Technovation 31 (2011) 118–127

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Technovation

0166-49

doi:10.1

n Corr

E-m

brodrig

journal homepage: www.elsevier.com/locate/technovation

Team vision in product development: How knowledge strategy matters

Elena Revilla a,n, Beatriz Rodrıguez b

a Operations and Technology Management Department, IE Business School, Marıa de Molina, 12, 5 Planta, 28006 Madrid, Spainb Applied Economy Department, Avd. Valle Esgueva 6, Universidad de Valladolid, 47011 Valladolid, Spain

a r t i c l e i n f o

Available online 20 November 2010

Keywords:

Team vision

Product development

Knowledge strategy

72/$ - see front matter & 2010 Elsevier Ltd. A

016/j.technovation.2010.10.007

esponding author. Tel.: +34 91 5689600; fax:

ail addresses: elena.revilla@ie.edu (E. Revilla),

uez@eco.uva.es (B. Rodrıguez).

a b s t r a c t

In today’s more complex multinational and technologically sophisticated environment, the group has re-

emerged in importance as the project team. Work teams are important to organizations in general, but are

especially critical in product development because they span many functional areas including

engineering, marketing, manufacturing, finance, etc., and new product teams must frequently be

composed of individuals from different backgrounds and perspectives. In these circumstances, this

paper addresses the contingency role that knowledge strategy plays in explaining the relationship

between team vision and product development performance. After studying the team vision on 78 new

product developments from a wide variety of firms, we found that effective team vision varies depending

on the knowledge strategy—defined in terms of punctuated equilibrium in the explorative cycle, low

ambidexterity and high ambidexterity. Our results demonstrate that while trade-off is positively

associated with success in all strategies, clarity is only associated with low ambidexterity strategies

and strategy-fit is only associated with high ambidexterity strategies.

& 2010 Elsevier Ltd. All rights reserved.

1. Introduction

Organizations have become increasingly dependent on cross-functional teams to carry out their R&D tasks and innovate. Recentempirical research shows that most firms have implemented cross-functional teams for the majority of new product developmentprojects undertaken (Hong et al., 2005). Product development isbecoming multidisciplinary and technologically complex and occursat intersections of different fields. Additionally, research substanti-ates links between effectiveness and collectivist notions such ascohesion, coordination or cooperation (Teasley et al., 2009). Further-more, the effectiveness of product development is contingent uponthe integration of different specialized capabilities, strong functionalgroups, large numbers of people and multiple pressures (Perry-smithand Vincent, 2008; Nellore and Balachandra, 2001). Clark andWheelwright (1993) and Coopers (1999), among many otherresearchers, also suggest that the success of product developmentis determined by the integration of abilities of both upstream (e.g.research and development, marketing and design engineering) anddownstream activities (e.g. manufacturing engineering, operationsand quality control. However, despite the virtues of cross-functionalteams, which have been widely extolled, and the increasing attentionbeing devoted to understanding their integration process, different

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perspectives and backgrounds may lead to conflict and result innegative outcomes (Keller, 2001).

In light of the conflicting literature, there is still a relative dearthof studies investigating team-level factors influencing such inte-gration among all of the functions involved in product developmentand their effects on performance (Hoegl and Parboteeah, 2007).Literature in the area of innovation has suggested that performancecan be affected by two sets of factors—the characteristics of theteam and the contextual influence of the team (Sethy, 2000; Lynnand Akgun, 2001). Accordingly, this paper considers variablesrelated to these two sets of factors. Regarding team characteristics,it focuses on team vision because this concept is consideredimportant to minimize the effects of the functional diversity inthe group and to promote better performance. In this paper, teamvision refers to the existence of a common background, a clear set ofgoals, priorities, trade-offs and a good understanding of the overallgoals of the firm and of the project itself. As Brown and Eisenhardt(1995) state, although this aspect of the team is considered critical,our understanding of exactly what team vision is and its link withproduct development performance is very weak. Crawford and DiBenedetto (2000) also point out that there is surprisingly littleresearch on vision at the product development level.

Although team vision may be able to influence product develop-ment performance, it may not be, in itself, sufficient to explain productdevelopment performance. The ability of team vision to produce betterperformance can be helped or harmed by contextual influences of theteam (Olson et al., 1995; Lynn and Akgun, 2001). Team or groupcontext reflects influences or contingences stemming from the teamenvironment (Doolen et al., 2003). Abernathy and Clark (1985)

E. Revilla, B. Rodrıguez / Technovation 31 (2011) 118–127 119

suggested that the importance of innovation in competition dependedon its capacity to influence the firm’s existing resources, knowledgeand skills. Danneels (2002) adopted the same basic principle andcategorized product developments based on whether the requiredcapabilities already existed in the firm, or were new. From this point ofview, product development operates under different logic, so a firmshould choose the one in which they develop the new product.Previous research has already pointed out the need to analyzevariations on the degree of newness of knowledge in explainingkey-organizational questions related to innovation (Freel and de Jong,2009; Ellonen et al., 2009; Jayawarna and Holt, 2009; Gobbo andOlsson, 2010; Rhee et al., 2010). This paper draws on a knowledgestrategy (Choi et al., 2008) to examine how knowledge exploration andexploitation actions moderate the relationship of team vision andproduct development effectiveness.

The conceptual distinction between exploration and exploitation(March, 1991) has emerged as an underlying theme in research onorganizational learning and strategy (Levinthal and March, 1993;Bierley and Chakrabarti, 1996; Vera and Crossan, 2004), innovation(Rothaermel and Deeds, 2004) and organization theory (Holmqvist,2003). Exploration is a manifestation of organizational learning thatentails activities such as search, variation, experimentation, challen-ging existing ideas and research and development. It is thus aboutimproving and renewing the organization’s expertise and compe-tences to compete in changing markets by introducing the variationsneeded to provide a sufficient amount of choice to solve problems(March, 1991). Exploitation is a different manifestation of organiza-tional learning that involves efficiency, selection, implementation,control, refining and extending existing skills and capabilities. Itreflects how the firm harvests and incorporates existing expertise andcompetences into its operations, not only to economize the efficiencyof existing resource combinations (Levinthal and March, 1993) butalso to create new ones.

