Cross-Functional "Coopetition": The Simultaneous Role of Cooperation and Competition within Firms Author(s): Xueming Luo, Rebecca J.

Slotegraaf and Xing Pan Source: Journal of Marketing, Vol. 70, No. 2 (Apr., 2006), pp. 67-80 Published by: American Marketing Association Stable URL: http://www.jstor.org/stable/30162086 . Accessed: 24/05/2013 09:35
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XuemingLuo, Rebecca J. Slotegraaf,& Xing Pan

Extantmarketing in literature tends to view cross-functional as primarily relationships cooperative or competitive thisresearch focuses on cross-functional nature,butnotboth.In contrast, (i.e., the jointoccurrenceof "coopetition" across functional areas within a firm). midlevelmanagers and cooperationand competition Using responses from enhances a firm's customerand financialperfortop executives,the authorsfindthatcross-functional coopetition mance. The authorsfurther show thatthis influenceis mediated by marketlearning,indicating thatperformance returns to cross-functional an underlying occurs through coopetition learningmechanism.

: The Cross-Functional "Coopetition" Simultaneous RoleofCooperation and Competition Within Firms

cholars in marketing and strategicmanagement that across functional argue knowledgetransfer cholars boundaries is critical for numerous outcomes, new product success (e.g., Griffin and Hauser including 1992), organizational (Huber 1991), and overall learning firm 2004). In themarperformance (e.g.,GrayandMeister an (1992) arguethat MenonandVaradaraj literature, keting a firm's market must be transferred or dissemiknowledge natedacrossdepartments before can playa critknowledge ical roleas a strategic asset.1 Research that a also indicates firm's lies in its ability to transfer competitive advantage market knowledgeacross departments (e.g., Maltz and Kohli1996). the transfer of knowledge across functional However, boundaries canbe rather difficult andcomplicated. Eventhe most organized efforts to share knowledge are often tendencies to guardand selectively impeded by employees' shareinformation Consider thenumber of 2003). (Gilmour that have difficulties with internal companies experienced For example,Hewlett-Packard's transfer. knowledge early in thelaptopmarket failure a 23-pound with can be product attributed to itslackofknowledge flowbetween itsmarket(Fisher, Maltz, and ing and engineering departments Jaworski Motorsfound thatits knowledge1997). General

in thetransfer of manufacturing sharing attempts insights from its Saturn to its other division divisions more proved difficult than and Woodruff Barilla (Kerwin 1992). expected areas impededknowledge SpA's own sales and marketing transfer to itsoperations area whenit attempted a to install distribution (Hammond 1994). just-in-time system Within academicresearch across marketing and manscholars also recognize that transfer is agement, knowledge valuablebutoften difficult to achieve(e.g., KogutandZander 1992; Szulanski1996) and have subsequently studied barriers to knowledge transfer. research to Although points severalfactors thatcan impedeknowledge transfer across functional boundaries within an organization, a critical factoris thedegree ofcompetition acrossfunctions. In particushowsthat an arduous between the lar,research relationship source andtherecipient (Szulanski1996),orinterfunctional internal knowl(Maltzand Kohli 1996),can impede rivalry In transfer. numerous functions must comsituations, edge for a firm's scarce resources and thus relucare often pete tantnotonlyto shareinformation to prevent a competing function from but inforalso to receive gaining knowledge mation forfearthat it will heighten thevalue of a compet2000). ing function's (Guptaand Govindarajan knowledge is whether can Thus,thequestion competing departments with one another to enhance cooperate effectively organizational learningand performance. More generally, how to "functions" IWe refer firms and "departments" cross-functional interchangeably should strategically manage competithis article. tionandcooperation to achievecompetitive throughout advantage? The extant literature has not addressed this marketing because it is often assumed that crossimportant question, Luo is Assistant Professor of Marketing, Xueming College of Business functional interactions between and other funcmarketing of Administration, Texas, (e-mail;Iuoxm@uta.edu). University Arlington units tional are or but Rebecca J.Slotegraaf is Assistant of Marketing primarily Professor cooperative competitive, not and Lilly Facboth. On the one have viewed Fellow and Pan is ProAssistant hand, ulty (e-mail; manyresearchers rslotegr@indiana.edu), Xing fessorof Marketing cross-functional froma cooperation interactions (e-mail;xpan@indiana.edu), KelleySchool of Busiaspect, The authors appreciate the constructive ness, Indiana University. on the value of interfunctional coordination and focusing comments and suggestionsfrom the anonymous JM reviewers, Rohit communication Griffin and Hauser Moorman 1992; (e.g., and seminar at theUniDeshpande,KenPrice,K.Sivakumar, participants andRust1999;Narver and Slater1990). On theother hand, of and Jinan in China on verTexas, versity Arlington, University previous others have viewed cross-functional interactions from a sions ofthismanuscript. on interdepartmental competition aspect,focusing rivalry Journal ofMarketing Vol. 70 (April 67-80 2006),

0 2006, American Association Marketing ISSN:0022-2429 1547-7185 (print), (electronic)

67

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and Krohmer1999; Levitt (e.g., Homburg,Workman, functional areas competewith 1969). However, although in thepursuit of divergent one another individual goals and et Houston al. 2001), theymust strategic priorities (e.g., so that also cooperate work toward the firm's common they an interests and Slater (Narver 1990). Consequently, organization'sfunctional areas are oftenforced to competeand with one another. Thus,itis critisimultaneously cooperate relationcal to understand howtheseseemingly conflicting and affect firm shipsinterplay performance. In an effort to understand theseeffects we focus better, on cross-functional whichwe defineas the "coopetition," of cooperationand competition across joint occurrence a firm. A coopetition view of the functional areas within between and other functional areas interactions marketing not only emphasizesthe need to addresscomplexinterof structures but also echoes theimportance departmental and skills diverse and competitive knowledge coordinating within a firm. We across the cross-functional boundaries a firm's coopetition improves arguethatcross-functional customer andfinancial performance. We also investigate whether market learning plays a in the between cross-functional role mediating relationship This mediating role and firmperformance. coopetition mechais an underlying thatthere wouldsuggest learning contributes to nismby whichcross-functional coopetition in the is Market learning grounded performance. superior viewof thefirm (Grant1996) and is recknowledge-based for a firm's an source as competitive important ognized Nonaka 1994; and Zander 1992; advantage(e.g., Kogut have focused scholars Sinkula1994). Although marketing of topics, on thevalue of knowledge acrossa broadarray of market theutilization knowledge (e.g., Deshincluding 1992; pande and Zaltman1982; Menon and Varadarajan Moorman, Zaltman, and Deshpande 1992) and the units (Fisher, exchangeof knowledgeacross functional and Hauser1992; Maltz 1997; Griffin Maltz,and Jaworski andKohli1996),howintrafirm competcooperation among aboutkeymarketa firm's influences learning ingfunctions studies has yetto be explored. Following prior ingactivities SherMenon et al. Moorman 1995; Srivastava, 1999; (e.g., as we refer to market and vani, learning an Fahey 1998), of stores activities, keymarketing knowledge organization's new products, such as developing buildingbrandimage channelpartnerships and establishing among customers, in themarket. andnetworks test(1) whether we empirically in thisstudy, Therefore, and of cross-functional the joint occurrence competition cross-functionalcooperation (intensity and ability) and and financial customer a firm's performance improves theseperformediates market a firm's (2) whether learning Our results show that cross-functional mance returns. outeffect on performance has an important coopetition the market enhanced comes through paving way learning, interactions can intohow cross-functional fornew insight offers also a firm's Our affect advantage. study competitive should that andcompetition evidence cooperation managers to promote stimulated acrossfunctions be strategically both custhefirm's transfer and to enhance intrafirm knowledge andfinancial tomer performance.

