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multi-partner.docxMulti-partner alliance teams for product innovation: the role of human resource management fit
Isabel Estrada , Natalia Martin-Cruz and Pilar Perez-Santana
Innovation: Management, Policy, & Practice . 15.2 (June 2013): p161+.
Copyright: COPYRIGHT 2013 eContent Management Pty Ltd.
http://www.innovation-enterprise.com/
Abstract:
Teams working in multi-partner R&D alliances need a climate that fosters learning, creativity, and innovation to succeed in the joint development of new products. The strategic human resource management (HRM) literature recognizes that aligning human resources practices and those with the corporate strategy facilitate the creation of such a climate. However, the case of multi-partner-alliance teams remains underexplored. Drawing on the relational view of alliances, we emphasize the alignment of human resources practices of multiple partners as a driver of relational performance. We extend the existing literature by explaining how HRM fit may contribute to the generation of a strong climate for product innovation in the setting of multi-partner-alliance teams. To do so, we reconceptualize the traditional HRM fit notion, considering three dimensions (vertical, horizontal, and relational fit) in two levels (partner- and inter-partner-level), and thereby account for the dual nature of the HRM phenomena in collaboration for innovation initiatives.
Keywords: multi-partner alliance teams, multi-partner R&D alliances, human resource management fit, climate for teamwork, product innovation
Full Text:
Multi-partner R&D alliances (2) constitute powerful strategies for firms to deal with new product development challenges and represent, therefore, an important phenomenon in the collaboration for innovation landscape (Gerwin & Ferris, 2004; Lavie, Lechner, & Singh, 2007). To become operational, these alliances are usually configured as a portfolio of multiple subprojects involving teams formed by different partners who are jointly responsible for specific parts of the R&D project vis-a-vis the entire project's R&D. In this study, we refer to these teams as multipartner alliance teams (MA teams). MA teams offer huge potential for the co-development of new products, arising from the ideal combination of diverse knowledge resources contributed by the multiple partners (He & Wong, 2011; Lavie et al., 2007; Mothe & Quelin, 2001). However, there is an important distinction between potential for innovation and effective realization of such potential (Madhok & Tallman, 1998), the latter aspect depending on the management of partners' interactions that occur within the MA teams. In this regard, the climate prevailing in the MA team could be considered as a key determining factor (Bowen & Ostroff, 2004; West, 1990).
The literature on strategic human resource management (HRM) emphasizes the role of HRM fit in generating a team climate that encourages innovation (Boon, Den Hartog, Boselie, & Paauwe, 2011; Cavagnoli, 2011; Delery, 1998; Jimenez-Jimenez & Sanz-Valle, 2005). Traditionally, this literature has focused on single-firm new product development teams, analyzing two basic HRM fit dimensions: vertical fit (alignment between HRM practices and the firm's strategic goals) (Marks & Mirvis, 2011; Wang & Verma, 2012; West, 1990); and horizontal fit (HRM practices are mutually complementary) (Jiang et al., 2012; Laursen & Foss, 2003). By contrast, little scholarly attention has been paid to exploring the contributions of HRM fit in MA teams (Gerwin & Ferris, 2004; Lavie et al., 2007). In the multi-partner setting, multilateral interaction among partners presumably involves unique idiosyncrasies of teamwork dynamics (Das & Teng, 2002; Kaulio & Uppvall, 2009; Lavie et al., 2007; Thorgren, Wincent, & Eriksson, 2010). Therefore, merely extending the traditional notion of HRM fit (vertical and horizontal) may not be enough to capture the complex realities of MA teams. Rather, this notion needs to be reconceptualized to provide insights on how to create a strong climate in such product innovation contexts. As teamwork quality largely determines multi-partner R&D alliances success, understanding how to promote a climate for product innovation in MA teams may have important implications for innovation management, policy, and practice.
In this paper, we address this conceptual gap in research by combining insights from the strategic HRM literature (Laursen & Foss, 2003) and the relational view of alliances (Dyer & Singh, 1998; Mesquita, Anand, & Brush, 2008). While the first collection of literature underscores the importance of HRM efforts of individual partners, the second perspective suggests the importance of relational variables. According to the relational view, the collaborative relationship itself is the locus of innovation, providing outputs that can only be created through the joint contributions of the specific alliance partners. Based on these premises, we reconceptualize the traditional notion of HRM fit, recognizing its dual nature (partner-level and inter-partner-level) and adding a new dimension: relational HRM fit. According to our framework, this new dimension concerns the alignment between the separate sets of partners' alliance-specific HRM practices (i.e., practices that each partner firm individually adopts for those of its employees that are involved in a MA team) and represents a crucial factor toward development of team climate in MA teams.
