Problem 1: Factor Analysis

Problem 1.1 Modularity Level of NPD Project In Problem 1.1, we have beliefs about the constructs underlying the Modularity Level questions; we believe that there are two constructs: Modular Design, and Modular Level.

Social Capital (sc) Social Interaction Network Position

Modularity Level (ml) NPD Performance (npd) Product Prototype Development Proficiency Product Launch Proficiency Technological Core Competency Market Forecast Accuracy Design Change Frequency Product Development Cycle Time Innovation Level Modular Design Modular Level

Project Leadership Style (ls) Participating Style Selling Style Telling Style Delegating Style

Team Member Diversification (in) Knowledge Diversification Social Category Diversification

Analyze => Dimension Reduction => Factor

Next, select the variables ml1 through ml8.

Now click on Descriptives Then click on the following: Initial solution (under Statistics), KMO and Barletts test of sphericity (under Correlation Matrix) Click on Continue

Next, click on Extraction Select Principal components from the Methods pull-down Click on Unrotated factor solution (under Display). Also, check the Scree plot box (under Display) Click on Continue

Now click on Rotation Click on Varimax, then make sure Rotated solution is also checked. Click on Continue

Next, click on Options Click on Sorted by size Click on Continue then OK

Output 1.1: Factor Analysis for Modularity Level

FACTOR /VARIABLES ml1 ml2 ml3 ml4 ml5 ml6 ml7 ml8 /MISSING LISTWISE /ANALYSIS ml1 ml2 ml3 ml4 ml5 ml6 ml7 ml8 /PRINT INITIAL KMO EXTRACTION ROTATION /FORMAT SORT /PLOT EIGEN /CRITERIA MINEIGEN(1) ITERATE(25) /EXTRACTION PC /CRITERIA ITERATE(25) /ROTATION VARIMAX /SAVE BART(ALL) /METHOD=CORRELATION.

Testsofassumptions. Shouldbegreaterthan.50 indicatingsufficientitemsfor eachfactor. Shouldbesignificant(less than.05),indicatingthatthe correlationmatrixis significantlyfromanidentity matrix,inwhichcorrelation betweenvariablesareallzero.

Thesecommunalitiesrepresenttherelation betweenthevariableandallothervariables (i.e.,thesquaredmultiplecorrelation betweentheitemandallotheritems). Shouldbebiggerthan.50tobeusedasa reference,notasadeletecriteria.

Eigenvaluesrefertothevarianceexplainedoraccountedfor. Percentofvarianceforeachcomponentbeforeandafterrotation.

Thescreeplot showsthatafter thefirstfive components, increasesinthe eigenvalues decline,andthey arelessthan1.0.

The items cluster into these two groups defined by high loadings.

Interpretation of Output 1.1 The factor analysis program generates a number of tables depending on which options have chosen. The first table in Output 1.1 is the Kaiser-Meyer-Olkin (KMO) measure which tells one whether or not enough items are predicted by each factor. The KMO test should be greater than .50. The Barlett test should be significant (i.e., a significance value of less than .05); this means that the variables are correlated highly enough to provide a reasonable basis for factor analysis. Next, the Total Variance Explained table shows how the variance is divided among the 8 possible factors. Note that two factors have eigenvalues (a measure of explained variance) greater than 1.0, which is a common criterion for a factor to be useful. When the eigenvalue is less than 1.0, this means that the factor explains less information than a single item would have explained. The computer has looked for the best two-factor solution by rotating two factors. For this and all analyses, we will use an orthogonal rotation (varimax). This means that the final factors will be as uncorrelated as possible with each other. As a result, we can assume that the information explained by one factor is independent of the information in the other factors. We rotate the factors so that they are easier to interpret. Rotation makes it so that, as much as possible, different items are explained or predicted by different underlying factors, and each factor explains more than one item. One thing to look for in the Rotated Matrix of factor loadings is the extent to which simple structure is achieved. The Rotated Factor Matrix table, which contains these loadings, is key for understanding the results of the analysis. Note that the computer has sorted the 8 modularity level of NPD project (ml1 to ml8) into two overlapping groups of items, each which has a loading of |. 60| or higher |. 60| means the absolute value, or value without considering the sign, is greater than .60). Actually, every item has some loading from every factor, but there are blanks in the matrix where weights were less than |. 60|. Within each factor (to the extent possible), the items are sorted from the one with the highest factor weight or loading for that factor (i.e., ml4 for factor 1, with a loading of .836) to the one with the lowest loading on that first factor (ml5). Loadings resulting from an orthogonal rotation are correlation coefficients of each item with the factor, so they range from -1.0 through 0 to +1.0. Usually, factor loadings lower than |. 60| are considered low, which is why we suppressed loadings less than |. 60|. Principal axis factor analysis with varimax rotation was conducted to assess the underlying structure for the eight items of the Modularity Level Questionnaire. Two factors were requested, based on the fact that the items were designed to index two constructs: modular design, and modular level. After the rotation, the first factor accounted for 37.5% of the variance, and the second factor accounted for 65.8%. Table 1.1 display the items and factor loadings for the rotated factors, with loadings less than .60 omitted to improve clarity.

