the requirement of a general questionnaire survey. In addition, the managers may be too busy with their work and are not interested in doing the survey or having interviews with a university student. The managers interviewed are very limited. At last, only the marketing manager is interviewed because of time limit. The answers to the questions in the interview are too simple. Therefore the discussion is based on general description but not detailed situations from the beginning to the end or first-hand experimental data for better understanding. 2 Literature Review In literature terms ‘CFR’ and ‘collaboration’ or ‘reputational effectiveness’ have received different explanations, therefore it seems necessary to introduce some definitions. 2. 1 Definition Cross-functional Relationship Cross-functional relationship can be broadly defined as the set of communication patterns, knowledge exchanges, organizational mechanisms and formal and informal personal relationship which characterize the interface mong different departments in the firm, such as marketing, finance, RD, operations and so forth (Hutt, 2001). Collaboration Collaboration could be explained from two aspects: coordination and cooperation. The coordination is defined as harmonizing action for the various activities within a firm to achieve a desired level of e ffectiveness and efficiency. During the process of coordination, exchanges and interactions take place between functions in the firm, so the comprehensiveness, accessibility and compatibility among functions are maximized (Krajewski and Ritzman, 2004; Pinto et al. 1993, cited by Carr, Kaynak and Muthusamy, 2008). Cooperation is defined as the act of the functional areas working together within a firm to achieve the firm’s goals. Coordination capability is the combined action of coordination and cooperation (Carr, et al, 2008). Cross-functional barriers Cross-functional barriers create the threat to the established functional identities of the organizational members, which are divided into three categories of turf barriers, interpretive barriers and communication barriers (Hutt, 2001). As turf territory presents an area of expertise or authority, the functional groups have a strong desire to defend against the loss of power due to other organizational units. Major barriers to effective collaboration exist because each functional group focuses on a different facet of a problem and makes different senses of the total. This kind of thought world difference barrier is called interpretive barrier. In addition, the coding method for abbreviating goods descriptions within an organization can be misinterpreted by the members who are not familiar with it, therefore the information from the source may be distorted. This situation is called a communication barrier. Reputational effectiveness Reputational effectiveness means the degree to which the manager has been responsive to the needs, demands and reputations of the constituencies of the firm, including functional areas within the firm and customer organizations, upstream and down stream value chain partners, and other business and strategic alliance partners (Butaney, 2007). It actually is largely a measure of the degree of responsiveness of manager (Hutt, 2001). 2. 2 Cross-functional relationship in NPD The main research on the CFR between marketing and RD and other departments is about the coordination methods, especially on the information communication process, the barriers, intention and encouragement and the effective influence of strategies, organizational structure and information technology. †¢ Information process perspective Wu and Chen (2009) state that the improper communication between the departments can be caused by the improper organizational structure or poor atmosphere within the company. In some research, the interaction between marketing and RD during NPD is regarded as a process to turn the market opp. rtunity and technical possibility data into the information asset for commercial production. It is discovered that the success of NPD depends on the information share on customer demand, market segmentation, enterprise capability and competitor strategy information among various departments. Much of the research has shown that successful product development co mes when a clear understanding of customer needs is integrated with a clear understanding of RD and production resources (Krohmer, Homburg and Workman, 2002). And some more specific studies looked at the extent of the interaction and participation of various groups in the product development process. They have tended to tell that more interaction between the groups tends to lead to more success. It is proofed that other functional groups have influence on the marketing activities. Krohmer, Homburg and Workman (2002) measured the extent of influence of five functional groups over key marketing issues with a cross-national survey and related their cross-functional measure to key marketing outcomes. Two sets of hypotheses were tested using three-dimensional conceptualization of performance effectiveness, efficiency, and adaptiveness. As a result, they found that there was a high cross-functional dispersion of influence on marketing with certain activities such as pricing and new product development (NPD). In contrast, the cross-functional dispersion of influence with certain activities such as advertising is low. Research also tells that the common goal of the company benefits the cooperation between the departments. In a ase study, Hutt, Berth and Gary (1995) investigated the cross-functional barriers to the strategic change in Techno project. The turf war between the Marketing and RD was eased with political and administrative levers at the early stages. Later Techno’s goals were clarified and the strategy map was identified by both departments, and learning eventually spread through the organization. The project ended with success of collaboration at last. †¢ Reso urce interdependent perspective It is believed the resources within the departments are not easy to imitate, attain or replace. Therefore the scholars think marketing and RD need to depend on each other to get the necessary resources when they do not have sufficient resources to finish the NPD projects. †¢ Social system perspective This perspective focuses on the continuous fighting social process since the different functions have continuous conflicts for their benefits or rights. It emphasizes on the influence power, which means the influence of the information provider on the behavior and attitude change of the information receiver. It is thought the individual factors of professional ability, reward on the position have positive effect on the influence power. It is recognized that the degree of competition across the functions is a key factor that can impede knowledge transfer within an organization. Research further shows that an arduous relationship between the resource and the recipient, or intergroup rivalry can impede internal knowledge transfer. The cross-functional interaction can be viewed either from a cooperative aspect, focusing on the cooperation and communication or from a competition aspect, focusing on interdepartmental rivalry (Luo, Slotegrafft and Pan, 2006). 