Chapter Discussion

The focus of this chapter was to illustrate the components that facilitate social capital accumulation over time, and the actions/response that contribute to the growth and development of the network. The relational development behaviour has been strongly associated with providing an environment conducive to knowledge exchange (Carmeli & Azeroual, 2009). As evidenced in the analysis, there were varying conditions that contributed to how the relationship has developed over time and how the implementation of the conditions may have resulted in various developmental outcomes, as well as how these conditions have contributed to the multi-faceted benefits for each of the parties’ experience.

154 Recent studies have called for a focus on relational behaviour (Hughes et al, 2014) and social capital development behaviours (Ng and Feldman, 2010), Studies into network development have focused on survival functions, network membership and the impact of network structure following significant events (Carroll & Hannan, 2000). However, relational context plays a significant role to the functioning and responses to environmental changes that occur over time. To the researcher’s knowledge there has not been an ethnographic study on the development of an open innovation network built between a university and business. Cooperation, advantage, and trust can be built over time (Huemer, 2014). Networks are not static, and the oscillation of new members and internal/external pressures influence the resources available and the knowledge creation therein (Nonanka, 1994; Hughes & Perrons, 2011). As well, as the impact of embeddedness and the effects of social capital development over time (Ng and Feldman, 2010).

The analysis began with an overview of pre-existing platforms and motivational triggers that fostered early development of the relational exchange. Several scholars contend that the success or failure of strategic relationships is dependent on the existing similarities between the organizations. Several contingencies existed including prior academic-industry experience, institutional pressures, and constrained resources. However, it is not possible to identify all the contingencies associated with a relationship to develop a contractual arrangement prior to implementation. This is why the alliance literature has begun to consider trust and the development of social capital as the theoretical explanation for how partnerships can be maintained (Zaheer et al., 1998).

The successful transition to further stages in network development was dependent on the appropriate responses and actions taken to the tipping points. Each phase presented a new dynamic and challenge that required complex social processes to be coordinated; which had implications for the network structure and operational focus, and demanded actions to shift the organizational focus and to maintain the vitality of the relational exchange for continued value creation. The extent to which value can be created from opportunities presented by network content and structure can only be realised through the behaviour of the individuals acting within the social system. It aims to provide a temporal perspective of relational context and changes over time. The research investigation provides an extension of Cross & Parker’s (2004) stages of network development framework. The aim is to understand the structure, the network pressure, and the various relational themes that emerge.

155 A core challenge identified by the partners lied within the potential for conflicts about knowledge ownership and commercialization of developed technologies. Additionally, there was a common dissatisfaction between both partners in defining a sustainable business model for this type of relationship, and this provided the common language necessary to initiate discussion with key actors at the forefront. Within that challenge, a further complication stemmed from the tendency among university and business relationships to have idiosyncratic contracts for each new project, the implication being that within any one relationship, many different legal contracts could be in place each accounting for a specific project. The governance and project management complexity this creates is inefficient and unattractive to grow an overall university-business relationship. To minimize the negotiation process, simply the governance of the overarching relationship and speed up project development and approval, this relationship established a ‘master agreement’ to govern the nature of knowledge ownership, intellectual property and technology commercialization on a scale that covers the university rather than any one individual. This governance approach is unusual and not standard practice but allowed the relationship to grow and scale very quickly. For example, in the first year of the relationship alone, 7 number of projects were set up and over the course for the next 4 years, a further 55 projects were established.

Apart from the transaction cost advantages, there are institutional advantages to this form of coordination mechanism. Specifically, the master agreement contract creates mechanical trust that simplifies new project development, allowing the focus to shift squarely to more strategic issues rather than diverting attention to a lengthy process of contact negotiation and the micro-management of projects thereafter. This is a further component of the ‘rules of the game’ established within the early stages of the relationship that enabled far greater scope for value creation for both parties. It also lent credibility and prestige to the relationship in its early years, encourage more individuals to become involved in the relationship. This allowed for accelerated access to resources and project formation, but also allowed both partners to respond to new opportunities to drive growth and to recruit new members (i.e. hitherto unconnected employees for both organisations) into the relationship.

From the analysis, there have been four major tipping points that were identified and resulted in the further stages of development of the network: initiation, relationship building phase, maintenance, and renewal. The investigation then moves to reveal the functioning of the initiation phase. The initiation phase focused deeply on understanding each other’s mutual needs as well as how to leverage capabilities and resources that each partner could bring to the

156 table. For the university, this meant devoting diverse expertise, drawing external partners, and negotiating fair IP rights. For the business, this meant ensuring that academic goals were still capable of being achieved and brining unique challenges to the table. The relationship building phase focused on building internal awareness of knowledge based resources and trust among the actors. The maintenance phase focused on the continual encouragement of collaborative behaviors and knowledge support. The fourth and final stage shifts the focus of the network to a renewal and growth phase, which resulted in an emphasis on opportunity identification through new network partners and new project proposals.

The transition from each phase was characterized by key points that demanded actions a shift in the organizational focus to maintain the vitality of the relational exchange for continued value creation. The successful transition to further stages in network development is dependent on the appropriate responses and actions taken to the tipping points. Each phase presented a new dynamic and challenge that required complex social processes to be coordinated; which had implications for the network structure and operational focus. This research site and this analysis offers intriguing insight into the dynamic processes of relational exchange due to the self-organizing processes and methods employed in the construction and growth of the network. As mentioned previously, this relationship was built in a self-organizing and organic way, which indicates that network fragmentation benefited the development of the relationship. An over focus on rigid mechanisms and planning processes might dilute the adaptive nature which contributed to network growth. This network addressed these obstacles by being flexible. Rigid planning procedures may have reduced the ability to be responsive to changes. These findings suggest that multifaceted adaptive processes are essential, but are often overlooked in network studies.

A final, yet key, theme that emerged in this investigation was the need to continually engage with external institutional forces and to continual manage legitimacy through all phases of the network development. The group needed to define the tools that were necessary to communicate the ‘how’ and the ‘why’ effort should be expended on development to a wider audience, indicating that the network activity extends beyond the partner organizations and has an impact beyond the boundaries of the relational exchange.