Multiple Levels in the Organization of Innovation: Project Organization in Single-firm Projects and Multi-firm Projects

Studies about how the organization of new product (and new service) development projects (NPD) projects influences project performance typically investigate this in Single-firm projects, I e. projects with high ownership integration. However, NPD projects are often performed by two or more partnering firms. In this paper we investigate whether specific project-level organizational mechanisms, such as free flow of information between team members, project leader autonomy, external search for information, and decentralization, have different performance outcomes in Single-firm projects than in Multi-firm projects. Using data on web application development projects we find that project-level integration mechanisms, i.e. mechanisms that align and coordinate the interests and activities of team members, contribute comparatively stronger to the speed of problem solving in alliance projects than in Single-firm projects. This shows that the performance effects of a project's organizational form are determined by the interplay of firm-level organizational choices and project-level mechanisms.