Industrial Marketing Management 35 (2006) 308 – 322

A cross-national investigation of the R&D–marketing interface in the

product innovation process
Michael Song a,⁎, R. Jeffrey Thieme b,1
a
Charles N. Kimball, MRI/Missouri Endowed Chair in Management of Technology and Innovation and Professor of Marketing 318 Bloch School,
University of Missouri-Kansas City, 5110 Cherry Street, Kansas City, MO 64110–2499, USA
b
Department of Marketing and Supply Chain Management, 302 Fogelman College Administration Building, University of Memphis,
Memphis, Tennessee 38152–3120, USA
Received 29 May 2004; received in revised form 12 August 2004; accepted 10 September 2004

Abstract

Managing the interface between R&D and marketing is a critical element of successful new product development programs. The purpose of
this research is twofold. First, we develop testable hypotheses from a theoretical model of cross–functional team management in the product
innovation process based on the seminal work of Gupta, Raj, and Wilemon. We test the hypotheses using data collected from 376 U.S., 292
Chinese, and 279 Japanese firms. Second, we uncover and highlight similarities and differences in cross-functional involvement between
marketing and R&D in the product innovation process across these three countries. The results generally provide overall support for the model and
reveal some surprising cross-national differences.
© 2006 Elsevier Inc. All rights reserved.

Keywords: Product innovation; Cross-functional team; Structural equations modeling; Cross-national research

1. Introduction
In most industries, the ability to develop and launch new
products successfully is a major determinant of a firm's
competitive advantage. New product development (NPD) has
a direct effect on a firm's value. Since much of a firm's future
cash flow depends on the success of new products, new product
development plays an important part in the overall success of the
firm (Song & Parry, 1997a,b). The study of product innovation
and the new product development process has been gaining
attention in interdisciplinary management (e.g. Banbury &
Mitchell, 1995; Dougherty, 1992; Galbraith & Merrill, 1991;
Leonard-Barton, 1992; Robinson, Fornell, & Sullivan, 1992)
and international journals (e.g., Kotabe, 1990b; Manu, 1992;
Shane, 1995).
Research has demonstrated that effective R&D–marketing
integration is a major factor contributing to new product success
⁎ Corresponding author. Tel.: +1 816 235 5841; fax: +1 816 235 6529.
E-mail addresses: songmi@umkc.edu (M. Song), jthieme@memphis.edu
(R.J. Thieme).
1
Tel.: +1 901 678 5231; fax: +1 901 678 4051.
0019-8501/$ - see front matter © 2006 Elsevier Inc. All rights reserved.
doi:10.1016/j.indmarman.2004.09.024
in U.S., Japan, and China (Parry & Song, 1993, 1994; Song &
Parry, 1997a,b; Thieme, Song, & Shin, 2003; Xie, Song, &
Stringfellow, 2003). NPD is a complex process requiring input
from both R&D and marketing. The boundary-spanning nature
of the NPD process involves the integration of internal and
external analyses (Day, 1994). A successful new product
development process meets market demands and needs with
an appropriate technical solution. Marketing supplies the voice
of the customer (Griffin & Hauser, 1992, 1993, 1996), while
R&D uses the firm's assets and capabilities to create a product
with a differential competitive advantage (Day & Wensley,
1988). Thus, managing the R&D–marketing interface becomes
an important component in the NPD process.
Numerous R&D–marketing interface studies focus on cross-
functional activities (Dyer & Song, 1997; Song, Montoya-
Weiss, & Schmidt, 1997; Song, Thieme, & Xie, 1998; Song &
Xie, 2000; Song, Xie, & Dyer, 2000). Specialization within
functions can lead to coordination problems among departments
(Ruekert, Walker, & Olson, 1996). Obviously, not all
innovation projects require the same degree of integration
between R&D and marketing. Ruekert and Walker (1987a,b)
and Olson, Walker, and Ruekert (1995) find that the more
 M. Song, R.J. Thieme / Industrial Marketing Management 35 (2006) 308–322
innovative the project, the greater the need for integration
between R&D and marketing.
Song and Parry (1992) find that perceptions of R&D and
marketing managers in Japanese high-technology firms gener-
ally agree regarding the type of activities that require high
integration. Song and Parry (1993) identify integration factors
important in different stages of development (early involve-
ment, information sharing, and budgeting coordination). Other
studies also link cross-functional integration to product
competitive advantage and new product success (Song, Souder,
& Dyer, 1997; Song & Parry, 1997a).
This research empirically tests a theoretical model and extends
its applicability into Japan and China. We adopt a structural
equation modeling cross-national comparative approach and use
data collected from 376 U.S., 292 Chinese, and 279 Japanese
firms. The study is important for several reasons. China and Japan
have emerged as key players in the global economy. We choose
these two countries because they are likely to be economic
superpowers in the future. The United States is selected because it
is currently the world economic leader. Furthermore, Japanese
management practices have received considerable attention (e.g.,
Kagono, Nonaka, Sakakibara, & Okumura, 1985; Kotabe,
Durhan, Smith, & Wilson, 1991; Schonberger, 1982; Song,
Neeley, & Zhao, 1996), and both Japan and China have amassed
huge trade surpluses ($66 billion and $40 billion, respectively, in
2001) with the United States (U. S. Department of Commerce,
2002). While China has the world's largest untapped market, it
also has had one of the highest growth rates for the past twenty
years. China's GDP has quadrupled since 1978 (Central
Intelligence Agency, 2001) and few economists expect rates to
fall any time soon (Economist, 1996). Continued optimism stems
from China's shift in emphasis from a low-cost manufacturing
advantage owing to low labor costs to developing technological
expertise (Barnathan, Crock, & Einhorn, 1996). Also, the Chinese
and Japanese economies are the second and third largest in the
world, trailing only the United States (Central Intelligence
Agency, 2001).
Our study is both a test of extant theory and an exploration of its
applicability to different contexts. We begin by developing the
theoretical model that motivates our study into testable hypotheses.
This model can be viewed as an extension of the seminal work of
Gupta, Raj, and Wilemon (1986) which is often cited, but has yet to
be subjected to a holistic empirical test. We use this theoretical
foundation to uncover and highlight similarities and differences in
cross-functional involvement between marketing and R&D in the
product innovation process across three countries, the United
States, China, and Japan. We then discuss our samples and
measures. Next, we present and discuss the results of our structural
equations analyses. Finally, we suggest both research and
managerial implications as well as some limitations of our study.
2. Conceptual framework and hypotheses
Fig. 1 presents our theoretical model. Following the literature
(see Griffin & Hauser, 1996 for a recent review of the cross-
functional literature), the model hypothesizes that the success of
a firm's new product program depends on the gap between ideal
309
and achieved levels of marketing's involvement with R&D in
conducting R&D activities, the gap between ideal and achieved
levels of information provided by marketing to R&D, and the
gap between ideal and achieved levels of R&D's involvement
with marketing in conducting marketing activities.
This model is deeply influenced by the model developed by
Gupta et al. (1986) and our extensive case studies in the United
States, China, and Japan. The cross-functional integration gap
consists of three components: the Marketing–Involvement Gap,
the Marketing–Information Gap, and the R&D–Involvement
Gap. Each of these constructs captures a distinct component of
the overall R&D–marketing integration effort. The Marketing–
Involvement Gap captures the difference between achieved
levels and the perceived need for marketing's involvement in
R&D tasks (ideal levels). The Marketing–Information Gap
captures the gap between the achieved levels and the perceived
need for marketing's information sharing with R&D (ideal
levels). Finally, the R&D–Involvement Gap captures the
difference between the achieved levels and the perceived need
for R&D's involvement in marketing activities (ideal levels).
This separation allows for a more detailed investigation of the
integration gap.
The central premise of the model is that minimizing the gap
between the perceived need for R&D–marketing integration and
the achieved levels of integration improves the likelihood of NPD
success. When achieved levels are less than the ideal levels, such
problems as lack of coordination, planning, and communication
may lead to poor performance. Alternatively, excessive involve-
ment can have a negative effect on innovation success. When the
achieved levels are greater than ideal levels, valuable resources
are likely to be wasted. Because coordinating and implementing
R&D and marketing integration is a costly endeavor (Clark &
Wheelwright, 1992; Olson et al., 1995), excessive integration is
not likely to yield positive returns on investment.
The model is consistent with other studies (e.g., Ruekert &
Walker, 1987a,b; Ruekert, Walker, & Roering, 1985). While
cross-functional involvement has been found to be critical to
NPD success, we cannot claim that it is equally important for
every task in the process (e.g., Cooper & Kleinschmidt, 1986;
Rothwell et al., 1974; Ruekert et al., 1996; Song & Parry, 1992;
Song et al., 1998, 1997, 2000). Full involvement from all
functional areas on all tasks in the development process would
be wasteful in terms of both resources and time (Song et al.,
1998). Involvement from some functional areas in some tasks
could lead to delays without adding sufficient value to the
performance of the process (Song et al., 1998; Xie, Song, &
Stringfellow, 1998). Tasks that are inherently complex require
much more involvement from a diverse set of functional
specialties than do simpler tasks. Some tasks do not require
involvement from certain functional areas, while other tasks
demand intense involvement from all areas (Clark & Wheel-
wright, 1992; Olson et al., 1995).
Cross-functional integration is not a panacea in NPD. In
some cases, cross-functional integration improves effectiveness
but lengthens development time, thus decreasing efficiency.
Thus, the key to NPD success lies in managing R&D–
marketing relationships in such a way as to minimize the gap
310 M. Song, R.J. Thieme / Industrial Marketing Management 35 (2006) 308–322

