The performance implications of contractual design: toward a configurational perspective

This study sets out to increase our understanding of the performance implications of contracts in interfirm projects in two fundamental ways. First, relying on configurational theories, we conceptually frame contracts as bundles of functional roles that simultaneously influence the governance of interfirm projects and its performance implications. Second, we expect that the importance of particular contractual roles and the interplay between them is likely to vary across different contextual and relational settings. Using a sample of 180 interfirm innovation projects, the findings of this study carry several key theoretical and managerial implications. Whereas prior research has tended to consider the different contractual functions in isolation, our configurational perspective illuminates the relevance of looking at them in concert. Second, this study shows that different settings ask for different contractual configurations. Third, our theoretical and methodological approach allows demonstrating the notion of equifinality in terms of contract design. For managers, our findings indicate managers for interfirm innovation projects should realize that contracts can have different functions and that it is important to consider these contracts in concert. Moreover, whereas a particular contractual configuration can be high-performing in some settings, in can be low-performing in others. Based on these findings we encourage practitioners to move away from the templatization of contractual design

Connecting Interfirm and Intrafirm Collaboration in NPD Projects:Does Innovation Context Matter?

Interfirm collaboration is an important strategy for firms to generate new products and services. Whereas existing research emphasizes the importance of interfirm collaboration engagement to realize synergistic benefits in interfirm NPD projects, it remains surprisingly silent on the potential impact of intrafirm relational processes and how they can impact the interfirm setting. In this article, we therefore explore the impact of intrafirm collaboration engagement on the relationship between interfirm collaboration engagement and new product development (NPD) performance in interfirm NPD projects. Relying on insights from information processing theory, the authors hypothesize that intrafirm collaboration engagement increases firms' capacity to process complex information flows in the case of extensive interfirm collaboration engagement. Moreover, it is expect that the added value of extensive intrafirm collaboration engagement depends on the innovation objective (i.e., incremental versus radical new product development) of the interfirm NPD project. In particular, we hypothesize that the positive moderating impact of intrafirm collaboration engagement on the relationship between interfirm collaboration engagement and NPD performance is stronger for radical interfirm projects than incremental interfirm projects. Analyzing 195 interfirm NPD projects, a negative interaction effect between interfirm and intrafirm collaboration engagement is observed in radical interfirm NPD projects, whereas significant interactions between them remain absent in incremental interfirm NPD projects. Jointly, these findings provide first evidence that intrafirm relational processes can substantially impact partners' ability to realize relational rents in interfirm settings. Moreover, the negative interaction effect between interfirm and intrafirm collaboration engagement points to potential trade-offs between inward-looking and outward-looking absorptive capacity

The effects of MNC parent effort and social structure on subsidiary absorptive capacity

How subsidiaries gain absorptive capacit

When intra-firm and inter-firm collaborations co-occur: Comparing their impact across different innovation contexts

There is evidence that intra-firm collaboration and inter-firm collaboration are important for new service development (NSD) and new product development (NPD) success. However, evidence of the contributions of each to innovative outcomes is inconsistent. This inconsistency is associated with the tendency of studies to examine the impact of intra-firm collaboration or inter-firm collaborations exclusively. However, most firms involved in NSD or NPD engage simultaneously in intra-firm and inter-firm collaborations. Using a multi-dimensional conception of collaboration we advance a deeper understanding of the relative contributions of these attributes in intra-firm versus inter-firm collaborative environments during NSD versus NPD. Analyses of survey data from 134 innovations confirm that collaboration clearly matters for both NSD and NPD success, but its impact differs depending on (a) whether a new product or service was developed, (b) on the collaborative environment (intra-firm or inter-firm), and (c) on the collaborative attributes examined. Implications for advancing innovation theory and practice are provided

WHEN INTRA-FIRM AND INTER-FIRM COLLABORATIONS CO-OCCUR: COMPARING THEIR IMPACT ACROSS NEW SERVICES VERSUS NEW PRODUCT INNOVATIONS

