Perspectives on Various Issues of Interest

Virtuous spillover effects of quality penalties on the continuity of health care

In a recently published article my co-authors and I examine two effects of the quality penalties on an important determinant of health-care quality, namely, continuity of care for ailments targeted (intra-ailment effects) and ailments not targeted (spillover effects) by the regulation. Continuity of care, broadly defined as enabling appropriate care across patient conditions, settings, and time, is an important part of the health-care delivery continuum that helps patients discharged after intensive hospital-based care to smoothly transition into their communities. Continuity of care can refer to relational continuity, where a patient’s care is managed by the same provider over the entire care cycle; informational continuity, where the patient’s information is transferred over care episodes; continuity of physical location, where the entirety of a patient’s care occurs in the same location; management continuity, which refers to how care is integrated across sites and episodes; or transitional continuity, which occurs when patients are discharged from intensive care to another type of care. We focus on transitional continuity, which encompasses “a broad range of time-limited services designed to ensure health-care continuity, avoid preventable poor out-comes among at-risk populations, and promote the safe and timely transfer of patients from one level of care to another or from one type of setting to another”. Transitional continuity of care can occur in hospital-based step-down or recovery units or in other facilities such as skilled nursing facilities (SNFs), inpatient rehabilitation facilities, long-term care hospitals, and home health agencies.

The findings of this study offer directions for considering routines when developing regulatory policies in the health-care context. Health-care organizations are structured around medical specialties, and the services within these specialties share strong complementarities owing to common knowledge-base, processes, and physical assets. Since it is not practically possible to devise all-encompassing regulations, information about complementarities can help in developing policies that consider potential spillovers due to the underlying complementary processes and assets. Additionally, our findings also shed light on how policymakers can consider spillovers due to these complementarities and the underlying routines to positively influence performance measures that are often difficult to regulate. Post-acute care facilities are scattered, and it is not easy to create policy instrument/regulations to directly improve the quality of transitional continuity of care. We show that current policies that focus on readmissions, bundled care, and accountable care organization can address continuity of care-related quality measures.

For health-care organizations, our study has implications for considering processual and structural routines in quality improvement efforts. Resource allocation decisions can take these routines and complementarities into account. One key criticism of regulatory policies is that they motivate organizations to redirect resources from other activities to respond to the requirement. We show that these regulations can trigger a different sequence of actions whereby organizations develop routines that can aid in not only improving the outcome required by the regulation but also of other related tasks. This finding motivates careful considerations of routines at individual, processual, and structural levels to not only fulfill the requirements of a regulation but to gain operational and strategic benefits. Based on the results of this study, large health-care organizations should invest in acute care facilities to develop necessary routines for improving transitional continuity of care.

Our study has implications beyond healthcare. Manufacturing, merchandise, and service industries can experience quality spillovers from regulatory changes owing to complementarities in production functions. For example, the department of transportation requires the disclosure of on-time performance for domestic flights. Process reengineering to improve ground turnaround times for domestic flights motivated by such focused disclosures can also benefit international flights. Our study speaks to outcomes from other types of regulations, such as environmental regulations. 

Source: Deore, A., Krishnan, R., & Nair, A. (2023). Virtuous spillover effects of quality penalties on the continuity of health care. Production and Operations Management, 32(9), 2846-2863.

Innovation and supply chain management for uplifting underprivileged communities

Last month (July 2022) I spent time in an Indian village working with an organization that connects rural communities to solar, water, education, professions and advocacy to help communities and individuals take control of their lives and the well being of their communities. As part of its mission, Barefoot College International (BCI) aspires to increase economic mobility by making vocational and educational opportunities accessible to women and girls from the most marginalized communities around the world. The organization seeks to ensure that every woman and girl has the skills and knowledge she needs to be a catalyst for change to the benefit of herself, her family and her entire community. The organization is involved in four programs - Solar, Enriche, Water, Livelihoods.

