Knowledge sharing and safeguarding in R&D collaborations: The role of steering committees in biotechnology alliances

• Published in: Strategic management journal Vol. 39; no. 7; pp. 1912 - 1934
• Main Authors: Devarakonda, Shivaram V., Reuer, Jeffrey J.
• Format: Journal Article
• Language: English
• Published: Chichester, UK John Wiley & Sons Ltd 01-07-2018; John Wiley & Sons, Ltd; Wiley Periodicals Inc
• Subjects: Alliances; Assimilation; Biotechnology; Biotechnology industry; Collaboration; Committees; economics; Governance; Interfaces; joint committees; Knowledge; Knowledge sharing; knowledge transfer; R&D; R&D alliances; Research & development; RESEARCH ARTICLE; transaction cost; Vehicles
• ISSN: 0143-2095; 1097-0266
• DOI: 10.1002/smj.2898

Research summary: This research contributes to alliance governance research by demonstrating how partners' administrative controls in nonequity collaborations regulate knowledge transfers across partners. These administrative controls can take the form of board-like joint committees having explicitly delineated authority over certain alliance activities. We illuminate governing committees as an important, albeit neglected, instrument for administrative control in the governance of non-equity alliances, and we demonstrate that these organizational mechanisms facilitate knowledge flows within the scope of an alliance. We also show that governing committees safeguard against misappropriation hazards, particularly when a partner possesses the incentive and ability to engage in such behavior. This study extends alliance governance research beyond the implications of the equitynonequity dichotomy to consider a wider and richer gamut of governance instruments available to address the challenges associated with knowledge transfers in alliances. Managerial summary: Non-equity allianees are important vehicles to collaborate with external partners, particularly in the biopharmaceutical industry and other high-tech sectors. To guide these collaborations effectively, partners can use the contract to custom-build jointly-staffed managerial units with clearly demarcated decision-making responsibilities. We demonstrate that these organizational mechanisms facilitate knowledge flows within the scope of an alliance. We also show that governing committees also safeguard against misappropriation hazards, particularly when a partner values a firm's knowledge highly, or it possesses the required ability to absorb and assimilate a firm's knowledge. Our results imply that contractually-defined managerial interfaces provide a channel to regulate knowledge-sharing in collaborative alliances.