Perceived Perceived
Environmental Environmental
Uncertainty -.02 Perceived Participation .01 Uncertainty
-.12 * -.13*
-.01 Environmental Harmony Formalization Centralization in Decision -.11*
Uncertainty Making

Harmony -.45 ** -.23** Harmony

-.02 .04 -.30** .01 .05 -.12** .11*
-.32** .13* -.26** .04 .03 -.19** .08
.23** -.29** .00 -.09 -.13*

-.12 ** -.13**
-.08 .09
-.09 -.14*
Formalization Marketing- Marketing- R&D- Formalization
Involvement .11* Information .26** Involvement
.16 ** -.03
Gap -.42** Gap -.12* Gap
-.06 -.21** -.21** .06
-.03 .17**

Centralization -.03 .25** -.14**

Centralization
.04 -.18** .00
-.05 -.12* .01

Participation Participation
in Decision in Decision
Making -.54** -.10* .01 Making
.14* -.31** .08
-.21** -.34** -.15**

Success
Italics - United States
Bold - China Summary Fit Statistics:
Normal - Japan X2 (45) = 100.24
NFI = 0.95
* significant at α = 0.05. NNFI = 0.93
** significant at α = 0.01. CFI = 0.97

Fig. 1. Summary of three-group path model analysis.

between the ideal and achieved levels of involvement between
R&D and marketing. Formally, we hypothesize,
H1. The greater the gap between the degree of R&D–
marketing integration ideally required and actually achieved,
the lower is the probability of innovation success.
In light of the importance of the integration between R&D and
marketing in the NPD process, what factors influence the size of
the gap between ideal and achieved levels of integration? The
cross-functional integration literature (Gupta et al., 1986; Parry &
Song, 1993, 1994; Song & Parry, 1992) suggests several
important antecedents: the level of perceived environmental
uncertainty, the degree of harmony between R&D and marketing,
the degree of formalization, the degree of centralization in the
decision-making process, and the level of participation in new
product decision-making exercised by the development team
members. Each of these is hypothesized to affect the R&D–
marketing integration gap. Perceived environmental uncertainty
affects the integration gaps by influencing perceived need for
integration (ideal levels) while harmony, formalization, central-
ization, and participation in decision–making affect the integra-
tion gaps by influencing the achieved levels of integration.
Perceived environmental uncertainty refers to the unpredict-
ability of changes in competitors' product designs, consumers'
demands for new products, and technology that affects the way
products are either used or made. Following the literature
(Gupta et al., 1986), we argue that an increase in the level of
perceived environmental uncertainty increases the perceived
need for integration within development projects. Development
teams must make many important decisions in the NPD process,
and these decisions often depend on competitors' actions,
consumers' demands, and germane technologies. The faster
these factors change and the greater the magnitude of these
changes, the more difficult it is for the teams to make these
decisions. Therefore, when facing high levels of perceived
environmental uncertainty, NPD teams are likely to perceive
higher required levels of R&D–marketing integration. Yet, both
theoretical and empirical studies demonstrate that perceived
environmental uncertainty has no direct effect on the actual
level of R&D–marketing involvement achieved. By increasing
the perceived need for involvement without affecting the actual
degree achieved, high environmental uncertainty leads to a
greater integration gap. Thus, we hypothesize as following:
H2. The greater the environmental uncertainty perceived, the
greater is the gap between the degree of R&D–marketing
integration ideally required and actually achieved.
The organizational climate also has been shown to affect
R&D–marketing integration (Moenaert, Souder, DeMeyer, &
Deschoolmeester, 1994; Song & Parry, 1993; Souder, 1981).
A harmonious relationship is positively associated with higher
R&D–marketing integration (Moenaert & Souder, 1990b;
 M. Song, R.J. Thieme / Industrial Marketing Management 35 (2006) 308–322
Ruekert & Walker, 1987a,b; Song & Parry, 1993). Harmony
refers to a give-and-take relationship whereby each department
challenges the other on important issues in meetings and
personal discussions, involvement between R&D and market-
ing from the very early phases of discussions concerning new
products, and the resolution of conflicts between R&D and
marketing at lower levels of the organization. If a harmonious
relationship exists, R&D and marketing have a better
understanding of each other's point of view and the rationale
behind positions on different decisions. This cross-functional
understanding helps prevent conflicts in future decision-making
tasks. In a cross-functional relationship with low harmony,
neither department understands the rationale behind the other's
decision-making and does not attempt to increase mutual
understanding, thereby decreasing cross-functional coopera-
tion, communication, interaction, and appreciation. Since a
higher level of R&D–marketing harmony increases the degree
of integration achieved without affecting ideal levels, we
hypothesize that,
H3. The more harmonious are R&D–marketing operating
characteristics, the smaller is the gap between the degree of
R&D–marketing integration ideally required and actually
achieved.
Formalization has been shown to affect R&D–marketing
integration, but the direction of the effect is not clear. We define
formalization as the degree to which rules and procedures are
established within an organization. Some studies find it has a
positive effect, while others find a negative effect. For example,
Song and Parry (1993) found formalization to be a detriment to
the achieved level of R&D–marketing integration. NPD
inherently involves many uncertainties. The prespecification
of job rules and procedures can lead to improper formalization.
That is, it is difficult if not impossible for senior management to
anticipate each issue that will need to be resolved by an NPD
team. In many cases, the team needs the authority and autonomy
to develop its own rules and procedures in order to handle
contingencies as they arise. Too much formalization can impede
much-needed information flows between the two departments.
Formal specification of rules and procedures can discourage
participation and cooperation between departments. In highly
formalized structures, formal rules and procedures may be used
instead of negotiation, discussion, and involvement to resolve
disputes.
Other studies find formalization to have a positive effect. It
can lead to reduced role ambiguity. By establishing formal rules
and procedures concerning the performance of each job
(Zaltman, Duncan, & Holbeck, 1973), formalized systems of
coordination spare team members the burden of continually
deciding who is responsible for specific tasks in the NPD
process. Thus, formalization can reduce potential conflicts in the
integration between R&D and marketing. It can encourage
increased communication between departments and enable a
team to achieve higher levels of integration (Moenaert & Souder,
1990a; Moenaert et al., 1994; Ruekert & Walker, 1987b).
The effect of centralization on R&D–marketing integration
is also controversial in the literature. Centralization refers to
311
the organizational level at which decision-making occurs and
the extent of employee participation in decision-making
(Zaltman et al., 1973). In highly centralized organizational
structures, most decisions are approved at higher levels. In less
centralized structures, authority is pushed downward. Central-
ization can decrease the level of R&D–marketing integration
(Moenaert & Souder, 1990b; Moenaert et al., 1994) because
each department chooses hierarchical instead of horizontal
channels of communication. In addition, centralization can be
a barrier to building trust between departments. Some
researchers have found, however, that centralization is
positively related to levels of R&D–marketing integration
(e.g., Song & Parry, 1993). Because of the hierarchical
approval structure, centralization may lead to more efficient
decision-making.
Research suggests that the degree of participation in
decision-making affects the R&D–marketing interface (Gupta
et al., 1986; Ruekert & Walker, 1987b; Song & Parry, 1993).
Whereas centralization refers to the approval by senior