Our research contributes to bridging the fields of collaboration for innovation and strategic HRM, addressing calls to consider the importance of the relational dimension in the HRM fit (Wright, Dunford, & Snell, 2001) and extending existing understanding on the particular setting of MA teams working in an underexplored open innovation space where relational problems likely occur, putting at risk the alliance potential for innovation (Munyon, Summers, & Ferris, 2011). In addition, our extended HRM fit notion should be considered by firms in the structuring stage of multi-partner R&D alliances in practice, as well as in the design of innovation policies funding these complex product innovation initiatives.
The rest of the paper is organized as follows. First, we discuss the importance of the team climate for product innovation in the particular context of MA teams by reviewing the literature. Second, we present our reconceptualization of the HRM fit notion and discuss its contributions to MA team climate, presenting our theoretical propositions. The paper finishes with a conclusion and implications section.
TEAM CLIMATE FOR PRODUCT INNOVATION AND HRM FIT IN MA TEAMS
Team climate (i.e., the shared perception of team members about teamwork procedures and routines) is considered critical to team success (Bowen & Ostroff, 2004; Chatenier, Verstegen, Biemans, Mulder, & Omta, 2010; Hertel, Geister, & Konradt, 2005; Nonaka & Konno, 1998). Supporting evidence could be found in different teamwork contexts, like R&D teams (e.g., Pirola, 2006), medical teams (e.g., Proudfoot et al., 2007), manufacturing teams (e.g., Herbert, 2005; Zarraga & Bonache, 2005), or teams in the service sector (e.g., Schneider, Ehrhart, Mayer, Saltz, & Niles, 2005). Likewise, prior literature (e.g., Anderson & King, 1993; King & Anderson, 1995; West, 1990; West & Farr, 1990) inform the importance of team climate for teamwork innovation (either for product, process, or service innovation), characterized by the values of vision, participative safety, task orientation, and support for innovation.
Recent contributions like those of Chatenier et al. (2010) have recognized the importance of managing the human side of open innovation initiatives between two or more partners aimed at creating and delivering a new product to overcome problems associated with mutual working relationships. In a similar vein, Lunnan and Barth (2003) focused on what they referred to as bridge teams (i.e., organizational teams that interact closely with an alliance partner in the pursuit of a joint project), concluding that teamwork dynamics promoting both exploration and exploitation behaviors are important tools for achieving technology learning from partnerships. O'Sullivan (2003) examined virtual multi-firm teams in charge of co-developing a high-tech aerospace product, emphasizing the role played by shared understanding between team members. Recently, Lavie and Drori (2012) argued that the presence of relational conflicts between scientists in the Israeli nanotechnology sector may limit the contribution of collaboration to knowledge creation. As reflected by all this evidence, how to generate a strong team climate represents a key issue in the functioning of R&D partnerships and other new product development initiatives (e.g., Chatenier et al., 2010; Herbert, 2005; Pirola, 2006; Schneider et al., 2005; Zarraga & Bonache, 2005). The importance of a strong innovative climate could be applied to our research setting as well. However, an explanation of how to create such a climate in the context of MA teams is still lacking.
To explain how a strong team climate could be generated in the context of MA teams, two different selections from prior works may prove particularly insightful: the strategic HRM literature and the relational view of alliances. On the one hand, the former literature allows the identification of HRM fit as a key driver of team climate for innovation (Delery, 1998; Kamoche, 1996; Lado & Wilson, 1994; Wright et al., 2001). On the other, the relational view perspective underscores the inter-organizational nature of MA teamwork dynamics. To explain the contributions of HRM fit to team climate in the context of MA teams, we start from the well-accepted premises that: (a) HRM fit is a multidimensional concept (Boon, 2008) and (b) the success of collaboration for innovation initiatives is influenced by factors both at the partner-level and inter-partner-level (Dyer & Singh, 1998). These two premises lead us to recognize the dual nature of the phenomenon of HRM fit in the setting of MA teams, guiding our subsequent reconceptualization of the HRM fit notion. We first borrow from existing research the traditional notion of HRM fit, extend it conceptually to the case of MA teams (under the label of 'HRM fit at the partner level') and explain its contributions to MA team climate. Subsequently, we enrich this traditional notion by introducing a new dimension that accounts for the necessary HRM fit at the inter-partner level (Figure 1).
