Matching goal-based incentive systems with cross-functional integration to improve operation and innovation performance

Abstract

Purpose

Cross-functional integration has been an important factor for manufacturing firms' performance outcomes. The study aims to expand previous research by investigating the moderating role of goal-based incentive systems in the relationship between cross-functional integration and competitive performance.

Design/methodology/approach

Based on multi-source data from 269 manufacturing firms around the world, regression analysis is used to test the proposed research model.

Findings

The authors' findings suggest that cross-functional integration enhances manufacturers' innovation and operational performance. Moreover, cross-functional integration has a stronger impact on operational performance when firms implement a well-designed goal-based incentive system. However, the authors find that the goal-based incentive system does not moderate the relationship between cross-functional integration and innovation performance.

Originality/value

The study, by investigating the fit between goal-based incentive systems and cross-functional integration, provides practical insights into the ways that firms apply cross-functional integration and goal-based incentive systems to enhance competitive performance.

Citation

Kang, M., Ki-Hyun, U., Shou, Y. and Roh, J.J. (2022), "Matching goal-based incentive systems with cross-functional integration to improve operation and innovation performance", International Journal of Operations & Production Management, Vol. 42 No. 2, pp. 230-254. https://doi.org/10.1108/IJOPM-05-2021-0345