Accepted Manuscript

Understanding how the functional integration of purchasing and marketing

accelerates new product development

Carmen González-Zapatero, Javier González-Benito, Gustavo Lannelongue

PII: S0925-5273(17)30288-8
DOI: 10.1016/j.ijpe.2017.09.004
Reference: PROECO 6817

To appear in: International Journal of Production Economics

Received Date: 8 November 2016

Revised Date: 16 August 2017
Accepted Date: 6 September 2017

Please cite this article as: González-Zapatero, C., González-Benito, J., Lannelongue, G., Understanding
how the functional integration of purchasing and marketing accelerates new product development,
International Journal of Production Economics (2017), doi: 10.1016/j.ijpe.2017.09.004.

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 ACCEPTED MANUSCRIPT
TITLE PAGE

MANUSCRIPT TITTLE

Understanding how the functional integration of purchasing and marketing accelerates new
product development

AUTHORS CONTACT INFORMATION

Carmen González-Zapatero, IME – Salamanca University, carmengz@usal.es

(Corresponding Author). Cell phone: (34) 676 770 241

Javier González-Benito, IME – Salamanca University, javiergb@usal.es

Gustavo Lannelongue, IME – Salamanca University, lannelongue@usal.es

Postal Address: Facultad de Economía y Empresa de la Universidad de Salamanca.

Departamento de Administración y Economía de la Empresa. Campus
Miguel de Unamuno s/n. 37007 Salamanca. Spain

Tel: (34) 923294400 Ext. 6837

Fax: (34) 923294715

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Understanding how the functional integration of purchasing and marketing accelerates new

product development

HIGHLIGHTS

 Purchasing-marketing functional integration is broken down into three components.

 One component completely mediates the effect the others have on the speed of NPD.
 The crucial component is the one that ensures optimal decision alignments.

ABSTRACT

In the context of ever more demanding customers, and companies’ growing dependency on external suppliers, the
importance of purchasing-marketing integration has been highlighted by recent research. However, further
theoretical and empirical development is still much in need. Grounded in Information Processing Theory, we
present a model that provides a new breakdown of the components of functional integration and explains how the
interaction between them accelerates new product development (NPD). The model was tested on a sample of 141
Spanish firms using structural equation modelling (SEM). The study makes several contributions: It provides
empirical evidence of the benefits of purchasing-marketing integration; it identifies its three components: shared
information on purchasing, shared information on marketing, and the alignment of decisions, and it uncovers the
complete mediation of aligned decisions on the effect shared information has on speed in NPD. Additionally, it
contributes to solving the lack of consensus on the conceptualization of functional integration as reported by the
literature.
Keywords: Purchasing-Marketing Functional Integration, Innovation Speed, New Product Development,

Mediation Analysis

1 INTRODUCTION
The integration of different pairs of functions, such as R&D-marketing or marketing- manufacturing, has been

extensively studied in the literature (e.g., Gupta et al., 1986; Swing & Song, 2007). The purchasing function has

only recently been included in these dyadic

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relationships (Piercy, 2009; Smirnova et al., 2011; Lindgreen et al., 2016), possibly because its role has often been

perceived as administrative and residual. However, different economic and business trends are increasing

corporate dependency on external resources and capabilities for both manufacturing and innovation activities, and

include the following highlights: (1) Growing production outsourcing; for example, 90% of the manufacturing of

Boeing 787s is subcontracted to a global network of 900 suppliers (Sheth et al., 2009); (2) Greater prominence of

initiatives that involve intense collaboration with suppliers, such as networking, open innovation, and reverse

logistics (West et al., 2014; Cannella et al., 2016; Tachizawa & Giménez, 2010); (3) Global competition for

supplies (Sheth et al., 2009; Schoenherr et al., 2012); and (4) Growing awareness of the non-replicability of

competitive advantages derived from relationships with suppliers, due to their idiosyncratic nature (Lawson et al.,

2009). This ever greater reliance on suppliers’ resources is shifting managers’ perception from viewing the

purchasing function as residual to understanding it to be strategic (e.g., Cousins et al., 2006; Schoenherr et al.,

2012) and linked to financial performance (Schoenherr et al., 2012).

This development, along with ever more complex, difficult to predict, and demanding markets, has drawn

increasing attention to the benefits and inevitability of integrating the supply expertise of the purchasing function

with the customer consultancy role of the marketing function (Williams et al., 1994; Sheth et al., 2009; Lindgreen

et al., 2016). Moreover, scholars have argued that this internal link is necessary to complement external integration

initiatives with customers or suppliers. Purchasing-Marketing integration would allow transferring the benefits

obtained through any of these external integration practices to the other end of the company’s internal value chain.

The need to co-manage these two functions is therefore being highlighted by the literature (Lindgreen et al., 2016).

This co- management would imply, for instance, simultaneously assessing a company’s need to be

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customer-oriented, supplier-oriented, or both at the same time (Wagner & Eggert, 2016; Ziggers & Henseler,

2016). Some authors have developed conceptual frameworks to assess when each one of these options would be

more expedient (Wagner and Eggert, 2016). Others provide evidence of the beneficial effects of simultaneously

implementing both strategies (Ziggers & Henseler, 2016). Yet this co-management would also require assessing

which interfaces these two functions could use to coordinate their interdependent tasks. Accordingly, some authors

have proposed different combinations of integration mechanisms to manage this link in different situations (Toon

et al., 2016: Matthyssens et al., 2016; Gonzalez-Zapatero et al., 2016).

However, the literature on purchasing-marketing integration still has sundry shortcomings:

(1) much of this research has remained largely conceptual (e.g., Piercy, 2009; Lindgreen et al., 2016: Toon et al.,

2016; Wagner & Eggert, 2016), (2) it remains at a business or functional level (Ziggers & Henseler, 2016,

Smirnova et al., 2011), (3) there are few empirical studies that show their disaggregated impact in different

performance indicators; the few that exist rely on economic performance measures such as market share or market

growth (Smirnova et al., 2011), or on aggregated performance measures that mix different operational indicators

that may conceal certain effects (e.g., volume flexibility, delivery speed, delivery reliability/dependability, product

conformance to specifications, and customer satisfaction) (Ziggers & Henseler, 2016).

Our main objective, therefore, is to help to fill the above gaps by providing an empirical analysis of the purchasing-

marketing link within the specific framework of new product development (NPD). NPD has been identified as

one of the main areas of interaction between these two functions (Williams et al., 1994), and so there is a need for

studies that incorporate this unit of analysis. The empirical analysis provided in this paper focuses on a specific

performance measure, namely, the speed of NPD. This speed is an operational performance

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indicator that has been typically linked to NPD success (e.g., Swink, 2003, Griffin, 2002, Gerwin and Barrowman,

2002).

Functional integration or coordination has been identified as an NPD accelerator in previous studies (e.g., Gerwin

and Barrowman, 2002, Chen et al., 2010). However, in many cases these analyses have focused on studying the

impact that certain specific functional integration antecedents have on the speed of NPD, such as the creation of

cross-functional teams (e.g., Zirger & Hartley, 1996; Carbonell & Rodríguez, 2006) or the use of certain

integration methods or technologies such as Computer Aided Design (CAD) or Quality Function Deployment

(QFD) (Swink, 2003), and not on the impact of functional integration per se.

Studying functional integration per se helps to understand how these antecedents achieve their goals, and hence

the reason it is this paper’s approach. However, it poses an important challenge, for although this concept has

been around for decades, authors often contend that it remains poorly understood (Kahn & Mentzer, 1998; Pagell,

2004; Chen et al., 2009; Frankel & Mollenkopf, 2015). Among other shortcomings, scholars have noted a lack of

consensus over the concept itself, and have called for theoretical grounding to provide context for understanding

its role.

