Managing Relational Capabilities of Inter-Organizational Innovation Ecosystems: Empirical Investigations

Problem statement: The inter-organizational relationship has become an increasingly emerging configuration in the domains of an innovation ecosystem. The synergy of firms, with diverse institutional logics, motives and resources position has the potential to generate common good, that lie beyond the reach and capability of a single firm. However, managing the idiosyncrasies of firms in such alliances remain highly problematic in practice and largely limited in the extant literature, and thus often results in firms’ unwillingness to engage in a collaborative innovation ecosystem. To address this, first, we conduct a review of the literature to elucidate the research gap, highly influential authors, and countries, the classification of the body of literature according to the network antecedents, management, and performance issues that are fundamental to innovation network projects. These results, however, advance our understanding of the critical issues affecting the practices of co-creation of value and the ecosystem innovation performance. Furthermore, while knowledge on inter-organizational relationship has been dominated in the context of large corporations, a comprehensive understanding of how relational capabilities of a network is linked to the co-value creation of local SMEs network is missing. Second, we try to address this by performing an empirical study of local SMEs business networks, in practical terms, to understand how the network develops and leverages the distinct capabilities and resources of partners while advancing the ecosystem innovation performance. Since the diverse idiosyncrasies associated with firms continue to limit the proliferation of the inter-firm innovation ecosystem, our third chapter tries to examine how institution-based trust-building programs enable the development of actors’ innovation performance in the ecosystem. Finally, despite the presence of prior studies on the inter-firm alliance for commercial purposes, studies on a cause-related alliance of firms in a period of global uncertainty are largely underdeveloped. We addressed this problem in the fourth chapter, by examining the first empirical context of collaborative value practices of a cause-based inter-firm alliance. Research design: To address the gaps, we first reviewed the state-of-the-earth on inter-organizational relationships and integrate the innovation ecosystem literature, to understand the current body of literature and explore the avenue for future research. Based on the result of this study, we conducted two series of qualitative case studies and one quantitative study, analyzing (1) the relational capabilities enabling value co-creation of an inter-firm innovation network, (2) the inter-firm innovation network characterizing the social cause rather than commercial purpose interests, and (3) the development of trust in inter-firm innovation projects. We mainly relied on the explorative, grounded theory methodology to select and analyze our cases. For both case studies, a series of in-depth personal interviews were conducted across two business networks involving the network companies allying. In addition to this, a comprehensive list of secondary data was generated to augment the research process and increase the robustness of the findings. Results: The results of this thesis first map out the state of the earth, describing the emerging themes and direction for future agenda. Based on our review of extant literature, we found that research in inter-organizational innovation is emerging fast. This is due to the plethora of economic and commercial advantages firms derived in their relationship- thus creating an opportunity for more research in the field. Despite the growing attention of researchers in the field, the literature on inter-organizational relationships suffers from many weaknesses - making it problematic to achieve common alliance success. Generally, we discovered that research in the field is highly fragmented. First, research in an inter-organizational business network is, however, still struggling to gain a solid identity in practice because of the nuance of factors and their effects on inter-firm relationships. Our findings showed that several factors caught researchers’ attractions while others remain largely limited. Th results showed that these factors have parsimonious effects on innovation ecosystems– failing many inter-organizational projects across many industries and sectors. These results were further clustered according to three categories of network management: network antecedents, network management, and network performance. The extant literature, however, provides no integrated framework to entangle such challenges in inter-organizational relationships. Second, we empirically examined the development of relational capabilities of local SMEs inter-firm network contracts. The study identifies key antecedents for successful organizing of inter-firm engagement, and the consequent development of network relational dynamic capabilities in a business network environment: friendship, institutional arrangements, participatory culture, homophily, flexibility, coordination and control, communication/information flows, trust-building, transparency and managing change/adaptability. Our findings also suggest that organizing for inter-firm engagement in a business network context, positively influenced network relational performance over time. Third, we