According to these differences between exploration and exploi-tation, it is expected that team vision will have different effects onproduct development performance depending on the productdevelopment knowledge strategy—defined in terms of explorationand exploitation. Thus, focusing on team level analysis, the purposeof this article is to define team vision as a means to integratedifferent functional areas, discuss its components and to under-stand how the impact of team visioning on product developmentperformance may vary depending on the knowledge strategy type.Studying the extent to which this team-related factor affectsproduct development performance, this paper makes severalcontributions. From a practical point of view, this study focuseson understanding factors that explain product development suc-cess. Although this paper is somewhat exploratory in nature, itconsiders variables that can be influenced by managers; thefindings of the study should provide useful recommendations forenhancing product development performance. In terms of theory,an important contribution of this study is the extension of theexisting research on team vision, which so far has focused primarilyon the organizational level, to a team level. Another majorcontribution of this study is its examination of how some appar-ently conflicting demands that are placed on product developmentteams affect performance. For example, this study supports thatproduct development does not involve a trade-off betweenexploration and exploitation in such a way that one occurs atthe expense of the other. On the contrary, product developmentefforts simultaneously develop both knowledge activities.

In order to do this, this paper, first, discusses the concept of teamvision, followed by how a vision may be developed and helps theintegration of the different groups and tasks, thus leading tosuccess in product development. Next, it characterizes the productdevelopment knowledge strategy and associates it with teamvision components. Then, we test the hypothesis on the basis of

data generated from a questionnaire survey accomplished in asample of product developments. Such test can give a snapshotof where differences exist and how team vision can contributeto success in product development. A discussion of the implica-tions, limitations and future research directions concludes ourresearch paper.

2. Literature review and hypotheses

2.1. Team vision

The product development literature states that effective inno-vation in new products relies on inputs from different functionsand that for innovation to cross the domain from the individual tothe team domain; it needs the right mix of individuals from avariety of functional areas such as marketing, research and devel-opment, manufacturing and purchasing (Tang, 1998). The path totechnology commercialization requires the combination of manydifferent knowledge sets (Perry-smith and Vincent, 2008). Accord-ingly, the knowledge necessary for product development is usuallycodified and structured differently in the various functional areas(Carlile, 2002; Madhavan and Grover, 1998). One of the primarybenefits of working in teams is that, as a unit, the team is morelikely to have access to the necessary information and expertise tosolve problems (Williams and O’Reilly, 1998).

While this type of team has great potential, it is simultaneouslyone of the most difficult types of team to manage successfully.Functional background differences are the key source of taskconflict that can undermine group functioning. (Pelled et al.,1999; DeDreu and Weingart, 2003). While greater diversity inthe functional background of team members is linked to a highernumber of innovations the group proposes (Bantel and Jackson,1989; Milliken and Martins, 1996), the cross-functional team hasbeen noted as having difficulties in reconciling ideas and movingfrom wildly different perspectives towards consensus (Dougherty,1992). Task conflict includes disagreements and debates regardingtask content that revolve around what actions are necessary tocomplete the task. In this situation, process losses that jeopardizethe final product development result may come about (Ancona andCaldwell, 1992).

In order to minimize the effects of functional diversity in thegroup and to promote better performance, it is important to developa common view among team members (Imai et al., 1985; Hayeset al., 1988. Because individuals from various functional areas oftenhave different ideas about the product to be developed, withouteffective team vision these individuals generally pull the project indifferent directions and thereby adversely affect the performance ofthe new product (Sethy, 2000).

Kotter (1995) describes vision in terms of something that helpsclarify the direction in which to proceed. Similarly, Crawford and DiBenedetto (2000) describe vision in terms of team direction, goalsand objectives. From the perspective of the new product teams,Brown and Eisenhardt (1995) define vision as the meshing of anorganization’s competence and strategies with the needs of themarket to create an effective concept. In this same line, team visionis seen as a shared purpose and plan of action that clarifies mission,strategic fit and sets of project targets and priorities that areconsistent with the firm’s internal capabilities and the market placerealities (Clark and Wheelwright, 1993).

The concept of vision becomes one of the tools or means toengender meaning to a project. Weick (2001) has discussed howsystems of sense-making are vitally important when specializationand decentralization results in the segregation of people and thedifferentiation of processes in undertaking an activity. Becauseproduct development requires coordination and aligns all functions

E. Revilla, B. Rodrıguez / Technovation 31 (2011) 118–127120

involved, all team members must be able to make sense of projectgoals so that they can support them and internalize them as beingaligned with their own. Furthermore, given the interrelation anddependence among the functional areas, there needs to be a clearunderstanding of the cause and effect relationships that exists sothat the impact of adverse actions that some team member mayhave on others can be traced. This requires the project members toundertake a sense-making exercise, which focuses on what the endpoint should be. Only then can the weavings of seemingly uncon-nected actions be clarified to understand how the parts form thewhole (Christenson and Walker, 2004). When this occurs, productdevelopment members might better see the logic of mutual adjust-ment and employ coping mechanisms to provide the requiredflexibility for the projects.

2.2. Team vision, components and impact in product development

According to the above, this study identifies three componentsin the concept of vision. It should be clear, align the goal of theproject with the company strategy and support the strategy byoffering an understandable trade off of projects goals.