The Solar program seeks to ensure that every woman and girl has the skills and knowledge she needs to be a catalyst for change to the benefit of herself, her family and her entire community. BCI achieves this by making vocational and educational opportunities accessible to women and girls from the most marginalized communities around the world. By training women to become Solar Engineers, even if they are illiterate or have no formal education, rural resilience is forged by each village at a time.

The Enriche program supports women’s aspiration to transform themselves and their communities. It provides them with the opportunity to embark on an empowerment journey; a journey to gain the confidence, skills and knowledge they need to reach their full potential as agents of sustainable change and to support their entrepreneurial aspirations.

As part of the Water program, the organization aims to harness every drop of fresh water that falls from the sky rather than relying on hand pumps, wells, and unpredictable groundwater levels. By combining traditional harvesting practices with new technologies, BCI make water accessible, clean and safe to drink for millions of people in need.

The Livelihoods program plans to address the challenges of climate change by envisioning soil-based livelihoods that generate resilience and dignified wages for small landholding farmers using Regenerative Agriculture, Permaculture Principles and Agroecology built systems to sustain life and care for land.

I primarily worked with the team that manages the supply chain for the Solar program. 

Notwithstanding the lack of formal education (in the case of many team members), I observed a strong desire to learn and improve operations and supply chain. I shared some thoughts on improving supply management, inventory management, and quality management practices with the team and also learnt from them.

My work with the organization gave me an opportunity to understand how best practices that are widely used in developed (and for-profit) contexts need to be tailored in light of the underlying contingencies.

I also learnt about the innovative ways in which educational programs are being developed for women.

Overall, an enlightening experience and I hope to continue my efforts to contribute to strengthening grassroots innovation, operations and supply chain management practices that are aimed at uplifting underprivileged communities.

Quality penalties and continuity of health care

In a study my co-authors and I examine whether quality penalties aimed at reducing readmissions improve continuity of health care. We investigate if the quality penalty policy impacts continuity of care for services that were targeted by the policy through what we refer to as primary spillover effects. We also investigate the secondary spillover effects of the quality penalty policy on continuity of care for related ailments that were not targeted by the policy. The findings of this study show that externalities from quality penalties for readmission not only benefit continuity of care for the regulated ailments, but also allow health care organizations to adapt their existing routines and unlock continuity of care improvements for related, but non-targeted ailments. The finding that continuity of care does not diminish for unrelated services assuages concerns that hospitals respond strategically by neglecting or redirecting resources away from unrelated services. We provide novel insights as to how organizations respond to regulation by actively re-configuring their care patterns and coordinating service provision with attendant spillover effects on a variety of patients. Processual mechanisms such as the source of patient admissions and length of stay, and structural mechanisms such as system size and investments in continuity of care facilitate the spillover effects. 

Source: Ananthakrishnan, R., Deore, A., Nair, A. Virtuous Spillover Effects of Quality Penalties on the Continuity of Health Care. Working paper.

 

External auditors and certification bodies of ISO 9001

 

In a research study my co-authors and I seek to advance the knowledge on ISO 9001 implementation by examining two research issues. First, we investigate the relationship between external auditors, certification bodies, and the operational and market-oriented outcomes from the ISO 9001 certification. Second, we study the different roles played by external auditors and certification bodies in affecting the outcomes achieved from the quality of implementation of the standard. Using a dataset comprising of 537 firms from Australia and New Zealand that are ISO 9001 certified, our findings show that the quality of external auditors enhances operational outcomes as well as strengthens the relationship between ISO 9001 implementation and operational outcomes. This affirms the role of external auditors in the implementation of the standard. On the other hand, the reputation of certification bodies has a positive direct effect on market-oriented outcome, and its effect is strengthened by the quality of ISO 9001 implementation. The findings, therefore, show the contrasting roles between external auditors and certification bodies in enhancing different outcomes of ISO 9001 adoption in terms of operational and market-oriented ones.