2. 3 How to Achieve Cross-functional Collaboration The researchers discovered some measures which can be taken in the social, structural and individual ways. 2. 3. 1 Information communication †¢ Mutual understanding between departments As Galbreath (1998, cited by Ryals, 2001) mentioned, customer relationship management (CRM) integrates marketing, sales and service functions through business process automation, technology solutions and information resources to maximize each customer contact, however Hall (1997, cited by Ryals, 2001) found that, even where organizations have technological integration, performance integration does not always follow. Furthermore, Hall (1997) notes that an understanding of the perspective from both marketing and CRM disciplines is a prerequisite of cross-functional integration. †¢ More effective information communication in project teams Management is communication (Baker, 2003, pp. 275). It is very necessary to have effective information communication management in order to improve the quality of the interdepartmental communication. There are some measures to make the communication flow between marketing and RD in order under the common company goals (Ye, 2009). . At the beginning of the NPD process, start the communication on project choice, target market, grasp of development opp. ortunities and project goal as soon as possible. b. In the middle of the development, communicate the marketing demand and technology information in routine visit and meetings between the departments. c. Build a project team, make clear the responsibilities of the departments, coordinate the management and make d ecision to solve the problems that the departments face commonly. Zhang (2009) thinks the internal communication effect can be improved when different information technology is adopted properly, and the internal communication can be used as a performance interference measure. She suggests to have special employees in charge of internal communication, who are both the compilers of the communication information and the administrator of the information system. †¢ Informal social communication The role of formal and informal interpersonal communication on three key NPD outcome variables-NPD success, perceived relationship effectiveness, and interpersonal collaboration were examined by some researchers. The results show that both formal and informal communication has a positive effect on NPD success and on Marketing Manager/RD Manager working relationship. It is found that the informal communication has a much greater effect on collaboration than formal communication during NPD process. When collaborative behavior occurs amongst managers, there is a tendency to view the relationship as productive, and to view the other managers in a favorable way (Kahn, 1996; Jassawalla and Sashittal 1998; Kahn and Mentzer 1998, cited by Elias and Graham, 2005). 2. 3. 2 Integrating management structure †¢ Shared revenue targets and united reward systems When the two departments have higher domain similarities, they are more likely to cooperate. Kotler, Rackham, and Krishnaswamy (2006) defined the role of marketing in â€Å"the Buying Funnel† based on the customer’s decision sequence. Marketing is usually responsible for the first few steps—building brand awareness and brand preference, creating a marketing plan, and generating leads for sales. Then Sales executes the marketing plan and follows up on leads. They think the funnels of this kind -integrated into the CRM system and into sales forecasting and account-review processes form an increasingly important backbone for sales management. So marketing and sales can be integrated better with shared revenue targets and reward systems and integrated metrics. But the performance app. raisal systems for marketing and RD are often separated. The performance of marketing is usually measured by market share and customer satisfaction, while that of RD is done by the patent numbers and how advanced the technology of the new products is. Research discovers that it is common in the enterprises that people think the new products are successful due to the wise decision of the marketing, but the products fail due to the errors of RD departments (Ye, 2009). In this case, there is less active participation of RD in cross-functional collaboration or information sharing if RD’s effort is not paid much attention. The common app. raisal system based on the individual performance is a barrier to the effective collaboration between the departments because the individual performance has nothing to do with the cross-functional cooperation, the goals of individual performance may differ much from the goals of the project teams, and difference may cause much conflict. In the contrast, a united reward system ill benefit the cooperation, because the both parties will be rewarded when a new product is sold successfully (Ye, 2009). †¢ Restructuring The departments can be reconstructed to work more efficiently. Wind (2005) examines opp. ortunities for how marketing insights across the organization can drive growth and innovation, making technology and marketing to create convergence, and rethinking the customer experience and relationship. He thinks that organizations may create linking processes or engage in creative reconstructuring of the entire organization through interdisciplinary app. oaches, such as integrative processes. He concludes that creating the common foundation of disciplinary tools and insights can help cultivate a market perspective across the organization and develop more creative solutions to business challenges. Lu and Yu (2009) argue that under most circumstances the balanced organizational structure will be adopted for a marketing project team in the enterprises. Project team is a kind of matrix organizational structure (Ye, 2009). It functions better for horizontal communication than the traditional pyramid structure. Therefore it is a good choice for NPD project structure. When the project team leader and the functional manager have repeated authority on a task, the innovation behavior is usually positively affected. Gong and Tang (2004) analyzed the effectiveness of five kinds of integration mechanisms (location arrangement, work changeover, informal social system, reward and encouragement and formal integration system) between the RD and marketing under different combination of demand dynamics, competitive dynamics and technological dynamics. It is suggested that work changeover, informal social system, reward and encouragement can be used to increase the integration between marketing and RD when there is low technological dynamics, demand dynamics and high competitive dynamics. †¢ Location arrangement The long distance separation of two departments hinders the communication between them. The geographical factor may let the people have different perspectives or technical terms, hence encourage the short-sighted behavior benefiting only their own. Therefore location rearrangement to closer distance helps the departments to communicate better. †¢ Work changeover Liu (2010) says work changeover among the departments and communication culture development can help to improve the internal communication. Robert and Qreiny (2004, cited by Ye, 2009) state the project team members are not willing to accept the information from the other departments when the members do not trust each other very much because they share the technical terms with and have trust on the people in their own departments long term (Ye, 2009). So the employees will know much about the work in other departments, win more respect and trust and can communicate better in a project team if they are trained two or three years in the work positions in other departments. 