The first component, clarity, refers to the extent of communica-tion, understanding and acceptance of a set of project goals thatguide development efforts (Hong et al., 2004). It must create a clearimage of what product development is trying to do and providedirection to its members. It has been demonstrated that goals areassociated with enhanced performance and strategy developmentat both individual and team levels (Locke and Lathan, 1990).However, the mere existence of these goals is not enough toinfluence performance. The product development goals must bewell articulated and clearly understood and shared among teammembers. Project goals should be able to help members todetermine what actions are consistent or inconsistent with theoverall product development goal. Creating a clear vision requiresexcellent communication, unambiguous definitions and a deepunderstanding of project goals (Cooper and Slagmulder, 1999). Itmeans that it must be based on realistic customer requirements(Rosenau, 1989) and good understanding of the competitivesituation and technical risk (Clark and Wheelwright, 1993).

Thus, developing a common understanding about the productgoals is expected to help in bringing functional knowledge andexpertise together while important product development-relateddecisions are being made. When diverse knowledge is broughttogether, teams come up with better ideas, make connectionsbetween seemingly unrelated pieces of information and consider avariety of approaches. As a result, the team has extraordinarypotential to achieve superior results.

The second vision component, strategic fit, is defined as thealignment between the projects and goals of the targets and thecompany’s strategies. It is the extent to which a firm’s strategyguides the product development. Strategy fit helps in creatingconsistency among various decisions, generating ideas for satisfyingcustomer needs in a superior manner and building synergistically onthe firm’s existing technology and manufacturing process. This, inturn, facilitates the development of successful products.

Accordingly, strategic fit has been showed to be related to teamperformance and new product development efforts (Shum and Lin,2007). Having compatible goals allows ‘‘the same vision’’ to beshared, suggesting a deeper understanding of how product devel-opment supports the company strategy. Product developmentsthat have a high degree of strategic fit tend to receive quicker topmanagement support and get easier access to internal resources(Hong, 2000). If not, others, both on and off the product develop-ment team, will continually question its direction and will try tochange the vision as the project progresses.

The third component, trade-off, refers to the extent to which therelative priority of the goal of each project is clear. This is especiallyimportant given that product development teams consist offunctional specialists with different priorities. Additionally, asmore firms engage in time-based competition, defining, commu-nicating and understanding the trade-offs between cost, qualityand time become more critical (Hong, 2000). High time pressurecreates a need for cognitive closure and can make it difficult forteam members to develop a common understanding about theproduct (Karau and Kelly, 1992). Because of time-based competi-tion, team members may be forced to consider a narrow range ofdecision alternatives and may not be able to think deeply about thevarious ways to build superior products. Therefore, the ability tomake quick trade-off decisions is expected to increase the productdevelopment performance.

Additionally, having clear trade-offs reduces confusion aboutwhat product development members are supposed to do andsubjectivity in operational decision making. More subtly, under-standing the trade-offs also builds team cohesion which is generallyviewed as a desirable quality of high-performing teams (Perry-smithand Vincent, 2008). On the contrary, unspoken and ambiguoustrade-offs can generate confusion and frustrate team members.Similarly, the desire to satisfy too many goals can lead to loss ofcohesiveness and sense of direction within the product develop-ment. Teams with unclear trade-offs often experience more diffi-culties than teams with clear trade-offs in defining how key issuesshould be valued or how to proceed with the product development

Given research has linked team effectiveness to clearly definedgoals (Guzzo and Shea,1992) and interdependent feedback (Campionet al., 1993); in this study, product development performance ismeasured by perceived team effectiveness. Team effectiveness is aprocess outcome that shows the efficiency of the product develop-ment process from product concept to manufacturing and the degreeof collaborative teamwork (Zirger and Maidique, 1990). Whencooperation and shared knowledge exist, the members of productdevelopment get work done quickly, reduce cost and also reducedesign and engineering hours. They have a general sense of creativity,productivity and timely conflict resolution as well as effectivedecision implementation and communication (Hong et al., 2004).

2.3. Knowledge strategies

The idea of the ‘‘knowledge strategy’’ has been recently devel-oped by authors in the field of organizational learning andorganizational knowledge. For example, Bierley and Chakrabarti(1996) define the knowledge strategy as the set of strategic choicesthat shape and direct the organization’s learning processes anddetermine the firm’s knowledge base. Zack (1999) defines knowl-edge strategy as ‘‘the overall approach an organization intends totake to align its knowledge resources and capabilities to theintellectual requirements of its strategy (p. 135)’’. Through theknowledge strategy, it is possible to identify the strategic knowl-edge gaps to take decisions regarding the creation, developmentand use of a firm’s knowledge in alignment with the requirementsof the business strategy.

A knowledge strategy can be viewed as a firm’s set of strategychoices regarding two knowledge domains: (1) the creation of newknowledge (exploration) and (2) the combination of existingknowledge to create new products that have value in the marketplace (Bierly and Daly, 2007). These decisions concern the manage-rial choices on how to balance knowledge exploration and knowl-edge exploitation, together with choices on the use of internal andexternal knowledge (Vera and Crossan, 2003). More specifically,knowledge strategy decides the degree to which the productdevelopment focuses its resources on either generating new

E. Revilla, B. Rodrıguez / Technovation 31 (2011) 118–127 121

knowledge or incrementally enhancing the existing body of knowl-edge. Researchers in the field of management technology havediscussed these differences in terms of radical and incrementalinnovation (Damanpour, 1991). Exploration involves radical inno-vation in the sense that it changes the underlying logic andprinciples, while exploitation involves incremental innovationand improvements that modify the underlying logic (Gilsing andDuysters, 2008; Harryson et al., 2008).

Following Gupta et al. (2006), there are two different yet bothlogical mechanisms to achieve a balance between exploration andexploitation, punctuated equilibrium and ambidexterity. Thepunctuated equilibrium mechanism describes a knowledge strat-egy as long-term cycling through periods of exploration andexploitation. The ambidexterity mechanism describes a knowledgestrategy based on the synchronous excel of both exploration andexploitation. Existing literature is silent on the question of whetherthese two mechanisms are equally viable and whether exogenousand endogenous contextual factors should drive the choicebetween them. In spite of the need for further elucidations,Revilla et al. (2010) presume that the choice of a knowledgestrategy may be made by combining exploration and exploitationin terms of addressing punctuated equilibrium or ambidexterity(see Fig. 1).

