How The Impact Of Integration Of Marketing And R&D Differs Depending On A Firm?s Resources And Its Strategic Scope

Increasing the integration of marketing and R&D is widely recognized as an approach to improve the new product performance (NPP) of companies. However, empirical evidence for the positive effect of integration on NPP, especially at the corporate level, is mixed. This study provides a comprehensive theoretical underpinning of the conditions that influence the benefits that can be obtained from more integration. A model of the effect of integration on NPP, in conjunction with a company?s resources and strategic scope, is developed and tested with data from a worldwide sample of companies in the pharmaceutical industry (n = 148). Our results show that the effect of integration is indeed dependent on the situation. In particular it depends on the company?s underlying resources (i.e., specialized knowledge and assets): integration multiplies the positive effect of resources on NPP. The strength of the multiplication effect is in turn dependent on strategic scope. It is strong if the strategic scope is narrow, i.e., for companies with selective products in a few market segments. Our results imply that, when trying to improve NPP, management should not invariably think of increasing integration. Instead, they should evaluate the company?s resource (dis)advantages, its strategic scope, and the level of integration. If the company scores low on resources, increasing integration should not be a high priority. Additionally, integration is most important for companies with a narrow strategic scope where the interdependency between marketing and R&D is relatively strong.