Cross-Functional Coopetition
Theoretical Nature of Cross-Functional Coopetition or the joint occurrence of cooperative and Coopetition, includcan exist at behaviors, levels, multiple competitive and business units (SBUs), departments, strategic ingfirms, task groups (e.g., Brandenburger and Nalebuff1996; Hamel,Doz, and Prahalad1989; Tsai 2002). One theoretiof coopetition can be drawnfrom research cal foundation In particular, in thesociology on social structure literature. relations framework that thesocial embeddedness purports ofthese relaandthat thesocialstructure arealwayspresent behaviors tionsinfluences 1985; (Granovetter subsequent of thetypesof social Uzzi 1997, 1999). In consideration weakties(Granovetter relations, 1973) arecharacterized by high returns by sporadicinteractions, yet theycan offer to diversepools of information linkingpeople or firms tiesarecharacterized embedded (Burt1992).In contrast, by such is and interactions thatinformation frequent stronger and more as (Granovetter 1985) perceived trustworthy both is high(Gulati1998).In considering types cooperation thegreatest valueis recogofrelations, research showsthat is a complementary mix of bothforms nized whenthere their we that firms enhance Thus, (Uzzi 1999). perexpect social ties that are whenthey exhibit formance cooperative in a broader framework. nested competitive literature Research in the marketing supportsand For example, extends thisnotion. Vargoand Lusch (2004) of collaboration not only among pointto the importance but also amongintraorganizapartners interorganizational Attheintrafor tional functions a firm's viability. long-term havealso recscholars level,somemarketing organizational interaction may be a ognized that interdepartmental double-edgedsword, involvingboth collaborationand rivalry (e.g., Ruekertand Walker 1987). We explicitly the interaction address thisinterdepartmental by examining the occuror of cross-functional effects joint coopetition, and competition, across functional rence of cooperation a firm. areaswithin interIn cross-functional coopetition, interdepartmental of knowledgeacross functional actionsand the transfer in nature. and cooperative areas can be bothcompetitive becauseknowledge can nature often occurs The competitive to outperprivate departments generate gainsforindividual their form Indeed,cross-functional competicounterparts. from direct tionmayresult amongfunctional comparisons units(Levitt1969; Maltz and Kohli 1996),interdepartmenlimited resources to obtain tal struggles (e.g.,orgatangible resources and nizational (e.g., personnel) intangible capital, et al. mentaltime,attention) (Frankwick top executives' (Houston 1994),anddivergent priorities goals and strategic and Walker1987). At thesame time, et al. 2001; Ruekert a firm within acrossfunctions transfer maybe knowledge need to collabobecause in nature departments cooperative of market in thetransfer ratewithone another knowledge Informal of thefirm. interests forthecommon cooperative is particularly interaction among functional departments morefrequent and valuableinforforobtaining important know!mation 1985) andforachieving (Granovetter greater

2006 of 68I Journal April Marketing,

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across departments (Ruekertand Walker edge transfer "hall talk"and storytelling are infor1987). For example, occur malknowledge transfer that processes among departments as a meansto bring together peopleand departments and to facilitate attainment of the organization's goals 1990). Thus, the degreeto whicha (Kohli and Jaworski firm's withvarious cooperatein conjunction departments in thefirm's levels of competition social structure jointly thefirm's levelofcross-functional defines coopetition. To clarify the conceptof cross-functional coopetition we briefly discusshow it differs from two related further, constructs: is similar cross-functional to First, coopetition alliancesin thatbothinvolvecooperainterorganizational tion between firms), (i.e., functions, competing segments differences exist. An obviousdifference is the yetimportant levelofanalysis; theformer is focused at theintraorganizais focusedat theinterorganizationallevel,and thelatter tionallevel.As a result, forexample, thecompetitive elewithin a firm mentof coopetition is likelyto be different fromthe competitive elementbetweenfirms, such that and conflict are to be less extreme within a rivalry likely firm thanbetween firms. In addition, characterunderlying isticsof interorganizational alliances,such as anticipated future interaction (Heide and Miner1992) and relationship and to playa role age (Anderson Weitz1989),arenotlikely in cross-functional cross-functional Second, coopetition. is also similar to market in that orientation both coopetition across functions or In cooperation emphasize departments. a view of market orientation particular, process suggests thatknowledgeabout customers is disseminated across Kohli and Jaworski 1990). However, departments (e.g., and market orientation differ in an important coopetition Whereas market on promoting orientation focuses way. functional coordination and reducinginterdepartmental conflict and friction and Slater 1990),cross(e.g., Narver functional coopetition recognizesthatinterdepartmental is not alwaysunfavorable conflict and can even produce benefits and Narus 1990; Lado, Boyd, (Anderson specific andHanlon1997). The Effectof Cross-Functional Coopetition on Performance We expect the ofcross-functional jointoccurrence cooperationandcompetition to enhance firm The synperformance. has been theorized to producevarious ergyof coopetition cost savings, resource benefits, including learning, sharing, andinnovation (Lado, Boyd,andHanlon1997).Atan intraunits level, cooperation organizational among competing interactions to may be evident by absorbedand frequent uncovercompeting units'know-how (Tsai 2002). Therewe focuson theability and intensity, of fore, respectively, the natureof interdepartmental and examine cooperation the performance of cross-functional effects in coopetition more detail by investigating the occurrence of (1) joint cross-functional andcompetition and(2) cooperative ability thejointoccurrence of cross-functional intencooperative and sity competition. The joint occurrence of cross functionalcooperative and competition. Cross-functional abilability cooperative