Table 1.1 Factor Loadings for the Rotated Factors Modularity Level Items ml4 Our NPD project use modularized design ml1 Our NPD project share common modules ml2 Our new product features are designed around a standard base unit ml3 Our new products can be customized by adding feature modules as requested ml5 Our new product feature modules can be added to a standard base unit ml6 Our new product modules can be rearranged by end-users to suit their needs ml7 Our new product could partially upgrade, conveniently wear and tear or adapt new components ml8 Our new product modules can be reassembled into different forms Eigenvalues % of variance Factor Loading 1 2 0.821 0.734 0.732 0.836 0.677 0.837 0.830 0.781 3.001 2.270 37.510 65.889 Communality 0.681 0.616 0.637 0.698 0.545 0.727 0.706 0.661

The first factor, which seems to index competence, loads most strongly on the first five items, with loadings in the first column. The second factor was, which also seems to index competence composed of the three items with loadings in column 2 of the table.

Problem 1.2 Leadership Style of NPD Project In Problem 1.2, we have beliefs about the constructs underlying the Leadership Style questions; we believe that there are four constructs: Participating Style, Selling Style, Telling Style and Delegating Styles.

Social Capital (sc) Social Interaction Network Position

Modularity Level (ml) NPD Performance (npd) Product Prototype Development Proficiency Product Launch Proficiency Technological Core Competency Market Forecast Accuracy Design Change Frequency Product Development Cycle Time Innovation Level Modular Design Modular Level

Project Leadership Style (ls) Participating Style Selling Style Telling Style Delegating Style

Team Member Diversification (in) Knowledge Diversification Social Category Diversification

Analyze => Dimension Reduction => Factor

Next, select the variables ls1 through ls16.

Now click on Descriptives Then click on the following: Initial solution (under Statistics), KMO and Barletts test of sphericity (under Correlation Matrix) Click on Continue

Next, click on Extraction Select Principal components from the Methods pull-down Click on Unrotated factor solution (under Display). Also, check the Scree plot box (under Display) Click on Continue

Now click on Rotation Click on Varimax, then make sure Rotated solution is also checked. Click on Continue

Next, click on Options Click on Sorted by size Click on Continue then OK

Output 1.2: Factor Analysis for Leadership Style

FACTOR /VARIABLES ls1 ls2 ls3 ls4 ls5 ls6 ls7 ls8 ls9 ls10 ls11 ls12 ls13 ls14 ls15 ls16 /MISSING LISTWISE /ANALYSIS ls1 ls2 ls3 ls4 ls5 ls6 ls7 ls8 ls9 ls10 ls11 ls12 ls13 ls14 ls15 ls16 /PRINT INITIAL KMO EXTRACTION ROTATION /FORMAT SORT /PLOT EIGEN /CRITERIA MINEIGEN(1) ITERATE(25) /EXTRACTION PC /CRITERIA ITERATE(25) /ROTATION VARIMAX /SAVE BART(ALL) /METHOD=CORRELATION.

Testsofassumptions.

Shouldbegreaterthan.50 indicatingsufficientitemsfor eachfactor. Shouldbesignificant(less than.05),indicatingthatthe correlationmatrixis significantlyfromanidentity matrix,inwhichcorrelation betweenvariablesareallzero.

Thesecommunalitiesrepresenttherelation betweenthevariableandallothervariables (i.e.,thesquaredmultiplecorrelation betweentheitemandallotheritems). Shouldbebiggerthan.50tobeusedasa reference,notasadeletecriteria.

Deleted ls10

Deleted ls4

Deleted ls8

Deleted ls16

Deleted ls11

Deleted ls14

Deleted ls15