There is evidence that intra-firm collaboration and inter-firm collaboration are important for new service development (NSD) and new product development (NPD) success. However, evidence of the contributions of each to innovative outcomes is inconsistent. This inconsistency is associated with the tendency of studies to examine the impact of intra-firm collaboration or inter-firm collaborations exclusively. However, most firms involved in NSD or NPD engage simultaneously in intra-firm and inter-firm collaborations. Using a multi-dimensional conception of collaboration we advance a deeper understanding of the relative contributions of these attributes in intra-firm versus inter-firm collaborative environments during NSD versus NPD. Analyses of survey data from 134 innovations confirm that collaboration clearly matters for both NSD and NPD success, but its impact differs depending on (a) whether a new product or service was developed, (b) on the collaborative environment (intra-firm or inter-firm), and (c) on the collaborative attributes examined. Implications for advancing innovation theory and practice are provided.Intra-firm collaboration, inter-firm collaboration, new service development, new product innovation

Governing Collaborative New Product Development:Toward a Configurational Perspective on the Role of Contracts

This study inductively explores the interplay among different contractual functions and their impact on project performance in collaborative new product development (NPD) projects. Applying a configurational perspective, contracts are conceptualized as bundles of different functions. In line with the notion of discriminating alignment, an explicit distinction is made between different contextual settings in terms of innovation objectives (i.e., incremental versus radical) and relational embeddedness (i.e., presence versus absence of prior collaboration) in the exploration of the project performance implications of different contractual configurations. Fuzzy set qualitative comparative analyses on a sample of 125 collaborative NPD projects helped to generate propositions on the interplay between different contractual functions across different contextual settings. The results indicate that the contractual coordination function is an important function in achieving high project performance in collaborative NPD projects. However, the research findings demonstrate that it is not a sufficient condition and needs to be complemented with discrete safeguarding functions depending on the particular context. Together, these findings provide new insights into how particular combinations of contractual functions can help address the core governance challenges of collaborative NPD. They also point to the relevance of applying a configurational perspective to the study of the role of contracts in management research. Finally, they provide practitioners with specific recommendations concerning the design of contracts for collaborative NPD projects

When does goodwill trust matter in interfirm new product development?

This study explores the impact goodwill trust has on new product development performance in 177 interfirm projects. Whereas the findings suggest that the relationship between goodwill trust and project performance is non-linear, they also reveal that the environmental context of the project (i.e. the degree of task interdependency) influences this relationship. In particular, we find an attenuated positive curve between goodwill trust and project innovation performance for modular innovation projects (projects with limited task interdependency), whereas the relationship becomes U-shaped for architectural innovation projects (projects with very high task interdependency). Jointly, our findings contribute to a more contingent perspective on the role of trust in inter-firm relationships, emphasizing that the benefits and liabilities of goodwill trust are likely to be different for different kinds of innovation projects

Headquarters to subsidiary transfer effects on marketing strategy exploitation

The transfer of locally created marketing strategies worldwide represents a key competitive advantage for multinational corporations (MNCs). Although a research topic of much interest, empirical content of past studies is scarce. Absorptive capacity studies typically test direct effects of either the transfer capacity of the strategy's initiator or the recipient's ability to process and exploit the strategy on related learning outcomes. Mixed findings allow the possibility of more complex relationships. This study examines the relationships between MNC headquarters and marketing units located in subsidiary firms using a sample of 213 marketing managers. The study systematically explores linear, interaction, and quadratic effects within a structural equation modeling paradigm. The findings indicate that the relationship between a MNC headquarters' transfer capacity and a subsidiary marketing unit's processing capacity on the strategy's exploitation is one of mediation and moderation. The subsidiary marketing unit's processing capacity is a key mediating variable and headquarters' transfer capacity moderates the effects of this variable on the exploitation of the marketing strategy by the subsidiary's unit

[Photograph 2012.201.B1026.0860]

Photograph used for a story in the Daily Oklahoman newspaper. Caption: "The gentleman on the left insists he is Francis Porta