to skillsin recognizing thevalue of new market ityrefers as well as and knowledge assimilating, transforming, market across lateral cross-functional deploying knowledge forcooperaan absorptive interactions, reflecting capacity tiveknowledge transfer 1990; Zahra (Cohenand Levinthal andGeorge forcross-functional 2002). The ability cooperationextends of market beyondtheacquisition knowledge, because functional unitsthatdo nothave thecapacity for assimilation andtransformation maynotbe able tointernalize theavailable or to deployiteffectively. knowledge thejointimpact of cross-functional Regarding cooperativeability andcompetition on firm itis possiperformance, ble thata negative effect Rindmay occur.In particular, fleischand Moorman(2003) showthata firm's customer orientation ifthefirm is engaged in a coopmaydeteriorate erative alliance with competitors; one reason for this decline is a low leveloftrust alliancemembers. It is among also noted that interfunctional decreases thelevelof rivalry in information trust (e.g., Maltz and Kohli 1996), which that cross-functional suggests competition coupled with could a firm's decrease customer-based cooperative ability performance. we expectthat thejointoccurrence of crossHowever, functional and has cooperative ability competition a positiveeffect on a firm's customer and financial performance A combination of cross-functional performance. cooperativeability andcompetition interacmaynurture productive tions(e.g.,Brandenburger and Nalebuff Lado, 1996; Boyd, and Hanlon 1997; Uzzi 1999) thatcan facilitate >aternal efficiencies and sharingof best practicefor successful and of knowledge. In particular, deployment exploitation can foster knowlcooperation amongcompetitors greater and result in rents (Lado, Boyd,and edge seeking syncretic Hanlon 1997). High cross-functional cooperative ability the nature of gaining, and sharing emphasizes absorbing, customerand marketknowledge,whereas high crossfunctional witha competition may providedepartments to incentive share this to understand one strong knowledge another's better. Indeed,Tsai (2002) empirically positions shows thatproductive interactions can be nurtured when is high there for resources acrossa firm's SBUs competition because theyare more likelyto share information and valuableknowledge stores. These productive interexploit actions can also affect firm Forexample, Von performance. Hippel (1987) shows thatcooperation amongcompeting firms can improve each firm's profits. As such,thejointeffect of highcooperative and ability better highcompetition may generate problem solvingin customer needsandhigher (Hamel, satisfying performance and Prahalad Doz, 1989; Lado, Boyd, and Hanlon 1997; Tsai 2002). Therefore, we predict that at thefunctional level within thefirm, thejointoccurrence of cooperative ability and competition customer and financial givesriseto better performance. : Thejoint H1 occurrence ofcross-functional abilcooperative has a positive effect on a firm's ityandcompetition (a) customer and(b) financial performance performance. Thejointeffect ofcross functional cooperative intensity and competition. Cross-functional cooperativeintensity Cross-Functional 169 Coopetition

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refersto the degree to which lateral,interdepartmental interactions are frequent and close within an organization. Priorresearch showsthatfrequent interaction cooperative enhances and knowledge sharthelevelof communication FreTsai and Szulanski Korine, 1994; 2002). (Ghoshal, ing as functional areas also serve interactions across quent may a mechanism both recognizewhere thathelps functions useful market could serveand route potentially knowledge boundariesfor it to the destinations across functional outcomes (Huber1991). improved We expectthat thejointoccurrence of cross-functional has a positive influand competition intensity cooperative andfinancial enceon a firm's customer performance perforcan create interactions mance.More specifically, frequent more opportunities to share knowledgeand ideas (Tsai functions acrosscompeting information 2002), and sharing of knowledge within a firm can offer timely integration stimulates superior perfor(e.g.,Uzzi 1997),whichin turn acrosscompeting mance. Intensive cooperation departments of and conversion thedevelopment maynotonlypromote of customer into a sharedunderstanding tacitknowledge and Moorman needs(Nonaka 1994; Rindfleisch 2001) but more collaborative and effective also generate strategic within theorganization decisionmaking Korine, (Ghoshal, a competitive and Szulanski1994).Indeed, interdepartmeninteractions tal structure mayenable coupledwithfrequent channels andties a firm on thecommunication to capitalize to thus acrossitsfunctional embedded areas, leading greater andfinancial returns. market of cross-functional thejoint occurrence Furthermore, and intensity competition mayreduceknowlcooperative In and create although synergies. particular, edge overlap to sharesimilar functions are likely theintraorganizational and market situations constraints resource imposedby the is less across firm, likelyto be departments knowledge across functions the traditional redundant, emphases given Rust With less and 1999). (Moorman redundancy, frequent access interaction departments provides amongcompeting across market to novel and complementary intelligence silos (Granovetter functional 1973).This access knowledge better fosters to nonredundant information solving problem anddecision 2004) andis essential (e.g.,Cummings making and financial value(e.g.,Kohli of customer forthecreation we predict thatthejoint and Jaworski 1990). Therefore, and occurrence of cross-functional intensity cooperative and financial enhances customer performance. competition of cross-functional cooperative H2:The joint occurrence ona firm's effect hasa positive andcompetition intensity and(b) financial (a) customer performance. performance The Mediating Role of Market Learning that simultanea firm withdepartments We also arguethat learnits market enhance and may ouslycompete cooperate Market will which in turn performance. higher generate ing, in and knowlrefers to a firm's expertise broadly learning as developing such stores of activities, keymarketing edge to cusbrand new products, building image,responding tomers' needs, and establishingchannel relationships Shervani, (Menonet al. 1999; Moorman1995; Srivastava, 2006 ofMarketing, 701Journal April

andFahey1998).On thebasisoftheknowledge-based view of thefirm, which that results competitive posits advantage from different and market stores knowledge expertise (e.g., Grant1996; Nonaka 1994), we examinewhether market is a route from whichcross-functional coopetition learning a firm's customer andfinancial enhances performance. and The coexistenceof cross-functional cooperation is to a create that a competition likely synergy improves firm's the occurrence of crossmarket First, learning. joint functional offers the cooperative abilityand competition forcustomer and market to crossa opportunity knowledge in an absorbedand effective firm's functional boundaries of competition, effect brought way. Withthe facilitating in knowing aboutby theinterest moreaboutcompetitors' (Hamel,Doz, and Prahalad1989; Tsai 2002), the positions to recognize, and applyspeassimilate, cooperative ability acrosscompeting is cializedmarket knowledge departments withwhich likelyto enhancethe ease and effectiveness learningmay occur (Cohen and Levinthal1989; Grant 1996; Szulanski1996). ofcross-functional Second,the cooperjointoccurrence is also expected to improve ativeintensity and competition to a firm's marketlearningby enabling departments in proactive and innovative enhance their stores knowledge can improve interactions the and frequent ways.Intensive transfer of complex (Hansen 1999) and adaptaknowledge as we tionto complex situations (Uzzi 1997). Furthermore, can cross-functional competition previouslyindicated, motivation to understand other functions' instillthe posioccuracrosscominteractions tions.Thus,whenintensive of cross-functional thisjoint occurrence petingfunctions, enables thecompetand intensity competition cooperative knowlattain new and to complementary ing departments misunfor reduces the chance that interdepartmental edge and Hauser of derstanding complexknowledge(Griffin novelideas and to diffuse theopportunity 1996) and offers and Szulearning (e.g., Ghoshal,Korine, greater promote lanski1994). of crossthejointoccurrence we expect that Therefore, and and functional ability competition thejoint cooperative and of cross-functional occurrence intensity cooperative market enable a firmto generatestronger competition learning. is influenced market by (a) thejoint learning H3:A firm's and ofitscross-functional occurrence ability cooperative of its crossoccurrence and the (b) joint competition andcompetition. functional intensity cooperative in marketing showsa largeand accuExtant literature of the influence of evidence amount regarding mulating firm on and market perintelligence learning organizational formance 1990; Maltz and Kohli (e.g., Kohliand Jaworski 1996; Moorman,Zaltman,and Deshpande 1992; Rindfleisch and Moorman 2001; Zhou,Yim,and Tse 2005). In view tenets of theknowledge-based fundamental addition, indicate that Zander and 1996; 1992) (Grant superior Kogut as strategic storesand organizational learning, knowledge and market financial assets,lead to improved performance. As previously argued,we believe thatcross-functional buildthenecessary (1) helpsa firm knowledge coopetition