2.4. Hypothesis

Just knowing that product development may have differentknowledge strategies is not particularly compelling. What makesthis of interest is that these divergences significantly and differentlyaffect the relationship of team vision and product developmentperformance. This study assumes that the way product developmentpursues exploration and exploitation determines the impact of eachteam vision on product development performance.

This assumption can be articulated as hypothesis to be testedempirically,

H1. Differences in the knowledge strategy, in terms of exploration and

exploitation, lead to differences in the impact of team vision on team

effectiveness.

Now that this general hypothesis has been proposed, we will tryto deeply analyze the impact of team vision on product develop-ment depending on the specific knowledge strategy. The argu-ments used are based on the importance of team collaboration toface product development. Exploitation and exploration activitiesemerge throughout a problem resolution process aimed to createnew products (Mohrman et al., 2003). Exploitation occurs with theutilization of existing knowledge for innovative problem solving.Exploration occurs when existing knowledge is not sufficient tosolve the problem identified, so new knowledge needs to beconstructed and acquired to contribute to the existing body ofknowledge.

Punctuated equilibrium in explorative cycle

High Ambidexterity

Low

Ambidexterity

Punctuated equilibrium in exploitative cycle Low

Low High

High

EXPLOITATION

EXPLORATION

Fig. 1. Knowledge strategies.

Accordingly, exploration involves unfamiliar situations and alack of prior knowledge regarding how the problem should besolved. There is ambiguity regarding the tasks to be completed. Thismeans the existence of multiple and conflicting interpretationsabout how a problem should be addressed. High ambiguityrequires the team members to collaborate to a higher degree inorder to deal with such a volatile and unpredictable situation.Additionally, the exploration often requires a complex set ofknowledge and skills. As a result, exploration increases theorganizational dependency among the diverse functional knowl-edge areas involved in product development. It increases the needto connect people using different instruments, concepts andapproaches so they can think together and achieve convergenceof ideas and views within the team (Hoegl and Parboteeah, 2007).However, due to differences in language, norms and mentalmodels, exploration is also related to difficulties in communicationand the need for strong feedback among functional areas. Bierlyand Daly (2007) argued that exploration may result in productdevelopment without a definite focus, pursuing too many direc-tions at once. This may severely stain the product development’sresources and may not allow appropriate development of theproject.

Clearly, exploration requires going beyond simply throwinginformation to others and harmonizing a common meaning forknowledge that is functionally specialized and difficult to share. Inthese circumstances, team vision is expected to allow teammembers to be more aware of relevant project information andcoordinate their individual task. It helps the team to be in a betterposition to evaluate problems with different perspectives and cometo a higher quality solution. In summary, team vision probablyprovides a more coherent front as product development faceshigher levels of exploration.

On the contrary, exploitation exhibits an experience effect thatincludes the application of past experience and competenceswithin the firm. Repeatedly using the same knowledge reducesthe likelihood of errors and false starts and facilitates the devel-opment of familiar routines (Levinthal and March, 1993), whichallow the decomposition of sequenced activities in an efficientorder, thus eliminating unnecessary steps (Eisenhardt and Tabrizi,1995). It also leads to a deeper understanding of concepts, bootingthe firm’s ability to identify valuable knowledge within them,developing connections between knowledge and combining it inmany different ways (Katila and Ahuja, 2002). However, a strongcommitment to an exploitation strategy also entails trade-offs. Thehigher the amount of different knowledge involved in the devel-opment of a product focused on exploitation, the higher the needfor integration. When this happens, it is important that team visioncan help members to work together and increase cohesion in theteam. Thus, when exploitation intensifies, team vision is expectedto be more positively associated to performance.

Thus, it is logical to presume that low levels in both explorationand exploitation, as is the situation of low ambidexterity, will havea lower impact on performance than high ambidexterity.

H2. The positive effect of team vision on team effectiveness will be

higher when the knowledge strategy in product development com-

prises higher levels of exploration and exploitation (higher ambidex-

terity versus lower ambidexterity.

Compared to less innovative products (exploitation), moreinnovative products (exploration) may require major changes inthe existing technology and manufacturing process and therebydisturb the balance among product, technology and manufacturingsystems (Clark and Fujimoto, 1991). Exploration moves farther awayfrom current organizational routines and knowledge bases than doesexploitation (March, 1991). Exploration introduces more variations

Table 1Profile of participating companies and projects.

Percent

SectorIndustrial 75.7

Service 24.3

Number of employeesr499 65.8

500–999 9.6

1000–4999 12.3

5000–9999 6.8

Z10000 5.5

Age of the firm (years)1–10 24.4

11–50 60.0

450 15.6

NationalitySpanish 71.4

Multinational 25.7

Project duration (months)r6 31.1

7–12 37.7

13–24 19.7

424 11.5

E. Revilla, B. Rodrıguez / Technovation 31 (2011) 118–127122

than exploitation and as such, needs to provide a greater number ofchoices to solve problems (March, 1991). In this way, exploration hasmore possibilities of engendering new ideas, creating new knowledgecombinations and allowing obsolete knowledge substitution thanexploitation. Exploitation does not demand so much need forcollaboration and therefore it does not gain as much as explorationdoes from the increased cross-functional exchange of ideas andinformation. Thus, it is expected that team vision has less influenceon performance when the need for integration of knowledge andthe seeking of consensus across different or divergent viewpointsdiminishes. In other words, when exploration has been the focus pointon the product being developed, team vision can exhibit higherimpact on product performance than when the focus is on exploita-tion. The benefit from the efforts of team vision on less innovativeproduct development is likely to be lower.

