Collaborative product development

Purpose - This paper aims to examine the impact of internal coordination capability on supplier involvement. Design/methodology/approach - Hypothesized relationships are tested using confirmatory factor analysis and hierarchical linear regression models. Findings - It was found that internal coordination capability and supplier involvement effort have a positive effect on collaborative product development (CPD) performance. In addition, internal coordination capability positively moderates the relationship between supplier involvement and CPD performance. Research limitations/implications - The study used targets or goals as the standard for measuring all scales in CPD performance. Although, this approach has several advantages and it is widely reported in the literature, it fails to account for the aggressiveness of the goals or targets as well as relative importance of the metrics. Practical implications - Managers attempting to gain short‐term benefits through increased collaboration scope will risk negative CPD performance unless they are willing to invest significant effort in supplier involvement to reduce the transaction cost. Originality/value - Unlike existing literature which focuses either on internal integration or external integration, this study focuses on their interaction. It provides empirical evidence that internal coordination capability has a direct and an indirect impact (as moderator) on CPD performance.