management of decisions made by personnel at lower levels,
participation refers to the amount of input by development team
members in the decision-making process (whether or not
decisions must be subsequently approved by senior manage-
ment). Decisions of primary concern relate to whether a
specific new product should be developed, a new idea or
program should be adopted, and whether existing products
should be modified or abandoned. When NPD team members
are allowed to participate in these important decisions, they
gain a sense of ownership of the project. With this increased
stake in the outcome, they are more inclined to share
information and increase the level of integration between the
two departments.
Several studies (e.g., Gupta et al., 1986; Parry & Song, 1993)
argue that effective R&D–marketing integration is “character-
ized by (1) little formalization, (2) selective decentralization, (3)
mutual adjustment as a coordinating mechanism, and (4)
decision-making power distributed among managers and
nonmanagers” (Gupta et al., 1986, p. 11). Following this
reasoning, low levels of formalization and centralization and
high levels of participation in NPD decision-making lead to
high levels of achieved R&D–marketing integration. By
increasing achieved levels of integration without affecting the
perceived need for it (ideal levels), this pattern of organizational
structure reduces the R&D–marketing integration gap. Thus,
we have the following hypotheses.
H4. The lower the degree of formalization in an organization,
the smaller is the gap between the degree of R&D–marketing
integration ideally required and actually achieved.
H5. The lower the concentration of power in an organization,
the smaller is the gap between the degree of R&D–marketing
integration ideally required and actually achieved.
H6. The greater the degree of employee participation in the
new product decisions, the smaller the gap between the degree
of R&D–marketing integration ideally required and actually
achieved.
312 M. Song, R.J. Thieme / Industrial Marketing Management 35 (2006) 308–322
3. Methodology
3.1. Data collection
To accomplish our research objectives, we collected data
from the United States, China, and Japan. Our overall research
design, which follows the procedure for conducting interna-
tional research developed by Douglas and Craig (1983),
consisted of a multistage combination of extensive case studies
and survey research. Because this is a cross-national compar-
ative study, the survey instruments had to be equivalent if not
literally identical (Douglas & Craig, 1983; Kotabe, 1990a;
Kotabe, Durnhan, Smith, & Wilson, 1991). Since existing scales
for measuring the constructs have been extensively tested and
validated, our major tasks were to ensure that the “terms in each
version of the questionnaire should have a common frame of
reference across cultures that should be relevant to the specific
culture surveyed” (Kotabe et al., 1991, p. 33).
The existing research on cross-functional integration was
reviewed and scales designed to measure each construct were
identified. We then conducted field research interviews in four
U.S. firms, six Chinese firms, and two Japanese firms. These
interviews enabled us to select appropriate research methods to
establish content validity, further develop the measures, and
establish equivalence of constructs, measures, and samples. The
interviewing process also allowed us to assess the possibility of
cultural bias and response format bias.
Participants were shown the model of the R&D–marketing
interface and were asked whether it adequately described their
experiences and how they would modify it. They also were
shown a list of scale items compiled from our literature review
(and earlier case-study interviews). They were asked to assess
the extent to which each item measured the construct it was
intended to measure in their own culture and to suggest possible
modifications and additions.
After completing the interviews, we followed the paradigm
for developing better marketing measures suggested by
Churchill (1979) and Gerbing and Anderson (1988) to identify
subsets that were unique and possessed “different shades of
meaning” to informants. We submitted a list of constructs and
corresponding measurement items to a panel of nine academic
experts from prominent business and engineering schools. The
panel members were asked to evaluate each item for clarity,
specificity, and representativeness. In addition, suggestions for
additional measures were solicited.
The final questionnaire included only the items judged to
have high consistency and face validity with the constructs in all
three cultures. A parallel-translation/double-translation proce-
dure was used to ensure that the translations to Chinese and
Japanese were accurate and that the question meanings were not
changed. The Chinese and English questionnaires were pre-
tested using eight bilingual MBA students as well as all the
participants of the field research interviews mentioned earlier.
Many items were eliminated due to difficulties in interpretation
or definitional ambiguities as expressed by the participants.
The United States sampling frame consisted of a mailing to all
companies listed in the U.S. High-technology Industries
Directory. The Japanese sampling frame consisted of a mailing
to 792 companies traded on the Tokyo, Osaka, and Nagoya stock
exchanges. The Chinese sampling frame consisted of a mailing
to 982 companies obtained from a Chinese statistical bureau.
The companies were initially contacted through a phone call
or one-page presurvey. The purpose of this letter was threefold:
to gain a tentative commitment to participate, to identify key
contact persons, and to ensure that the final sample consisted
only of companies (1) actively involved in NPD, and (2) with
both R&D and marketing departments. After industry stratifi-
cation to match all three samples, the final sample was narrowed
to 728 U.S. companies, 611 Japanese companies, and 514
Chinese companies.
In administering the survey, we followed the total design
method for survey research suggested by Dillman (1978). We
requested the contact person at the firm to select a high-
technology division and to ask a marketing manager in these
divisions to complete the appropriate questionnaires. To
increase the response rate, we not only established personal
contacts and a good relationship with the companies, but also
obtained appropriate endorsements from trade associations and
business leaders in the respective countries. We also offered
several incentives for participation, including research brief-
ings. After three follow-up letters and sometimes multiple
phone calls/faxes, we received responses from 382 U.S. firms,
296 Chinese firms, and 308 Japanese firms. The response rates
(adjusted for returned mail and deletion of unusable ques-
tionnaires) were .52, .48, and .60, respectively (some ques-
tionnaires were deleted due to missing values in an entire
section). Following Armstrong and Overton (1977), we tested
for differences between early and late respondents. We found no
significant differences, indicating that nonresponse bias was not
a major problem in our data.
3.2. Measures
Following Sujan, Weitz, and Kumar (1994), we adapted a
two-step approach for our hypothesis testing. We begin with a
measurement model for each country to establish reliability,
convergent validity, and discriminant validity. Next, we test our
hypotheses using a three-group path analysis LISREL model
(Jöreskog & Sörbom, 1989).
Each of the separate measurement models includes all
measures and constructs except for the single-item construct
overall success of the NPD program. All constructs are
measured using identical items across each country except for
perceived environmental uncertainty, for which three items
were used in the United States and China, and two in Japan. All
measurement items are listed in Appendix A.
3.2.1. Perceived environmental uncertainty
We define perceived environmental uncertainty as uncer-
tainty regarding customer demand for new products, occurrence
of major technological change in the industry, and competitors'
product design changes. These items are adapted from Burns
and Stalker (1961), Galbraith (1977), Gupta et al. (1986), Parry
and Song (1993), and case studies.
 M. Song, R.J. Thieme / Industrial Marketing Management 35 (2006) 308–322 313

