In a study my co-author and I study how the national context (the social system) interacts with the project structure (the technical system) in influencing buyer-supplier collaboration quality, an indicator of project-level effectiveness of inter-firm interactions. We further examined how structural deviation, the difference between the actual and ideal project structure, differentially influence collaboration quality in China and U.S. We tested the hypotheses using survey responses from 214 U.S. based and 212 China based buying companies. Due to their distinctive national cultures and economic ideologies, the two countries differ in their ideal project structures, the ones that lead to the highest level of collaboration quality. Our research model is as follows:
Results suggest that a formal project structure is only effective in enhancing buyer-supplier collaboration quality in the U.S. and not in China. Centralization hurts collaboration quality only in U.S. based projects. These results highlight the important and differential role played by the administrative structure for motivating collaborative behaviors in different national contexts. The task structure, characterized as task interdependence, does not play such a differentiating role as the results show it to be equally effective in improving buyer-supplier collaboration quality in both U.S. and Chinese NPD projects. Supporting the STS view, we also show that the ideal project structure, a result of the interaction between the social and technical systems, varies between U.S. and China. Specifically, the ideal project structure in U.S. is more formal and less centralized as compared to that in China. We also found some support for our prediction that the negative effect of structural deviation on collaboration quality is dampened by China’s national context. Below we discuss theoretical and managerial implications of these findings.
This study presents key insights for project managers about the relative importance of different aspects of the project structure in influencing the quality of buyer-supplier interactions. Compared to the task structure, the administrative structure has a more nationally-contingent impact in shaping buyer-supplier project interactions. Specifically, a formal and decentralized structure, though usually advocated by the project management literature, does not always lead to more effective project-level interactions, especially in countries with similar cultural and economic contexts as China. The significant association between task structure and collaboration quality in both countries suggests the importance of assigning interdependent tasks to each group for encouraging collaborative behaviors. This finding questions the traditional wisdom about outsourcing modular, rather than integral, tasks to external suppliers with the purpose of reducing transaction cost. Specifically, we show that task modularity, though reducing short-term transaction costs, might hurts the quality of inter-firm interactions, which limiting the dyad’s value creation potential. Overall, our findings suggest that project managers could encourage effective project-level collaborations by creating mutually dependent tasks involving both buyer and supplier sub-groups.
Results from this study point to the importance of considering the national context when structuring an interorganizational team. Testing the conceptual model in two culturally distinct countries, China and the U.S., reveals varying effects of project structures on collaboration quality. The comparison between U.S. and China presents two culturally distinct nations who are playing important role in the emerging global product development initiatives. While U.S. has always been a leader in NPD, China is increasingly displaying its product development capabilities. The findings from this study have direct implications for project managers who are in charge of NPD teams in these two countries. Specifically, a formal and decentralized inter-group structure is found to be more effective in enhancing collaboration quality in the U.S. than in China, while task interdependence is equally effective in promoting inter-group collaboration in China and in the U.S. Thus, when initiating interorganizational product development efforts in the global context, project managers are advised to consider the impact of the national culture and economic ideology of different locations in order to cultivate a high-quality collaboration process. By revealing country-level contingency effects evidenced in Chinese and the U.S. based NPD projects, this study shows the inappropriateness of a “one-size-fits-all” approach when structuring NPD teams globally.
The stronger negative effect of structural deviation in the U.S., as compared to China, also has managerial implications. In low-context cultures, such as the U.S., project manages need to pay more attention to identify and stick to the ideal project structure because deviating from it adversely impacts collaboration quality. As shown in this study, the ideal project structure should be congruent with social values held by project members. Such structure-value congruence motivates collaborative behaviors among project members. In contrast, managerial efforts of ensuring maximum conformance to the ideal project structure are less rewarding in high-context cultures, such as China, where negative effect of divergence from the ideal-state is partly mitigated by cultural ethos that dominate public life beyond NPD projects. In such high-context cultures, rather than solely relying on the governance of the ideal project structure, project managers need to understand the implicit rules and unspoken protocols embedded within the cultural ethos in order to cultivate a high-quality collaboration process.
Source: Yan, T. and Nair, A. 2015. Project Structure and Buyer-supplier Collaboration Quality in New Product Development: A US-China Comparative Study. Unpublished manuscript.