Emotional capability is considered an emerging phenomenon in the group behavior literature. However, little attention is given to the role of emotional capability in heterogeneous work groups in general and cross-functional product development teams in particular in an empirical context. In this study, the antecedents and results of the emotional capability in software development project teams using Huy's (1999) dynamics of encouragement, displaying freedom, playfulness, experiencing, reconciliation, and identification constructs were investigated. By studying 95 software development project teams in the IT departments of 52 firms, it was found, on the basis of using the Partial Least Squares (PLS) method, that the dynamics of encouragement is positively related to the speed-tomarket, and the dynamics of encouragement and experiencing is positively related to the market success of new software products. In addition, it was demonstrated that team autonomy has a positive influence on the dynamics of encouragement; collaboration among team members has a positive impact on the dynamics of encouragement and experiencing; and team experience has a positive effect on the dynamics of experiencing. This study has several theoretical and managerial implications. In terms of theoretical implications, this study enhances the empathy concept by operationalizing it at the team level, i.e., collective empathy, and tests its impact on the project performance. This study also highlights the roles of collective hope, joy, and enthusiasm in a project's performance by empirically demonstrating the benefits of working in a fun environment. Further, this study empirically shows that team emotional capability mediates the relationship between collaboration among team members and market success of the software products, indicating that management and regulation of the emotions acts as a platform to actualize the joint behavior toward some goal of common interest for the successful products. In terms of managerial implications, this study suggests that managers should enhance the team's emotional capability to enhance the project performance. In particular, managers should promote courage, joy, and hope, and increase communication among people to develop collective empathy and the ''liking'' of one party for the other. Managers should also promote collaboration and mutual interaction among team members; give autonomy to project team members to make important decisions about the software product; keep control of the project's process to some level; and encourage people to use their previous experience during the projects to increase the team's emotional capability.