3.2.2. Harmony Table 1

Three items are used to measure the degree of harmony Summary statistics for constructs
between marketing and R&D. The first assesses whether there Mean Standard Minimum Maximum
was a give-and-take relationship, that is, to what extent each deviation
department challenged the other in meetings and discussions Construct — US
and tried to understand the other's point of view. The second Perceived environmental 4.08 0.74 2.00 6.00
uncertainty
examines the degree to which marketing and R&D were
Harmony 4.42 0.93 1.00 6.00
involved in early discussions concerning new products. The Formalization 3.82 1.06 1.00 6.00
third focuses on whether conflicts between R&D and mar- Centralization 4.09 0.97 1.00 6.00
keting were resolved at lower levels in the organization. The Participation in decision 4.35 0.89 2.00 6.00
items are adapted from Barker, Tjosvold, and Andrews (1988), making
Marketing involvement 1.17 0.87 −0.60 3.40
Gupta et al. (1986), Parry and Song (1993), and Song and Dyer
in R&D gap
(1995). Marketing information 1.10 0.78 −0.67 3.33
sharing gap
3.2.3. Formalization R&D involvement 1.13 0.95 −0.67 4.67
Formalization refers to the degree to which rules and in marketing gap
New product program 3.76 1.22 1.00 6.00
procedures are established within the organization and is
success
measured using three items. The first assesses whether perfor-
mance appraisals are based on written standards. The second asks Construct — China
whether duties, authority, and accountability of personnel are Perceived environmental 3.78 0.76 1.00 6.00
documented in policies, procedures, and job descriptions. The uncertainty
Harmony 4.01 0.88 1.67 6.00
third examines whether procedures and guidelines are available
Formalization 4.14 0.91 2.00 6.00
for most work situations. These items come from well-established Centralization 3.03 0.95 1.00 5.33
and valid scales: Barker et al. (1988), Gupta et al. (1986), Hage Participation in decision 3.73 0.92 1.00 6.00
and Aiken (1967), and Parry and Song (1993). making
Marketing involvement 0.35 0.85 −3.00 3.20
in R&D gap
3.2.4. Centralization
Marketing information 0.96 1.05 −2.00 3.33
Three items measure the degree to which power was located sharing gap
in higher levels of the organization: (1) whether actions were R&D involvement − 0.36 0.77 −3.00 2.33
taken without the approval of a supervisor, (2) whether people in marketing gap
who wanted to make their own decisions were quickly New product program 4.04 0.94 2.00 6.00
success
discouraged, and (3) whether approval was needed for certain
decisions that people should be able to make for themselves. Construct — Japan
These items are from well-established and valid scales: Barker Perceived environmental 3.53 0.83 1.00 6.00
et al. (1988), Gupta et al. (1986), Hage and Aiken (1967), Parry uncertainty
and Song (1993), Song and Dyer (1995), and Song and Parry Harmony 4.14 0.80 1.00 5.67
Formalization 4.12 1.04 1.00 6.00
(1993).
Centralization 3.03 0.93 1.00 5.00
Participation in decision 3.93 1.01 1.00 6.00
3.2.5. Participation in decision-making making
To determine whether marketing and R&D personnel were Marketing involvement 0.43 0.80 −1.40 3.00
involved in strategic decisions regarding overall NPD in their in R&D gap
Marketing information 1.13 0.98 −1.33 4.00
organization, four items are used. We asked respondents to
sharing gap
report the degree to which people in each department were R&D involvement − 0.46 0.68 −3.33 0.67
allowed to participate in decisions regarding (1) the develop- in marketing gap
ment of new products, (2) the adoption of a new idea or program, New product program 4.00 1.00 1.00 6.00
(3) the modification of existing products, and (4) the deletion of success
existing products. These items are taken from well-established
and valid scales: Gupta et al. (1986), Hage and Aiken (1967), into three parts: Marketing–Involvement Gap, Marketing–
Parry and Song (1993), and Song and Parry (1993). Information Gap, and R&D–Involvement Gap. This expanded
Cross-functional involvement and integration between R&D operationalization allows for a more complete investigation into
and marketing is a broad concept with many components. The the nature of the construct.
antecedents to R&D–marketing integration are likely to have First, we consider marketing's involvement in tasks typically
different effects on each of the components. Therefore, in much performed by R&D alone. More specifically, we examine the
the same way that Kohli and Jaworski (1990) and Jaworski degree to which marketing is involved in setting new product
and Kohli (1993) decompose the complex market-orientation goals and priorities, creating R&D's budget proposals, estab-
construct into three distinct components, we divide Gupta et al. lishing product development schedules, generating new product
(1986) broad notion of the R&D and marketing integration gap ideas, and screening new product ideas. We refer to the
314 M. Song, R.J. Thieme / Industrial Marketing Management 35 (2006) 308–322

Table 2
Measure validation
Constructs Reliability Overall fit indices Convergent validity Discriminant validity
(number of items)
U.S. China Japan U.S. China Japan
Perceived environmental .51 .84 .65 X 2(296) = 766.21 X 2(296) = 798.43 X 2(271) = 728.70 US: smallest t-value No confidence intervals for Φ
uncertainty(3—US/ NFI = .95 NFI = .98 NFI = .98 for λ = 4.71. include 1.0 for any of the
China, 2—Japan) NNFI = .96 NNFI = .99 NNFI = .98 China: smallest t-value three samples.
for λ = 3.11.
Harmony (3) .72 .64 .66 CFI = .97 CFI = .99 CFI = .99 Japan: smallest t-value
for λ = 3.38.
Formalization (3) .76 .80 .75
Centralization (3) .79 .94 .93
Participation in decision- .79 .84 .80
making (4)
Marketing–Involvement .80 .61 .70
Gap (5)
Marketing–Information .70 .64 .62
Gap (3)
R&D–Involvement Gap (3) .80 .55 .51