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in theform stores forsuperior market of thejoint learning, of cross-functional occurrence and cooperative intensity and (2) enables the firmto exploit these competition, forsuperior in theform stores market learning, knowledge of cross-functional ofthejointoccurrence abilcooperative In turn, market leads ityand competition. superior learning firm to improved financial and market performance (e.g., Dodgson 1993; KogutandZander1992). we purport that theperformance Therefore, advantages of cross-functional are achievedthrough an coopetition mechanism. learning underlying H4:Market mediates the ofthe influence occurlearning joint rence ofcross-functional andcompeticooperative ability on a firm's tion and(b) finan(a) customer performance cialperformance. H5:Market mediates the ofthe influence occurlearning joint rence ofcross-functional andcomcooperative intensity on a firm's and (b) (a) customer petition performance financial performance.

Methodology
Sample The sample consists of firmsthat operate in highsectors such as biotechnology, software develtechnology information and electronics within opment, technology, China.As thesecondlargest in theworld, China economy a critical market to consider (Boisot and Child represents and Samiee 2003). Usingtheofficial China 1996; Walters Basic Statistical Units Yearbook as thesampling we frame, selected 500 firms in metropolitan randomly headquartered areaswith nationwide in China.2 operations The datawerecollected from twokeyinformants within the organization to minimize commonmethod potential bias. In particular, commonmethodbias concernsarise whenbothindependent and dependent variables are measuredby the same keyinformant Van Lil(e.g., Bruggen, and Kacker To the two informants lien, 2002). specify key from each of the500 firms, thefirms weretelephoned and to select one midlevel requested manager randomly (e.g., sales,marketing, [R&D] departresearch-and-development ment and one topexecutive executive manager) (e.g., chief The key informants were careofficer, generalmanager). and fullychosento ensurethattheyhad the knowledge to complete thequestionnaire in a thoughtful background The midlevel manner. and senior executives were managers interviewed and Li 2002). In (Atuahene-Gima separately theseresponses foreach company, generating top executivesanswered aboutorganizational survey questions permarket and firm informaformance, learning, demographic tion, whereas midleveldepartment managersanswered about cross-functional comforces, questions cooperative and some of items firm as a forces, petitive performance checkofdatavalidity. 2These 500 firms were selected from five cities, equally major in theEast,Chengdu in the in West, including Shanghai Beijing theNorth, in theSouth, and Changsha in Central Guangzhou China. We selected thisequal distribution to minimize bias of market regional heterogeneity.

A totalof 329 firms metthescreening (658 managers) criteria andbackground and to respond (i.e., theknowledge twokeyinformants from each firm) and initially agreedto Aftermatching and deleting participate. key informants from data,we ended up withusable information missing 163 firms As a result,we obtaineda (326 informants). rateof 32.6% oftheoriginal and response sample(163/500) 49.5% of the qualifiedinformants (163/329).To testfor thedemographic dataof70 bias,we compared nonresponse firms thatagreedto participate but did not completethe interviewswith those of the completed and useful We found no significant in firm difference size, responses. and location, ownership. industry, The results theperformance items that weredestesting to check informant (sales growth, ignated response validity customersatisfaction, and return on investment [ROI]) exhibit high consistencybetween top executives and midlevelmanagers (Guttmans:.83,.88, and .87, respecTo thesenior ensure that executives wereappropritively). ate and reliable, we examined theextent of their involvementin makingstrategic decisionsin the firm(Li and Atuahene-Lima2001); the resultsshow high strategic involvement (M = 6.81 on a seven-point scale). Amongthe midlevel severalfunctional areas werecovered, managers, sales (38%), marketing (33%), R&D (21%), and including others(8%). Note thatall functional areas may generate market to enhancecustomer value (Kohli and knowledge Jaworski andSlater1990) andthat theprocess 1990;Narver of marketintelligencedissemination across functional boundaries can be evaluated from by midlevelmanagers and otherfunctional areas (e.g., Fisher, Maltz, marketing andJaworski 68% 1997;MaltzandKohli1996).In general, of informants had morethanfiveyears'experience in the and 91% had at leasttwoyears'experience withthe firm, firm. the informants were Thus, key reasonably knowledgeable aboutthe cross-functional within the firm dynamics and the in Sohi, Grewa12004). (e.g.,Johnson, Among firms oursample, 72.5% weresmallor medium in size,with500 or fewer The largest was elecemployees. industry segment tronics (36.3%), followed by information technology (28.1%) andbiotechnology (18.7%). Measures We assessedall constructs as multi-item measures. In addition,we scoredeach itemon a seven-point scale, ranging from "strongly disagree"(1) to "strongly agree" (7). The was prepared in English, translated intoChiquestionnaire nese by independent and thenback translated translators, into Englishto ensureaccuracyand follow appropriate was then guidelines(Brislin 1970). The questionnaire with 17 Chinese managersin a pilot study. pretested ensuredthe relevanceand Reponses fromthe pretests ofthefinal measures. We describe all measures equivalence in Table 1 and detailthem in theAppendix. We discussthe measurement results in the"Results" section. We measuredcross functionalcooperativeintensity withsix itemsthatwe constructed to assess thedegreeto whichthelateral cross-functional interactions are frequent and close. We adaptedthismeasurein partfromsimilar in marketing research that focuses on relational embeddedCross-Functional 171 Coopetition

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TABLE 1 Main Constructs, Sources, and Definitions Construct Construct Sources Construct Definition The extent ofthefrequency and closenessofthe social interactions lateral areas amongfunctional thefirm. within in KeyInformants the Dyad Midlevel managers

Cross-functional Antia and Frazier and cooperative intensity (2001); Rindfleisch Moorman (2001) Cross-functional cooperative ability

The ability to assimilate Cohenand Levinthal and deploy market Midlevel managers inlateral interactions (1990); Szulanski knowledge amongfunctional areas. (1996); Zahraand George(2002) Levitt (1969); Houston et al. (2001); Maltz and Kohli (1996); Ruekert and walker (1987) Menonet al. (1999); Moorman (1995); Srivastava, Shervani, and Fahey(1998) Moorman and Rust (1999) The degreeto which both Midlevel departments compete managers for limited and intangible resources and tangible for and department importance, power, strategic charter. inand knowledge The firm's storesof expertise activities new keymarketing (i.e.,developing brand product development, building image, customers' current and potential sensemaking needs,and others). Topexecutives