empirically explored institution-based trust-building in the context of an inter-firm innovation ecosystem. The findings show that relational risk mediates the effects of trust in institutional openness and honesty, similarity/identification trust, and institutional reliability on the innovation performance of SMEs. In addition to these findings, our study also established that institutional trust-building practices differ greatly by the size of the enterprise (small vs medium). While small firms are found to be more vulnerable to relational risks of inter-firm similarity (over-familiarity) than medium-sized firms, Medium-sized firms, on the other hand, are vulnerable to high relational risks caused by low institutional openness and low competence on innovation performance. Finally, in the last chapter of this thesis, we empirically explored the value-creating activities of a cause-based social alliance project in Northern Italy, seeking to address the social challenges of society in times of the COVID-19 pandemic. The finding of this study provides evidence that despite the different organizations, motives, and even diverse institutional logics, the collaborative value creation framework is a suitable theoretical lens to understand value generation in cause-based social entrepreneurship (SE) alliance. The study found four critical aspects of collaborative value processes, that enable the alliance actors to leverage the cause-based SE alliance capabilities: value definition, co-value creation, value balance, and value renewal. Due to the idiosyncrasies associated with the alliance firms, our study showed several challenges confronting the alliance, such as finding the right cause-driven social alliance partner, different institutional logics, systems, and operational guidelines, stakeholder commitment to the cause, resource-cause alliance fit, and trust. Contribution: Our results contribute, first, to the literature on managing the inter-organizational innovation network. By considering the context of local SMEs business networks, we provide empirical insights into the relational dynamics of actors in the innovation ecosystem. By the network context, we examined collaborative value processes that are critical to open innovation performance. Second, we bridge social entrepreneurship by better linking inter-firm cause-based alliance literature, a subject that is highly fragmented in the literature. Third, our empirical study of network relational capabilities contributes to the relational dynamic capabilities’ literature – discussing the processes enabling the development of the network’s relational capabilities while organizing inter-firm engagement projects. Lastly, we also contribute to research by empirically exploring the institution-based trust-building in the context of SMEs innovation ecosystem literature. The findings also contribute to the existing empirical studies on how institutional trust factors affect inter-firm innovation performance and the mediating role of relational risk involved in inter-firm business relationships. Finally, we contribute to practice, by arguing that the development of institution-based trust is a critical antecedent of setting up a successful cause-based inter-firm alliance. Limitations: This thesis underlies amongst others three main limitations: First, qualitative studies are prone to researchers’ bias as data is subjectively interpreted by researchers. This, however, makes it impossible to eliminate the influence of researchers’ personal views and perceptions. To minimize this bias, we adopt various triangulations methods thus, addressing the limitation of the case study approach. Second, the generalization of findings is limited by the case studies approach, giving the unique context of each case. Third, the quantitative study adopted is not without limitations. For instance, the small sample size, and use of limited scales, are likely to influence the results of the study. We recognized these limitations and proposed that future research should try to address more context-sensitive theorizing and by discussing findings limited to just specific case contexts. Future Research: This thesis proposed some agenda that future research should address: First, the research on network relational dynamic capabilities across various business networks, could offer more robust generalizable findings. Second, the case study approaches adopted in this thesis, however, has limitations. This limited context inherent in a case study design provides a narrow empirical context for the applicability of the results. Third, the quantitative studies adopted also posed some limitations, and thus, future research could explore other multi-dimensional scales of institutional trust-building practices for bigger firms, and even in different sectors/industries, or even across different geographic locations. Finally, future studies may also try to replicate the collaborative value practices of a cause-based SE network, addressing a particular industry or market, or even comparing across different network levels with a diverse membership, and market/industry structure. Thus, the samples from bigger firms and corporations and their attitude to a social cause may be highly influenced by the size, capability, and motives, since our current case is largely by SMEs. Further, a quantitative study on how collaborative value practices influence actors’ social performance, could yield interesting findings to the cause-based social entrepreneurship alliance literature.