Effect of Cross-Departmental Collaboration on Performance: Evidence from the Federal Highway Administration

Abstract

Cross-departmental collaboration, one of the most salient administrative reforms, has been promoted to resolve cross-jurisdictional administration issues over the previous three decades. Nearly all previous empirical studies have examined the direct impact of cross-departmental collaboration on organizational performance without accounting for the indirect effects of managerial practices. Using data from the Federal Highway Administration, this study develops an integrated structural equation modeling and Bayesian network model used to examine both direct and indirect impacts of cross-departmental collaboration on organizational performance. The structural model indicates that cross-departmental collaboration has a direct effect on organizational performance and indirect effects through its influence on resource acquisition and knowledge creation. The scenario-based simulation suggests the optimal integration of managerial actions to improve agency performance, which is achieved by encouraging cross-departmental collaboration and supporting the knowledge creation process. Finally, implications are provided to present practical managerial actions from the Federal Highway Administration as an exemplar for other highway agencies.