Costs and benefits of inter-departmental innovation collaboration

Abstract

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp11003.pdf Non-technical SummaryResearch on management and organization science has identified inter-departmental innovation collaboration as a mechanism to facilitate corporate innovation performance.Inter-departmental collaboration increases the exchange of information thereby benefiting innovation processes and outcomes. At the same time, inter-departmental innovation collaboration has been identified as a source of increased costs. Costs, such as project delays, can arise because departments set different task priorities and pursue incongruent objectives but also because of differences in educational backgrounds of employees. In the worst case, these differences between departments can cause dysfunctional conflicts that may lead to innovation project terminations. Such costs may absorb the gains generally associated with inter-departmental innovation collaboration.Drawing from organizational information processing theory, this paper builds and tests hypotheses on the costs and benefits of innovation-related collaboration within firms. Based on a sample of 433 German manufacturing firms we show inter-departmental innovation collaboration to increase process innovation performance, but not product innovation. In line with information processing theory, we submit that process innovation, more so than product innovation, depends strongly on company specific knowledge embedded throughout the organization and the exchange thereof. Our empirical results also detect costs produced by inter-departmental innovation collaboration in terms of project delay and termination. These costs, however, do not affect innovation performance at the firm level. We conclude firms to be well able to balance the costs and benefits of inter-departmental collaboration across their innovation project portfolio. Das Wichtigste in KürzeAbteilungsübergreifende Zusammenarbeit an innovativen Projekten fördert den AbstractInter-departmental innovation collaboration facilitates innovation performance. At the same time, it has been identified as source of increased coordination costs. Using organizational information processing theory, this paper builds and tests hypotheses on the costs and benefits of innovation-related collaboration within firms. Based on a sample of 433German manufacturing firms we show inter-departmental innovation collaboration to increase process innovation performance, but also to pro...

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