Market orientation theory was used to relate the implementation of target costing systems and business model innovation to firm performance using a sample of 189 electronics and information industry manufacturers in China. As expected, the implementation of target costing was positively associated with both business model innovations and firm performance. Further, the diversity of product development teams was also crucial. It positively moderated the association between target costing and business model innovation. Finally, the business model innovation was positively related to firm performance.

This study investigated how cross-functional teams can influence their business model innovation and firm performance through team learning, consisting of multiple modes of within-team, cross-team, and market learning. Using a matched dyadic data set from a study of 330 cross-functional team members and their supervisors sampled from 165 electronics and information industries in China, the empirical results clearly indicate that within-team, cross-team, and market learning can improve business model innovation and firm performance. The results of the mediating model show how the business model innovation mediates the relationship between team learning and firm performance.

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