The paper’s second objective is therefore to help to fill these gaps in the general literature on functional integration.

In order to do so, we rely in Information Processing Theory, which allows us to provide a multidimensional

concept of functional integration, stress the optimization approach that it should have, and study the interaction

between its different dimensions.

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Our two main objectives will also contribute to the Purchasing and Supply Management (PSM) literature. A panel

of leading scholars in PSM have recently identified the challenges and research opportunities in this field

(Schoenherr et al., 2012). Among others, they have pointed out the need to seek opportunities to engage in cross-

functional research on PSM. They have also highlighted the need to identify best practices to leverage the supply

base for innovation. Our study singles out the alignment of suppliers’ knowledge capabilities with market

knowledge as a way of improving the supply base’s innovation potential.

The rest of the paper is structured as follows: section 2 reviews the theoretical background that informs the study

and identifies the components of functional integration. Section 3 presents an explanatory model of the

relationship between these components as predictors of speed in NPD. Section 4 describes the methodology used

to verify the model. Section 5 presents the paper’s findings, and section 6 discusses their implications. Finally,

section 7 summarizes the main conclusions.

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2 LITERATURE REVIEW

2.1 New Product Development

New product development (NPD) processes have been defined as communication networks, as well as problem-

solving or decision-making chains (Brown & Eisenhardt, 1995; Song & Montoya Weiss, 2001) involving different

stages - e.g., opportunity identification or the selection of ideas, the appraisal and approval of the product’s final

prototype, production, and distribution - which should be completed for a product to be introduced to the market.

Each functional area (e.g., marketing, R&D, finance, manufacturing, purchasing, etc.) brings its particular

expertise to the process, and coordinates with the others to develop the best possible new product. This process

may have different drivers, such as technology push, demand pull, or suppliers’ proposals (Souder & Sherman,

1993; West et al., 2014).

Depending on multiple factors, such as industry context or the kind of innovation (incremental vs. radical), these

NPD stages may adopt either a sequential or a concurrent approach (Swink & Song, 2007; Valle & Vázquez-

Bustelo, 2009). In a sequential approach, coordination occurs precisely between the functions responsible for

adjacent stages, and no stage will begin until the preceding one has been completed. For example, in a demand-

pull situation, marketing would scan the customer market to identify the latest customer preferences, and then

coordinate with R&D to translate customers’ preferences into product specifications, R&D then coordinates with

production for designing the productive process, and finally, purchasing would receive a set of requirements

regarding the necessary components and raw materials. Traditionally, both academic and professional circles have

noted the scarce involvement and integration of this last function (Carbone, 1995; Dyer, 1996; Sheth et al., 2009;

Piercy, 2009). This last interaction has therefore been described in

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terms of procurement requirements being “thrown over the wall” to purchasing (Carbone, 1995; page 38).

A more simultaneous, or concurrent, approach stresses that besides coordinating with the functions responsible

for the consecutive stages, these selfsame functions should share information and accommodate their decision-

making with the functions that will come into play in subsequent stages. This will enable all the functions involved

to be briefed sooner on what is expected of them, increase their reaction time, and be assured of the opportunity

to contribute ideas and requirements from the very onset of the process (Abdalla, 1999; Swink & Song, 2007).

Analyzing the integration of purchasing and marketing during NPD is particularly relevant from this concurrent

perspective, as these functions often represent the two opposite ends of the process as interpreted from the

sequential approach described above.

2.2 Speed in New Product Development

Sundry publications in the academic and business literature suggest that firms managing to reduce the time spent

on the production, sale, distribution or development of new products achieve a major competitive advantage (e.g.,

Clark & Fujimoto, 1991; Chen et al., 2010). This competitive approach has been referred to as time based/oriented

competition, first- mover strategy, fast-follower strategy, fast product development cycle time, on-time schedule

performance, speed to market, and innovation speed (Kessler & Chakrabarti, 1999; Menon et al., 2002, Chen et

al., 2005).

The contribution this celerity makes to a firm’s competitiveness is based on several effects. On the one hand, it

has a positive bearing on costs: speedier NPDs involve shorter timeframes, and therefore consume fewer

resources. On the other hand, this speed impacts

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favorably on sales through several mechanisms: (1) speedier NPDs register a higher novelty ratio, and innovative

products appeal to consumers (Clark & Fujimoto, 1991). What’s more, innovative products lead to an increase in

sales via pricing, as they allow a premium to be added due both to their original characteristics and to their prompt

availability (Clark & Fujimoto, 1991; Gupta et al., 1992); (2) speedier NPDs also lead to an increase in sales

through a greater adjustment of the new products to customers’ expectations. This is because more streamlined or

shorter NPDs may be launched closer to the time the product is consumed, and therefore respond to more recent

information on consumer preferences. This reduces the risk of not adjusting to the latest customer preferences

(Fisher, 1997; Wathne & Heide, 2004). Finally, (3) speedier NPDs provide more time for selling the new product

before its lifecycle ends, and therefore increase the return on sales.

Scholars have pointed out, however, that trade-offs may exist between these time-based strategies and other

business objectives such as quality or costs (Meyer & Utterback, 1995; Gupta et al., 1992; Swink et al., 2006,

Chen et al., 2010). In any case, two important questions need to be kept in mind. The first one is that many NPDs

may have enough margin to be accelerated without compromising other objectives, such as cost or quality (Gupta

et al., 1992). Applying new approaches (e.g., functional integration, waste and error reduction, and overlapping

activities) could be performance-enhancing in multiple dimensions simultaneously. The second question is that

these trade-offs may simply represent different ways of competing. Swink et al. (2006) note that organizations

with major trade-offs between different performance-indicators (quality-speed-quality) are still successful

companies.

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2.3 Functional Integration and Information Processing Theory
Functional integration has been referred to in a number of different ways in the literature: collaboration,

coordination, teamwork, unity of effort, connectivity, alignment, internal integration, or cross-functional

integration (Chen et al., 2009; Frankel & Mollenkopf, 2015; Swink & Schoenherr, 2015). Although the concept

has been around for decades under different denominations, studies frequently appear claiming it still remains

poorly understood (e.g., Pagell, 2004; Frankel & Mollenkopf, 2015; Swink & Schoenherr, 2015). Among other

shortcomings, researchers bemoan the following: (1) concept operationalizations that refer to the presence or

absence of integration antecedents or enablers, rather than to the degree of integration achieved (Pagell, 2004;

Turkulainen & Ketokivi, 2012); (2) the absence of a theoretical grounding that helps to understand how it works

and provide arguments to identify the means by which the attributes of integration are linked to performance

indicators (e.g., Turkulainen & Ketokivi, 2012; Frankel & Mollenkopf, 2015); and (3) the lack of consensus about

the concept itself (e.g., Pagell, 2004; Frankel & Mollenkopf, 2015) .

We overcome the above limitations through the following three approaches: (1) avoiding defining, or

operationalising, the concept by using antecedents that may, or may not, promote functional integration, such as

joint participation, collocation, Information and Communication Technologies (ICTs), integrating incentives,

socializing activities, or integrating managers (e.g., Leenders & Wierenga, 2002); and (2) grounding our definition

in Information Processing Theory (IPT), which allow us to (3) synthesize previous functional integration

definitions by identifying their two differentiated and essential components, as well as provide arguments for our

hypothesis.