There are a number of practical implications drawn from the findings. First, our study confirms once again that quality implementation is the key determinant of the operational outcomes of ISO 9001 adoption. At the same time, however, the findings also confirm the important role of external auditors in enhancing the effect of implementation on the operational outcome from ISO 9001 standard. This result is instructive in that it is the quality of auditors rather than the reputation of certification bodies that help firms in gaining the operational outcomes. For many firms, however, this finding could raise a practical problem: how to find good auditors? The answer to this question is not straightforward because, unlike certification bodies who have certain brand equity, auditors are employed by certification bodies and their quality is somewhat hidden from the customers and is only revealed after they are engaged after the ISO 9001 certification is over. Indeed, this problem is exacerbated by the fact that firms cannot simply resort to reputable certification bodies in order to find good auditors. The positive correlations between quality of auditors and reputable certification bodies only show a medium strength and, hence, this does not provide a strong assurance that reputable certification bodies will always send quality auditors. Therefore, while engaging reputable certification bodies is recommended, firms should request that they are served by experienced and quality external auditors whose characteristics are partly captured in this study. At the same time, however, the findings also infer that high quality auditors are not necessarily always employed by reputable certification bodies; they could also be part of less reputable certification bodies. In this regard, our findings also provide a ray of hope for firms who cannot afford to engage reputable certification bodies that normally charge higher costs than their counterparts. In particular, smaller firms with limited resources still have a chance to engage high quality auditors and to benefit from their services.

Our findings show that the reputation of certification bodies (rather than the quality of external auditors) helps firms improve their market-oriented outcome, including broadening their market scope and winning more customers. This finding suggests that customers still rely on “brand image” of reputable certification bodies. Customers perceive ISO 9001 certifications issued by reputable certification bodies to be of higher value than others. While this may be true to a certain extent, it is important to balance this notion with our finding, which shows that certification bodies do not have a direct positive effect on operational outcomes. Instead, firms ought to seek high quality ISO 9001 implementations that are then vetted by high quality auditors so as to obtain operational outcomes. The operational outcomes in turn exert a positive effect on market performance. This result therefore sends a strong message to firms that are trying to attain market-oriented outcomes solely from compliance to the standard’s requirements without internalizing the implementation process. More importantly, since it is operational outcomes that are mainly desired by customers (rather than the certification), simply signaling high quality ISO 9001 implementation by tapping into the reputation of certification bodies could be a misleading strategy to gain market-oriented outcome.

Source: Prajogo, D., Nair, A., Castka, P. 2022. The effects of external auditors and certification bodies on the operational and market oriented outcomes of ISO 9001 implementation. IEEE Transactions on Engineering Management. (Forthcoming).

The Effects of External Auditors and Certification Bodies on the Operational and Market-Oriented Outcomes of ISO 9001 Implementation

There are a number of practical implications drawn from the findings of our study. First, our study confirms once again that quality implementation is the key determinant of the operational outcomes of ISO 9001 adoption. At the same time, however, the findings also confirm the important role of external auditors in enhancing the effect of implementation on the operational outcome from ISO 9001 standard. This result is instructive in that it is the quality of auditors rather than the reputation of certification bodies that help firms in gaining the operational outcomes. For many firms, however, this finding could raise a practical problem: how to find good auditors? The answer to this question is not straightforward because, unlike certification bodies who have certain brand equity, auditors are employed by certification bodies and their quality is somewhat hidden from the customers and is only revealed after they are engaged after the ISO 9001 certification is over. Indeed, this problem is exacerbated by the fact that firms cannot simply resort to reputable certification bodies in order to find good auditors. The positive correlations between quality of auditors and reputable certification bodies only show a medium strength and, hence, this does not provide a strong assurance that reputable certification bodies will always send quality auditors. Therefore, while engaging reputable certification bodies is recommended, firms should request that they are served by experienced and quality external auditors whose characteristics are partly captured in this study. At the same time, however, the findings also infer that high quality auditors are not necessarily always employed by reputable certification bodies; they could also be part of less reputable certification bodies. In this regard, our findings also provide a ray of hope for firms who cannot afford to engage reputable certification bodies that normally charge higher costs than their counterparts. In particular, smaller firms with limited resources still have a chance to engage high quality auditors and to benefit from their services.