2. 3. 3 Building Interpersonal Trust In a NPD project, every department is assigned different tasks. The requirements for lead time, operation methods and resource distribution are different for different departments; therefore the goals of the departments are different. The departments may have much conflict or rivalry if the goals vary very much. However the collaboration can be more effective when the people from different departments have good personal relationship. The social psychological factor of interpersonal trust is likely to be important in determining relationship effectiveness. Some researchers make perceived relationship effectiveness research based on two variables (power of the marketing department, and stake holding) and four endogenous variables (total interdependence, influence strategies, interpersonal trust, and manifest influence). The research focuses on a specific project carried out by a cross-functional team composed of at least one person each from sales and marketing, along with people from other departments. It seems reasonable to expect the sales manager to think that his/her relationship with the marketing manager is effective due to the need to build collaboration in cross-functional teams (Conrad 1990, cited by Hutt, 2001). The findings of Smith and Barclay (1997, cited by Hutt, 2001) generally supp. rt the proposition that greater trust is associated with greater perceived â€Å"task performance†, similar to relationship effectiveness (Hutt, 2001). 2. 4 Collaborative Capabilities of Marketing Managers The personal capabilities or skills of a marketing manager to achieve cross-functional collaborative is discussed. Some capabilities are strongly related to the personalities of the managers. The study helps the managers to develop themselves to be better collaborators. 2. 4. Reputational Effect iveness Factors Tsui (1990, 1994, cited by Hutt, 2001) researches on reputational effectiveness of managers and subunits, based on role theory, organizational members occupy a position which encompasses a set of roles as specified by role senders. Each category of role senders (e. g. each functional area) might be considered a constituency with whom the focal manager has some level of interdependence due to work flow, authority, or resource exchange relationship. And he suggests that the effective manager actively interacts with diverse constituencies; attempts to influence their expectations; or if necessary, persuades them to accept the manager’s preferred goals, standards, or actions. The perspective closely aligned with Anderson’s (1982, cited by Hutt, 2001) depiction of marketing’s role with the firm. Tsui (1994, cited by Hutt, 2001) categorized the factors which may facilitate or constrain the responsive behavior and the attainment of reputational effectiveness in the below table.   Structural Factors |Social Factors |Individual Factors | |Constituency background |Group norms |Conscientiousness | |Reward system |Social information |Self-monitoring | |Measurement system |Social categorization |Self-efficacy | |Type of goals |Trust and reputation |Adaptive self-regulation | |Distribution of power | |Collectivism | Table 2. 1 Reputational Effectiveness Factors †¢ Structural Factors The marketing managers face a lot of role incompatibility because the managers with whom they often interact have varied background. Their reputational effectiveness can be achieved easier when the structural conditions increases the similarity of the constituency perspectives. The managers’ responsive behavior can be encouraged by the rewards based on the organizational goals. The group goals make the managers have increased consensus on expectations and perceived interdependence, therefore facilitate responsive behavior (Hutt, 2001). †¢ Social Factors The social factors such as a prevailing norm in a functional unit affect the responsive behavior and the reputational effectiveness of the managers. The individual factors such as personality, ability and motivational factors influence the responsive behavior and the reputational effectiveness of the managers, too. Tsui (1994, cited by Hutt, 2001) asserts that high self-monitoring managers actively tune into cues regarding constituents’ expectations and adjust their behavior to meet constituent demands. †¢ Individual Factors Hutt (2001) concludes that the reputational effectiveness of the marketing managers relies on their ability to respond to the needs and demands of members of the internal exchange network, which the managers must initiate and nurture with multiple groups within the firm. Butaney (2007) lists the attributes that the marketing managers need to have in order to get the relational competence. Relational competence is defined by Carpenter (1993) as â€Å"attributes of the individual which serve interpersonal goals and promote positive relationship† . It includes initiation and enhancement. Initiation’s specific attributes include assertiveness, dominance, instrumental competence, shyness and social anxiety, while enhancement’s ones include intimacy, trust, interpersonal sensitivity, altruism and perspective taking, e. g. , openness, transcending boundaries, flexibility, and responsiveness. 2. 4. 