Different theoretical approaches can shed light on and explain different nuances of the functional integration

concept (Frankel & Mollenkopf, 2015). This paper is grounded in IPT

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in particular because it provides us with the basis to present functional integration as a two- step process that

should aim for optimal decision-making. Initially adapted by Galbraith (1973) from developmental psychology,

IPT assumes that companies are open social systems that deal with uncertainty. As they grow, they organize

themselves into specialized, interdependent subunits, with information processing then occurring within and

between these subunits for dealing with this uncertainty (Galbraith, 1974; Tushman & Nadler, 1978). Information

processing is viewed accordingly as an internal integrating concept achieved through different antecedents (e.g.,

rules and programs, hierarchy, joint planning, formal information systems, and lateral relations) (Galbraith, 1974;

Tushman & Nadler, 1978). The application of IPT to different situations, at different levels of analysis, with

different performance indicators and with diverse concept operationalizations, is helping to develop the literature

on functional integration or internal integration in different ways:

Swink and Schoenherr (2015) have relied on IPT to argue for the ability that internal integration has to increase

different kinds of productivity (ROS, ROA, ATO). Schoenherr and Swink (2012) have relied on ITP to argue for

its ability to moderate the effect of customer and supplier integration on different kinds of operational productivity.

Swink et al. (2007) have grounded their reasoning in IPT to explain the effect of four different strategic integration

activities on manufacturing plant performance, and therefore on business performance. Hult et al. (2004) have

developed a model that explains how the firm’s information processing capacity can improve its supply chain

performance. They have highlighted how the shared meaning attained through information processing could

decrease cycle time. Our study joins this stream of literature and also relies on IPT, albeit with the aim of

undertaking a more itemized analysis of the workings of functional integration. While some of the above authors

have relied on a unidimensional concept of functional integration in their application of IPT (Schoenherr and

Swink, 2012; Swink and Schoenherr, 2015), we

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will use IPT arguments to identify and define the different components of internal integration. This would permit

us to argue for their disaggregated and two-step effect on NPD speed.

As Kahn and Mentzer (1998) reported nearly twenty years ago, most functional integration definitions rely either

on an interaction/communication perspective or on a collaborative perspective, or even on both. Following this

approach, reinforced by numerous subsequent proposals (see Table 1), we identify two core components in

functional integration.

Table 1: Conceptualizations of Functional Integration.

Authors Concept

Khank & Mentzer, 1998 S

Integration is a process of interdepartmental interaction and interdepartmental
collaboration that brings departments together into a cohessive organization.

U
N
Participants work cooperatively toward a win-win solution by bringing all
relevant issues into the open, sharing information and analysing the
Xie et al., situation objectively. In the NPD process, collaboration it is more to lead to
1998
A sound decisions on NPD
selection, design and launch because it facilitates integration of

M
diverse skills, resources and perspectives, resulting in the most jointly
optimal solutions.

DT
EP
Integration is a process of interaction and collaboration in which
Pagell, manufacturing, purchasing and logistics work together in a cooperative
2004 manner to arrive at mutually acceptable outcomes for their organization.

E
Swink et al., 2007 C Product-process integration is the process of co-developing product and processes
and sharing specification information and related knowledge.

C
A
Chen et al., 2009
Internal process integration refers to the management of restructuring
activities that aims at seamlessly linking relevant business processes and
reducing redundant processes within a firm. Thus, two key dimensions of
internal process integration are internal process connectivity and internal
Schoenherr & Swink,
process simplification.
2012; Swink &
Schoenherr, 2015
Internal integration refers to cross-functional intra-firm collaboration and
(Information Processing
information sharing activities that occur via interconnected and synchronized
Theory)
processes and
systems.

We have labelled the first one “information shared and understood”. Most definitions include this element under

different denominations, such as interaction (Kahn & Mentzer, 1998), communication (Swing & Song, 2007), or

connectivity (Chen et al., 2009). This information

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should not just be shared, as its implications for the other function should also be understood (Calantone et al.,

2002). This first component aligns perfectly with the integrating concept of IPT, as it has been described as “the

gathering, interpreting, and synthesis of information that occurs between interdependent functions in the context

of organizational decision making” (Tushman and Nadler, 1978). We have chosen this label because this

expression it is included in most functional integration definitions, and it is self-descriptive, facilitating the

presentation of our arguments.

Our second component has been labelled “aligned decisions”. This component replaces the intuitive concept of

collaboration or cooperation often included in functional integration definitions. In their concepts of functional

integration, different authors have recently stressed that it should generate efficiencies -costs, technology,

processes, competitive position, etc. (Chen et al., 2009; Swink & Schoenherr, 2015)-, by reducing redundancies

(Chen et al., 2009), by exploiting each department’s competencies and strengths (Schoenherr & Swink, 2012),

and by arriving at mutually acceptable outcomes, or at least the best ones for the firm (Xie et al., 1998, Pagell,

2004). Our “aligned decisions” component reflects this efficiency trend, differentiating it from other possible

kinds of collaboration or cooperation. Xie et al. (1998) explain that there is a whole range of interfunctional

coordination options (e.g., avoidance, accommodation, competition, etc.). Accommodation, for example, consists

of one party yielding to the wishes of the other, rather than combining two diverse viewpoints and making common

sense of them. The decision may therefore fail to consider important information. Accommodation may be due to

the greater personal charisma of the professional of the other party, or greater political power within the company.

Decisions inspired by accommodation, and other ineffective options (Xie et al., 1998), may provide a sense of

collaboration, cooperation, teamwork, shared meaning or unity of effort that would nevertheless be far from

optimally aligning the two functions’ requirements and capabilities,

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and far from generating efficiencies for both parties and for the NPD process. IPT signals that information

processing aims to create more robust and optimal strategies, and prevents unexpected problems that require

workarounds (Galbraith, 1974), and avoid redundancies (Swink & Schoenherr, 2015). In their development of

IPT, Swink and Schoenherr (2015) have stressed that this optimization is reflected in different profitability

indicators. IPT therefore allows us to stress that collaboration or shared meaning should be one that generates

optimization. By stressing this, we go one step further from the works that rely mainly on the shared meaning that

processing information achieves (Hult et al., 2004; Swink & Schoenherr, 2012). In some situations, as in the

purchasing-marketing case, this shared meaning could be a mere accommodation to the other party’s will. Given

the traditionally different status of these two areas within companies, purchasing professionals have often

complained that when they interact with marketing they do not do so on a level pegging (Williams et al., 1994).

To differentiate our second component from previous proposals that relied on a concept of collaboration that could

conceal non-optimal decisions, we have chosen this new label: “aligned decisions”.

Based on the above discussion, we derive the following definition of functional integration for this specific

research:

Purchasing-Marketing Functional Integration implies information shared and understood with/by the other

function, and this information being translated into aligned decisions. Aligned decisions are the optimal ones that

achieve efficiencies by making the most of both function’s resources and capabilities, avoiding redundancies and

reworking, and obtaining advantageous results for both parties or, at least, for the firm.