HRM FIT AT THE PARTNER LEVEL: VERTICAL AND HORIZONTAL FIT
As illustrated in Figure 2, the strategic HRM literature traditionally considered two main dimensions of HRM fit: vertical and horizontal (Delery, 1998; Kamoche, 1996; Lado & Wilson, 1994; Wright et al., 2001). Both dimensions must be in place simultaneously to promote a strong climate for innovation in MA teams.
In the context of MA teams, vertical fit refers to the alignment between the partner's alliance-specific HRM practices (practices that a partner firm adopts for its employees involved in a MA team) and the objectives of the alliance (product innovation). Put differently, each of the HRM practices that a partner firm applies for its alliance's employees needs to support somehow the development of innovations.
Following West's (1990) proposals, some individual HRM practices can be identified as major drivers of a strong MA team climate. As an example, promoting MA team members' autonomy may send a positive signal about the level of trust the firm has for team members (Hoegl & Parboteeah, 2006). Similarly, the existence of a leadership style which promotes members' participation could foster the generation of creative solutions for shared problems, enhancing the common vision and feeling within the MA team (Zarraga & Bonache, 2005). Moreover, the use of group-based compensation (Baron & Kreeps, 1999; Bowen & Ostroff, 2004; Zarraga & Bonache, 2005) motivates team members to join forces toward the team's objective, aligning individual goals and efforts and enhancing team's effectiveness. Finally, two HRM practices are essential in MA teams: lateral communication and teamwork training. First, enhancing a fluent communication within the team would allow members to transfer easily their knowledge, opinions, and ideas, and generate a trust-based environment (Edmonson, 1999; Edmonson, Bohmer, & Pisano, 2001). Second, innovative training methods could enhance the common vision, making team members familiar with the alliance culture, teaching them to be more creative and to solve complex problems in a more efficient manner (Collins & Smith, 2006; Stevens & Campion, 1994, 1999; Werbel & DeMarie, 2005). To sum up, we claim a positive relationship between HRM vertical fit and the generation of a MA team climate for product innovation.
Proposition 1: 'Vertical fit between each partner's alliance-specific HRM practices and its alliance objective contributes to generating a strong MA team climate for product innovation.
In the context of MA teams, horizontal fit refers to the complementarities between the systems of the partner's alliance-specific practices. In other words, HRM practices that an alliance applies for, its alliance employees need to be mutually reinforcing (i.e., positive synergies exist among them) (Jiang et al., 2012). In this line, Laursen and Foss (2003) studied the relationships between new HRM practices, their complementarities, and their impacts on innovation performance, and identified two particular HRM systems that are conducive to innovation. Jimenez-Jimenez and Sanz-Valle (2005), using a sample of manufacturing Spanish firms, analyzed the relationship between innovation efforts and a firm's HRM system and found that the effect of systems of complementary HRM practices on innovation performance is greater than the separate effect of these practices. Similarly, Ichiniowski, Shaw, and Prennushi (1997) studied the effects of innovative HRM practices on the productivity of steel productions lines and found that systems of complementary HRM practices have larger impact than individual innovative practices. Therefore, we claim a positive relationship between HRM horizontal fit and the generation of a MA team climate for product innovation.
Proposition 2: 'Horizontal fit' among each partners' alliance-specific HRM practices contributes to generating a strong MA team climate for product innovation.
HRM FIT AT THE INTER-PARTNER LEVEL: THE RELATIONAL DIMENSION
As stated earlier, the success of collaboration for innovation initiatives is influenced by factors at both the partner and inter-partner levels (Dyer & Singh, 1998). A core premise of the relational view of the alliances is that critical resources may span firm boundaries and may be embedded in inter-organizational routines and processes (Dyer & Singh, 1998; Mesquita et al., 2008). Moreover, multilateral interaction among partners in MAs involves unique idiosyncrasies of collaborative dynamics at all levels (Lavie et al., 2007), including the innovation processes in MA teams (e.g., Chevrier, 2003; Fontaine, 2002). As Chatenier et al. (2010) stressed:
Challenges typical for working in an open innovation
context included low reciprocal commitment, lower
social cohesion and unsafe learning climate, high
diversity and cognitive distances, high level of uncertainty,
low resource availability, absence of traditional
hierarchical lines, and power differences (p. 275).
For example, Fontaine (2002) examined the dynamics of geographically dispersed Asian teams that played pivotal inter-organizational roles. He stressed that clarifying the team mission, negotiating ethics, and building MA team identity can be harder because of 'vast culture and organization differences the team members bring with them' (Fontaine, 2002, p. 124). However, the relational rents, defined (Dyer & Singh, 1998, p. 662) as:
supernormal profits jointly generated in an exchange
relationship cannot be generated by either firm in
isolation and can only be created through the joint
idiosyncratic contributions of the specific alliance
partners (or relation-specific investments).