Cross-functional competition

Market learning

Firm performance

The perceptions ofstrategic market performance Topexecutives and financial share performance (i.e.,market customer newproduct growth, loyalty, sales growth, customer satisfaction, development, customer costs,customer retention, selling lifetime value,and ROl). and refining and reposiing and sellinga product/service, an existing customer (i.e.,building tioning product/service), a brand cusextensive imageamongcustomers, developing tomer service and making senseof customers' capabilities, current and potentialneeds), and channel (i.e., pricing below competitors, and distribution establishing marketing in the market, withbusinesspartnetworks collaborating andknowing aboutbusiness The results ners, environment). showgood overallfit:x2 = 36.85, d.f.= 32, p > .05; comindex parativefit index (CFI) = .981, goodness-of-fit of approximation (GFI) = .957,androotmeansquareerror (RMSEA) = .031; as we expected,the threefirst-order latentconstructs loaded significantly on market learning X = .816,p < X = .753,p < .01; customer: (product/services: = .610,p < .01). .01; channel: .610, In terms of performance, twobroadmetwe examined marTo assessthefirm's ricsoffirm performance. strategic suchas market andROI, ketandfinancial outcomes, growth that measure of financial we used a four-item performance and Rust in part, from theworkof Moorman we adapted, customer-based to assessthefirm's (1999). In addition, persatisfaction and customer its customer formance, including of customer we used a four-item measure retention, performance thatwe also adapted,in part,fromthe workof andRust(1999). Moorman or To control forany extraneous effects due to firm covariates. In we included several also factors, parindustry to control firm size andfirm we included ticular, ownership We measured of scale andresource foreconomies capacity. is consiswhich the number of size employees, firm using

ness at other levels (e.g., Antiaand Frazier organizational 2001; Rindfleischand Moorman 2001). Our crossabilitymeasureincludessix items functional cooperative to evaluate, examine assimithat thecoreunderlying ability market other transferred from late,and exploit knowledge In line interactions. duringcross-functional departments withtheprocessperspective of absorptive (Cohen capacity andLevintha11990; Lane, Salk,andLyles2001), thismeathethree-item scale that Szulanski sureextended (1996) iniand validated. tially suggested included The measureof cross functional competition 11 itemsthat assessedtheextent to whichfunctional areas compete with one anotherfor tangibleand intangible and and charter resources, (Ruekert strategic importance, to whichdepartments Walker 1987) and theextent struggle withone another because of divergent goals departmental and strategic (Houstonet al. 2001; Levitt1969; priorities one itemto enhance Maltz and Kohli 1996). We dropped in a tenwhichresulted scale validity (see theAppendix), itemmeasure. of market theten-item measure We developed learning in and knowledge stores of thefirm's to capture expertise from Menon our measure activities, keymarketing adapting With activities. andcolleagues'(1999) listofkeymarketing we modelmarket as a thesetenitems, learning higher-order This approach is similar of three subdimensions. construct to examfactor to extant literature that uses a second-order ine cooperative and (Sivadas Dwyer 2002). competency in prodincludemarket subdimensions Our three learning a new uct/service (i.e., developing promotproduct/service, 2006 72 I Journal ofMarketing, April

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withextant research tent (e.g.. Lee and Grewal2004; Luo and we measured 2001), firmownership using a dummy 0 = otherwise variable(1 = firms withforeign ownership, due to strategic and [i.e., state-or private-owned firmsl) firms in between and local differences foreign operations we included China(e.g., Peng and Luo 2000). In addition, that effects two industry variablesto controlfor market a firm's choices have been reported to influence strategic and Li and performance outcomes(e.g., Atuahene-Lima 2002; Li and Calantone1998; Zhou,Yim, and Tse 2005). we included which we meaindustry hostility}, Specifically, scale thatJaworski and Kohli suredusing the five-item whichwe mea(1993) developed,and market volatility, in marsuredusinga four-item scale that is well-accepted Li literature and and Calantone Slater 1998; keting (e.g., Narver and Tse 2005). 1994;Zhou,Yim,

whensquared(r2= .336), is less thanthe (r = .58), which, AVE foreither customer or financial performance perforIn all cases, we mance(AVE = .75 and .72, respectively). which findthattheAVEs exceedthesquaredcorrelations, confirms discriminant validity. again The Effects of Cross-Functional Coopetition theeffects of crosswe capture Usingregression analysis, withthe interaction functional betweenthe coopetition and competition constructs. We mean-centered cooperation thesevariables before theinteraction to reduceany creating betweenthe main and the interaction effects collinearity AikenandWest's(1996) (AikenandWest1996).Following and Cohen and Cohen's (1983) recommendations, we entered thevariables intothemodel in distinct We steps: thecovariates, entered then themaineffects, the andfinally To examinethe incremental interaction effects. effect of the interaction between cross-functional including cooperationand competition, we examined thechangein R-square additional (AR2), whichindicatesthe value of including variables in a model(CohenandCohen1983) andthevalue of interactions in particular (Aikenand West 1996). The resultsfor the effects of cross-functional on coopetition firm performance appearin Table3. The results showthattheinteraction between (i.e., the and of) cross-functional jointoccurrence cooperative ability has a positiveand significant effect on cuscompetition tomer (b = .19,p < .01) and on financial performance per= formance of H1 (see Table 3). (b .26,p < .01), in support In addition, the results show thatthejoint occurrence of cross-functional andcompetition has a cooperative intensity effect on customer positiveand significant performance (b = .23,p < .01) andon financial (b = .16,p < performance ofH2 (see also Table3). Moreover, of .05),in support entry the joint occurrence of cross-functional and competition of crosscooperative abilityand of thejoint occurrence functional and in competition cooperative intensity thethird a of level additionalvariance step explained significant the main effects. thesetwo typesof beyond Specifically, cross-functional coopetition explained8% more variance = 3.96, p < .01) and forcustomer performance (F(2,159) 10% morevarianceforfinancial performance (F(2 159)= 4.43,p < .01). For ourexamination of whether there are anydifferentialeffects forthetwotypes of organizational performance, modelcomparisons showthat thejointoccurrence ofcross-

and Results Analysis

Measure Validation theworkof Anderson and Gerbing (1988), we Following testthevalidity of themeasures factor usingconfirmatory Overall chimodel statistics indicate that the analysis. is model withall constructs squareforthe measurement 1427.18(p = .00), with an acceptable ratioof chi-square to degrees of freedomof 1.67; the CFI, GFI, adjusted index (AGFI), and RMSEA are .96, .94, goodness-of-fit .93,and .05,respectively. foreach of themeasures, as indivalidity Convergent catedby Cronbach's alpha,all exceededthe.7 benchmark theminimum 1978).As Table2 shows, (Nunnally reliability acrossthemeasures is .90. Furthermore, at .71 or higher, the averagevarianceextracted (AVE) for each construct exceedsthe.5 benchmark and Larcker (Fornell 1981). Discriminant of the measureswas supported validity withtwodifferent we conducted a series First, approaches. of chi-square difference testsby examining of pairs constructs two models constrained model and one (one using unconstrained for each of measured constructs model) pair (Andersonand Gerbing1988). The resultssuggestthat unconstrained modelsfitthe data better thanconstrained discriminant we commodels,indicating Second, validity. constructs with thesquared paredtheAVE oftheindividual correlation betweenconstruct pairs (Fornelland Larcker inTable2, thelargest correlation is that 1981).As is evident between customer and financial performance performance

TABLE 2 Descriptive Statistics of Key Constructs Variables Cross-functional cooperative intensity (CI) Cross-functional cooperative ability (CA) Cross-functional competition (CM) Market (LEARN) learning Customer performance (CUPF) Financial performance (FIPF) *p< .05.
**p< .01.