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3 MODEL AND HYPOTHESIS
Figure 1 shows the conceptual model proposed. It depicts the sequence in which each component of functional

integration has a bearing on speed in NPD. Firstly, Information Processing Theory (IPT) establishes a negative

relationship between information processing and uncertainty (Galbraith, 1974; Tushman and Nadler, 1978). The

more uncertainty present due to environment circumstances, or to the interdependency among specialized

subunits, the more information processing is needed. NPD is a mainstream task that involves several functional

areas that have to consider environmental variables such as customers and suppliers. Specialized functional areas

are therefore highly interdependent during NPD, and subject to high uncertainty. IPT consequently establishes

that the different specialized subunits, by jointly gathering, synthesizing and interpreting information, can reduce

this uncertainty and achieve optimal strategies (Galbraith, 1974; Tushman and Nadler, 1978; Swink and

Schoenherr, 2015). In this sense, IPT argues that information processing enhances visibility and reduces the

uncertainty derived from functional interdependency, which reduces the potential limitations of myopic

perspectives and decreases bounded rationality (Galbraith, 1974; Tushman & Nadler, 1978). This broader

perspective allows making the optimal combination of both functions’ resources and requirements. Although the

possession of such information does not guarantee aligned decision-making, due to different barriers such as

conflicting reward systems, these decisions will nonetheless be difficult to coordinate if their ramifications for the

other function are unknown.

Therefore, by applying these IPT arguments we can posit a positive relationship between our two identified

functional integration components, namely, information shared and understood and optimal decision alignment in

the purchasing-marketing case. Sharing information on customers and suppliers and understanding its

implications for the other function would

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reduce uncertainty and lead to the optimal alignment of both functions’ resources and requirements. These

arguments allow us to formulate the following hypothesis:

H1: A higher degree of information shared and understood regarding the purchasing and marketing

functions is positively correlated to the degree of alignment of the decisions involving both functions.

FIGURE 1. Conceptual Model

Purchasing-Marketing
Functional Integration
CU
Components SN
Information A
Shared and
Understood

H1
M
DT Speed

Aligned
Decisions
H3

EPH2
in NPD

Secondly, the model considers that aligned decisions avoid time-wasting and delays during NPD. In their

developments of IPT, scholars have signaled that more robust and optimal strategies prevent unexpected problems

that require workarounds (Galbraith, 1974), and avoid redundancies (Swink & Schoenherr, 2015). Since

workarounds consume time, and redundancies double the time needed, it can be logically deduced that aligned

decisions reduce time cost. Hult et al. (2004), grounded in IPT, state that in those contexts in which subunits are

interdependent (e.g., the supply chain) the shared meaning of concepts such as

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quality and timeliness needs to be resolved so that effort can be focused on necessary activities. As a consequence,

cycle time will be reduced (Hult et al., 2004). Likewise, NPD task interdependency requires aligned decision-

making on aspects such as quality, timings or cost in order to focus effort and avoid time-wasting and delays.

Even though this alignment requires time, decision-making lacking this consistency will imply reworking and

time- wasting.

In the purchasing-marketing case, failure to consider the purchasing function’s requirements and capabilities may

promote the development of products that are very attractive for consumers, but for which there is no production

availability on the supplier market, or having to wait for the necessary components to be made, or having to

redefine the product’s specifications to adapt it to the materials available or to more economical ones (Freeman

& Cavinato, 1990; Carbone, 1995). This causes extra work and leads to delays or waiting times. Likewise, this

lack of alignment may lead purchasers to initiate processes for finding and selecting suppliers whose resources

are not in demand on customer markets. This will lead to the subsequent abandoning of the suppliers, with the

resulting waste of time. Based on these arguments, we formulate our second hypothesis.

H2: A higher degree of alignment in the decisions involving the purchasing and marketing

functions is positively correlated to speed in the NPD process.

Thirdly, the model presents a third hypothesis that reflects the positive impact of functional integration on NPD

speed, but making explicit that this is a two-step effect between interdependent functional integration components.

Galbraith (1974) reported a relationship between information processing and lead time, contending that if an

organization’s information processing capacity to handle events is overloaded, a possible response might be

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to extend delivery dates until they are long enough to keep the scheduling problem within the organization’s

information processing limits. Consequently, it may be deduced that the greater the information processing

capacity, the shorter the lead times an organization can provide. Due to the interdependent nature of NPD tasks,

the related information processing capacity occurs through and between the integration of specialized and

interdependent functions (Tushman & Nadler, 1978). This information processing capacity, as argued in the

previous hypothesis, relies on two interdependent components; each one needs the other in order to achieve the

positive effect of functional integration, namely, NPD speed. Without any information on the other function, it

will be difficult to make decisions in a coordinated or aligned manner. Furthermore, sharing information will be

of no use either unless it is taken into account through an aligned decision-making process. Both components

complement each other, and there is a relationship of prevalence between them. Sharing information on the market

and on suppliers is required for coordinating these two markets from the start, and thus expediting the NPD

process. This means that the impact of shared information on speed in NPD arises through the complete mediation

of aligned decisions. Information is important, but translating information into knowledge becomes critical to

reduce cycle time (Hult et al., 2004). This notion informs our third hypothesis.

H3: The alignment of decisions completely mediates the relationship between the information shared and

understood and speed in the NPD process (i.e., sharing information helps to expedite the NPD process

inasmuch as it allows aligning the decisions between the purchasing and marketing functions).

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4 METHODOLOGY

4.1 Data
To test this model, a population of manufacturing firms was chosen. In order to ensure better response rates, our

aim was to identify firms in which we could expect NPD activity, and were large enough to be organized into

specialized functions working in a coordinated manner during NPD. To meet the first criterion, we identified the

SICs with a high rate of patent applications. As patent applications were not listed by SIC, we chose those that

were related to the “top ten technological areas in terms of patent application” as per the 2013 ranking of the

OEPM (Spanish Office of Patents and Brands) 2013 . This led to the selection of the following three sectors:

fabricated metal products, except machinery and transport (SIC 34), transportation equipment (SIC 37), and

electronic and other electrical equipment (SIC 36). To meet the second criterion, firms with more than 50

employees were chosen. Based on these criteria, the ORBIS database provided a total of 578 firms.

Purchasing Managers were chosen as key informants for this study, as they are knowledgeable about the issues

being researched and are expected to be willing to discuss them (Kumar et al., 1993). Purchasing has a long

tradition in expecting and receiving information and requirements from other functions and adapting to them (e.g.,

Williams et al., 1994, Carbone, 1995, Matthyssens et al., 2016), while marketing may not perceive the need to

receive information on purchasing and aligning with it. Purchasers seemed therefore more able to evaluate both

flows of information and alignment. Purchasers’ reward systems are frequently related to suppliers meeting

delivery dates, so they are well aware of the deadlines involved in the NPD process. The response rate and low

levels of missing dates reported below confirm their competency as informants. A comparative analysis

considering both perspectives will certainly be a useful extension of our analysis.

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A questionnaire was sent out according to the approach contained in Dillman’s Total Design Method (1978). In

order to increase the response rate, whenever possible, contact was made over the phone. An email was then sent

to introduce the research project, with a link to the virtual questionnaire. Those firms that so requested (3%) were

sent a questionnaire by post, together with a stamped addressed envelope for returning the completed

questionnaire. Two rounds of reminder calls were made to those firms that had not answered after two weeks.

This process identified 43 firms in the initial cohort that no longer conducted purchasing activities, either because

these operations had been rerouted through the parent companies in other countries or because they had abandoned

their manufacturing operations and devoted themselves solely to commercialization. This reduced the study’s

cohort to 535 firms. We received 197 questionnaires. Of these, 56 were unusable due to the high rate of missing

data, five surveys had a missing value, and the rest were properly completed. We contacted the respondents by

phone or email to ask them to provide the missing answer in the case of the five surveys noted. By the end of this

process, we had three surveys with one missing value, which was replaced by the mean score. We therefore ended

up with 141 completed questionnaires, which means a response rate of 26%. We obtained satisfactory results

while assessing the sample’s representativeness. The sampling error was ±7.08%, with a 95% level of confidence.