2 Marketing Manager’s Collaborative Skills Marketing managers’ personal capability is very important for having good CRF. Gabarro (1979, cited by Hutt and Thomas, 2010) asserts that the development of a working relationship involves the development of an interpersonal contract—â€Å"an unwritten but living document that evolves over time as two people work together, learn about each other, and implicitly or explicitly test the limits of what each wants from the relationship and is willing or able to give to it †. Central to the contract is a set of mutual expectations concerning performance, roles, trust, and influence. Nowadays the customers demand relatively more complex products and service arrangement. The managerial work which Butaney (2007) explains as the functions a manager performs simultaneously at three levels is managing information (communicating and controlling), managing people (leading and linking) and managing tasks/actions. The marketing manager needs to achieve collaboration among various constituents of the firm, so that the firm can succeed in the market because of the collaborative advantage achieved. The personalities with benefits the collaboration is summarized by some researchers. Butaney (2007) emphasizes the attributes/skills of the managers necessary for developing collaborative capability, such as role-taking ability, including volunteering and taking initiative and leading, ability to communicate effectively and efficiently, understand and app. reciate the cognitive and emotional perspectives of diverse constituents, ability to build relationship networks among customers, functional experts within the firm, and key industry personnel, relational competencies (e. g. , openness, transcending boundaries, flexibility, and responsiveness), an awareness of and an ability to implement app. ropriate conflict management and influence strategies. In all, these abilities of relational competence of the marketing managers are very important. In conclusion, the collaboration between the marketing and RD and other departments can be strengthened when the information exchange process is more convenient, the employees in different departments have more mutual understanding and the achievement of the collaboration is stressed and rewarded. On the other hand, marketing manager’s personal communication ability is very important for the effective collaboration with other departments. In this chapter, the three questions raised at the beginning are answered from the literature review. The cross-functional interaction in NPD is regarded as an information process, as the information on customer need, technical possibility data and competitors is shared and selected (covered in 2. 2). The common goal of the company benefits the collaboration. The departments have interdependent resources and the information providers have better influence power over the information receiver. The collaboration is more effective when the information transmission between the departments is smooth, the departments pursue common goals and are organized tightly. The cross-functional collaboration can be made better through social and structural means (covered in 2. 3). A mutual understanding of the goals of other department is a prerequisite of cross-functional integration. It is good to have periodical communication plan between the departments for a common project. Some structural integration measures such as shared revenue and united reward system, location arrangement, work changeover, can be used. In next chapter a case study is made on Chang Xin Asset Management Company. How the principles reviewed are app. lied in the company and what consequences have been made will be discussed. 3 Research Methodology In this chapter, the research method of this dissertation, including case study, data collection and data analysis, is introduced. The reasons why those methods and case were chosen is explained. Finally, the limitation of every method is discussed. 3. 1 Case Study A case study is expected to discover the particularity and complexity of a single case, in order to comprehend its activity within a specific circumstance (Stake, 1999). Case study is app. opriate when investigators need (a) to define research topics broadly and not narrowly, (b) to cover contextual or complex multivariate conditions and not just isolated variables, and (c) to rely on multiple and not singular sources of evidence. Case study is decided to be used in this study because the CFR is such a broad topic that it is difficult to make the research in general. Case study can narrow the scope of research. Moreover, this method can make clear the abstract concept with specific case. In addition, the analysis is conductive on the case itself and its r Marketing Cross-Functional Relationship During Npd Essay Example Marketing Cross-Functional Relationship During Npd Essay Marketing Cross-functional Relationship during NPD and collaborative capability for marketing managers Abstract In the era of hi-tech and rapid information development, the success of the enterprises mainly depends on the continuous NPD. It is discovered by a lot of research that the collaboration between the marketing and other departments is critical to the success of new products. The marketing can have better promotion performance through effective collaboration with RD and other departments. Adopting deep interview for a special case, this study elaborates the cross-functional relationship (CFR) management based on research findings and related theories. The study suggests the structural, social and individual ways to improve the interdepartmental collaboration. The main research conclusions are as follows. a. Chang Xin Company pays much attention to teamwork and cooperation between marketing and other departments in the whole process of NPD. In the project discussion phase, the departments carry on the project planning and market survey together. The marketing deals with the inquiries at promotion and the after-sale service with the help of RD, Investment Management and other departments. b. The relationship between marketing and other departments can be build through sharing resources, work turnover, mutual understanding and common goals. Chang Xin still has something to do to build information communication platform such as network system, information transmission and tracking system in order to get high efficiency of information exchange. c. We will write a custom essay sample on Marketing Cross-Functional Relationship During Npd specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Marketing Cross-Functional Relationship During Npd specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Marketing Cross-Functional Relationship During Npd specifically for you FOR ONLY $16.38 $13.9/page Hire Writer In addition to building the enterprise culture to value cross-functional communication, the company had better set up mutual promotion and reward system to give impact on the career development views of the managers. At the same time, the responsibilities of each department should be clearly specified. Contents 1 Introduction7 1. 1 Objective7 1. 2 Review of Chapters8 1. 3 Limitation of Study8 2 Literature Review10 2. 1 Definition10 2. 2 Cross-functional relationship in NPD11 2. 3 How to Achieve Cross-functional Collaboration13 2. 3. 1 Information communication13 . 3. 2 Integrating management structure15 2. 3. 3 Building Interpersonal Trust17 2. 4 Collaborative Capabilities of Marketing Managers18 2. 4. 1 Reputational Effectiveness Factors18 2. 4. 2 Marketing Manager’s Collaborative Skills20 3 Research Methodology22 3. 1 Case Study22 3. 2 Data Collection23 3. 3 Data Analysis24 4 Case Analysis: Chang Xin Asset Management26 4. 1 Company Background26 4. 2 Status of Cross-functiona l Collaboration in NPD26 4. 3. 1 Social Methods29 4. 3. 2 Structural Methods29 4. 3. 3 Integration of information/resource31 4. Collaborative Capability of Marketing Manager32 4. 5 Results34 5 Conclusion35 6 References36 7 Reflective Report39 1 Introduction 1. 