Antecedents and Results of Emotional Capability in Software Development Project Teams à Ali E. Akgu¨n, Halit Keskin, John C. Byrne, and Ayse Gunsel Emotional capability is considered an emerging phenomenon in the group behavior literature. However, little at- tention is given to the role of emotional capability in heterogeneous work groups in general and cross-functional product development teams in particular in an empirical context. In this study, the antecedents and results of the emotional capability in software development project teams using Huy’s (1999) dynamics of encouragement, dis- playing freedom, playfulness, experiencing, reconciliation, and identification constructs were investigated. By studying 95 software development project teams in the IT departments of 52 firms, it was found, on the basis of using the Partial Least Squares (PLS) method, that the dynamics of encouragement is positively related to the speed-to- market, and the dynamics of encouragement and experiencing is positively related to the market success of new software products. In addition, it was demonstrated that team autonomy has a positive influence on the dynamics of encouragement; collaboration among team members has a positive impact on the dynamics of encouragement and experiencing; and team experience has a positive effect on the dynamics of experiencing. This study has several theoretical and managerial implications. In terms of theoretical implications, this study enhances the empathy con- cept by operationalizing it at the team level, i.e., collective empathy, and tests its impact on the project performance. This study also highlights the roles of collective hope, joy, and enthusiasm in a project’s performance by empirically demonstrating the benefits of working in a fun environment. Further, this study empirically shows that team emo- tional capability mediates the relationship between collaboration among team members and market success of the software products, indicating that management and regulation of the emotions acts as a platform to actualize the joint behavior toward some goal of common interest for the successful products. In terms of managerial implications, this study suggests that managers should enhance the team’s emotional capability to enhance the project perfor- mance. In particular, managers should promote courage, joy, and hope, and increase communication among people to develop collective empathy and the ‘‘liking’’ of one party for the other. Managers should also promote collab- oration and mutual interaction among team members; give autonomy to project team members to make important decisions about the software product; keep control of the project’s process to some level; and encourage people to use their previous experience during the projects to increase the team’s emotional capability. Introduction A s software development is a complex prob- lem-solving or decision-making process, the sharing and integration of knowledge among individuals is a crucial task of the software develop- ment project teams (Walz, Elam, and Curtis, 1993). The technology and innovation management (TIM) literature indicates that the success of software pro- jects depends on the interaction of knowledge and skills among team members, which is inherently a process that requires intense social interactions (Hoegl and Parboteeah, 2007; Nicholson and Sahay, 2004). Although, as noted by Reus and Liu (2004), such social interactions are imperative for knowledge generation and exploitation, they also elicit many emotions. Indeed, while team members bring their knowledge and skills, they also bring their emotions (Kelly and Barsade, 2001). Interestingly, many schol- ars have conducted research to garner a better under- standing of knowledge and skill management practices rather than the emotional aspects of the project teams as a whole (Rhee, 2007). As project teams develop routines regarding the manner in which the emotions of its members are managed, e.g., setting of practices to either foster or discourage the devel- opment of expressed emotions, an investigation of a team’s capability to develop and manage the emotions of its members through the team processes, i.e., emo- tional capability, is thus warranted. In a team context, à The research was supported by the Scientific and Technological Research Council of Turkey (TU ¨ BI ˙ TAK) under grant no. SOBAG 107K279. Address correspondence to: Dr. Ali E. Akgu¨n, Gebze Yu¨ksek Teknoloji Enstitu¨su¨, Isletme Fakultesi, Istanbul Cad. No. 101, 41400 Gebze-Kocaeli, Turkey. E-mail: alieakgun@gmail.com. J PROD INNOV MANAG 2011;28:957–973 r 2011 Product Development & Management Association