An ANOVA test on the available demographics that could impact our analysis, such as size, showed no significant

differences between the sample and the population, or between the first 25 respondents and the last 25 (Wagner

and Kemmerling, 2010) (see Table 2).

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Table 2. ANOVA Test for non-response bias.

Population 25 first vs. 25

vs. last
Sample

F F
Number of Employees. ,023 (p=,880) .007 (p=,932)
Total Assets. ,009 (p=,926) .027 (p=,871)

The respondents’ experience in their current position was distributed as follows: 11% more than 20 years; 23%

between 10 and 20 years; 26% between 5 and 10 years; 23% between 2 and 5 years, and 11% less than 2 years.

Table 3 includes information on respondent distribution per SIC, and size in terms of the number of employees

and assets.

Table 3. Sample demographics.

N
A
M
As a single data source was used, and to avoid common method bias, while designing the questionnaire we

followed the recommendations made by Podsakoff et al. (2003): the questions regarding dependent variables were

placed before those related to the independent variables in the survey. The Harman Test (Podsakoff et al., 2003)

revealed that our model’s variables do not load in a single factor. Instead they load in many factors, six of them

with an eigenvalue higher than 1, with each one of them accounting for a low percentage of the variance. These

results therefore indicate that common method bias does not seem to be a significant problem.

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4.2 Metrics

The unit of analysis was the development of a new product that met the following requirements: (1) already for

sale with data on its level of success, and (2) for which the purchasing department had managed the suppliers (raw

materials, components, subcontracted production, etc.). Those surveyed were asked to respond to the

questionnaire in terms of the latest NPD process that fulfilled those requirements, with the aim being to avoid

covering only success stories.

Components of Functional Integration. Multivariate testing was used to measure the two components of functional

integration: information shared and understood, and aligned decisions. Accordingly, the heads of purchasing were

asked to use a Likert-type scale (from 1

-not at all- to 7 -completely-) to assess the extent to which the statements contained in Table 4 applied to their

experience during the NPD selected. These statements aim to measure integration per se, or achieved integration,

and avoid measuring integration antecedents, such as for example the exchange of reports or the existence of

integrating managers. They were inspired by previously selected items that were consistent with our approach or

were inspired in the works used to conceptualize our variables.

With a view to scoring the information shared and understood, use was made of the first four items in Table 4,

inspired by similar items used by Schoenherr and Swink (2012) and the work by Gupta et al. (1986). The

measurement of the decisions’ degree of alignment involved the next four items, which have been inspired by

adapting them from the work by Xie et al. (1998) and Chen et al. (2009). The two last items were reverse coded,

and the responses were therefore reverted before proceeding to the analysis.

A confirmatory factor analysis (CFA) revealed that the structure of the data observed did not properly fit our

proposed identification of two components of functional integration. We

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therefore considered an exploratory factor analysis (EFA). The latter’s results are shown in Table 4. This analysis

revealed that the information shared and understood was in turn subdivided into two sub-dimensions, with the

first focusing on commercial data, and the second on data related to purchasing. This result was consistent with

previous literature. Traditionally the purchasing function has been less involved in NPD than other areas (Carbone,

1995; Di Benedetto & Calantone, 2003), and purchasers have reported that they do not interact as equals with

marketing professionals (Williams et al., 1994). These arguments lead us to conclude that the two streams of

information may not necessarily behave in the same way, and they should therefore be analyzed separately. This

disaggregated analysis is also consistent with previous works that identify different components, and analyze them

separately (e.g., Khan and Mentzer, 1998; Chen et al., 2009).

A further CFA, whose results are also shown in Table 4, shows that when we consider three components of

functional integration, covering this breakdown of the information shared and understood, we obtain a good fit

with the structure of the data observed. Therefore, purchasing-marketing functional integration is broken down

into three components.

This CFA also confirms the unidimensionality of the three dimensions, providing proof of their convergent

validity and reliability. It was also verified that each construct’s average variance extracted (AVE) is higher than

the square of its estimated correlation with other factors, which reflects a suitable discriminant validity (Fornell

& Larcker, 1981).

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TABLE 4 Purchasing-Marketing Functional Integration Components: Exploratory and Confirmatory

Factor Analyses

Exploratory Confirmatory
Factor Factor
Analysis Analysis
F1 F2 F3 F1 F2 F3
Marketing Purchasing managers/professionals received enough .195 .869 .136 .82
Information commercial information (e.g., Product strengths and
Shared and weaknesses, trends, market threats and
opportunities) to
Understood. efficiently play their role during the NPD process.
Purchasing managers/professionals reached a high .168 .860 .190 .80
degree
of understanding on the commercial implications of
the
decisions made during the NPD process.
Purchasing Marketing/Commercial managers/professionals .081 .103 .896 .66
received
Information enough purchasing information (e.g., Available
suppliers,
Shared and materials and components, costs, quality, deliveries)
to
Understood. efficiently play their role during the NPD process.
Marketing/Commercial managers/professionals .175 .228 .839 .92
reached a
high degree of understandin on the purchasin
g g
implications of the decisions made during the NPD
process.

Aligned The decisions made regarding marketing and

Decision purchasing issues throughout the NPD process.
s
- Try to favor equally the goals of both areas .802 .254 .194 .86
(purchasing and marketing)

- Draw the most from both functions’ .637 .469 .171 .76
capabilities.
.838 - .173 .67
- Did not generate rework or the need to repeat .023
tasks. .752 .205 - .61
.042
- Did not cause task duplication in either
functional area.
Varimax Rotation Χ2/g.l.=1.351
Explained GFI=.961
Variance AGFI=.917
TLI=.975
74.51% CFI=.985
Cronbach’s Alpha: .797 .756 .809
Composite
.818 .797 .777
Reliability:
AVE .533 .663 .641

Squared correlation
.220
estimates: F2: Purchasing
.193 .346
information shared

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F3: Aligned decisions

Speed of the NPD. The speed of the NPD was contained in a multivariate construct adapted from Kessler and
Bierly (2002). The heads of purchasing were asked to use a Likert-type

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scale (from 1 -very low- to 7 -very high-) to assess the extent to which they met the standards of speed stipulated
by the firm for each one of the specific stages in the NPD process. This procedure ensured that all the respondents
considered the same stages of the process, as recommended by Chen et al. (2005).

This yardstick for measuring speed meets the conditions of formative scales (Diamantopoulos and Winklhofer,
2001; Jarvis et al., 2003): (1) each item measures a different aspect of the speed in NPD; (2) a change in any one
of the items would involve a change in the construct, and not the other way around; and (3) consideration needs
to be given to each and every one of the items in order to have a complete view of the speed of the process. We
therefore built the measurement construct by computing the mean of the scores assigned to the different items
contained in Table 5. Some authors recommend testing for multicollinearity in formative scales to discard
repetitive items. However, Diamantopoulos and Winklhofer (2001) stress that theoretical arguments should
prevail in formative scale building to statistical inference. In our case, each item refers to a conceptually different
stage of NPD, so discarding items does not seem reasonable. We relied on a mean of scores to compute the scale.
This kind of scale makes interpretation and replication easier.

TABLE 5. Speed in NPD

Speed in NPD Speed in the stage involving brainstorming and the selection of ideas as regards the
preset time for this phase/stage.
Speed in the design stage as regards the preset time for this phase.
Speed in the stage involving the appraisal and approval of the final prototype as
regards the preset time for this phase.
Speed in the production stage as regards the preset time for this phase.
Speed in the transportation stage as regards the preset time for this phase
(from suppliers through to PoS).

