The Management of Social Capital in R&D Collaboration

Abstract

Rapidly developing technologies, increased global competition, and more stringent customer demands are compelling companies to improve the pace and quality of their product and process innovation. As a consequence, companies are increasingly pushed to form technological partnerships to share development costs and to reduce time-to-market. This chapter focuses on the ‘dark side of cooperation’ by concentrating on the complications and pitfalls encountered by thirty general and R&D managers from ten leading companies in R&D collaborations in the automotive, electronic, energy, heavy, and pharmaceutical industries. The partnering relationships described include strategic R&D alliances, supplier-customer partnerships, and cooperative relationships with knowledge institutions. The empirical research shows that these relationships are extremely vulnerable. For example, the partners may worry about releasing too much confidential information and technology. The occurrence of these problems can be explained by social capital theory. Network relations may enhance the social capital of a company by making it feasible for it to get easier access to information, technical know-how, and financial support. But, at the same time, these relationships may lead to social liability, e.g., by reducing the possibilities for relating to companies outside the network, risk of spillover, and high coordination costs of the networkrelations. R&D relationships, especially, are, for the most part, not very tightly knit, and hence their problems relate to lack of information and to opportunism. This chapter then focuses on the methods managers can use to minimize these problems by reducing social liability and hence enhancing social capital. Partnership management is considered to be, to a great extent, management of trust and goes far beyond signing confidentiality agreements and agreeing to follow guidelines. This chapter ends with possible solutions for every phase of the collaborative lifecycle. It includes an outsourcing and partnering matrix as a management tool for the strategic foundation of make-buy-or-collaborate decisions.