1 Objective Deploying activities for total quality control and cost reduction to achieve good business performance are the main issues for a firm. In the process of new product development (NPD), the new products are often unstable quality and there are varying problems need to be fixed. The problems could be better solved by improving communication and information-sharing between different departments and their managers. Therefore, the interdepartmental collaboration is needed. Souder and Chakrabarti (1978, cited by Ye Youming, 2009) found out that 68% RD projects will fail in business performance completely and 21% will fail partially when there is serious management problems between the marketing and RD. This study will focus on the collaboration between the marketing department and other departments, especially in the NPD phase and find out the way to achieve the most effective cross-functional relationship (CFR). The main objectives are to explore important features of cross-functional working relationship during NPD and to gain further knowledge on the relative importance of collaborative capability for marketing managers. The questions raised on the topic are as below. How can marketing develop good collaborative relationship with other departments in the firm? How can the cross-functional collaboration be effective in NPD process? How can marketing managers develop skills to be successful in establishing multiple collaborative relationships? According to these questions, the discussion involves four parts: First, the features of CFR in the process of NPD. Second, the principles and critical factors for cross-functional collaboration. Third, the collaborate capabilities of marketing managers. Finally, the cross-functional collaboration in Chang Xin Asset Management Company, especially between Marketing Department and Investment Management Department in new mutual fund development process. 1. 2 Review of Chapters The dissertation is divided into five parts. In the introduction part, the background of CFR and its effect is introduced. The objectives and purpose of the study are listed. In the literature review part, the research results of CFR and managing methods in NPD are reviewed, some problems of the research are pointed out and the main topic of this study is raised. The research methods are introduced in the research methodology part. The research methods, investigation methods and interview design are examined. Part four is the case study on Chang Xin Asset Management Company. The investigation material and literature knowledge are combined to analyze the effectiveness of the cross-function relationship management. Later the role of marketing manager in the collaboration within the firm is discussed. In the last part, conclusion is drawn on how to have effective cross-functional collaboration within firms, especially in NPD process. 1. 3 Limitation of Study There are some limitations of the study. First, the research result on this area which the author can find is very limited, therefore the secondary data for this subject is limited. Second, the primary data from Chang Xin is limited. It is impossible to have questionnaire survey because the employee numbers in the company are not many, so the sample quantity can not meet the requirement of a general questionnaire survey. In addition, the managers may be too busy with their work and are not interested in doing the survey or having interviews with a university student. The managers interviewed are very limited. At last, only the marketing manager is interviewed because of time limit. The answers to the questions in the interview are too simple. Therefore the discussion is based on general description but not detailed situations from the beginning to the end or first-hand experimental data for better understanding. 2 Literature Review In literature terms ‘CFR’ and ‘collaboration’ or ‘reputational effectiveness’ have received different explanations, therefore it seems necessary to introduce some definitions. 2. 1 Definition Cross-functional Relationship Cross-functional relationship can be broadly defined as the set of communication patterns, knowledge exchanges, organizational mechanisms and formal and informal personal relationship which characterize the interface mong different departments in the firm, such as marketing, finance, RD, operations and so forth (Hutt, 2001). Collaboration Collaboration could be explained from two aspects: coordination and cooperation. The coordination is defined as harmonizing action for the various activities within a firm to achieve a desired level of e ffectiveness and efficiency. During the process of coordination, exchanges and interactions take place between functions in the firm, so the comprehensiveness, accessibility and compatibility among functions are maximized (Krajewski and Ritzman, 2004; Pinto et al. 1993, cited by Carr, Kaynak and Muthusamy, 2008). Cooperation is defined as the act of the functional areas working together within a firm to achieve the firm’s goals. Coordination capability is the combined action of coordination and cooperation (Carr, et al, 2008). Cross-functional barriers Cross-functional barriers create the threat to the established functional identities of the organizational members, which are divided into three categories of turf barriers, interpretive barriers and communication barriers (Hutt, 2001). As turf territory presents an area of expertise or authority, the functional groups have a strong desire to defend against the loss of power due to other organizational units. Major barriers to effective collaboration exist because each functional group focuses on a different facet of a problem and makes different senses of the total. This kind of thought world difference barrier is called interpretive barrier. In addition, the coding method for abbreviating goods descriptions within an organization can be misinterpreted by the members who are not familiar with it, therefore the information from the source may be distorted. This situation is called a communication barrier. Reputational effectiveness Reputational effectiveness means the degree to which the manager has been responsive to the needs, demands and reputations of the constituencies of the firm, including functional areas within the firm and customer organizations, upstream and down stream value chain partners, and other business and strategic alliance partners (Butaney, 2007). It actually is largely a measure of the degree of responsiveness of manager (Hutt, 2001). 2. 