Our findings show that the reputation of certification bodies (rather than the quality of external auditors) helps firms improve their market-oriented outcome, including broadening their market scope and winning more customers. This finding suggests that customers still rely on “brand image” of reputable certification bodies. Customers perceive ISO 9001 certifications issued by reputable certification bodies to be of higher value than others. While this may be true to a certain extent, it is important to balance this notion with our finding, which shows that certification bodies do not have a direct positive effect on operational outcomes. Instead, firms ought to seek high quality ISO 9001 implementations that are then vetted by high quality auditors so as to obtain operational outcomes. The operational outcomes in turn exert a positive effect on market performance. This result therefore sends a strong message to firms that are trying to attain market-oriented outcomes solely from compliance to the standard’s requirements without internalizing the implementation process. More importantly, since it is operational outcomes that are mainly desired by customers (rather than the certification), simply signaling high quality ISO 9001 implementation by tapping into the reputation of certification bodies could be a misleading strategy to gain market-oriented outcome.

Withstanding the economic recession: Examining the efficacy of manufacturing strategy alignment and process integration

In this paper, we examine how manufacturing strategic alignment and process integration affect manufacturing plant performance under two distinct environmental contexts presented by long-term macroeconomic instability. A large-scale dataset was specifically assembled for the purpose of this research investigation by combining plant-level survey data on practices and performance with secondary macroeconomic data for 14 countries from multiple sources. The results from multi-level regression analyses indicate that while manufacturing strategy alignment and process integration are beneficial for plant performance, they have distinct effects when the contingency factor, macroeconomic instability, is taken in consideration. Notably, when plants face high macroeconomic instability, process integration has a stronger effect on performance whereas in low instability environment manufacturing strategy alignment provides higher performance benefits. 

The findings have implications for managers in pointing out ways in which firms can successfully compete during times of recession. In particular, the study found that overly emphasizing the internal manufacturing alignment during recession could lead to opposite result than expected. Although, it could be a common policy to strengthen the internal alignment during recession, too much internal focus could lead firms to go far away from the requirements of the market. The study also offers practical insight regarding the lack of cost implication of manufacturing alignment during recession. The study finds no costs, delivery and flexibility benefit of alignment but negative impact of the same on quality performance. Hence, it would be important for the managers to re-consider the justification of investigating in alignment, especially during recessions. Recessions do not have a set start and conclusion time; hence, decisions about any questionable investment during recession can be detrimental to the future survivability of the firms.

On the other hand, the findings validate the need for process integration during economic instability. Supply and operation managers might hesitate to support processes integration due to initial negative impact on costs and popular negative news such as the cost overruns at Boeing and Airbus due to poor suppliers’ integration. However, the findings of this study highlight that process integration exerts a positive effect on all dimensions of performance when there is no recession, and provides higher quality, delivery and flexibility performance in the presence of economic recession (although cost performance does suffer). Hence, during recession, process integration efforts by firms present a trade-off between costs and other three operational performance factors. Moving the focus from internal alignment to external integration through improving real time information sharing with suppliers and customers will help firms identify the problems quickly and respond accordingly, especially during recession. It is also suggested by several studies that during recession, firms’ sole focus on cost cutting could be detrimental for brand image, future recovery and overall performance. Nonetheless, considering the range of practices required for supplier integration, such as, product/process integration, supplier involvement with new product development, joint decision making, and information sharing, the focal firms need to identify the priority areas for integration rather than integrating all aspects between the parties. To summarize, managers should not expect universal impact of recession on the manufacturing performance but should carefully consider the wide-ranging impact of the recession on the firm’s performance. This is in line with other contingency theory studies that found that contingency factors could have varied influence on manufacturing performance.