Control Variables. In order to control for the possible effect that the different contextual circumstances may have

on functional integration, the analysis included the following control variables.

The participants’ exclusive dedication to the NPD. Taking Carbonell and Rodríguez (2006) as a reference, the

heads of purchasing were again asked to use a Likert-type scale from 1

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(not at all) to 7 (fully) to rate the extent to which those participating in product development were dedicated full-

time to the project.

The participants’ experience in similar NPDs. Also taking Carbonell and Rodríguez (2006) as a reference, the

heads of purchasing were again asked to use a Likert-type scale from 1 (not at all) to 7 (fully) to rate the extent to

which those participating in the selected NPD process had a high level of experience in the performance of similar

projects.

Clarity of goals. Based on Swink (2003), we asked the heads of purchasing to use a Likert- type scale from 1 (not

at all) to 7 (fully) to rate the extent to which clear and explicit goals had been set in the NPD process in question.

Firm size. This was measured according to the organization’s headcount in 2013. These data were provided by

the SABI database, which contains comprehensive information on companies in Spain and Portugal.

Industry type. Companies SIC codes were used to control for Industry effect.

4.3 Analysis
The literature provides different methodological techniques for testing hypotheses on mediation: (1) the causal

steps procedure (Baron and Kenny, 1986), often referred to as B-K approach, (2) the James et al. (2006) proposal,

based on Structural Equation Modeling, also referred to as the JMB approach, (3) normal theory point estimation,

known as the Sobel Test (1982), and (4) bootstrapping relaying methodologies (e.g., Preacher & Hayes, 2004;

Zhao et al., 2010). Of these, the B-K and JMB approaches follow a step-by-step procedure that tests for both the

isolated effects across the variables studied and their combined effect. The two other techniques mentioned focus

especially on testing the significance of the indirect or combined effect. The two first techniques, therefore, fits

better our analysis’s itemized approach, and allow us to test all the proposed hypotheses. However, in spite of its

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widespread use, several papers in recent years have referred to B-K procedure limitations, highlighting the JMB’s

superiority (e.g., MacKinnon et al., 2000; MacKinnon et al., 2002; James et al., 2006; Fritz & MacKinnon, 2007;

MacKinnon, 2008; Le Breton et al., 2009). These limitations include the following: (1) it is based on regressions

with ordinary least squares, and assumes the perfect validity of the measurements, and (2) it requires a statistically

significant relationship between the dependent and independent variables. Considering these arguments, we will

base ourselves on JMB methodology. Furthermore, as the JMB approach uses SEM, it will also allow us to

simultaneously test the effect of our two independent variables.

The JMB approach (Frazier et al., 2004; James et al., 2006) recommends starting by testing a complete mediation

effect vs. a partial one, as it is a more parsimonious assumption. This recommendation perfectly fits our set of

hypotheses. Testing for complete mediation implies testing the relationships shown in Figure 2: the effect the

shared information has on aligned decisions, as well as the effect the latter have on the speed of the NPD process.

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5 RESULTS
TABLE 6. Mean, Standard Deviation, and Pearson Correlation Coefficients

Mea S.D. 1 2 3 4 5 6 7 8 9 10 11
NPD Participants’ dedication
n
3.6 1.99 1 .272** .246** .219** .094 -.022 -.077 .045 -
NPD Participants’ experience .157+ .019 .041
NPD Goal Clarity

Organization Size
.295**
T
5.59 1.36 .272** 1 .261** .144+ -.045 .189* -.140+ .258** .043 .243**

P
4.99 1.56 .246** .261** 1 .161+ .117 -.007 -.115 .291* .201* .268**
SIC 37

SIC 36

SIC 34
.257**

RI
3.87 11.6 .219** .144+ .161+ 1 .191* -.038 -.161+ .059 -.069 -.011 .022
8
.38 .49 .094 -.045 .117 .191*

C
1 -.514**-.531** -.071 .135 -
Marketing Information Shared .007 -.109
and Understood .30 .46 -.022 .189* -.007 -.038 -.514** 1 -.454** .018
Purchasing information Shared .009 -.011 .107
and Understood .32 .47 -.077 -.140+ -.115 -.161+ -.531**-.454** 1 .056 .131 .018
Aligned Decisions .008
4.50 1.42 .045 .258** .059 - .018 .056 1 .374** .473**

S
Speed in NPD .291** .071 .289**
4.82 1.21 -.157 .043 * - .135
.201 coefficients
+p<0.1 *p<0.05; **p<0.01; ***p<0.001. (two-tailed) Pearson correlation - -.131 .374** 1 .329** .135
.069 .009
4.90 1.11 .019
U
.243**
.268**
- - -
.011 .007 .011
.018 .473** .329** 1
.292**
4.66 .89 .041
N
.295**
.257**
.022 -
.109
.107 .008 .289** .135 292**
1

A
The descriptive statistics and correlations for the variables in our study are included in Table

6. The complete mediation model depicted in Figure 2 recorded a good fit, as shown by the different indicators:

χ2(60) = 77.52 (p = .064), χ2/DF = 1.292, GFI =.931, AGFI= .863, TLI =

.944, CFI = . 968, and RMSEA = .046. These results support our hypotheses 1, 2 and 3, confirming that aligned

decisions completely mediate between information shared and understood and speed.

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FIGURE 2. Model for Analyzing the Complete Mediation of Aligned Decisions in the Relationship between

Information Shared and Understood and Speed in NPD.

Purchasing-Marketing Functional NPD Participants’ dedication

Integration Components
NPD Participants’ experience
-.04
Marketing
Item 1 Information NPD Goal Clarity .18*
.81***
Shared and
.80***
Item 2 Understood

I
Organizational Size
.16+

.53*** -.12

Item 5
.77 ***

Item 6

Item 7
.86***

.66***
Aligned
Decisions
.27**
Speed
in NPD R
Item 8
.60***

C
S
.19+ -.02

-.00
Purchasing
Item
Note 1: 3
Standardized
Item 4
.67***

.91***

their order of appearance.

Coefficients.
Information Note
Shared and
2: The items correspond

U
to the statements listed in Table 4 according to
SIC 34 Fabricated metal products,
except machinery and transport

N SIC 37 Transportation equipment

A
As additional proof of the robustness of the results, consideration was given to an alternative model that is shown

in Figure 3. As regards the previous model, inclusion was made in this case of the direct effects on speed in NPD

of the information shared and understood, involving both marketing and purchasing. As is to be expected, given

that the two restrictions are removed, this model’s fit improves: χ2(58) = 76.459, (p = .053), χ2/DF = 1.318,

GFI

=.933, AGFI=.860, TLI =.939, CFI =.966, and RMSEA =.048. Nevertheless, the

improvement in the fit is not significant (∆χ2 = 1.061(2), p>0.588), indicating that the inclusion of these direct

effects does not enhance the model. In fact, we can see that the standardized coefficients of these direct effects on

speed in NPD of both dimensions of the information shared and understood were not significant. Therefore, this

additional test simply

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confirms the complete mediation of the aligned decisions in the relationship between shared information and

speed. In other words, the whole influence of information shared and understood on speed is channeled through

the alignment of decisions.

FIGURE 3. Model for Analyzing the Direct and Indirect Effect of Information Shared and Understood

on Speed in NPD.

