A Capability Approach To Interorganizational Innovation

To address knowledge incongruences, firms are increasingly turning to strategic alliances as a means to access a wider pool of knowledge. However, firms find though they have the opportunity to access external knowledge, they do not possess the ability to successfully act on that knowledge. This research seeks to address the question “Why are only some alliances successful in creating innovations?” through the development of a model and associated hypotheses of collaboration based on knowledge management capabilities and relationship characteristics, as evidenced by innovation outcomes. Using a capability-based framework, this research investigates (1) the outcomes of innovative performance and alliance satisfaction in collaborative relationships, (2) how knowledge capabilities serve as a means to produce these performance outcomes, and (3) the mediator role of relational trust between the knowledge capabilities and performance outcomes. This research offers new insight into capability based inter-organizational collaboration by linking the independent, yet complementary, perspectives of the knowledge-based view of the firm and dynamic capabilities theory together with transactive memory theory. The results confirm that a firm’s knowledge capabilities positively influence the success of interorganizational relationships at both a micro and macro level. Realized absorptive capacity promotes alliance performance directly, while a firm’s potential absorptive capacity and knowledge networking capability are important preconditions of realized absorptive capacity and contribute to alliance performance indirectly.