Abstract
This study draws on theories of organizational inertia and relational view to examine how the pursuit of partnership synergy influences radical innovation in different technological contexts. We differentiate between two types of synergy: explicit synergy, defined as the potential to exchange interfirm operational elements to renew processes or capabilities, and tacit synergy, conceptualized as the potential to synthesize cross‐boundary resources to develop new perspectives or thinking modes. We find that both explicit and tacit synergies have positive impacts on radical innovation, and such impacts are contingent on interfirm technological diversity and environmental technological dynamism in opposing ways. Specifically, environmental technological dynamism positively moderates the relationship between explicit synergy and radical innovation but not the relationship between tacit synergy and radical innovation. In contrast, interfirm technological diversity positively moderates the relationship between tacit synergy and radical innovation but not the relationship between explicit synergy and radical innovation. Our study sheds new light on the generation of radical innovation in alliances. It also provides practitioners with useful guidelines for crafting synergy strategies that will facilitate the pursuit of radical innovation.
Highlights
Alliance innovation literature has indicated a synergistic approach for explaining collaborative innovation: a firm can share, exchange, and combine cross-boundary knowledge and capabilities with its partners to develop and implement innovative ideas, which it would not be able to achieve on© The Authors
The results show that explicit synergy and tacit synergy are positively related to radical innovation (b = 0.18, p < 0.05; b = 0.18, p < 0.05, respectively)
The present study extends our understanding of collaborative radical innovation by examining the effects of different forms of partnership synergy on radical innovation when facing different technological contexts
Summary
Alliance innovation literature has indicated a synergistic approach for explaining collaborative innovation: a firm can share, exchange, and combine cross-boundary knowledge and capabilities with its partners to develop and implement innovative ideas, which it would not be able to achieve on. Along this line of inquiry, some scholars posit that partnership synergy underpins continuous renewal of technologies, leading to increased innovation outcomes that entail radical changes to existing products or processes (McDermott, 1999; Rothaermel and Deeds, 2004). We introduce two types of technological context a firm may find itself in when allying with other firms – interfirm technological diversity and environmental technological dynamism (cf. Wang and Chen, 2009) – that allow us to discover whether different contexts exert different influences on the relationship between synergy and radical innovation
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