2 Cross-functional relationship in NPD The main research on the CFR between marketing and RD and other departments is about the coordination methods, especially on the information communication process, the barriers, intention and encouragement and the effective influence of strategies, organizational structure and information technology. †¢ Information process perspective Wu and Chen (2009) state that the improper communication between the departments can be caused by the improper organizational structure or poor atmosphere within the company. In some research, the interaction between marketing and RD during NPD is regarded as a process to turn the market opp. rtunity and technical possibility data into the information asset for commercial production. It is discovered that the success of NPD depends on the information share on customer demand, market segmentation, enterprise capability and competitor strategy information among various departments. Much of the research has shown that successful product development co mes when a clear understanding of customer needs is integrated with a clear understanding of RD and production resources (Krohmer, Homburg and Workman, 2002). And some more specific studies looked at the extent of the interaction and participation of various groups in the product development process. They have tended to tell that more interaction between the groups tends to lead to more success. It is proofed that other functional groups have influence on the marketing activities. Krohmer, Homburg and Workman (2002) measured the extent of influence of five functional groups over key marketing issues with a cross-national survey and related their cross-functional measure to key marketing outcomes. Two sets of hypotheses were tested using three-dimensional conceptualization of performance effectiveness, efficiency, and adaptiveness. As a result, they found that there was a high cross-functional dispersion of influence on marketing with certain activities such as pricing and new product development (NPD). In contrast, the cross-functional dispersion of influence with certain activities such as advertising is low. Research also tells that the common goal of the company benefits the cooperation between the departments. In a ase study, Hutt, Berth and Gary (1995) investigated the cross-functional barriers to the strategic change in Techno project. The turf war between the Marketing and RD was eased with political and administrative levers at the early stages. Later Techno’s goals were clarified and the strategy map was identified by both departments, and learning eventually spread through the organization. The project ended with success of collaboration at last. †¢ Reso urce interdependent perspective It is believed the resources within the departments are not easy to imitate, attain or replace. Therefore the scholars think marketing and RD need to depend on each other to get the necessary resources when they do not have sufficient resources to finish the NPD projects. †¢ Social system perspective This perspective focuses on the continuous fighting social process since the different functions have continuous conflicts for their benefits or rights. It emphasizes on the influence power, which means the influence of the information provider on the behavior and attitude change of the information receiver. It is thought the individual factors of professional ability, reward on the position have positive effect on the influence power. It is recognized that the degree of competition across the functions is a key factor that can impede knowledge transfer within an organization. Research further shows that an arduous relationship between the resource and the recipient, or intergroup rivalry can impede internal knowledge transfer. The cross-functional interaction can be viewed either from a cooperative aspect, focusing on the cooperation and communication or from a competition aspect, focusing on interdepartmental rivalry (Luo, Slotegrafft and Pan, 2006). 2. 3 How to Achieve Cross-functional Collaboration The researchers discovered some measures which can be taken in the social, structural and individual ways. 2. 3. 1 Information communication †¢ Mutual understanding between departments As Galbreath (1998, cited by Ryals, 2001) mentioned, customer relationship management (CRM) integrates marketing, sales and service functions through business process automation, technology solutions and information resources to maximize each customer contact, however Hall (1997, cited by Ryals, 2001) found that, even where organizations have technological integration, performance integration does not always follow. Furthermore, Hall (1997) notes that an understanding of the perspective from both marketing and CRM disciplines is a prerequisite of cross-functional integration. †¢ More effective information communication in project teams Management is communication (Baker, 2003, pp. 275). It is very necessary to have effective information communication management in order to improve the quality of the interdepartmental communication. There are some measures to make the communication flow between marketing and RD in order under the common company goals (Ye, 2009). . At the beginning of the NPD process, start the communication on project choice, target market, grasp of development opp. ortunities and project goal as soon as possible. b. In the middle of the development, communicate the marketing demand and technology information in routine visit and meetings between the departments. c. Build a project team, make clear the responsibilities of the departments, coordinate the management and make d ecision to solve the problems that the departments face commonly. Zhang (2009) thinks the internal communication effect can be improved when different information technology is adopted properly, and the internal communication can be used as a performance interference measure. She suggests to have special employees in charge of internal communication, who are both the compilers of the communication information and the administrator of the information system. †¢ Informal social communication The role of formal and informal interpersonal communication on three key NPD outcome variables-NPD success, perceived relationship effectiveness, and interpersonal collaboration were examined by some researchers. The results show that both formal and informal communication has a positive effect on NPD success and on Marketing Manager/RD Manager working relationship. It is found that the informal communication has a much greater effect on collaboration than formal communication during NPD process. When collaborative behavior occurs amongst managers, there is a tendency to view the relationship as productive, and to view the other managers in a favorable way (Kahn, 1996; Jassawalla and Sashittal 1998; Kahn and Mentzer 1998, cited by Elias and Graham, 2005). 2. 3. 