M 5.28 5.89 4.19 5.10 5.41 5.08

SD 1.23 1.14 1.31 1.18 1.05 1.36

AVE .74 .73 .71 .72 .75 .72

CI .91 .43** .32** .18* .36** .27**

CA

CM

LEARN

CUPF

FIPF

.91 .36** .90 .37** -.12 .24** -.17* .35** -.10

.90 .39** .37**

.95 .58**

.90

Notes: Thecoefficient for eachmeasure is onthe andthe intercorrelations areonthe alpha diagonal, off-diagonal Cross-Functional 173 Coopetition

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TABLE 3 and Financial on Performance TheEffect ofCross-Functional Coopetition Customer

CustomerPerformance Variables Independent Effects Coopetition occurrence ofcross-functional Joint cooperative and competition ability (CA x CM) occurrence ofcross-functional Joint cooperative and competition (CI x CM) intensity MainEffects Cross-functional (CA) ability cooperative Cross-functional (CI) intensity cooperative Cross-functional (CM) competition Covariates Firm size Firm ownership Industry hostility Market volatility OverallModel F value R2 Adjusted AR2 F Incremental .05. *p< **p<.01. .06 .16* .24** -.09 8.83** .25 .27** .32** -.16* .04 .16* .23** -.11 10.65** .43 .18 9.52** Model 1 Model2 Model3 FinancialPerformance Model4 Model5 Model6

.19** .23** .29** .36** -.13 .04 .14 .24** -.10 8.87** .51 .08 3.96** .16* .09 .22** -.12 7.21** .21 .36** .22** -.11 .17* .08 .21** -.16* 11.77** .45 .24 13.47**

.26** .16* .39** .23** -.10 .16* .08 .21** -.16 10.04** .55 .10 4.43**

functionalcooperative ability and competitionhas a thanon customer on financial effect performance stronger the < =1, p .01) andthat =11.28, d.f.dlf (x2dltf performance of cross-functional occurrence intensity cooperative joint effect on customer has a stronger and competition perfor= = 3.71,d.f.diff on financial mancethan (x2dlff performance interaction < is that It 1, p .10). among frequent possible and retention helpsbuildcustomer departments competing financial in a firm's whereas perforimprovements loyalty, and assimilating moreabsorptive mancerequire cooperationamong competing departments. The Mediating Role of Market Learning mediates to whichmarket To examinetheextent learning we reliedon the of cross-functional theeffects coopetition, mediatedregression approachthatBaron and three-step to establish More recommend. specifically, Kenny(1986) marmust affect of market mediation coopetition learning, must and and ketlearning performance, marketing learning theresults As we previously affect indicated, performance. affects cross-functional showthat performance coopetition to establish (see Models 3 and 6 in Table 3). Therefore, market must affect cross-functional mediation, coopetition The must affect market and performance. learning learning, of cross-functional resultsshow thatthejoint occurrence on effect has a positive and competition ability cooperative = occurthe < and that market .22, .01) (b joint p learning andcompetirenceofcross-functional intensity cooperative effect on market tionhas a positive (b = .17,p < learning

p < .Ol).3

.05), as Model 7 shows(see Table4). Theseresults support on of market of theeffect learning H3. Forourexamination market has the results indicate that learning a performance, firm's customer a effect on and perforsignificant positive mance(b = .32,p < .01) andfinancial (b = .28, performance as Table 4 shows,inclusionof market Furthermore, of of theeffect model reducesthestrength the in learning In particular, on performance. cross-functional coopetition and of cross-functional thejoint effect ability cooperative and thejointeffects on customer performance competition on andcompetition ofcross-functional intensity cooperative are financial and bothcustomer performance performance no longer (see Models 8 and9 in Table4). Thus, significant of crossmarket fullymediatesthe joint effect learning on and functional ability competition customer cooperative the joint effectof crossmediates fully performance, on cusand competition functional intensity cooperative of effect the mediates and tomer joint performance, fully on and cross-functional competition intensity cooperative andfirm market variance between common learning 3Although the whether we examined influence this effect, may performance would andfirm market between performance learning relationship wasreported firm when differ managers bymidlevel performance there indicate that The results executives. rather than by senior market between a strong remains (reported learning relationship andfirm bymidlevel executives) (reported performance bysenior r= .31, p < .01. managers):

2006 of 74! Journal April Marketing,

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TABLE 4 The Mediating Effectof MarketLearning Model7: Market Learning Model8: Customer Performance .32** Model9: Financial Performance .28**

Variables Independent Effect Mediating Market learning Effects Coopetition Joint occurrence ofcross-functional cooperative and competition (CA x CM) ability ofcross-functional Joint occurrence cooperative and competition (CI x CM) intensity MainEffects Cross-functional (CA) ability cooperative Cross-functional cooperative intensity (CI) Cross-functional competition (CM) Covariates Firm size Firm ownership hostility Industry Market volatility OverallModel F value R2 *p< .05. **p<.01. the interaction financial Moreover, performance. although of cross-functional and competieffect cooperative ability itseffect tionon financial remains performance significant, Table diminishes mediation. (see 4), illustrating partial forH4 and H5 and the These results offer strong support thatcross-functional realizesperforargument coopetition market manceadvantages through learning.