Therefore, in this process, the relational view emphasizes compatibility among the organizational processes of collaborating partners as the way to effectively capitalize on the alliance's innovation potential (i.e., effective realization of innovation). In particular, it can be argued that the potential for innovation of the alliance is shaped over time and is conditioned on the extent of interpartner alignment. Put differently, the partners' working and decision-making procedures must be aligned enough to facilitate coordinated action in the MA team context (Mesquita et al., 2008). Deepening these ideas, alliance scholars have considered that interpersonal interactions shape the performance of collaborative relationships, emphasizing the role of inter-partner alignment. For example, Seabright, Levinthal, and Fichman (1992) stated that the strong criterion for partner selection is the coherence between partners' resource needs provision in the alliance. Similarly, Sarkar, Echambadi, Cavusgil, and Aulakh (2001), using a sample of alliances in the global construction contracting industry, found that partners' compatibility in terms of cultural and operational aspects impacted alliance performance.
Combining insights from the SHRM literature and the relational view of alliances, we extend the importance of inter-partner alignment to explain the contributions of HRM fit in MA teams. We then enrich the view that HRM systems influence employee attitudes and behavior through employee interpretations of the team climate (Bowen & Ostroff, 2004) in multi-partner teamwork contexts. In particular, we introduce the concept of 'relational fit' as a dimension of HRM fit at the inter-partner level and argue that it largely affects the creation of a strong climate in MA teams. By 'relational fit' we refer to the alignment between the separate sets of partners' alliance-specific HRM practices which are adopted by the partners involved in a particular MA team (Figure 3).
Taking into account the interaction among different systems of HRM practices in MA teams, we state the importance of this new dimension of HRM fit at the inter-partner level. A strategy of collaborative innovation should be accompanied by the adoption of HRM practices for all team members that share a focus on innovation (Bowen & Ostroff, 2004). As Boon (2008) stressed, 'the human resource system used for a specific group of employees should be consistent' (p. 23).
To that end, the separate sets of HRM practices of each of the partners involved in the MA team should be mutually consistent. It is necessary not only to achieve HRM fit at the partner level, but also at the overall alliance level. Otherwise, MA teams risk ending up with an inconsistent HRM architecture (Stieglitz & Heine, 2007) and a strong climate for innovation is not likely to arise. Put differently, it would be worthless if a partner individually adopts a set of alliance-specific HRM practices that fosters HRM fit at the partner level without relational fit; the lack of internal consistency in the MA team could spoil the climate. Thus, that 'fit between the fits' (Boon, 2008) may be relevant for enhancing and fostering the contributions of individual partners' HRM systems to innovation in MA teams. Based on these arguments (Chevrier, 2003; Das & Teng, 2000; Fontaine, 2002; Laursen & Foss, 2003; Lavie et al., 2007), we present the following proposition:
Proposition 3: 'Relational fit' between partners' alliance-specific HRM practices have a positive moderating effect on the relationship between HRM fit at the partner level (vertical and horizontal fit) and the creation of the MA team climate for product innovation.
CONCLUSION AND IMPLICATIONS
Understanding how to create a strong climate for product innovation has important implications for research and for the practice of multi-partner R&D alliances. These alliances are usually configured as a portfolio of multiple MA teams (i.e., teams formed by different partners who are jointly responsible for specific parts of the R&D project vis-a-vis the entire project R&D). However, little is still known about how to make these kinds of teams work to attain innovation. This conceptual gap has motivated the present work. In particular, we focus on the potential contributions of HRM fit to the creation of a strong climate for innovation in the setting of MA teams.
Combining insights from the strategic HRM literature (e.g., Delery, 1998) and the relational view of alliances (e.g., Dyer & Singh, 1998), we reconceptualize the traditional HRM fit notion under a multi-level perspective. In doing so, we make it relevant for the MA team case by recognizing the dual nature of the phenomenon. In particular, we distinguish three dimensions of HRM fit in two levels. We first extend the traditional two-dimension notion of HRM fit (vertical and horizontal fit at the partner level) to the setting of MA teams. Subsequently, we introduce a new dimension (relational fit) at the inter-partner level, accounting for the alignment between the separate sets of alliance-specific HRM practices adopted by the different alliance partners. Our model states that HRM fit at the partner level is a necessary but not a sufficient condition to generate a strong MA team climate. The actual generation of such a climate is contingent upon the existence of fit at the inter-partner level.