2 Integrating management structure †¢ Shared revenue targets and united reward systems When the two departments have higher domain similarities, they are more likely to cooperate. Kotler, Rackham, and Krishnaswamy (2006) defined the role of marketing in â€Å"the Buying Funnel† based on the customer’s decision sequence. Marketing is usually responsible for the first few steps—building brand awareness and brand preference, creating a marketing plan, and generating leads for sales. Then Sales executes the marketing plan and follows up on leads. They think the funnels of this kind -integrated into the CRM system and into sales forecasting and account-review processes form an increasingly important backbone for sales management. So marketing and sales can be integrated better with shared revenue targets and reward systems and integrated metrics. But the performance app. raisal systems for marketing and RD are often separated. The performance of marketing is usually measured by market share and customer satisfaction, while that of RD is done by the patent numbers and how advanced the technology of the new products is. Research discovers that it is common in the enterprises that people think the new products are successful due to the wise decision of the marketing, but the products fail due to the errors of RD departments (Ye, 2009). In this case, there is less active participation of RD in cross-functional collaboration or information sharing if RD’s effort is not paid much attention. The common app. raisal system based on the individual performance is a barrier to the effective collaboration between the departments because the individual performance has nothing to do with the cross-functional cooperation, the goals of individual performance may differ much from the goals of the project teams, and difference may cause much conflict. In the contrast, a united reward system ill benefit the cooperation, because the both parties will be rewarded when a new product is sold successfully (Ye, 2009). †¢ Restructuring The departments can be reconstructed to work more efficiently. Wind (2005) examines opp. ortunities for how marketing insights across the organization can drive growth and innovation, making technology and marketing to create convergence, and rethinking the customer experience and relationship. He thinks that organizations may create linking processes or engage in creative reconstructuring of the entire organization through interdisciplinary app. oaches, such as integrative processes. He concludes that creating the common foundation of disciplinary tools and insights can help cultivate a market perspective across the organization and develop more creative solutions to business challenges. Lu and Yu (2009) argue that under most circumstances the balanced organizational structure will be adopted for a marketing project team in the enterprises. Project team is a kind of matrix organizational structure (Ye, 2009). It functions better for horizontal communication than the traditional pyramid structure. Therefore it is a good choice for NPD project structure. When the project team leader and the functional manager have repeated authority on a task, the innovation behavior is usually positively affected. Gong and Tang (2004) analyzed the effectiveness of five kinds of integration mechanisms (location arrangement, work changeover, informal social system, reward and encouragement and formal integration system) between the RD and marketing under different combination of demand dynamics, competitive dynamics and technological dynamics. It is suggested that work changeover, informal social system, reward and encouragement can be used to increase the integration between marketing and RD when there is low technological dynamics, demand dynamics and high competitive dynamics. †¢ Location arrangement The long distance separation of two departments hinders the communication between them. The geographical factor may let the people have different perspectives or technical terms, hence encourage the short-sighted behavior benefiting only their own. Therefore location rearrangement to closer distance helps the departments to communicate better. †¢ Work changeover Liu (2010) says work changeover among the departments and communication culture development can help to improve the internal communication. Robert and Qreiny (2004, cited by Ye, 2009) state the project team members are not willing to accept the information from the other departments when the members do not trust each other very much because they share the technical terms with and have trust on the people in their own departments long term (Ye, 2009). So the employees will know much about the work in other departments, win more respect and trust and can communicate better in a project team if they are trained two or three years in the work positions in other departments. 2. 3. 3 Building Interpersonal Trust In a NPD project, every department is assigned different tasks. The requirements for lead time, operation methods and resource distribution are different for different departments; therefore the goals of the departments are different. The departments may have much conflict or rivalry if the goals vary very much. However the collaboration can be more effective when the people from different departments have good personal relationship. The social psychological factor of interpersonal trust is likely to be important in determining relationship effectiveness. Some researchers make perceived relationship effectiveness research based on two variables (power of the marketing department, and stake holding) and four endogenous variables (total interdependence, influence strategies, interpersonal trust, and manifest influence). The research focuses on a specific project carried out by a cross-functional team composed of at least one person each from sales and marketing, along with people from other departments. It seems reasonable to expect the sales manager to think that his/her relationship with the marketing manager is effective due to the need to build collaboration in cross-functional teams (Conrad 1990, cited by Hutt, 2001). The findings of Smith and Barclay (1997, cited by Hutt, 2001) generally supp. rt the proposition that greater trust is associated with greater perceived â€Å"task performance†, similar to relationship effectiveness (Hutt, 2001). 2. 4 Collaborative Capabilities of Marketing Managers The personal capabilities or skills of a marketing manager to achieve cross-functional collaborative is discussed. Some capabilities are strongly related to the personalities of the managers. The study helps the managers to develop themselves to be better collaborators. 2. 4. Reputational Effect iveness Factors Tsui (1990, 1994, cited by Hutt, 2001) researches on reputational effectiveness of managers and subunits, based on role theory, organizational members occupy a position which encompasses a set of roles as specified by role senders. Each category of role senders (e. g. each functional area) might be considered a constituency with whom the focal manager has some level of interdependence due to work flow, authority, or resource exchange relationship. And he suggests that the effective manager actively interacts with diverse constituencies; attempts to influence their expectations; or if necessary, persuades them to accept the manager’s preferred goals, standards, or actions. The perspective closely aligned with Anderson’s (1982, cited by Hutt, 2001) depiction of marketing’s role with the firm. Tsui (1994, cited by Hutt, 2001) categorized the factors which may facilitate or constrain the responsive behavior and the attainment of reputational effectiveness in the below table.   