Does organizational complexity matter? Understanding the impacts of dynamic capability in NPD projects

Improving the innovation capability of new product development (NPD) projects is crucial to ensuring their competitiveness. Although the roles of internal and external supply chain integration (SCI) have been identified and empirically examined, how SCI influences innovation capability needs further exploration, especially considering organizational complexity (OC), a prominent feature of NPD projects. This study reveals the mechanism through which three types of integration influence two types of innovation capability under the boundary condition of OC. Drawing on dynamic capability theory, we empirically examine the proposed moderated mediation research model using data from 239 NPD project leaders. The results show that all three types of integration contribute to both types of innovation capability through dynamic capability. Moreover, OC strengthens the indirect effects of the three types of integration on incremental innovation capability (IIC) via dynamic capability. Contrary to our hypotheses, OC has nonsignificant moderating effects on the indirect effects of the three types of integration on radical innovation capability (RIC) via dynamic capability. Theoretical and practical implications are discussed.