Internationalization of manufacturing is a growing trend necessitating a joint examination of international business and operations management issues. Our study aimed at finding the role played by organization-level and supply chain-level factors that impact perfor- mance under different environmental conditions, particularly as pre- sented by the severity of the recent Great Recession. The conceptual framework and the results of this study allow us to integrate these issues and show that careful attention to these factors is needed for manufacturing competitiveness. The organizational and supply chain factors have distinct performance implications. 

The Impact of Chain Organization Size on Efficiency and Quality of Affiliated Dialysis Facilities

In a recently published article we find that the size of chain organizations has a nonlinear effect on performance of dialysis facilities. Medium-sized chain organizations have lower efficiency and higher quality than smaller and larger chain organizations. 

The results call attention to being cognizant of the advantages and disadvantages of their growing size. Our study indicates that as chain organizations grow from a small size to an intermediate size, their efficiency drops and quality improves. We find that the efficiency bottoms out when chain organizations grow to have about 882 dialysis facilities whereas quality reaches its peak when the number of dialysis facilities in a chain organization reaches to about 796. After reaching these inflection points associated with efficiency and quality, facilities within the chain organizations become more efficient, but their quality levels suffer. This presents implications for decision makers to carefully think about the underlying mechanisms. The initial drop in efficiency as chain organization size increases may reflect the investments facilities affiliated with medium-sized chain organizations make when adding dialysis stations and personnel to address the demand growth. We conjecture that facilities affiliated with medium-sized chain organizations do not fully utilize their stations, thereby bringing down the efficiency. Their quality however increases, since staff in these medium-sized chain organizations has more time to give to each patient.

As chain organizations grow in size, it is likely that they see an increase in demand due to cross referrals among facilities within the chain. This increase in demand eventually provides the needed efficiency gains through economies of scale, but the associated deterioration in the quality of care raises concerns. It is possible that the approaches large chain organizations take to increase staff capacity, which differ from those taken by medium-sized chain organizations, could contribute towards deterioration in quality. Larger chain organizations tend to employ fewer registered nurses and licensed practical nurses as a percentage of their staff than medium-sized organizations. To offset the cost associated with staffing, large chain affiliated facilities employ higher levels of patient care technicians as compared to medium-sized chain organizations, which can lower their quality levels. As chain organizations grow, decision makers should appropriately manage the staffing patterns so as to avoid erosion of quality with a corresponding increase in efficiency.

To address both efficiency and quality performance, chain organizations should be strategic and develop appropriate coordination capabilities so that affiliated facilities can improve their quality while retaining efficiency gains through economies of scale. Technological innovations may make it easier to spread tacit knowledge pertaining to quality-oriented best practices. Opportunities for enabling interactions among people involved with clinical care, as well as nonclinical support services, can enhance learning and improve the quality of care. To facilitate quality improvement efforts, chain organizations can oversee the establishment of cross-disciplinary teams comprised of members from the affiliated dialysis facilities as well as the area manager from the chain organization. Organization-wide policies and procedures, including standards for clinical processes and quality improvement activities, should be widely communicated with affiliated dialysis facilities. Performance goals and objectives for dialysis facilities should be established and appropriate reporting structure of quality improvement initiatives and performance should be put in place. Chain organizations should provide feedback to affiliated facilities and, when needed, offer training and cross learning opportunities to the affiliated dialysis facilities.

For facilities within the chain organization, the results present implications for awareness of the influence of the contextual environment that chain organizations create. An independent facility has a better understanding and awareness of its resources and practices than facilities within chain organizations. Our results show that as these independent facilities join others to form a small- to medium-sized chain organization, they are able to improve quality but their efficiency suffers. The efficiency suffers, as these facilities have to coordinate efforts toward pooling their resources. As the size of chain organizations crosses a certain threshold level, the affiliated facilities gain economies of scale and increased demand, such that their efficiencies improve. However, they also witness growing heterogeneity and have difficulty managing the associated ambiguities, which have detrimental effects on their quality performance. An awareness of the changes in the environmental context and adoption of proactive adaptation measures, such as information exchange site visits to other affiliated facilities and training of staff members, can help manage efficiency and quality. Our results may be useful in other service settings beyond healthcare that have multiunit organizational forms, in that becoming part of a network, such as joining a chain organization, can have a positive or negative effect on efficiency and quality, depending on the size of the network.

