Enabling knowledge diversity to benefit cross-functional project teams: Joint roles of knowledge leadership and transactive memory system

Highlights

• A mediated moderation model is presented in cross-functional project teams (CFPTs).

• The authors uncover how and when knowledge diversity can improve CFPT performance.

• Achieving benefits of knowledge diversity is contingent upon knowledge leadership.

• Knowledge leadership positively predicts transactive memory system (TMS).

• TMS can reveal the moderating effect of knowledge leadership in CFPTs.

Abstract

Team members’ knowledge diversity has a “double-edged sword” nature within cross-functional project teams (CFPTs), showing an inconsistent relationship with team performance. For realizing this diversity’s potential benefits, leadership is usually an essential enabler. However, little is known about how knowledge leadership achieves this. This study proposed that knowledge leadership moderates the effect of knowledge diversity on team performance through a transactive memory system (TMS). By empirically testing survey data from 96 CFPTs, we found that knowledge leadership enables a positive linkage of knowledge diversity-CFPT performance by successively breaking down barriers to communication and cooperation in TMS development and functioning.

Introduction

To enhance competitive advantages and benefits of different viewpoints, organizations increasingly rely on cross-functional project teams (CFPTs) [1]. This refers to a temporary workgroup that aims to complete a project within a limited time frame, consisting of representatives of various functional units (e.g., departments and organizations) who possess diverse experience, skills, and knowledge relevant to completing projects [2,3]. To achieve shared team goals, members usually engage in a collective process and gradually develop a transactive memory system (TMS) to coordinate and utilize their distributed diverse knowledge effectively [4]. A TMS is defined as the cooperative division of labor for encoding, storing, and retrieving information based on a shared understanding of who knows what within the team [[5], [6], [7]]. Many scholars have pointed out that TMS represents an essential intangible force within cross-functional context, yielding anticipated performance gains from diverse knowledge resources, such as improved team learning [8], team innovation performance [9], team decision-making performance [10], or specific project outcomes [8,11]. Therefore, team members’ knowledge diversity (team composition input), TMS (teamwork process), and CFPT performance (output) potentially form a team effectiveness framework within CFPTs, according to the input-mediator-outcome (IMO) model [12].

However, knowledge diversity in such teams is increasing as their organizations require a diversification in the knowledge economy, and it is not easy to ensure team effectiveness because, as research suggests, knowledge diversity has a “double-edged” nature [[13], [14], [15], [16], [17]]. Diversified knowledge resources enhance the epistemic and learning motivation to process information [18]. Such motivation stimulates the autonomous development of a TMS and thus leads to high performance. Inversely, this diversity also induces social categorization phenomenon [19], and emerging complicated cognitive and social interaction processes are likely to impair TMS development and its effect on team performance. Taking the example of the cognitive process in software development projects, differences in knowledge depth and domain lead increasingly to knowledge boundaries among IT professionals. Designers and coders may not develop a shared understanding of their expertise because of discrepancies in programming language, design methodology, etc. Reconciling conflicts usually requires support from project managers or knowledgeable team members. In the social interaction process, shared project goals generally steer team members toward cooperation. However, competition can prevail over cooperation when representatives of divergent subgroup goals vie for scarce resources (e.g., physical space, equipment, manpower, and capital funds) during a project [2]. Unbalanced coopetition or the pursuit of competitive advantage considerably inhibits the effectiveness of knowledge activities [2,3]. Developing a well-functioning TMS to maintain team effectiveness is, thus, fraught with challenges unless leaders enact the interventions that value knowledge management [20,21].

In current popularity of the literature on both diversity and TMS, scholars have devoted increasing attention to how formal leadership in a cross-functional context as a contingency determines whether the benefits of knowledge diversity can be realized or not [15] or as a catalyst facilitates the development of a well-functioning TMS [9,10,22]. Indeed, knowledge leaders such as team members with exemplary knowledge or project managers are often also outstanding enablers or regulators. Knowledge leadership emphasizes leaders’ roles in information and knowledge management, aiming to realize the advantage of the intellectual capital [23]. Yet, notably less research has investigated how to accentuate the positive effects and attenuate the negative effects of knowledge diversity on both the TMS and team performance under knowledge leadership in a CFPT. This results in limited understanding of how knowledge leaders intervene in typical situations arising from knowledge diversity.

Knowledge leadership is defined as a process whereby an individual influences and supports other group members in the continuous learning processes necessary to achieve group or organizational goals [24,25]. As a type of development-oriented power, it incorporates ambidextrous knowledge management (motivations and support routes) and relationship management strategies (cooperation and trust) [[23], [24], [25]]. These strategies jointly ensure the achievement of anticipated teamwork processes and performance gains. Existing researches have typically advocated its roles in promoting knowledge-related activities such as knowledge sharing and application [26,27] or group learning [28]. Importantly, the implementation of these activities relies considerably on an effective TMS [8,27]. The motivational information processing in groups (MIP-G) model posits that epistemic and prosocial motivations for information processing facilitate formation of a superior TMS and team outcomes improvement; such motivations can be raised by various factors especially the leadership or members with power [18]. Accordingly, knowledge leadership is a potential contingency in the deployment of motivational mechanisms, enabling positive linkages from knowledge diversity to CFPT performance through the influence on TMS development and functioning.

Overall, this research aims to answer two questions. First, how does knowledge leadership as a contextual condition moderate the relationship between the knowledge diversity and team performance in CFPTs? Second, does the TMS reveal the moderating effect of knowledge leadership in typical situations arising from team members’ knowledge diversity? Guided by the IMO team effectiveness framework [12] and MIP-G theory [18], this study provides a mediated moderation analysis integrating knowledge diversity, leadership, and TMS literature. It empirically tested the moderating effects of knowledge leadership on the tripartite relationship among team members’ knowledge diversity, the TMS, and CFPT performance. Furthermore, the TMS was tested to mediate knowledge leadership’s moderating effects in the relationship between knowledge diversity and CFPT performance.

By identifying knowledge leadership as a novel contingent factor in the effectiveness of knowledge diversity, especially in CFPTs, this research further highlights the role of leadership in a project work context. It provides a conceptual and empirical integration of research to further underscore the role of knowledge leadership in a motivational work design related to knowledge characteristics. Moreover, it depicts how knowledge leadership enables diverse knowledge resources to be transited into team performance through developing a well-functioning TMS. This study thus offers new insights to the controversial discussion about knowledge diversity by further elucidating how and under what conditions knowledge diversity can improve team performance in a temporary project context with time pressure. Furthermore, our research delves deeply into the issue around how knowledge leadership coordinates both the development and the function of a TMS to achieve the potential of knowledge diversity. This broadens the understanding of how knowledge leadership creates an ideal environment for advancing team knowledge activities. Together, this research offers guidance to leaders and managers involved in CFPTs and their organizations about effectively coordinating and utilizing diversified knowledge resources to enable the team effectiveness.