R&D outsourcing contract for the unverified value of tacit knowledge sharing

Abstract

Purpose: The purpose of this paper is to provide a R&D outsourcing contract design framework to incent R&D outsourcing service providers sharing tacit knowledge. Design/methodology/approach: The author uses the principal-agent theory to builds multitask principal-agent model which focuses on two cases. One case is that the effort costs of explicit and tacit knowledge sharing are complementary, while another is the effort costs are substitutable. Findings: When the costs of explicit and tacit knowledge sharing are complementary, the buyer can increase the incentive coefficient of explicit knowledge sharing to stimulate tacit knowledge sharing. This motive method not only stimulates tacit knowledge sharing, but also will further stimulate the effort levels of explicit knowledge sharing. Moreover, the multitask R&D outsourcing contract can motivate the effort of explicit knowledge sharing to achieve system optimization, but it fails to motivate the effort of tacit knowledge sharing to achieve system optimization. Research limitations/implications: In this paper we only consider that the outsourcing relationship is short-term, so the multitask R&D outsourcing contract is formal. In fact, the outsourcing relationship may be long-term, and the multitask R&D outsourcing contract will be informal. Practical implications: Our study provides a theoretical model for formulating an effective R&D outsourcing contract and promoting the transfer of tacit knowledge sharing. Originality/value: The paper extends prior literature by designing multitask R&D outsourcing contract in order to share the tacit knowledge. We not only consider the cost of substitution relationship between tacit knowledge and explicit knowledge, but also consider the cost of complementary relationship.