Our theoretical contribution has some important implications for research. Overall, this study extends theoretical understanding on HRM issues in collaboration for innovation contexts. Although as far back as 1988 and 1999 some scholars (Lepak & Snell, 1999; Pucik, 1988) emphasized the necessity of making a conscious effort to bridge the gap between the human resources and the strategic alliances literatures, research in this direction remains scarce. Likewise, recent contributions like those of Chatenier et al. (2010) acknowledged the importance of investigating further the human side of open innovation initiatives. Therefore, this study contributes simultaneously to the fields of collaboration for innovation and strategic HRM by: (a) studying the relational side of the HRM fit phenomenon (Wright et al., 2001); and (b) paying specific attention to teams working in an underexplored open innovation context (i.e., multi-partner R&D alliances). In MA teams, problems associated with isolation, cohesion, and leadership are particularly common, likely damaging the potential of the alliance for product innovation (Munyon et al., 2011).
With regard to the implications for practice, some recommendations arise for both business managers and policy agencies. In consonance with prior evidence (O'Sullivan, 2003), ideally, all partners involved in real-life MA teams should design HRM practices jointly. Co-development of practices would promote internal consistency in MA teams, thereby optimizing partners' individual efforts. Whenever it is not possible to design an alliance-specific HRM system, at the least, decisions about MA teams' composition should be taken jointly among the involved partners. Hence, each firm should consider including in each MA team those employees with whom the HRM fit could be easily achieved.
However, as the number of partners--and the strategic differences among them--grows, the complexity of managing interdependencies among their alliance-specific HRM practices increases. Prior to the formation of a new multi-partner R&D alliance, potential partners should therefore assess the degree of relational fit potentially attainable in terms of strategy, objectives, cultures, and also HRM practices. Our framework further suggests that the creation of a strong climate for product innovation is a dynamic and context-dependent process, insofar as the firm must exert alignment efforts each time it participates in a new alliance (either with the same or different partners) that involves a new portfolio of MA teams.
Regarding innovation policies, it is important to note that public funding programs often favor the creation of complex multi-partner R&D alliances (e.g., with a large number of partners), overlooking the relational potential of the resulting projects. In deciding whether to provide funds for a specific project, policy agencies should assess the potential for alignment between the alliance-specific HRM practices of the applicant partners. In doing so, subsequent coordinated action in the MA team context and thus a more efficient use of public resources is ensured.
Finally, this study paves the way for further work in several ways. A highly promising avenue for further research is to analyze how to operationalize this extended notion of HRM fit. Moreover, studying the potential effects of other dimensions of HRM fit, such as person--team fit (Werbel & DeMarie, 2005), in the setting of multi-partner R&D alliances may be another interesting line of inquiry to pursue. Likewise, examining empirically the specific links between the different HRM practices and the climate for product innovation in MA teams is soundly warranted. To address the above mentioned research lines, and to test the conceptual propositions of this paper as well, we consider case study research (Yin, 2003) as a superior method. As there is a lack of research on the phenomenon of MA teams, case study methodology offers a higher capacity to explore such high-complexity team contexts (Creed, Zutshi, & Swanson, 2008) and provides the ability to capture the full complexity of HRM fit from a multi-level perspective (Boon, 2008).
ACKNOWLEDGEMENTS
The authors would like to thank the journal editors and the insightful comments from anonymous reviewers. Financial support has been received from the Regional Government of Castilla y Leon (Spain)--(Grant Ref. VA030A11-1), as well as from a fellowship co-funded by this regional institution and the European Social Fund.
Received 21 October 2011 Accepted 16 July 2012
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Isabel Estrada [1], Natalia Martin-Cruz* and Pilar Perez-Santana*
Department of Innovation Management and Strategy, University of Groningen, Groningen, The Netherlands; *Department of Management, University of Valladolid, Valladolid, Spain
[1] Authors listed in alphabetical order.
[2] In this study, a multi-partner R&D alliance is defined as 'a collective voluntary inter-organizational agreement that interactively engages multiple partners in multilateral R&D activities aimed at the co-development of new products' (Lavie et al., 2007).
Source Citation (MLA 8th Edition)
Estrada, Isabel, et al. "Multi-partner alliance teams for product innovation: the role of human resource management fit." Innovation: Management, Policy, & Practice, vol. 15, no. 2, 2013, p. 161+. Academic OneFile, http://link.galegroup.com/apps/doc/A337288506/AONE?u=udel_main&sid=AONE&xid=7f548aef. Accessed 1 July 2019.
Gale Document Number: GALE|A337288506