Based on these initial observations and categories concerningknowledge strategy of product development the following hypoth-esis is developed,

H3. The positive effect of team vision on team effectiveness in

punctuated equilibrium will be higher in the explorative cycle than

in the exploitative cycle.

3. Research methodology

3.1. Sample characteristics and data collection

Survey methodology was used for the empirical analysis. Thequestionnaire was designed and developed by authors from athorough literature review. The questionnaire was next validatedin a pre-test carried out by means of several personal interviewswith product development executives. These interviews allowed usto purify our survey items and rectify any potential deficiency.Minor adjustments were made on the basis of specific suggestions.

After the pilot study, the mailing list was obtained from Madri+d(Madrid, Spain). Madri+d (www.madridmasd.org) is a society thatgroups firms and public research organizations with the aim ofimproving competitiveness by encouraging R+D, innovation andknowledge transfer. Madrid is one of the most developed areas inSpain (GDP per capita regularly above the national media, and thehighest in 2006) and the one that concentrates the largest number offirms. By tapping into this area, the study gains a good insight into theeffectiveness of various practices and is able to develop more credibleconstructs (Koufteros et al., 2007). Therefore, the population wascomposed of Spanish firms focused on R&D and innovation operatingin the local area of Madrid.

Madri+d integrates a list of 3293 organizations (including bothpublic and private organizations) implicated in research anddevelopment activities; however, not all of them are involved innew product development. Hence, we removed Public ResearchCenters (University and Public Research Organization) and servicecompanies (such as consultancy, IT services and the like) from thelist. We then focused on sectors where the incidence of productdevelopment is strong, providing a final list of 616 companies.

Targeted respondents were product development managersthat agreed to participate in the study. They received the ques-tionnaire by e-mail or by accessing a web page where they couldfind it. They had to answer questions concerning a specific productdevelopment effort managed by themselves and completed by2004. A researcher involved in the study personally helpedrespondents to solve any questions on the survey.

The data collection process yielded 80 usable responses, for aresponse rate of 12.93%. Table 1 shows the profile of participatingcompanies and responses. In terms of industry type, answerscovered a wide number of industries, mostly the food and beverage(20%), chemistry and pharmaceutical (11.3%), electric systems and

electronics (10.1%), computing systems (7.5%), equipment manu-facture (5%) and transport (5%). These percentages are similar to theones in the original sample provided by Madrid+d, so the finalsample characteristics were not significantly different from theoriginal one in terms of industry type proportion.

As a single response was asked from each product development,single informant bias in data collection might stem as a result.However, the presence of common method bias was tested byfollowing the Harman’s one-factor test described in Podsakoff et al.(2003). According to this test, if common method variance were aserious problem in the study, a single factor could be expected toemerge from a factor analysis or one general factor to account formost of the covariance in the independent and criterion variables(Aulakh and Gencturk, 2000). To apply the test, a factor analysis onall items was performed. In this analysis, 7 factors emerged witheigenvalues greater than one (together explaining 71.6% of thevariance) and the first factor accounted for only 17%. Thus, the testsuggests that common method variance is not of great concern.

3.2. Description of measures

The measurement of the analysis variables was built on amultiple-item method, which enhances confidence about theaccuracy and consistency of the assessment. Each item was basedon a five point Likert scale and all of them are perceptual variables.Table 2 displays items used to measure the analysis variables.

Team vision was measured with 9 items corresponding to clarity ofproduct development mission and targets, the trade off of productdevelopment targets and the strategic fit of the product developmentgoals with the firm’s strategy (Hong, 2000). The clarity of the productdevelopment measures the extent of communication, understandingand acceptance of a set of product development missions and goals,which guide development efforts (Clark and Wheelwright, 1993;McDonough III, 2000; Bonner et al., 2002). Trade-off of productdevelopment expresses the project target specification of perfor-mance, cost, time and quality (De et al., 1995; Babu and Suresh,1996). Strategic fit is the alignment of the product development goalswith its competitive situation (e.g., customer expectations and

Table 2Description of items and constructors and factorial analysis results.

Construct Measurement items Mean S.D. Factorload

% varianceext.

Reliability

Knowledge strategyKnowledge

explorationProject produces many new novel and useful ideas. 3.5 0.8 0.62 33.5 0.84

Project does an outstanding job uncovering product problem areas

with which customer were dissatisfied.

3.2 1.0 0.81

Project does an outstanding job correcting product problem areas

with which customer were dissatisfied.

3.2 0.9 0.82

Project incorporates new knowledge, methods and inventions 3.6 0.8 0.65

Knowledgeexploitation

Project integrates new and existing ways of doing things without

stifling their efficiency

4.0 0.7 0.72 28.9 0.73

Project puts in operation lessons learned in other areas of the organization. 3.8 0.9 0.69

Project makes use of existing (technical and market) competences

related to products/services that are currently being offered.

3.9 0.8 0.43

Project is able to identify valuable knowledge elements, connect

and combine them.

3.9 0.7 0.52

Team visionTrade-off Project targets clearly specified trade-offs between performance

and cost.

