R&D partnership portfolio strategies for breakthrough innovation: Developing knowledge exchange capabilities

Abstract

In competitive business environments, partnerships and alliances are formed for the purposes of innovation because the technological, capital, and intellectual resources necessary to first research and then develop complex product, service, organization, and platform innovations rarely reside within the legal boundaries of a single firm (Grant and Baden-Fuller, 2004). Influential and leading firms that compete with multiple platforms are often the strategic center of numerous alliances and partnerships (Kedia and Mooty, 2013). From the perspective of these center, or focal, firms, the aggregation of these present and past partnerships and alliances form an alliance portfolio and an interactive resource from which new ideas and knowledge may be drawn (Dhanaraj and Parkhe, 2006; Wassmer, 2010). As such, focal firms seek ways to develop innovation-management functions and capabilities that ensure the collaborations of the alliance portfolio possess the competencies necessary to create a range of product, system, and organizational innovations (Laursen and Salter, 2006; Maula, Keil, and Salmenkaita, 2006; O’Connor, 2008). These innovation functions and capabilities encompass several critical and interrelated tasks, which include fostering, improving, and maintaining the relationships between the partnership through the processes related to research and development (Kale, Dyer, and Singh, 2002) and managing the intellectual property and knowledge that flows between the partners (Kyriakopoulos and De Ruyter, 2004). Other, more complicated tasks include identifying and building the necessary capabilities that allow the focal firm and its alliance partners to access and exchange knowledge resources between one another and the members of the focal firm’s alliance portfolio, enhancing knowledge flows and understandings within the collaboration (Fjeldstad et al., 2012; Grant, 1996; Heimeriks, Klijn, and Reuer, 2009). The development and sophistication of these capabilities enable the firms’ partnerships to be more efficient, effective, and responsive to customer and market demands (Hoffman, 2007; O’Connor et al., 2008). However, advances in online communication technologies, platforms, and forums-allowing for the efficient widespread solicitation, collection, and distribution of information and knowledge beyond the partnership, alliance, and alliance portfolio boundaries (Jeppesen and Fredricksen, 2006; Jeppesen and Lakahani, 2010)-have emerged and coalesced into new organizational forms called meta-organizations (Gulati, Puranam and Tushman, 2012). The prominence of these meta-organizations is reshaping the ways focal firms approach open innovation practices and alliance portfolios (Faraj, Jarvenpaa, and Majchrzak, 2011; Fjeldstad et al., 2012; Gulati, Puranam, and Tushman, 2012).