Understanding how the functional integration of purchasing and marketing accelerates new product development

Abstract In the context of ever more demanding customers, and companies' growing dependency on external suppliers, the importance of purchasing-marketing integration has been highlighted by recent research. However, further theoretical and empirical development is still much in need. Grounded in Information Processing Theory, we present a model that provides a new breakdown of the components of functional integration and explains how the interaction between them accelerates new product development (NPD). The model was tested on a sample of 141 Spanish firms using structural equation modeling (SEM). The study makes several contributions: It provides empirical evidence of the benefits of purchasing-marketing integration; it identifies its three components: shared information on purchasing, shared information on marketing, and the alignment of decisions, and it uncovers the complete mediation of aligned decisions on the effect shared information has on speed in NPD. Additionally, it contributes to solving the lack of consensus on the conceptualization of functional integration as reported by the literature.

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