The effects of organisational structure, interpersonal trust and communication during new product development projects

This study examines the antecedents of effective working relationships between Marketing and R&D managers during NPD projects. Adopting both a structural and individual-level perspective, we examine the impact on relationship effectiveness of formalisation, centralisation, communication frequency and bidirectionality, and interpersonal trust between Marketing Managers and R&D Managers during NPD product development projects. Our hypothesised model is tested using a sample of 184 product development projects conducted in Australia, and our findings reveal two dimensions of interpersonal trust (cognition- and affect-based trust) are potent factors driving effectiveness during product development projects. We also reveal differential effects of the two communication behaviours, and demonstrate that unlike bidirectional communication, communication frequency does not increase relationship effectiveness. Similarly, whilst formalisation can help improve relationship effectiveness on product development projects, centralisation does not have any positive effect.