.22** .17* .37** .29** -.12 .05 .10 .24** -.10 14.87** .53

.11 .13 .20** .24** -.09 .09* .10 .18** -.11* 10.92** .60

.20** .12 .26** .18** -.09 .16* .06 .20* -.17 9.62** .58

acrossthese AGFI = 90, and RMSEA = .05. Comparison threealternative SEM modelsillustrates thatSEM3, with fits mediation thedata best,fitting thedata effects, partial = betterthan SEMI with no meditation effects(x2diff full < and better than with SEM2 171.39,d.f.dif =1, p .01) = 24.44, d.f.diff = 4, p < .01). In effects mediation (x2dlff other these show that market words, findings learning parmediates theinfluence ofcross-functional tially coopetition Mode! Comparisons effects on firm consistent withtheregression performance, results in Table 4. the structural Furthermore, paths in to which To examine theextent ourresults arerobust across to be consistent with SEM3 the beta coefficients appear different models, we used structural equationmodeling from theregression results. show SEM3 results Specifically, alternative models.In particular, we fit (SEM) to compare for the market (b = support learning-customer performance thedatawiththree models(Morganand Hunt1994; Zhou, < and market .35, .01) p learning-financial performance model(SEMI), all variables Yim,andTse 2005). In thefirst to thecounterpart (b = .29,p < .01) linkages,4 comparable influence thetwo typesof firm and directly performance, < beta of .32 < .05) regression coefficients and .28 .05) (p (p do not we includeanymediation effect of market learning. results in Table4.5 Overall, theresults forSEM confirm our The secondmodel(SEM2) involves fullmediation of martheperformance benframework, conceptual demonstrating ket learning the occurrence of cross-functional (i.e., joint efits of cross-functional and therole of market coopetition andcompetition andthe cooperative ability jointoccurrence as a mediator of these benefits. of cross-functional and competition learning cooperative intensity are not modeledto affect The model performance). third of market All 4WeassessedSEM pathcoefficients a (SEM3) allows partialmediation learning. significance through with 1000 three modelsinclude theaforementioned covariates. procedure bootstrapping resamples. we found a significant cross-functional 5Although pathfrom The resultsindicate that fit indexes for SEM 1 are to in customer SEM3 (b = .18, coopetive intensity performance x2 = 1749.93,d.f.= 852, p = .00; CFI = .90, GFI = .88, < which was not in the .05), p significant regression analysis, speAGFI = .87, and RMSEA = .06; fitindexesforSEM2 are cific differences between results andSEM results regression may x2 = 1602.98,d.f.= 855, p = .00; CFI = .92, GFI = .91, be dueto different estimation leastsquares approaches (ordinary AGFI = .89, and RMSEA = .06; and fitindexesforSEM3 in theregression andmaximum in theSEM likelihood approach arex2 =1578.54, d.f.= 851,p = .00; CFI = .94, GFI = .92, andtothe for measurement error inSEM. approach) accounting 175 Cross-Functional Coopetition

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the channels for knowledgetransfer across functional boundaries within thefirm. The recently research on coopetition has stream emerging Althoughpriorworkhas suggesteda link between limited to theinterfirm level(e.g.,Rindfleisch beenlargely and performance and coopetition (e.g., Brandenburger and Moorman2003; Zeng and Chen 2003). Only a few Nalebuff1996; Hamel, Doz, and Prahalad 1989; Lado, studies haveexamined at theintraorganizational coopetition haveexplored thereaBoyd,andHanlon1997),fewstudies on SBU-levelknowledge in general level,focusing sharing sonsforthislink.Drawing from theknowledge-based view a multinational (Tsai 2002) or within organization (e.g., we probe ofthefirm, foran underlying mechanism learning at the and Szulanski1994). Coopetition Ghoshal,Korine, at the intraorganizational and pointout thatcoopetition in boththe level has largely cross-functional been ignored firm market levelinfluences learning. performance through and the management literature. RindNotably, marketing our that market results indicate Specifically, learning plays fleisch and Moorman (2001) pointout thatthemarketing role in the extentto which crossa major mediating research literature has devoted little systematic surprisingly firm influences functional Thus, coopetition performance. on interfirm letaloneintrafirm coopetition, coopetition. the value of simultaneous and competition cooperation and Our focuson thesimultaneous role of cooperation lies in how they influwithin cross-functional interactions in cross-functional advancesthe relationships competition whichin turnaffects ence a firm's market the learning, on market transfer acrossfuncrecent emphasis knowledge firm's Thisfinding a critical performance. highlights implifor superior and performance tionalboundaries learning an imporcationfor scholars becauseituncovers marketing becausecross(MaltzandKohli1996,2000). We arguethat and intraorganizational tantrole of marketing knowledge for andtheinteninvolves theability functional cooperation learningin exploiting cooperativeabilityand intensity can transfer and because of knowledge competition sity for firm better among competing departments performance. incentive transfer facilitate givenan underlying knowledge to understand functions' positions,the joint competing and competition Managerial Implications ofcross-functional occurrence cooperation the also offers to managers Our research advanthattranslate intocompetitive can createsynergies regarding insight of simultaneously and managing cooperation tage. Overall, our resultsindicatethatcross-functional importance in cross-functional interactions. execon a firm's customer- competition has an important Although impact coopetition that market transfer across utives and that market based and financial-based knowledge may recognize performance mustalso understand that areasis valuable, functional they learning mediates these performancereturns.Thus, in to is a the it firm's functional areas a due, part, underlying complicated process experience competimay although of cooperation in cross-functional and competition nature tion for resourcesand strategic emphasis,cooperative to shape notonlyits market forcesare necessary relationships. learning the strong, beneficial our resultsregarding Conseand financial but also its customer Notably, performance. on firm of influence cross-functional of simultaneous the our coopetition perforregarding synergy quently, findings but mance indicate that level at the functional and cooperation quenching fostering provide cooperation competition fullperformance or syncretic competition evidence of the"positive-sum" someempirical potential. maylimita firm's directs to understand ourresearch In other that rents of interfirm words, Lado, Boyd,and Hanlon managers coopetition and conflicts thatcompetition R&D, among marketing, (1997) theorize. not harmful. are other and that cross-functional our also show results finance, always departments Importantly, of cross-functional thejoint occurrence in different firm can affect Instead, fostering ways. performance coopetition toward and competition can directconflicts of cross-functional Forexample, thejointoccurrence cooperation coopa and interactions constructive has a stronger and competition erativeintensity actuallypromote firm's positive For example, market and overall thanon financialon customer-based effect performance. learning performance that were focused on had two functions Dutch Shell interacbecause frequent based performance, Royal potentially and own individual their efficient not be an tions departments competing bettering may competing departments among Whenthese theorganization. within forbusiness competing (Lado, Boyd,and Hanlon 1997); yetthecommuapproach theorganizacame together to shareknowledge, functions coninformation that can benefit offers additional nication tion reaped higherperformance and sumers(Fisher,Maltz, and Jaworski1997; Griffin (Burress and Wallace our research with This of twoimportant Hauser 1996). Our introduction 2003). findings, example, coupled concepts to cooperashould that a firm informs of cross-functional attempt managers cooperation-namely, cooperative of its functional areas nature thecompetitive and cooperativeability-also offers bridge important tively intensity and of the occurrence and and transfer intrafirm for competition coopleverage joint performance knowledge insight eration for improved firm customer and financial A combination of thetwocooperation outcomes. concepts in cross-functional performance. mayhelp solve the"fail-tocoopetition market valuable of use" problem stickyyet Indeed,the overwhelming push forlean budgetsand knowledge is likely to generate in business of occurrence that such the Kohli and practice downsizing today's 1996), (Maltz joint This functional areas. levels of offers and cross-functional among competition high competition ability cooperative result of how resources often be the can the abilityto recognizeand assimilatevaluableyet tacit competition frare eFor example,firms across departments. marketknowledgeand the joint occurrenceof crossapportioned because often to save cut and costs, functional budgets marketing quently provides cooperative intensity competition ofMarketing, 2006 761 Journal April