Source: Dreyfus, D., Nair, A. and Talluri, S., 2020. The Impact of Chain Organization Size on Efficiency and Quality of Affiliated Facilities—Implications for Multi‐Unit Organizational Forms. Production and Operations Management, 29(7), 1605-1623

 

Gavi to make Parsyl’s quality assurance platform available in Uganda and Senegal to address last mile distribution challenge

Vaccine supply chain in Uganda 🇺🇬 and Senegal 🇸🇳 to be boosted by a partnership between @gavi and @ParsylHQhttps://t.co/zpsJbargCH#GotLife pic.twitter.com/X8vPHoKyDg

— Gavi (@gavi) January 25, 2019

Differential Impact of Network Size on Cost Performance for High and Low Quality Hospitals

In a recently published study my co-authors and I consider the deductive configuration perspective and distinguish high and low quality hospitals by using clinical and experiential quality as two dimensions of quality capability. We examine the impact of healthcare network size on operating costs of hospitals. Additionally, we investigate the interaction effect of hospital demand and healthcare network size on operating costs.  The results of this study show that quality laggards experience lower costs per day through their affiliation with larger healthcare networks, but experiential quality focusers and clinical quality focusers experience higher costs. In contrast to our hypothesis, affiliation with a large healthcare network does not adversely affect the operating costs of holistic quality leaders. We show that clinical quality focusers and holistic quality leaders can complement the effect of network size and hospital demand to reduce their operating costs. However, quality laggards and experiential quality focusers do not observe a reduction in their costs due to the complementary effects of network size and hospital demand. 

Our results offer important theoretical and managerial implications that we discuss next. Healthcare networks are becoming ubiquitous. Even distinct health systems that can either take the form of a diversified single hospital system or multi-hospital system comprising of two or more hospitals owned, leased, sponsored, or contract managed by a central organization are entering into network arrangements. By being part of a network quality laggards may gain additional patients, which helps in increasing their resource utilization levels. In addition, the ability to learn best practices from other hospitals in the network further helps in reducing their operating costs. The marginal cost for these hospitals to be part of a network is low. However, experiential quality focusers and clinical quality focusers face the challenge of coordinating with other hospitals in the network while at the same time maintaining their quality levels. While health systems have a central governance structure, health networks do not have this ability to exert centralized control for efficiency. Hence, operations of healthcare networks require hospitals to complement their network-based benefits with their demand. Holistic quality leaders are especially well positioned to gain this complementary benefit. The clinical process of care and the practices that are aimed at enhancing patient experience are synergistic. These quality leaders attract larger numbers of patients by their intrinsic quality characteristics and network effects; however, they stand in good stead to achieve demand-based utilization levels and reduce the coordination burden of affiliation with large healthcare networks.

Growth in hospital networks, healthcare demand, and experiential learning calls attention to a better understanding of the relationship between a hospital’s holistic quality profile and its ability to gain benefits from healthcare network. This research sheds some important insights in this domain. There has been increasing evidence suggesting that hospitals must carefully manage both clinical and experiential quality. By focusing on both clinical and experiential quality, unlike experiential quality focusers and clinical quality focusers, holistic quality leaders are not adversely affected by the size of their network. Our results suggest that experiential quality focusers and clinical quality focusers should either embrace holistic quality management or restrict the size of their networks to maintain their quality level and to reduce coordination costs. 

Project Structure and Buyer-supplier Collaboration Quality in New Product Development: A US-China Comparative Study

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.