The impact of cross-functional coordination on customer coordination and operational performance: an information processing view

Abstract

PurposeThis study aims to investigate the impact of cross-functional coordination (cross-functional system, process and team coordination) on customer coordination (customer strategic and operational coordination) and operational performance. Following the lens of information processing theory (IPT), this study examines the diverse mechanisms of cross-functional coordination practices in enhancing firms’ information processing capabilities (IPCs) to cope with the higher information processing demands resulting from customer coordination, finally improving operational performance.Design/methodology/approachBased on data collected from 410 Chinese manufacturers, the authors use the structural equation modeling method to test the theoretical model.FindingsThe authors found that cross-functional system coordination is positively associated with customer operational coordination (COC) but not customer strategic coordination (CSC). Cross-functional process coordination increases both customer strategic and operational coordination. Cross-functional team coordination significantly promotes CSC but not COC. Both customer operational and strategic coordination facilitate operational performance.Originality/valueThis research pioneers in identifying three dimensions of cross-functional coordination based on IPT and examine their distinct impacts on various customer coordination activities. The authors distinguish two customer coordination dimensions and reveal their effects on operational performance. This research contributes to the development of IPT. Additionally, this study provides guidelines for managers to coordinate internal departments and collaborate with external customers to enhance firms’ operational performance.