Structural Factors |Social Factors |Individual Factors | |Constituency background |Group norms |Conscientiousness | |Reward system |Social information |Self-monitoring | |Measurement system |Social categorization |Self-efficacy | |Type of goals |Trust and reputation |Adaptive self-regulation | |Distribution of power | |Collectivism | Table 2. 1 Reputational Effectiveness Factors †¢ Structural Factors The marketing managers face a lot of role incompatibility because the managers with whom they often interact have varied background. Their reputational effectiveness can be achieved easier when the structural conditions increases the similarity of the constituency perspectives. The managers’ responsive behavior can be encouraged by the rewards based on the organizational goals. The group goals make the managers have increased consensus on expectations and perceived interdependence, therefore facilitate responsive behavior (Hutt, 2001). †¢ Social Factors The social factors such as a prevailing norm in a functional unit affect the responsive behavior and the reputational effectiveness of the managers. The individual factors such as personality, ability and motivational factors influence the responsive behavior and the reputational effectiveness of the managers, too. Tsui (1994, cited by Hutt, 2001) asserts that high self-monitoring managers actively tune into cues regarding constituents’ expectations and adjust their behavior to meet constituent demands. †¢ Individual Factors Hutt (2001) concludes that the reputational effectiveness of the marketing managers relies on their ability to respond to the needs and demands of members of the internal exchange network, which the managers must initiate and nurture with multiple groups within the firm. Butaney (2007) lists the attributes that the marketing managers need to have in order to get the relational competence. Relational competence is defined by Carpenter (1993) as â€Å"attributes of the individual which serve interpersonal goals and promote positive relationship† . It includes initiation and enhancement. Initiation’s specific attributes include assertiveness, dominance, instrumental competence, shyness and social anxiety, while enhancement’s ones include intimacy, trust, interpersonal sensitivity, altruism and perspective taking, e. g. , openness, transcending boundaries, flexibility, and responsiveness. 2. 4. 2 Marketing Manager’s Collaborative Skills Marketing managers’ personal capability is very important for having good CRF. Gabarro (1979, cited by Hutt and Thomas, 2010) asserts that the development of a working relationship involves the development of an interpersonal contract—â€Å"an unwritten but living document that evolves over time as two people work together, learn about each other, and implicitly or explicitly test the limits of what each wants from the relationship and is willing or able to give to it †. Central to the contract is a set of mutual expectations concerning performance, roles, trust, and influence. Nowadays the customers demand relatively more complex products and service arrangement. The managerial work which Butaney (2007) explains as the functions a manager performs simultaneously at three levels is managing information (communicating and controlling), managing people (leading and linking) and managing tasks/actions. The marketing manager needs to achieve collaboration among various constituents of the firm, so that the firm can succeed in the market because of the collaborative advantage achieved. The personalities with benefits the collaboration is summarized by some researchers. Butaney (2007) emphasizes the attributes/skills of the managers necessary for developing collaborative capability, such as role-taking ability, including volunteering and taking initiative and leading, ability to communicate effectively and efficiently, understand and app. reciate the cognitive and emotional perspectives of diverse constituents, ability to build relationship networks among customers, functional experts within the firm, and key industry personnel, relational competencies (e. g. , openness, transcending boundaries, flexibility, and responsiveness), an awareness of and an ability to implement app. ropriate conflict management and influence strategies. In all, these abilities of relational competence of the marketing managers are very important. In conclusion, the collaboration between the marketing and RD and other departments can be strengthened when the information exchange process is more convenient, the employees in different departments have more mutual understanding and the achievement of the collaboration is stressed and rewarded. On the other hand, marketing manager’s personal communication ability is very important for the effective collaboration with other departments. In this chapter, the three questions raised at the beginning are answered from the literature review. The cross-functional interaction in NPD is regarded as an information process, as the information on customer need, technical possibility data and competitors is shared and selected (covered in 2. 2). The common goal of the company benefits the collaboration. The departments have interdependent resources and the information providers have better influence power over the information receiver. The collaboration is more effective when the information transmission between the departments is smooth, the departments pursue common goals and are organized tightly. The cross-functional collaboration can be made better through social and structural means (covered in 2. 3). A mutual understanding of the goals of other department is a prerequisite of cross-functional integration. It is good to have periodical communication plan between the departments for a common project. Some structural integration measures such as shared revenue and united reward system, location arrangement, work changeover, can be used. In next chapter a case study is made on Chang Xin Asset Management Company. How the principles reviewed are app. lied in the company and what consequences have been made will be discussed. 3 Research Methodology In this chapter, the research method of this dissertation, including case study, data collection and data analysis, is introduced. The reasons why those methods and case were chosen is explained. Finally, the limitation of every method is discussed. 3. 1 Case Study A case study is expected to discover the particularity and complexity of a single case, in order to comprehend its activity within a specific circumstance (Stake, 1999). Case study is app. opriate when investigators need (a) to define research topics broadly and not narrowly, (b) to cover contextual or complex multivariate conditions and not just isolated variables, and (c) to rely on multiple and not singular sources of evidence. Case study is decided to be used in this study because the CFR is such a broad topic that it is difficult to make the research in general. Case study can narrow the scope of research. Moreover, this method can make clear the abstract concept with specific case. In addition, the analysis is conductive on the case itself and its r