3.4 0.7 0.69 22.7 0.82

The relative priority of each project target was clear. 3.6 0.7 0.66

Project targets clearly specified trade-offs between time and cost. 3.3 0.8 0.79

Project targets clearly specified trade-offs between quality and cost. 3.5 0.8 0.84

Strategic fit Project targets were consistent with our firm’s overall business strategy. 4.0 0.7 0.75

Project targets reflected the competitive situation. 3.8 0.8 0.81

Our firm’s overall product strategy guided the setting of project targets. 3.6 0.8 0.78 19.3 0.71

A clear set of project targets guided development efforts. 3.7 0.8 0.58

Clarity This product development team had a well defined Mission. 4.2 0.7 0.78

The project Mission was well understood by the entire team. 4.1 0.6 0.71

The project goals were well understood by the entire team 3.9 0.7 0.74

PerformanceTeam effectiveness The team used all product development resources rationally 3.6 0.7 0.79 61.8 0.89

The team implemented decisions effectively 4.0 0.7 0.84

The team used product engineering hours efficiently 3.6 0.9 0.84

The team coordinated activities well 3.8 0.8 0.81

The team used financial resources sensibly 3.5 0.9 0.68

The team worked well together 4.1 0.7 0.75

The team was productive 3.9 0.7 0.78

E. Revilla, B. Rodrıguez / Technovation 31 (2011) 118–127 123

competitive offerings) and its available resources (e.g., internal designand manufacturing capabilities as well as suppliers’ design and manu-facturing capabilities. Product development team members discusscustomer expectations, competitors’ offerings, product lines andinternal and suppliers capabilities (Rosenthal and Tatikonda, 1992;Englund and Graham, 1999).

Knowledge strategy has been modelled in product development as amultidimensional construct where exploration and exploitation areconsidered as representative dimensions. As stated by Crossan et al.(1999), exploration takes place when product development generatesnew knowledge. Likewise, exploitation encompasses processes thattake and transmit embedded knowledge, which has been learnt fromthe past down to product development. Accordingly, and based on Leeand Choi (2003), Mohrman et al. (2003) and Katila and Ahuja (2002),knowledge strategy was measured by using 8 items, four itemsconcerning exploration and four items concerning exploitation. Thefirst four items measured the degree in which product developmentintroduces new ideas and new knowledge in problematic areas wherecustomers were unsatisfied. The last four items measured the degreeto which product development introduces lessons learnt in the past,existing competences and the combination and integration of diverseknowledge.

Performance was measured through perceived team effective-ness. Specifically, in order to capture the efficiency and the degree ofcollaboration of the teamwork, product development managersindicated the extent to which the product development team wasable to work well together, coordinate activities, implement deci-sions effectively, act productively, use financial resources sensibly,

use product development resources rationally and efficiently useproduct engineering hours. These items were previously used byHong et al. (2005), who drew them from Ali et al. (1995), Crawford(1992) and Tersine and Hummingbird (1995).

Since knowledge strategy is considered to be contingent onenvironmental characteristics, the study includes as control vari-

ables two classic environmental variables of product development,environmental dynamism and complexity. Environmental dyna-mism, or the rate of change of the environment, is measuredthrough 4 items based on Gupta and Wilemon (1990) and Iansity(1995). Complexity, or the multiplicity of factors and issues in theenvironment, is measured through 3 items based on Clark andFujimoto (1991) and Clark and Wheelwright (1995). Additionally,organizational size, in terms of the number of employees, firm ageand duration of the product development project are alsocontrolled.

3.3. Analysis and results

Data analysis involved several steps. First, since our researchvariables were measured through multiple-item constructs, we hadto verify the items tapped into their stipulated construct. Thus, weconducted three independent factorial analyses by using SPSS 15.0 forWindows, one for knowledge strategy items, another for team visionitems and finally, one for the perceived team effectiveness construc-tor. In all cases we applied the principal component with ‘‘varimax’’rotation as the method of factor extraction, retaining factors with

E. Revilla, B. Rodrıguez / Technovation 31 (2011) 118–127124

eigenvalue greater than 1. The results obtained were factors thatcondense the original nominal variable information while providingcontinuous variables for each group of variables. The internal con-sistency measures (Cronbach’s alpha) were also considered in order toassess the reliability of the measurement instruments. Table 2summarizes the results, where it is possible to observe that all itemsload on their appropriate scales. The proportion of variance retainedand the measure of internal consistency of multi-item scales(Crobach’s alpha) also adequately meet the statistical threshold inexploratory research.

Second, the scatter graph of exploration and exploitation sug-gested the possibility of identifying some meaningful clusters. There-fore, a cluster analysis was undertaken to facilitate the specification ofgroups and define different knowledge strategies in terms of knowl-edge exploration and knowledge exploitation. This technique aims atsorting different objects into groups (clusters) in a way that the degreeof association between two objects is maximal if they belong to thesame group and minimal otherwise. Specifically, Ward’s hierarchicalmethod using the Euclidean distance as an agglomeration schedulewas applied to determine both the number of clusters and the initialseeds (centres of the groups). These were next introduced in a secondK-means cluster with no hierarchical analysis, which provided thefinal categorization of the firms.

Table 3Analysis of agglomeration coefficients.a

Number of

cluster

Agglomeration

coefficient

Change in coefficient in

the next level (%)

6 32.67 36.77

5 44.69 33.26

4 59.55 39.23

3 82.91 51.65

2 125.73 54.30

1 194.00

a Hierarchical cluster based on Ward method and Euclidean distance.

Table 4Results of cluster analysis (K-means) for knowledge strategy.

Low ambidexterity Punctuated equilibriumin explorative cycle

Exploration 2.79 (0.6) 1.66 (0.7)

Exploitation 2.52 (0.7) 3.88 (0.8)

N 46 17

In brackets standard deviation.

n po0.01.

Table 5Regressions results, vision components for team effectiveness for different knowledge

Variables Low ambidexterity Punctuated equili

Beta t Beta

Trade-off 0.37 2.89n 0.64

Strategic Fit 0.03 0.28 0.05

Clarity 0.31 2.35n 0.51

R2adj

0.20

F-statistic 4.72n

Sample Size 46

Dependent variable, teamwork.

n po0.05.nn po0.1.

The decision on the number of clusters is guided by an agglom-eration coefficient, which displays the dissimilarity between eachcase or group of cases that are merged in each step of the clusteringprocess (see Table 3). The agglomeration coefficient shows ratherlarge increases from a 4-cluster model to 3-cluster model, from3-cluster model to 2-cluster and from 2-cluste model to 1-cluster,which in terms of the percentage change in the clustering coefficientlead us to determine that the appropriate number of clusters is three.