Discussion

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outare noteasilytiedto financial marketing expenditures comes (Rust et al. 2004). As a result, and withinherent often unavoidable between marketing competitive pressures from the and other functions formorebudget (i.e., fighting a firm), shouldconsider sum within executives shrinking thatcan instill and ability specific approaches cooperative acrossthecompeting suchas use of intensity departments, cross-functional teams to focus on organizational goals and Hauser rather thanpurelyfunctional goals (Griffin of explicit 1996; Maltz and Kohli 2000), implementation thatfocus on the firm'slong-term employeeincentives andWernerfelt Simester, (Hauser, 1994),illustraobjectives tionof marketing effects on shareholder value expenditure of themarketing to increase thecredibility function within thefirm (Rustet al. 2004), and structural changesto offer forinformal moreopportunities interactions amongdepartments within thefirm. Ourfindings also pointmanagers to thevaluablemediin theprocessof converting atingrole of market learning cross-functional coopetitioninto higher performance. our resultsindicatethatengagingin more Specifically, intensive and absorbedcollaborations across competing functional boundaries can enhancea firm's overallperformance through a learning route.Thus, managers should nurture the frequency of interactions among competing and the absorptive departments capacityfor cooperation functions to promote amongcompeting intraorganizational which advances firm learning, ultimately performance. who wantto enhanceorganizational Finally, managers in more readilytransferring learningand are interested within thefirm shouldunderstand that theculknowledge of thisproblem notsimply from low intenprit mayresult butalso from a lack of sityof cross-functional cooperation assimilation anddeployment ofmarket Overall, knowledge. bothcooperative and ability intensity mayhelp functional areasrecognize where market resides within the knowledge assimilate such knowledge, and thendeploy organization, thismarket forimproved and subseknowledge learning firm quentsuperior performance. FurtherResearch and CurrentLimitations further research on cross-functional could First, coopetition examinedifferences acrossfunctional areas regarding the to and assimilate market cooperativeability recognize In particular, ourresearch unveiled that knowledge. departments are notthe same in their abilities to assimilate and use market that is available within the firm. knowledge research shouldpragmatically the Thus,further recognize difference functional areas their abilities among regarding to absorb market andexplore antecedents ofthis knowledge difference. research couldtrack howlearning mediSecond,further ates the relationship betweencross-functional coopetition and organizational over time. Our research performance indicated thatmarket role in learning plays a mediating cross-functional into customer and transferring coopetition financial it wouldbe interesting to However, performance. examine how cross-functional level learning translate may over time to build stronger cross-functional cooperative

of cross-functional and ability. thenotion Overall, intensity a novel future research coopetition mayprovide marketing of market knowlaboutthecomplexities way of thinking acrossfunctional within thefirm. boundaries edgetransfer

Appendix Operationalization of Measures

Cross-Functional Cooperative Intensity(6-Item Measure) New scale based on theworkof Antiaand Frazier(2001), Narverand Slater(1990), and Rindfleisch and Moorman = .91 and AVE = .74 (reportedby (2001): reliability midlevel managers). 1.Departments here share communications in our frequently business. 2. All departments discuss common in frequently problems our business. 3. Marketing share closetieswith in other personnel people departments. 4. Our with other is mutually relationship departments gratifycohesive. ingandhighly 5. Weexpect that ourstrong social relationinterdepartmental willexist far into the future. ship 6. There is little informal interaction from difamong people ferent (Reverse departments. coding) Cross-Functional Cooperative Ability(6-Item Measure) New scale based in parton theworkof Szulanski(1996) = .91 and and Cohen and Levinthal(1990): reliability AVE = .73 (reported midlevel by managers). our departinteractions, Duringthe interdepartmental ments herehavestrong to abilities 1.Identify new anduseful market transferred from knowledge other departments. 2. Understand newanduseful market transferred knowledge from other departments. 3. Valuenewanduseful market transferred from knowledge other departments. 4. Assimilate newanduseful market transferred knowledge from other departments. 5. Apply newanduseful market from transferred knowledge other departments. 6. Exploit newanduseful market transferred from knowledge other departments. Cross-Functional Competition (11-Item Measure) New scale based on the workof Houstonand colleagues and Walker (2001), Maltz and Kohli (1996), and Ruekert = .90 and AVE = .71 (reportedby (1987): reliability midlevel managers). 1.We regularly forthelimited resources across compete departments. 2. When members ofseveral talk about distribudepartments tionof resources across (i.e.,capital, personnel) departtensions run ments, frequently high. Cross-Functional 177 Coopetition

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3. Functional areasregularly for with eachother compete from more mental attention andtime executives. top 4. To getmore other resources for ourdepartment, departsacrifices. ments oftentimes have tomake and 5. Individual here to obtain time more departments try even from senior atthecosts ofother attention managers functions. andbenchmarked 6. Eachdepartment is constantly compared in the withother to improve departments efficiency organization. 7. Mostdepartments to gainmore here importry strategic firm. andpower the tance inside are 8. Theobjectives pursued bythemarketing department manuwith ofother those departments incompatible (e.g., IT [information (Item operations). technology], facturing, scalevalidity) toenhance dropped turf is considered to be a one'sdepartmental 9. Protecting inthis oflife business. way tooutperform for here tend others 10.Individual departments charter. a better department feelthat thegoalsof 11.Peoplefrom different departments with each are in harmony their respective departments other. (Reverse coding) MarketLearning (10-Item Measure) New scale based on the workof Menon and colleagues andFahey(1998): reliabilShervani, (1999) andSrivastava, = = AVE .72 and .90 bytopexecutives). (reported ity to other commarket compared knowledge, Regarding has a in strong position industry, my company panies your oftheexpertise in in terms 1.Developing new product/service. 2. Promoting andselling product/service.

3. Refining andrepositioning existing product/service. 4. Building brand customers. image among 5. Developing customer service extensive capabilities. 6. Sensemaking andpotential needs. customers' current 7. Pricing below competitors. 8. Establishing networks in the and distribution marketing market. 9. Collaborating with business partners. institu10.Knowing about business environment labor, (tax, tional regulations, regulations, Organizational Performance Customer (4-Item Measure) Performance Adapted in part fromthe work of Moormanand Rust = .95 and and Slater(1990): reliability (1999) and Narver AVE = .75 (reported bytopexecutives). 1.Customer loyalty. 2. Customer satisfaction. value. 3. Customer lifetime 4. Customer retention. FinancialPerformance Measure) (4-Item Adapted in part fromthe work of Moormanand Rust = .90 and and Slater(1990): reliability (1999) and Narver = AVE .72 (reported bytopexecutives). 1.Market share growth. 2. Salesgrowth. 3. Reducing costs. selling 4.

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2006 ofMarketing, 80 I Journal April

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