Purchasing-Marketing Functional
IC
NPD Participants’ dedication

RS
Integration Components
NPD Participants’ experience
-.03
Marketing
Item 1 Information NPD Goal Clarity .09+

U
.80***
Shared and
.81***
Item 2 Understood Organizational Size
.15+

Item 5
.86 ***
.52***
.13

N -.00

Item 6

Item 7
.77***

.66***
Aligned
A
Decisions
.24*
Speed
in NPD

Item 8
.60***

Purchasing
.19+

DM
-.09
-.08

-0.18

Item 3 .66*** Information

E
SIC 34 Fabricated metal products,
Shared and except machinery and transport
.92***
Item 4

T SIC 37 Transportation equipment

Note 1: Standardized Coefficients. Note 2: The items correspond to the statements listed in Table 4 according to

their order of appearance.

Figure 3 shows that the effect of sharing marketing information on the alignment of decisions is stronger than the

effect of sharing purchasing information, .52 (p<0.001) as opposed to .19 (p<0.10), which means that the effect

on the speed of the NPD process is greater in the former case (.52 x .24 = .13) than in the latter one (.19 x .24 =

.05).

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6 DISCUSSION OF RESULTS

6.1 Academic Implications

Our results provide an initial group of implications related to purchasing-marketing literature: Purchasing-

marketing integration is proving to have positive effects on economic and aggregated performance indicators

(Smirnova et al., 2011; Ziggers & Henseler, 2016). In order to further understand the potential of the purchasing-

marketing link, it is important to conduct studies that focus specifically on different operational performance

indicators (speed, flexibility, quality, etc.). It is also important to analyze this link at a different level of analysis.

We focus here on new product development, but other levels of analysis, such as the individual one (Frankel &

Mollenkopf, 2015), for instance, could enrich this knowledge link.

Very few articles have studied purchasing and marketing integration relying on a direct measure of this concept

(achieved integration) (e.g., Smirnova et al., 2011). However, to do so poses different challenges regarding the

conceptualization of functional integration, as explained in sections 1 and 2.3. In this regard, our results present a

second group of implications for functional integration literature in general. Firstly, in line with other scholarly

approaches (e.g., Khan and Mentzer, 1998; Chen et al., 2009) this study stresses the importance of identifying and

distinguishing the essentially different components of functional integration. The literature keeps offering

different proposals to define and/or operationalize these components (e.g., Chen et al., 2009; Swink & Schoenherr,

2015). Most researchers generally coincide on the first one, namely, sharing information or interaction. The second

component, however, is more contested. While some researchers rely on a consensus perspective-shared vision,

shared understanding (Kahn & Mentzer, 1998; Hult et al., 2004)- which can hide merely acquiescing to the other

party’s wishes (Xie et al., 1998), other researchers add an efficiency perspective to this concept (Xie et al., 1998;

Chen et al.,

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2009; Swink & Schoenherr, 2015). Since both scholars and practitioners would agree that the desired integration

is the one that procures efficiencies, research efforts should keep exploring this last option in order to provide a

more accurate definition and operationalization of efficient functional integration.

Secondly, our results highlight the importance of separately analyzing the possible effects each component has on

different variables. Previous research has analyzed, for instance, the impact of integration on speed (i.e., Swink &

Song, 2007), or on other performance indicators (i.e., Turkulainen & Ketokivi, 2012), albeit using an aggregated

concept of integration, In other cases (e.g., Khan & Mentzer), scholars have identified different components of

functional integration, albeit studying their effect on a composite measure of performance, instead of analyzing

separately their impact in different dimensions of this performance (e.g. cost, quality, speed, flexibility, market

share, etc.). Likewise, or results stress the importance of identifying the antecedents of each functional integration

component in a differentiated manner. González-Zapatero et al. (2016) have reported that, in the purchasing-

marketing particular case, not all the traditional functional integration antecedents were able to promote each one

of the three differentiated components. Aggregated concepts of functional integration or NPD performance may

lead to confusion; itemized analyses help to better understand how this functional integration phenomenon works.

Thirdly, our results involve acknowledging the importance of the relationships that may arise between these two

components, and thereby identify possible mediating effects. While most functional integration definitions and

argumentation about its effect on other variables seem to tacitly assume that the impact of sharing information on

other variables needs the mediating effect of a second functional integration component -e.g., collaboration or

shared meaning (Kahn & Mentzer, 1998; Hult et al., 2004; Swink & Schoenherr, 2015)-, few studies test this

mediating effect in their models (e.g., Hult et al., 2004).

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Finally, as commented in section 2.3, IPT has helped to expand functional integration literature in different ways.

IPT has also allowed us in this study to differentiate functional integration from its antecedents, to identify their

different components, and to explain the relationship between them and our dependent variable. Our analysis

reflects the benefits of relying on theoretical underpinnings to extend functional integration literature.

6.2 Practical Implications

This paper makes a number of contributions of relevance to the business world. Firstly, it draws managers’

attention to the fact that when speed is necessary for competing, there is a special incentive to promote purchasing-

marketing integration. These functions deal with elements outside the company that must be aligned, and over

which they sometimes have more limited control, such as customer preferences or suppliers’ availability and

capabilities. This purchasing-marketing integration avoids workarounds and time-wasting, and could allow

anticipating work and time-off by synchronizing time planning.

Secondly, the analysis and breakdown of the concept of functional integration may help top managers to better

understand its workings. Accordingly, it stresses that an initial step is needed to foster purchasing-marketing

integration: the establishment of fora and mechanisms to ensure that the purchasing and marketing information of

relevance to the NPD process flows in both directions, and its implications for the other party are understood.

González- Zapatero et al. (2016) have identified the traditional integration mechanisms that are able to promote

each different information flow in the purchasing-marketing case. Joint involvement in the different stages of

NPD and the use of shared databases are effective mechanisms for promoting both flows of information. However,

the mere physical proximity or collocation of

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purchasers and marketers does not ensure the flow of information from purchasing to marketing, and therefore

this mechanism should be reinforced with others.

Nevertheless, integration is not fully achieved, nor are its beneficial effects felt, if the decisions that affect both

functions do not subsequently transform this information into aligned decisions that lead to the most efficient

solution based on both parties’ needs and capabilities. This draws attention to the need for top managers to seek

mechanisms to ensure not only that information flows in both directions, but also that decisions are made in a way

that fosters efficiency or alignment. Implementing a common purchasing-marketing database, or joint

participation during the different NPD stages, for instance, might not be enough in the purchasing-marketing

case. Other mechanisms, such as the establishment of common incentives (e.g., margins), may be necessary to

foster the best possible use of the information shared through that database. This second step is crucial, and should

not be confused with other types of interfunctional fit such as, for example, simply adapting or submitting to the

other party (Xie et al., 1998). In certain circumstances, in which the other party enjoys greater personal charisma

or political power in the firm, a function may tend to follow the other party’s indications without defending its

own needs or seeking to foster its own capabilities. This may translate into a false sense of collaboration and

coordination that does not lead to greater efficiency.

In the specific case of the purchasing and marketing functions, the traditional role of purchases, which waited “on

the other side of the wall” for its buying instructions before accessing the supply market (Williams et al., 1994;

Carbone, 1995), may have a bearing on the fact this function still simply seek to adapt to what other functions ask

of it, instead of proceeding more proactively to ensure the firm can better exploit its specific capabilities and those

of its suppliers. Managers should assess whether the integrating mechanisms they rely on are actually promoting

aligned decisions.

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7 CONCLUSIONS

This study explains how purchasing-marketing integration accelerates the NPD process. Along these lines, and in

order to provide this analysis with a solid platform, we relied on Information Processing Theory (IPT). IPT

permitted us to ground our functional integration concept in its components, instead of its enablers, to describe

this phenomenon as a two-step process, and to differentiate efficient integration, referred to in this paper as aligned

decisions, from other kinds of coordination among functions (e.g., accommodation) (Xie et al., 1998).