The characterization of clusters, based on the final centres ofK-means analysis is displayed in Table 4. Cluster 1, including 46product development projects with low exploration and exploitation,represents a low ambidexterity strategy. Cluster 2, comprising 17product developments characterized by high exploitation but verylow exploration, presents a punctuated equilibrium in explorative cycle

strategy. Cluster 3, formed by 15 product developments, shows highexploration and exploitation. It clearly represents a high ambidexterity

strategy. Table 4 also shows the non-existence of product develop-ments with punctuated equilibrium in exploration cycle, which does notpermit testing H3. This result illustrates the strong cumulative natureof scientific knowledge. The F-statistics also let us conclude that bothdimensions have discriminatory power.

In order to describe the clusters more deeply, Anova tests forcontrol variables have been applied. The results show that there are nosignificant cluster mean differences in the size of the firm, theduration of the product development project and its complexity.On the contrary, significant cluster mean differences were detectedwhen considering the age of the firm (F-statistic¼3.5, p-value¼0.03)and environmental dynamism (F-statistic¼3.12, p-value¼0.04).In particular, differences are identified between cluster 2 and 3, withproduct developments of cluster 3 being characterized by higherlevels of dynamism and by younger firms.

Third, product development was split according to the knowl-edge strategy adopted (clusters) and regressed team effectivenesson the visioning constructs. Results of the three regressions arepresented in Table 5. From this table, it can be observed that thecoefficient of determination (R2

adj) was different for each group ofproduct development. 20% team effectiveness can be explained by

High ambidexterity Total F-statistic

4.13 (0.6) 2.80 (1.0) 63.96n

3.84 (0.7) 3.02 (1.0) 29.92n

15 78

strategies.

brium in explorative cycle High ambidexterity

t Beta t

1.88nn 0.64 1.94nn

0.19 0.81 2.16n

1.57 �0.06 �0.28

0.11 0.26

1.67 2.57nn

17 15

E. Revilla, B. Rodrıguez / Technovation 31 (2011) 118–127 125

the three components of team vision in the case of low ambidex-terity strategies; 26% in the case of high ambidexterity strategiesand only 11% in the case of punctuated equilibrium in explorativecycle strategies. Thus, H1 is supported. The analysis of the regres-sions equations also indicates that in low ambidexterity strategiestrade-off and clarity dimensions are significantly associated withteamwork (t¼2.89, po0.05; t¼0.31, po0.1), the impact of trade-off being slightly greater (beta¼0.37; beta¼0.31). In the case ofpunctuated equilibrium in explorative cycle strategies, the fit isclearly worse and only trade-off has a marginal significant effect onteam effectiveness (t¼1.88, po0.1). Finally, in high ambidexteritystrategies, trade-off and strategic-fit are statistically significant(t¼1.94, po0.1; t¼2.16, po0.05). In the last case, the effect ofstrategic fit on team effectiveness is much greater than the effect oftrade-off (beta¼0.81; beta¼0.64). Hence, H2 is also supported.

4. Discussion

This study contributes to research on product developmentsuccess—a central issue to researchers and managers alike.The research question guiding this study was, How do theconfluence of knowledge strategy and team vision dimensionsrelate to product development performance? Successful competi-tion requires that the components of team vision – clarity, strategyfit and trade-off – be aligned to knowledge strategy. Research onknowledge strategy based on the concepts of knowledge explora-tion and knowledge exploitation is quite recent and the under-standing of whether the choice of the knowledge strategydetermines managerial decisions remains fairly unclear. Using thisnovel view, the study analyzed the role of team vision in the successof product development and found that an effective team visionvaries depending on the knowledge strategy—defined in terms ofpunctuated equilibrium in the explorative cycle, low ambidexterityand high ambidexterity.

First of all, this article shows that product development does notinvolve a trade-off between exploration and exploitation in such away that one would occur at the expense of the other. On the contrary,product development efforts simultaneously develop both knowl-edge activities. Conversely, this study found strong evidence thatexploration and exploitation should be understood in terms of duality,mutual interdependence, continual change, harmony and balance.

The quantitative analysis found that the strategies that com-prise the highest levels of exploration and exploitation show thehighest impact of team vision on performance. Table 6 alsoindicates that the mean value for each vision dimension is thehighest in the high ambidexterity strategies implying that, undercertain circumstances, successful projects will likely need greatervision clarity, more trade-offs and more strategy fit. On thecontrary, the lowest impact of team vision is found in theexploitative strategies. An explanation for this observation maybe that under more ambitious strategies the vision is perceived asmore needed. Exploitative strategies are typically trying to refineand improve current products while moving within a familiar

Table 6Mean of vision components in different knowledge strategies (ANOVA test).

Lowambidexterity

Punctuated equilibriumin explorative cycle

High ambidexterit

Trade-off 2.55 2.80 3.29

Strategic Ft 2.84 3.24 3.25

Clarity 2.83 3.18 3.20

n Based on Tukey test and Duncan test (po0.05).nn po0.05.

knowledge base. These strategies lack the volume and diversity ofnew knowledge and so team vision effort may have less influenceon performance.

The results of this study also show that regardless of the type ofknowledge strategy, trade-off is always significantly associatedwith team effectiveness. These findings suggest that being able tomake trade-off decisions helps to solve problems and minimizeconflict in product developments. Understanding the trade-offsbetween cost, quality and time as well as quality and cost permits ateam to act rapidly and more sensitively to product developmentrequirements. Product development goals should not be judged onhow precisely the goals are set, but rather, on whether they are setin such way that they help to solve problems and take decisions inthe development of products (Hong et al., 2004). However, to assessthe relative magnitude of the importance of this team visioncomponent, this paper conducted an additional analysis. Table 6presents descriptive statistics of each vision component (meanvalue) and ANOVA test for the different knowledge strategy. TheANOVA F-test for trade-off was highly significant and indicated thatthe null hypothesis (all three groups have the same performancelevel (F¼3.55, po0.05) could be rejected. High ambidexteritystrategies show the highest trade-off values (highest mean value),followed by exploitation-based and low-intensity balanced. Thisresult provided additional support for our framework, suggestingthat the ability to make trade-off decisions is especially perceivedas an important predictor of team effectiveness in high ambidex-terity strategies.

