The bumpy road of technology partnerships: Understanding causes and consequences of partnership mal-functioning

Abstract

Research on technological partnerships has traditionally sought explanation of their high failure rates in partner characteristics and relationship features. This study introduces the notion of a 'bumpy road' in technology partnerships which refers to undesired outcomes such as 'partnership mal-functioning' and 'instability' to the degree to which innovation activities are hampered. We explain how firm-level strategies can reduce the probability of a 'bumpy road' in partnerships. We also assess the impact of this 'bumpy road' on innovative performance. We find that firms that excel in diversification of external activities (in terms of different types of partners) perform best. Moreover, a persistent product oriented innovation strategy geared at developing new products, new markets, or higher product quality will yield more stable partnership outcomes. Our results confirm that engagement in partnerships is beneficial for innovative performance. However, firms that experienced a 'bumpy road' in their technological partnerships have to pay a price in terms of a negative effect on their innovative performance.

Returns to alliance portfolio diversity: The relative effects of partner diversity on firm's innovative performance and productivity

“…Such "liabilities of collective action" (Barnett, 1994) or over-embeddedness can lead to negative effects on firm performance (Uzzi, 1997). If unforeseen events occur (such as an unforeseen exit) the embeddedness and corresponding dependency can hamper the focal firm's performance (Lokshin, Hagedoorn, & Letterie, 2011;Singh & Mitchell, 1996).…”

Drivers of University–Industry Links: The Case of Knowledge-Intensive Business Service Firms in Rural Locations

“…Nevertheless, previous evidence suggests that a high proportion (around a half) of inter-firm collaborative linkages fail, with a lack of shared goals and the complexity of coordinating and managing these linkages cited as the most cited reasons for failure (Park & Ungson 2001). Indeed, technology partnerships can be inherently unstable and provide a 'bumpy road' to travel on (Lokshin et al 2011). This instability results from the inability of firms to effectively predict or anticipate the intentions of their partners and the uncertainty this creates.…”

“…Partner selection, therefore, is often far from straightforward process (Petruzzelli 2011). Consequently, both universities and firms are required to overcome these information asymmetries in order to choose an appropriate partner (Das & Teng 2001;Das 1998;Lokshin et al 2011). This paper argues that two factors can potentially moderate these asymmetries: geographic and organisational proximity.…”

R&D Partnerships and Innovation Performance: Can There Be Too Much of a Good Thing?

“…Indeed, partnerships bear the inherent risk of freeriding, where one associate tries to absorb the maximum knowledge from the other while concealing its own efforts (see e.g., Shapiro and Willig 1990;Baumol 1993;Kesteloot and Veugelers 1995). For example, partnerships with a substantial overlap in core businesses, geographic markets, and functional skills have a success rate of approximately only 30% as competitors are inclined to maximize their own individual objectives rather than the partnership's interests (Lokshin et al 2011). In the survey used for the following analysis, indeed 60% of all firms declare perceiving leakage of information as a reason for not engaging in (additional) collaboration projects.…”