difference between ideal and achieved levels of marketing's
involvement in R&D tasks as the Marketing–Involvement
Gap.
Second, we consider the amount of marketing research
information that marketing provides to R&D. This includes
evaluating test marketing results, analyzing feedback from
customers regarding product performance, and analyzing the
moves of direct competitors. We refer to the difference between
ideal and achieved levels of marketing's degree of information
sharing with R&D as the Marketing–Information Gap.
Third, we consider R&D's involvement in typical marketing
tasks. These include designing communication strategies
directed at customers of new products, designing user and
service manuals, and training users of the new products. The
difference between ideal and achieved levels of R&D's
involvement in marketing tasks is referred to as the R&D–
Involvement Gap.
For each of the three gaps, ideal and achieved levels are
assessed. The subsequent gap measures are formed by subtract-
ing the achieved assessment from the ideal assessment reported
for each item. This operationalization is largely influenced by
our extensive case studies with U.S., Chinese, and Japanese
firms. Therefore, in presenting the results of hypotheses testing,
we use these three constructs to represent the R&D–marketing
integration gap.
3.2.6. Success
Since our focal point is to investigate R&D–marketing
integration, we want to avoid specific assessments of success
that would not be comparable across industries and countries.
Therefore, based on our case studies, success is measured by a
single item that asks respondents to rate the overall success of
their NPD program. Although this measure has been used
extensive in the new product literature (see Griffin & Page,
1993), the subjective scale may still be criticized for not
generating standardized measures of success across firms,
industries and countries. However, this is an artifact of real
world differences between firms, industries, economic condi-
tions, accounting rules, temporal situations and decision criteria
rather than a criticism of this scale. Because of these very real
differences, one may question the usefulness or even the
possibility of developing a cross-firm standardized success scale.
As suggested by many Japanese and Chinese managers during
our case study interviews, using the perceived performance
measurement scale permits us to make comparisons across
firms, based on each individual firm's assessments within their
own particular industries, cultures, time horizons, economic
conditions and expectations. In addition, the scale has been used
extensively in both the management and new product literatures
and has been shown to be highly correlated with the objective
measures of financial performance (Song & Parry, 1997b).
Table 1 presents summary statistics for each construct. While
the means are similar across countries, the most notable
differences are in the mean levels of the three integration
gaps. Interestingly, the mean levels for the integration gaps are
somewhat higher in the United States when compared to both
China and Japan.
3.3. Measurement model
As Table 2 reports, acceptable reliability for all constructs
was achieved and confirmatory factor analyses in each country
demonstrate good fit, convergent validity, and discriminant
validity. Considering the cross-national samples used, the
reliabilities (Cronbach's (1951) coefficient alpha) of the
constructs meet the standards for all measures (Nunnally,
1978). Overall, the fit indices from each confirmatory factor
analysis also indicate a good measurement model fit. The U.S.
model results in X 2(296) = 766.21, NFI = 0.95, NNFI = 0.96, and
CFI = 0.97. In China, the measurement model results are
X 2(296) = 798.43, NFI = 0.98, NNFI = 0.99, and CFI = 0.99. In
the Japanese model, the fit statistics are X 2(271) = 728.70,
NFI = 0.98, NNFI = 0.98, and CFI = 0.99. All t-values associated
with lambdas in each measurement model are at least 3.11
across all three countries. This indicates that all items have
significant loadings on their construct, thus demonstrating
 M. Song, R.J. Thieme / Industrial Marketing Management 35 (2006) 308–322 315

Table 3
Summary of hypotheses testing in the United States, China, and Japan
Hypotheses Gap between ideal and achieved level of R&D–marketing
integration
U.S. China Japan Overall
H1: The greater the gap between the degree of integration ideally required and actually achieved, Supported Supported Supported Supported
the lower is the probability of innovation success.
H2: The greater the environmental uncertainty perceived, the greater is the gap between the Not supported Supported Supported Supported
degree of R&D–marketing integration ideally required and actually achieved.
H3: The more harmonious R&D–marketing operating characteristics, the smaller is the gap Supported Supported Supported Supported
between the degree of R&D–marketing integration ideally required and actually achieved.
H4: The lower the degree of formalization in an organization, the smaller is the gap between Contradictory Not supported Contradictory Contradictory
the degree of R&D–marketing integration ideally required and actually achieved.
H5: The lower the concentration of power in an organization, the smaller is the gap between Supported Not supported Supported Supported
the degree of R&D–marketing integration ideally required and actually achieved.
H6: The greater the degree of employee participation in new product decisions, the smaller is the Supported Supported Supported Supported
gap between the degree of R&D–marketing integration ideally required and actually achieved.
Supported = significant structural coefficient estimation confirming hypothesis.
Not supported = nonsignificant structural coefficient estimation.
Contradictory = opposite hypothesis would have been supported.

convergent validity. The phi matrix represents the covariance
matrix for latent exogenous variables (Bollen, 1989). Since
none of the confidence intervals for any phi in any of the three
models include 1.0, the models exhibit discriminant validity as
well (see Sujan et al., 1994).
3.4. Path analysis
Having acceptable measurement models, we move to the
second stage of analysis by testing our hypotheses using a three-
group path analysis. Each construct is represented by single
measures formed by summing each item and dividing by the
number of items per construct. A summary of the results is
represented in Fig. 1. Fit statistics for this model indicate that the
model fits the data reasonably well: X 2(45) = 100.24, NFI = 0.95,
NNFI = 0.93, and CFI = 0.97. The fit statistics for the U.S. model
are: X 2(15) = 62.39, NFI = 0.94, NNFI = 0.88, and CFI = 0.95.
The fit statistics for the Chinese model are: X 2(15) = 24.88,
NFI = 0.96, NNFI = 0.96, and CFI = 0.98. The fit statistics for the
Japanese model are: X 2(15) = 12.97, NFI = 0.98, NNFI = 1.00,
and CFI = 1.00.
4. Results
While we formally state six hypotheses, there are actually
many more hypotheses that are tested. Each formal hypothesis
refers to R&D–marketing integration, which we divide into
three distinct types of integration. Therefore, each formal
hypothesis is applied across the three types of integration.
Furthermore, each hypothesis is tested across the three countries
sampled. Therefore, there are a total of fifty-four specific
hypotheses tested. For clarity and parsimony, we do not list all of
these hypotheses, but refer to the six formal hypotheses, noting
that these hypotheses are applied across three integration types
and three countries.
Results of the hypotheses tests are summarized in Table 3 and
graphically in Fig. 1. Our first hypothesis concerns the
relationship between the integration gaps and overall new
product success. We begin with the gap between the ideal and
achieved levels of marketing's involvement in R&D tasks (the
marketing–involvement gap). The results from U.S. and Japanese
firms suggest that the marketing–involvement gap negatively
affects the success of the NPD program. In China, however, the
marketing–involvement gap is found to have a positive
influence.
We also find that the gap between the ideal and achieved
levels of marketing's degree of information sharing with R&D
(the marketing–information gap) is negatively related to NPD
success, a finding fully supported across all three countries. Only
partial confirmation is provided for the notion that the gap
between the ideal and achieved levels of R&D's involvement in
marketing tasks (the R&D–involvement gap) is negatively
related to overall NPD success. It is supported in Japan, but the
structural coefficients in the United States and China are not
significant. Therefore, H1 is partially supported using combined
results.
H2–H6 concern the effects of uncertainty and four organiza-
tional constructs on each of the three cross-functional integration
gaps. Higher perceived environmental uncertainty (H2) is
associated with a higher marketing–information gap in China
and Japan. Counter to our hypotheses, high perceived
environmental uncertainty is associated with smaller market-
ing–involvement gaps in China and R&D–involvement gaps in
China and Japan. All other hypotheses regarding perceived
environmental uncertainty are unsupported due to nonsignifi-
cant estimations of structural paths.
Increasing harmony (H3) is associated with decreasing
marketing–involvement gaps in the United States and Japan,
with decreasing marketing–information gaps in all three
countries, and with decreasing R&D–involvement gaps in the
United States. Surprisingly, harmony is associated with
increasing R&D–involvement gaps in China. All other
hypotheses regarding harmony are unsupported due to nonsig-
nificant estimations of structural paths.
Counter to our hypothesis (H4), higher formalization leads to
a smaller marketing–involvement gap in the United States and
316 M. Song, R.J. Thieme / Industrial Marketing Management 35 (2006) 308–322