Our analysis identified three components in purchasing-marketing functional integration: marketing information

shared and understood, purchasing information shared and understood, and aligned decisions. Our results reveal

that one component completely mediates the effect the others have on the speed of NPD. The mere fact that these

two functions share information will only impact upon the speed of the NPD process inasmuch as they are able to

transform this information into aligned decisions.

This research is not without its limitations, and we shall now refer to some of the more salient ones. It uses a single

data source for the model’s main variables. Although our Harman test (Podsakoff et al., 2003) reveals that

common method bias does not seem to be a significant problem in this study, combining different data sources

would be a useful extension of this analysis. It uses perceptual measurements, which although grounded in the

literature inevitably introduce a certain amount of subjectivity. It does not control for contextual variables that

may have a bearing on the importance of the purchasing-marketing link, such as, for example, the degree of

dynamism or complexity of the environment in which the firm operates, the level of rivalry existing in the market,

or the extent to which NPD processes

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depend on suppliers or on outside capabilities and resources. Overcoming these limitations constitutes a research

path and is vital for the orientation of future studies that will enable delving further into the potential of purchasing-

marketing integration.

However, this study has made several important contributions that we summarize here. Firstly, it extends prior

research on purchasing-marketing integration. The benefits of aligning purchasing and marketing have recently

been stressed in the literature (e.g. Sheth et al., 2009; Lindgreen et al., 2016), but they have not been analyzed, or

empirically tested in the specific context of NPD. Sharing information on markets and suppliers, and reaching

decisions that make the most of that information, avoids redundancies and extra work, allows overlapping and

anticipation, and provides new product ideas that could be developed straightforwardly. Our results prove the

importance of this link, inviting practitioners, on the one hand, to assess the possibility of giving a more proactive

role to purchasers in NPD and, on the other, inviting academics to investigate this link further. The benefits in the

context of NPD practices, such as postponement or reverse logistics, would make this analysis worthwhile. So,

too, would their effect on other different operational performance indicators (e.g. quality, cost, or flexibility),

economic indicators (profitability, sales growth) or intangible goals, such as creativity or suppliers’ innovation

capability (Schoenherr et al., 2012).

Secondly, our study contributes to the debate on the concept of functional integration. As discussed earlier, there

is a recognized lack of consensus over the concept itself (Pagell, 2004; Chen et al., 2009; Frankel and Mollenkopf,

2015). We have stressed the need to separately analyze components that are conceptually different, instead of

relying on composite measures, the need to differentiate antecedents from achieved integration and, furthermore,

the need to rely on concepts and operationalizations of functional integration that reinforce the efficiencies or

optimization that it should provide. Our “aligned decision”

35
 ACCEPTED MANUSCRIPT
component reflects the importance of this approach and invites academics to further develop both its definition

and operationalization, and identify its antecedents. Sharing purchasing and marketing information fosters

decision alignment, although other mechanisms could reinforce this link. Managers’ awareness of its potential

would certainly help.

Acknowledgement

This research was funded by the Spanish Government (Ministerio de Economía y Competitividad) through

research projects ECO2013-47280-R and ECO2016-76876-R. Aid was also received from the research project

SA027U16 financed by the Consejería de Educación de la Junta de Castilla y León (Regional Ministry of

Education of Castile and Leon).

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Table 1: Conceptualizations of Functional ACCEPTED
Integration. MANUSCRIPT
Authors Concept

Integration is a process of interdepartmental interaction and interdepartmental

Khank & Mentzer, 1998
collaboration that brings departments together into a cohessive organization.

Participants work cooperatively toward a win-win solution by bringing all relevant issues
into the open, sharing information and analysing the situation objectively. In the NPD
Xie et al., 1998 process, collaboration it is more to lead to sound decisions on NPD selection, design and
launch because it facilitates integration of diverse skills, resources and perspectives,

TI
resulting in the most jointly optimal solutions.

Pagell, 2004
PR
Integration is a process of interaction and collaboration in which manufacturing,
purchasing and logistics work together in a cooperative manner to arrive at mutually

C
acceptable outcomes for their organization.

Swink et al., 2007 S

Product-process integration is the process of co-developing product and processes and

U
sharing specification information and related knowledge.

Internal process integration refers to the management of restructuring activities that aims

Chen et al., 2009 N

at seamlessly linking relevant business processes and reducing redundant processes within
a firm. Thus, two key dimensions of internal process integration are internal process

Schoenherr & Swink, 2012; A

connectivity and internal process simplification.

Internal integration refers to cross-functional intra-firm collaboration and information

Swink & Schoenherr, 2015
(Information Processing
Theory) M
sharing activities that occur via interconnected and synchronized processes and systems.

D
 ACCEPTED MANUSCRIPT

Population vs. 25 first vs. 25

Sample last

F F
Number of Employees .023 (p=.880) .007 (p=.932)
Total Assets .009 (p=.926) .027 (p=.871)
Table 3. Sample demographics.
ACCEPTED MANUSCRIPT

SIC Code Number of Number of Number of Number of Total Assets. Total Assets.
companies companies % Employees Employees Million Euro. Million Euro.
(Average) (S.D) (Average) (S.D.)
34 45 32% 113 (65) 25 (27)
36 43 31% 321 (644) 82 (167)
37 53 38% 674 (1784) 241 (790)
Total 140 100% 387 (1169) 124 (500)
 ACCEPTED MANUSCRIPT

Table 6. Mean, Standard Deviation, and Pearson Correlation Coefficients

Mean S.D. 10 11

1. NPD Participants’ dedication 3.6 1.99 1 .272

*
*
.246
**
.219
*
*
.094 -.022 -.077 .045 - .019 .041
.157

2. NPD Participants’ experience 5.59 1.36 .272** 1 .261

** .144 -.045
TI
.189* - .258*
+
.043 .243* .295*

3. NPD Goal Clarity 4.99 1.56 .246** .261 *

1
+
.161 .117 PR
-.007
.140+
-.115
*
.291* .201*
*
.268*
*
.257*

C
*
+ * *
.219**
4. Organization Size

5. SIC 37
3.87

.38
11.6
8
.49 .094
.144
+
-.045
.161
+
.117
1

.191* S
.191*

1
-.038

-.514**
-
.161+
-
.059

-.071
-.069

.135
-.011

-.007
.022

-.109
+p<0.1; *p<0.05; **p<0.01; ***p<0.001. (two-tailed) Pearson correlation coefficients .531*
*
6. SIC 36 .30 .46 -.022 .189* - -.038 -.514** 1 - .018 .009 -.011 .107
.007 .454*
*
7. SIC 34 .32 .47 -.077 - - - -.531** -.454** 1 .056 .131 .018 .008
.140 .115 .161
+ * +
8. Marketing Information Shared and 4.50 1.42 .045 .258
*
.291
** .059 -.071 .018 .056 1 .374* .473* .289*
Understood * * *
9. Purchasing Information Shared and 4.82 1.21 -.157 .043 .201
* -.069 .135 -.009 -.131 .374* 1 .329* .135
Understood * *
*
10. Aligned Decisions 4.90 1.11 .019 .243
*
.268
** -.011 -.007 -.011 .018 .473* .329* 1 .292*
* * *
*
11. Speed in NPD 4.66 .89 .041 .295
*
.257
** .022 -.109 .107 .008 .289* .135 292* 1
* *