Between trust and control in R&D alliances

DOIhttps://doi.org/10.1108/VJIKMS-02-2019-0027
Publication Date18 November 2019
Pages247-269
Date18 November 2019
AuthorKaisa Henttonen,Pia Hurmelinna-Laukkanen,Kirsimarja Blomqvist
SubjectInformation & knowledge management,Knowledge management,Knowledge management systems
Between trust and control in
R&D alliances
Kaisa Henttonen
School of Business, University of Eastern Finland - Kuopio Campus, Kuopio, Finland
Pia Hurmelinna-Laukkanen
University of Oulu, Oulu, Finland, and
Kirsimarja Blomqvist
LUT University, Lappeenranta, Finland
Abstract
Purpose Trust and control through contracting have been juxtaposed in many studies addressing
interorganizationalcollaboration and knowledge exchange. In this study, the authorsmove from the opposite
ends of a continuum between trustas an attitude and control exercised through formal contracts towardthe
center of the continuumwhere trust and contracting start to show similar features.The authors ask how trust
in its analytical formand control gained through establishing informal protectionfor knowledge assets affect
the innovationand market performance of rms engaged in research and development (R&D) alliances.
Design/methodology/approach The authors examine the existing literature and conduct a
quantitativeempirical study to answer the research question.
Findings The authors nd, rst, that controlling an organizations own knowledge assets in R&D
alliances with informal means of protectioncan be more effective than a strategy of controlling the alliance
through formal contracts. Second, the authors nd that an analytical audit of partner trustworthiness, and
especiallypartner capabilities and goodwill canbe more effective than trust as an attitude.
Research limitations/implications The ndings support softening the sharp distinction between
trust and control and provide evidenceon the relevance of highlighting the rm pointof view in knowledge
managementin R&D alliance governance.
Originality/value The study adds to the existing understanding of trust and controlin R&D alliance
governance. Specically, the authors turn the focus from interorganizational governance to intra-
organizational knowledge management measures, and particularly toward how a focal actor can take an
analytical approach to evaluate partner trustworthiness and use informal control in protecting its own
knowledge assets. Consequently, this study also provides a plausible explanation for the contradictory
ndings in studies that examine the relationship between trust and control. The study indicates that
dependingon thespecic nature of trust and control,they can be either a complement or a supplement factors:
the extremeforms of trust and control are notably different from those formsthat share similar features.
Keywords Innovation, Informal control, Research and development, Knowledge governance,
Analytical trust, Knowledge protection mechanisms
Paper type Research paper
Introduction
It is well-established that interorganizational collaboration can improve innovation and
market performance. Collaboration may provide access to complementary knowledge and
enhance innovative output. It may also provide access to distribution channels
and marketing capabilities, promoting market performance in the form of increased sales
and value added (Belderbos et al., 2004;Hite and Hesterly, 2001;Lööf and Broström, 2008).
Likewise, it is widely acknowledged that formal and informal governance is relevant to
Between trust
and control in
R&D alliances
247
Received24 February 2019
Revised2 September 2019
Accepted26 September 2019
VINEJournal of Information and
KnowledgeManagement Systems
Vol.50 No. 2, 2020
pp. 247-269
© Emerald Publishing Limited
2059-5891
DOI 10.1108/VJIKMS-02-2019-0027
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/2059-5891.htm
beneting from outcomes in interorganizational collaboration, that is, trust and controlplay
a notable role (Brattström et al., 2012;Cianci et al.,2018;De Man and Roijakkers, 2009;
Dhanaraj and Parkhe, 2006;Galati and Bigliardi, 2019;Long and Sitkin, 2018;Lui and Ngo,
2004;Jiang et al.,2013;Möllering and Sydow, 2018;Poppo and Zenger, 2002;Zhang et al.,
2018).
The challenge arising from these earlier studies is that they have very specicviews
on the relationship between trust and control, seeing them as a complement or a
supplement (Blomqvist et al., 2005)orfocusingonnding the balance between the two
by adjusting the amount of formal and informal governance to different levels
(Möllering and Sydow, 2018). Moreover, on their own, control and trust seem to be
approached in specicways.
First, past research on formal governance (especially in connection to informal
governance) has emphasized the role of contracts (formal, legally binding contracts and
relational governance) in regulatingrel ationships between the collaborat ing organizations
as a relevant issue (Olander et al., 2010). Approaching control as contracting directs
attention to the rights and obligations of the actors involved, and the activity in the
collaboration (Arranz et al., 2012;Blomqvist et al., 2005;Cao and Lumineau, 2015;Culle n,
2000;Faems et al., 2008;Frankel et al., 1996;Edelenbos and Eshuis, 2012;Powell et al.,
1996;Yli-Renko et al., 2001). While useful as such, this view is of limited use in fully
capturing the motivation and strategies of individual actors. In fact, recent knowledge
management literature suggests that the understanding of both the knowledge creating
conditions and knowledge protection related to securing organizational performance
remains scant, especially in the context of interorganizational collaboration (Manhart and
Thalman, 2015;Durst and Zieba, 2018;Durst, 2019;Durst et al., 2015;Abubakar et al .,
2017).
We argue that past research may have overlooked the role of internal, rm-specic
mechanisms to apply knowledge governance in the context of inter-rm collaboration. If a
rm could best invest in research and development (R&D) alliance governance by
focusing on its own actions, not by trying to control anything and everything through
contracts? Instead of considering the formal governance of the alliances or the behavior
of the partners per se (Das and Teng, 1998), we examine how rms govern their own
knowledge assets and actions in R&D alliances. We are especially interested in seeing
how they exercise control using informal knowledge protection mechanisms (Gallié and
Legros, 2012;Hurmelinna-Laukkanen and Puumalainen, 2007) that we believe match
well with trust as the form of governance residing at the other end of the continuum of
governance modes.
Second, as in the case of control, it seems that discussionon trust has taken specic paths
in the context of interorganizational collaboration. While trust building is a central aspect
enhancing knowledge exchangein R&D activities, there is a large body of research ontrust,
that does not differentiate trust (in the relationship) from the trustworthiness of
partners (Barney and Hansen, 1994). Seminal articles on trust in inter-rm alliances still
conceptualize trust as a collectively held attitude or orientation (Zaheer et al., 1998;
Dyer and Chu, 2000). However, this view of trust as a passive, generalized attitude has
been criticized (Currall and Inkpen, 2002;Li, 2007) and a more active approach to trust
has been called for Möllering (2005),Blomqvist (2014) and Poppo et al. (2015). Likewise,
recent research acknowledges the problem of paying attention to the amount of trust
(too little vs too much) instead of considering the type of trust in many studies
(Möllering and Sydow, 2018).
VJIKMS
50,2
248

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