smaller R&D–involvement gaps in the United States and Japan.
All other hypotheses regarding formalization are unsupported
due to nonsignificant estimations of structural paths.
High centralization (H5) leads to a large marketing–
involvement gap in the United States and a large R&D–
involvement gap in Japan. All other hypotheses regarding
centralization are unsupported due to nonsignificant estimations
of structural paths.
The hypothesized effect of participation in decision-making
on the marketing–involvement gap (H6) is unsupported due to
nonsignificant estimations of structural paths in all three
countries. With respect to the marketing–information gap,
however, H6 is supported in all three countries. Concerning the
R&D–involvement gap, H6 is supported in the United States but
is not supported in China and Japan where the estimated
coefficient is nonsignificant.
5. Discussion
Six of the nine hypothesized relationships between integra-
tion gaps and NPD success were confirmed by the data. Two of
the remaining relationships were not statistically significant and
we found support for a relationship in a direction opposite to our
hypothesis in one case (China). Only H4 (formalization) is not
supported in any of the countries. Formalization has received
mixed support in previous studies, so this is consistent with
previous research. Overall, our study finds general support in the
United States, China, and Japan for the model, which is based
largely on Gupta et al. (1986) theoretical framework. While it is
often cited, this is the first comprehensive empirical test to find
support for their seminal work. Also, by testing across three
countries, we find support for the generalizability of their
theoretical framework to other cultures.
Perhaps the most interesting and informative way to consider
our results is to look only at those paths significantly related to
success in the model for each country. Starting with success and
moving backward through the model, we identify the integration
gaps that play the most important role in success and then
identify the independent variables with the greatest influence on
those integration gaps. These summaries are depicted graph-
ically in Fig. 2. Viewing the results in this way, we capture a
description of the patterns in the NPD process that lead to
successful programs. Each of these descriptions can be
compared to highlight similarities and differences among United
States, Chinese, and Japanese NPD systems.
From Fig. 2 we see that NPD success in the United States
is associated with minimizing both marketing–involvement
and marketing–information gaps. Minimized marketing–
involvement gaps are fostered through harmonious relation-
ships between marketing and R&D, a high degree of
formalization, and a decentralized organizational structure. A
harmonious relationship between R&D and marketing along

- Marketing-
Harmony Involvement
Gap

Perceived
Harmony Environmental
Perceived Marketing- Uncertainty + -
- -
Environmental Involvement
Uncertainty Gap +
- Marketing- Marketing-
Formalization Involvement -
Harmony Information
Gap
Perceived Gap -
- Success
Environmental -
+
Uncertainty +
Participation Success
Centralization - in Decision
Success Making
Marketing-
-
Harmony Information
Gap
- - Perceived
Harmony Environmental -
- Uncertainty -
Marketing- Participation
Information in Decision
- Gap Making R&D-
Participation -
in Decision Formalization Involvement
Making Gap

Centralization

United States China Japan

Fig. 2. Significant paths to successful new product development.

 M. Song, R.J. Thieme / Industrial Marketing Management 35 (2006) 308–322
with high levels of participation in decision-making by both
departments is helpful in minimizing marketing-information
gaps.
In China, a small marketing–information gap leads to
success, while a large marketing–involvement gap leads to
success. Also, higher environmental uncertainty creates a
smaller marketing-involvement gap. Finally, in order to reduce
marketing–information gaps, Chinese firms are advised to
decrease levels of perceived environmental uncertainty (by
increasing research efforts), increase levels of harmony
between departments, and increase levels of participation in
decision-making.
NPD success in Japanese firms is associated with the
minimizing of the gap between ideal and achieved levels of all
three types of R&D–marketing integration mechanisms. To
reduce the marketing–involvement gap, Japanese firms should
promote harmony between R&D and marketing. To minimize
the marketing–information gap, they should decrease the levels
of perceived environmental uncertainty, increase levels of
harmony, and increase levels of participation in decision-
making. Finally, to reduce the R&D–involvement gap, Japanese
firms should increase perceived environmental uncertainty,
increase formalization, and adopt a decentralized organizational
structure.
Given this understanding of the conditions in each country
conducive to successful NPD, we now compare the cross-
cultural results to identify similarities and differences among
these countries.
5.1. Cross-national similarities
NPD success across all three countries is associated with
minimizing the marketing–information gap, which is the only
integration mechanism consistently related to success in our
study. This finding reinforces the importance of information
sharing between R&D and marketing departments as a way
to reduce uncertainty in the highly volatile environment of
NPD. Furthermore, minimizing the marketing–involvement
gap is related to success in both the United States and Japan.
Thus, in addition to providing information to R&D,
marketing can be helpful if it becomes involved in traditional
R&D activities.
Next, we see that both harmonious relationships between
marketing and R&D and an environment that encourages
participation in decision-making are associated with minimizing
the marketing–information gap in all three countries. Also, in
China and Japan, success under low perceived environmental
uncertainty conditions is associated with a small marketing–
information gap.
The last similarity we note is that harmonious relationships
between marketing and R&D are associated with a small
marketing–involvement gap in both the United States and Japan.
The better the personnel in these departments work together, the
more receptive is R&D to marketing's involvement in traditional
R&D tasks. Also, the better the working relationship between
the two departments, the more likely is marketing to offer
assistance to R&D in traditional R&D tasks.
317
5.2. Cross-national differences
One of the more interesting differences found in this study
occurs in China, where a large marketing–involvement gap is
associated with overall NPD success. This is counter to our
hypothesis and counter to the findings for the United States
and Japan. For an explanation we look at the cultural
background of Chinese businesses and the ideal and actual
levels of marketing's involvement in R&D tasks across
countries. The Chinese have only recently adopted a system
that encourages free markets. In the former centrally controlled
system, Chinese managers were not concerned with the
activities of other functional areas and production was dictated
to firms through central planning agencies. Marketing
functions did not exist in the way that they do in the Western
world (Schermerhorn & Nyaw, 1991). We also consider that
the ideal and achieved levels of marketing's involvement in
R&D tasks are lower in China than in the United States and
Japan at a significance level of α = 0.001. The ideal levels of
marketing's involvement in R&D tasks in China, the U.S., and
Japan are 3.55, 4.95, and 3.90, respectively. The actual levels
of marketing's involvement in R&D tasks in China, the U.S.,
and Japan are 3.20, 3.78, and 3.47, respectively. One
possibility for the surprising findings may be that while the
Chinese are achieving marketing involvement in R&D
activities close to what they perceive as an ideal level, their
perception of the ideal level is lower than it should be. The
Chinese may not yet fully grasp the importance of marketing
and its involvement in cross-functional activities. Had their
perception of the ideal level of marketing's involvement in
R&D tasks been on a par with that reported by U.S. and
Japanese managers, their marketing–involvement gap would
be significantly larger and might have provided considerably
different results.
Another interesting cross-national difference is the absence
of a relationship between minimization of the R&D–
involvement gap and NPD success in the United States and
China. In contrast, this is an important factor for Japanese
managers. The Japanese seem to be able to simultaneously
employ all three integration mechanisms, whereas U.S. and
Chinese managers are not. As mentioned earlier, integration of
cross-functional activities has advantages and disadvantages.
Gains in information sharing and uncertainty reduction are
made at the expense of higher management costs. Participa-
tion in joint activities by marketing and R&D personnel
involves the meshing of different professional and personal
orientations. The Japanese have found a way to combine these
cross-functional relationships, such that all three of the
integration mechanisms studied are beneficial to the NPD
process.
Given the concerns that many have in applying Western
management theories to Eastern cultures (see discussion in
(Hofstede, 1994)), it is somewhat surprising that this
theoretical model fit best in Japan. To explain these
differences we consider cultural differences. In his seminal
work on cross-cultural differences, Hofstede (1980) identified
relatively independent dimensions that discriminate cultural
318 M. Song, R.J. Thieme / Industrial Marketing Management 35 (2006) 308–322

