Intra-firm causal ambiguity on cross-functional project team’s performance

Field: Business, Management and Accounting (Social Sciences)

Purpose The purpose of this paper is to examine the negative effect of intra-firm causal ambiguity on the project team’s performance—efficiency and effectiveness, and also examine the moderating role of openness and the integrative capabilities. Design/methodology/approach The population in this study is teams that come from a variety of companies which work with cross-functional teams or matrices, such as advertising agencies, recreational or amusement parks, television companies, production houses, radio stations, private education providers, manufacturing enterprises and IT companies. The sample population was chosen based on their tendency to form creative teams to respond to environmental/market dynamics by involving employees from different backgrounds and levels in the planning and implementation of projects. Findings As hypothesized, intra-firm causal ambiguity negatively influenced the project team’s efficiency and effectiveness, while openness moderated the effect of intra-firm causal ambiguity to efficiency, but not to effectiveness, and the team’s integrative capabilities did not moderate the above relationship. Research limitations/implications First, the sample in this study only focused on teams with creativity doing a project. Any future research is expected to focus more on the selection of sample types which also have a tendency to apply openness, and focus their activities on improving their integrative capabilities. Second, there are no data about the background experience of the members of the teams in working together on previous projects, so future studies need to discover whether that experience also affects the variables included in this study. Third, the category of the time horizon samples for the project’s implementation, which were between one month and two years, is still too wide. It may have contributed to the overlapping of the moderating effect, so future studies need the sample project’s categories to have a much narrower range (one to three months, four to six months, or one year). Fourth, the regression results for the moderating variables are partially not supported. This may relate to the characteristics of the respondents. To obtain the data and a more complete knowledge, further research can be done into creative on-going team types, such as an interior design team, a company’s production performance team and others. Practical implications A practical implication based on the research that has been done is that, when the condition of intra-firm causal ambiguity occurs, strategies to reduce the condition are needed. First, before a project starts, all the team members must understand the systemic process of the project’s resources related to the environment and the objectives. Systemic understanding of the resources system can help the team to effectively manage any causal ambiguity in the resources system. Second, referring that the higher the intra-firm causal ambiguity is, the efforts to codify the resources and the systemic process of the project should also be higher as well. So the second strategy is to codify/create tools that guide the project, in order to make it easily understandable, accessible and always up to date, over the lifespan of the project. Originality/value The results of research into the impacts of intra-firm causal ambiguity on the organizational performance are still inconsistent. Some researchers claim that intra-firm causal ambiguity has a negative effect on performance, but there are also studies that show the opposite result. This research accommodates these inconsistencies by examining the effects of a moderating variable on the impact of intra-firm causal ambiguity on a cross-functional team’s performance, in its contextual and internal aspects. The contextual aspect is represented by the openness of the team, while the team’s ability to integrate the diversity of knowledge, i.e. its integrative capability, is represented as the internal aspect.