Furthermore, results indicate that for high ambidexterity strate-gies, strategy fit was also significantly associated with team effec-tiveness. This finding is consistent with the work by Song andMontoya-Weiss (1998) who found that for successful radical innova-tions, strategic planning, which they related to vision, is positivelyassociated with new product success. If a vision is determined at thebeginning of a these product developments, given the high degree ofuncertainty and ambiguity present, the project vision will likelyexperience changes and corrections. Under these assumptions, a clearstrategy that guides product development allows the project team toanalyze implications of each new alternative and select that one towhich the organization is committed.

This study did not find any direct or significant associationbetween vision clarity and team effectiveness for high ambidex-terity product development and so, it is somewhat contradictory tothe Lynn and Akgun (2001). As an explanation, we suggest that forthis type of product development, teams normally move away fromcurrent organizational routines and knowledge bases and havingclear project goals is not valued positively. What is more importantis the extent to which a firm’s strategy guides product developmentin unknown and conflicting situations by encouraging agreementbetween team members about strategic priorities along withspecific objectives and courses of action required for coordinationbetween product development goals and company strategy.Strategic guidance must lead to articulate a common vision, sothat team members have a common understanding of how productdevelopment supports the firm’s strategy.

yOverall F-Statistic Mainn

group diffLevene test

2.74 3.55nn 1–3 0.817 1–3

3.01 1.57 0.424

2.97 1.29 0.548

E. Revilla, B. Rodrıguez / Technovation 31 (2011) 118–127126

In contrast to high ambidexterity strategies, low ambidexteritystrategies exhibit a different profile. The strategic fit was not foundsignificant. Since in these less ambitious situations the projectvision does not experiment many changes and its direction is notcontinuously questioned, the role of strategy fit does not seem to beas important as in high ambidexterity product development. On thecontrary, here, clarity of vision was found to be positively asso-ciated with team effectiveness. The interpretation of this finding isthat for the project to succeed, it is important for a team to knowwhat the product development goals are. In these less ambitiousstrategies, project vision should be clearly articulated and anychange in the vision is badly admitted. A robust and shared visionis required to finish the development of a product successfully.It becomes critical to get to market with the initially envisionedproduct. The lack of clear and shared vision is perceived as a majorreason for disappointing performance. Clear project goals that arewell-communicated, understood and accepted improve overallteam effectiveness because team members engage in goal-relatedfunctions (Hong et al., 2004).

The relative importance of the clarity of vision on productdevelopment for high ambidexterity and low ambidexterity strate-gies demonstrates that although clarity of vision may enhance teameffectiveness, beyond a certain level of uncertainty and ambiguity, itmay result in lower team effectiveness because of the cost experi-mentation. Clear visions may reduce the team capacity to formulatechallenging questions and explore creative solutions. In situations ofhigh ambidexterity, clear project objectives may discourage therequired independent thinking and creativity. The relative magni-tude of strategic fit reveals that although it may not be beneficialin situations of low ambidexterity, after a certain point, it may have apositive effect. Thus, the relationship between strategic fit and teameffectiveness shows that at low levels of ambidexterity its effect isnot significant, but at high levels, its effect is positive. In situation ofhigh ambidexterity, strategy fit provides a common understandingof the appropriate ways of acting.

All results must be viewed in light of the limitations of the study.Each limitation serves as an avenue for future research. First, thescope of this study is limited to firms located in the Madrid area. Inaddition, the sample size is not large. Broadening the study to othergeographic areas may lead to conceptual refinement and insight.As a second limitation, this article tries to define the constructs asprecisely as possible by drawing on relevant literature and by closelylinking our measures to the theoretical underpinnings through acareful process of item generation and refinement. Evidently, thismeasurement effort represents an advance for research but, none-theless, the items are far from being perfect as long as they measurefacts that are neither fully nor easily measurable. Third, all of the datahave been collected from the same respondent using the sameperceptual measurement technique. Although the presence ofcommon method has been tested and the results show that commonmethod bias should not be a problem, multiple respondents shouldbe considered in future research to rule out potential drawbacks.Finally, it is also important to note that both the external environ-ment and the organization’s internal characteristics naturally inter-fere with product development efforts therefore amplifying orattenuating the organization’s tendency to explore and/or exploit.This work is obviously only a preliminary step towards a betterunderstanding of the impact of team vision on performance. Hope-fully, it can serve as the starting point for future research in thisimportant area of inquiry.

5. Conclusions

This study highlights the importance of the team in productdevelopment and examines the relationship between team vision

and performance, and the possible moderating role of knowledgestrategy. We have tested our hypotheses on data collected from 78new product developments in a variety of industries. Our findingsreveal that the effect of team vision on team effectiveness variesbased on the knowledge strategy—defined in terms of punctuatedequilibrium in explorative cycle, low ambidexterity and highambidexterity. Team vision has greater importance in productdevelopments characterized by high ambidexterity, when teameffectiveness is used as the outcome. The authors believe this studyfurthers existing knowledge and can guide future research andpractice on this most important issue of team-related factors andthe management of product development. Moving forward, futurestudies that further clarify the role of knowledge strategy on thecomplex relationship between team-related factors and productdevelopment performance are welcome. From a practical point ofview, this study implies that product development managersshould pay more attention to the development of a common viewamong team members. Successful product development requiresthat the components of team vision – clarity, strategy fit and trade-off – be aligned to knowledge strategy.

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