Table 4
Summary of cross-national similarities and differences
Relationship Similarity/difference
Minimization of the gap between ideal and achieved levels of marketing's degree of information Relationship is consistent across
sharing with R&D → Success. all three countries
High degree of harmony between marketing and R&D → Minimization of the gap between ideal Relationship is consistent across
and achieved levels of marketing's degree of information sharing with R&D. all three countries
High degree of participation in decision-making → Minimization of the gap between ideal Relationship is consistent across
and achieved levels of marketing's degree of information sharing with R&D. all three countries
Low perceived environmental uncertainty → Minimization of the gap between ideal and achieved Relationship is consistent across
levels of marketing's degree of information sharing with R&D. China and Japan
High degree of harmony between marketing and R&D → Minimization of the gap between ideal Relationship is consistent across
and achieved level of marketing's involvement in R&D tasks the United States and Japan.
Minimization of the gap between ideal and achieved level of marketing’s involvement in R&D Relationship is consistent across
tasks → Success. the United States and Japan but
is reversed in China.
High perceived environmental uncertainty → Minimization of the gap between ideal and achieved Relationship in China is contrary
level of marketing's involvement in R&D tasks. to hypothesis and is not significant
in the United States and Japan.
Minimization of the gap between ideal and achieved level of R&D's involvement in marketing Relationship is consistent with hypothesis
tasks → Success. in Japan, but is not significant in the United
States and China.

differences across various countries. Japan scored very high
on the uncertainty avoidance and masculinity dimensions and
near average on the individualism–collectivism dimension.
Uncertainty avoidance refers to a preference for structured vs.
unstructured situations. High scores on uncertainty avoidance
indicate a cultural bias towards the establishment and
following of formal rules. The masculinity dimension refers
to the degree to which a culture values assertiveness,
performance, success, and competition over values such as
quality of life and concern for others. High scores on the
masculinity dimension reflect a tendency towards the former
values while low scores indicate a preference for the latter
values. The individualism–collectivism dimension reflects a
preference for acting as an individual rather than acting as a
member of a group. A score near the mean on this dimension
might indicate a balance between identification with a group
and identification as an individual. However, we speculate that
it may also indicate a willingness to identify with multiple
groups instead of strict identification to a single group or a
broader view of group boundaries. In the case of NPD
projects, this may reflect a willingness to identify primarily
with a home department (marketing) while also identifying
with a secondary department (R&D) on a limited basis. It may
also indicate a broadening of group identification beyond strict
departmental boundaries and identifying with the entire (cross-
functional) team as a group. Viewing these three dimensions
together, we see a cultural pattern in Japan that fosters cross-
functional integration between marketing and R&D that leads
to successful NPD. They are highly motivated to succeed
(high masculinity), prefer structured processes (high uncer-
tainty avoidance), and are able to balance work between their
own department and other departments (medium score on
individualism–collectivism). These characteristics are consis-
tent with best practices in the NPD literature (Brown &
Eisenhardt, 1995; Cooper, 1990; Cooper & Kleinschmidt,
1986; Griffin, 1997; Zirger & Maidique, 1990).
In contrast to the high scores on both uncertainty avoidance
and masculinity dimensions in Japan, the U.S. scored near the
mean on both of these dimensions and China2 scored low on
uncertainty avoidance and near the mean on masculinity
(Hofstede, 1980). These cultural differences may explain why
NPD teams in the U.S. and China are limited in their ability to
integrate marketing and R&D compared to Japanese teams.
Table 4 summarizes the similarities and differences among the
three countries.
5.3. Research and managerial implications
Our results indicate that while the model does not fit
perfectly in each country, it is a useful framework for
studying the R&D–marketing interface and for investigating
important factors in overall NPD success. Again, all
hypotheses except for H4 received support in at least one
country. H4 relates formalization to each of the integration
gaps. We followed the literature (e.g., Gupta et al., 1986;
Parry & Song, 1993) in hypothesizing that low levels of
formalization reduce the integration gaps, but results show
that the opposite is true. In fact, highly formalized organi-
zational structures lead to small integration gaps, which
suggests that less role ambiguity and conflict enables more
efficient and effective coordination of the R&D–marketing
interface.
Our findings reveal many similarities and differences among
the United States, China, and Japan. Some of the differences are
likely to be due to cultural and historical factors. The United
States is sometimes characterized as being an individualistic,
short-term oriented, and highly mobile society. Thus, U.S.
managers are interested in their personal influence on a firm's
2
Following Hofstede (1994), we use the Hong Kong scores as an exponent
of Chinese culture here.
 M. Song, R.J. Thieme / Industrial Marketing Management 35 (2006) 308–322
success for the sake of their own career. The Chinese have been
struggling with major change as they move from a highly
centralized system into a free-market economy. Finally, Japan
can be characterized as more collectivist, more long-term
oriented, and less mobile than the United States (Kagono et al.,
1985; Lazer, Murata, & Kosaka, 1985). Thus, Japanese
employees value the effect of group efforts on the overall
success of the firm and are less interested in personal
achievement.
Despite cultural or historical differences, we believe much
can be learned from the way the model fits other countries.
First, the study of cross-national similarities and differences
can help improve the NPD process within one's own firm.
Second, such study also can be helpful when a firm is engaged
in joint ventures. Taking time to learn how foreign firms are
likely to develop new products may help managers avoid
costly misunderstandings and improve the overall success of
the end result.
For example, this study suggests that Chinese firms could
benefit from a deeper understanding of the influence that
marketing's involvement in R&D tasks can have on overall
success. Given China's recent entry into the free market,
managers have not yet fully grasped this importance
(Schermerhorn & Nyaw, 1991). Their perception of the ideal
level of this type of integration is significantly lower than that
of U.S. and Japanese managers. Consequently, even when
Chinese firms achieve a small marketing–involvement gap,
this factor is not associated with success. We feel that the
Chinese can learn from the United States and Japan by raising
their expectations, and, eventually, their achieved levels of this
type of integration.
Many U.S. firms have learned to adapt Japanese
manufacturing techniques to improve productivity. An
enormous amount of attention has been given to just-in-
time delivery and production, total quality management,
efficient plant configurations, and quality circles (e.g.,
Schonberger, 1982). Similarly, over the last forty years the
Japanese have been successful in adopting the U.S.
marketing philosophy and adapting it to their own culture
by focusing on the international dimensions (Lazer et al.,
1985). This study suggests that it is time for U.S. and
Chinese managers to learn from Japanese management
techniques that have been beneficial to cross-functional
integration in the innovation process (Nonaka, 1991). For
example, U.S. managers have been criticized for emphasiz-
ing information processing over the knowledge creation
strategies used in Japan (Nonaka, 1994). The United States
and China also can learn from the Japanese the importance
of devoting attention to the R&D–marketing interface. In
Japan, a highly formalized and decentralized organizational
structure leads to a small R&D–marketing integration gap,
which has a significant impact on overall success. Managers
in the United States and China can use these tactics to
encourage a more efficient use of R&D talent in marketing
tasks.
Finally, the results of this study can be used by managers
involved in NPD with cross-national partners to learn about the
319
similarities and differences between their two systems.
Understanding how different countries engage in NPD before
entering a joint venture can greatly reduce conflict due to
misunderstandings.
5.4. Limitations3
As with almost all empirical research in marketing, one of
our goals was to develop a parsimonious model. Following
extant theory, we focused on factors that were most likely to
have the largest impact on cross-functional integration and
success and did not include every variable that is likely to
have an impact. We recognize that the omitted variable
problem could be an issue in our study. Future studies could
enhance our findings by investigating other factors. Future
studies could also compliment our findings by taking a
different perspective. Our study focuses on the marketing
point of view. Interesting findings are likely to result from a
similar study taken from the R&D point of view and would
address common methods bias issues. Similarly, a study taken
from an R&D perspective could add additional integration
constructs such as the sharing of R&D information with
marketing.
Following Griffin and Page (1996), future research could
incorporate a multidimensional measure of success. Our
single item measure captures a global measure of innovation
success, but limits the generalizability of our findings to other
aspects of success that are also important. Additionally,
recent research (Xie et al., 1998) indicates that our oper-
ationalization of cross-functional harmony may benefit from
expansion in future studies. For example, future research
could investigate nonlinear relationships between harmony
and integration. It is plausible that moderate levels of
harmony are preferred, whereas too little or too much har-
mony might be counterproductive. It is also likely that levels
of harmony have differential impacts at different stages of the
innovation process. Future studies might also incorporate a
more robust measure of harmony. While our confirmatory
factor analyses indicate both convergent and discriminant
validity across the three countries, reliabilities were somewhat
low in China and Japan. Our measures are taken directly
from Gupta et al. (1986), but an update for this construct
may be helpful.
Acknowledgement
Michael Song is also a research fellow at the Eindhoven
Center for innovation Studies, Eindhoven University of
Technology, the Netherlands. This research was partially
conducted when Dr. Song was staying at Eindhoven
University of Technology. The names of the authors are in
alphabetical order and both authors contributed equally to this
research.
3
We thank the anonymous reviewers for their comments and suggestions in
these issues.
320 M. Song, R.J. Thieme / Industrial Marketing Management 35 (2006) 308–322

Appendix A. Measurement Items

Construct Selected sources

Perceived environmental uncertainty — 6-point scale ranging from highly unpredictable to highly predictable. (Burns & Stalker, 1961; Galbraith, 1977;
1. Customer demand for new products is highly predictable. Gupta et al., 1986; Parry & Song, 1993)
2. Occurrence of major technological change is highly predictable.
3. Competitors' product design changes are highly predictable.⁎
Harmony — 6-point scale ranging from strongly disagree to strongly agree. (Barker et al., 1988; Gupta et al., 1986;
1. There is a give-and-take relationship between R&D and marketing. Each challenges the other in their meetings and Parry & Song, 1993; Song & Dyer, 1995)
discussions and tries to understand the other's point of view.
2. Marketing and R&D are always involved from the very early phases of discussions about a new product.
3. Conflicts between R&D and marketing are resolved at lower levels of the organization.
Formalization — 6-point scale ranging from strongly disagree to strongly agree. (Barker et al., 1988; Gupta et al., 1986;
1. Performance appraisals in our organization are based on written performance standards. Hage & Aiken, 1967;
2. Duties, authority, and accountability of personnel are documented in policies, procedures, or job descriptions. Ruekert & Walker, 1987b;
3. Written procedures and guidelines are available for most of the work situations. Song & Parry, 1993)
Centralization — 6-point scale ranging from strongly disagree to strongly agree. (Barker et al., 1988; Hage & Aiken, 1967;
1. In this organization very few actions are taken without the approval of a superior. Parry & Song, 1993; Song & Dyer, 1995;
2. In this organization a person who wants to make his own decisions would be quickly discouraged. Song & Parry, 1993)
3. People have to get approval for certain decisions that they should be able to make for themselves.
Participation in decision-making — 6-point scale ranging from no participation to extensive participation. (Gupta et al., 1986; Hage & Aiken, 1967;
1. The degree to which R&D and marketing departments participate in decisions on the development of new products. Parry & Song, 1993;
2. The degree to which R&D and marketing departments participate in decisions to adopt a new idea or program. Song & Parry, 1993 and case studies)
3. The degree to which R&D and marketing departments participate in decisions on the modification of existing products.
4. The degree to which R&D and marketing departments participate in decisions to delete existing products.
Gap between actual and ideal level of marketing's involvement in R&D's decision-making — 6-point scale ranging from (Gupta et al., 1986;
no involvement to complete involvement. Norton, Parry, & Song, 1994;
1. The current degree of marketing's involvement with R&D in setting new-product goals and priorities. Parry & Song, 1993; Song & Dyer, 1995;
2. The current degree of marketing's involvement with R&D in generating R&D's budget proposals. Song & Parry, 1992;
3. The current degree of marketing's involvement with R&D in establishing product development schedules. Song & Parry, 1993 and case studies)
4. The current degree of marketing's involvement with R&D in generating new-product ideas.
5. The current degree of marketing's involvement with R&D in screening new-product ideas.
6. The ideal degree of marketing's involvement with R&D in setting new-product goals and priorities.
7. The ideal degree of marketing's involvement with R&D in generating R&D's budget proposals.
8. The ideal degree of marketing's involvement with R&D in establishing product development schedules.
9. The ideal degree of marketing's involvement with R&D in generating new-product ideas.
10. The ideal degree of marketing's involvement with R&D in screening new-product ideas.
Note: Gap measures were created by subtracting current degree of involvement items from ideal degree of involvement
items.
Gap between ideal and actual level of marketing's degree of information sharing with R&D — 6-point scale ranging (Gupta et al., 1986; Norton et al., 1994;
from no information sharing to complete information sharing. Parry & Song, 1993; Song & Dyer, 1995;
1. The current level of marketing's degree of information sharing with R&D regarding test marketing results. Song & Parry, 1992;
2. The current level of marketing's degree of information sharing with R&D regarding feedback from customers Song & Parry, 1993 and case studies)
regarding product performance.
3. The current level of marketing's degree of information sharing with R&D regarding competitors' moves.
4. The ideal level of marketing's degree of information sharing with R&D regarding test marketing results.
5. The ideal level of marketing's degree of information sharing with R&D regarding feedback from customers regarding
product performance.
6. The ideal level of marketing's degree of information sharing with R&D regarding competitors' moves.
Note: Gap measures were created by subtracting current degree of infor-mation sharing items from ideal degree of
information sharing items.
Gap between ideal and actual level of R&D's involvement in marketing's decision-making — 6-point scale ranging from (Gupta et al., 1986; Norton et al., 1994;
no involvement to complete involvement. Parry & Song, 1993; Song & Dyer, 1995;
1. The current degree of R&D's involvement with marketing in designing communication strategies directed at customers Song & Parry, 1992;
of new products. Song & Parry, 1993 and case studies)
2. The current degree of R&D's involvement with marketing in designing user and service manuals.
3. The current degree of R&D's involvement with marketing in training users of new products.
4. The ideal degree of R&D's involvement with marketing in designing communication strategies directed at customers
of new products.
5. The ideal degree of R&D's involvement with marketing in designing user and service manuals.
6. The ideal degree of R&D's involvement with marketing in training users of new products.
Note: Gap measures were created by subtracting current degree of involvement items from ideal degree of involvement
items.
Success — 6-point scale ranging from strongly disagree to strongly agree. (Gupta et al., 1986; Parry & Song, 1993;
Overall, our new-product program is a success. Song & Parry, 1993)
Note: ⁎ indicates item not used in the Japanese model based on confirmatory factor analysis results.
 M. Song, R.J. Thieme / Industrial Marketing Management 35 (2006) 308–322
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Dr. Michael Song holds the Charles N. Kimball, MRI/Missouri Endowed
Chair in Management of Technology and Innovation, is Professor of Marketing
at the Bloch School, University of Missouri–Kansas City, and also serves an
Advisory Research Professor at Eindhoven University of Technology.
Dr. Jeff Thieme is an Assistant Professor of Marketing at the University of
Memphis and his research interest is product innovation.