Managing Interorganizational Innovation Projects: Mitigating the Negative Effects of Equivocality Through Knowledge Search Strategies

Abstract

Equivocality, or divergent interpretations and understandings of tasks and knowledge, has negative effects on performance because it increases conflicts and creates communication and coordination challenges in inter-organizational innovation projects. However, equivocality may also stimulate team members to discuss beliefs and interpretations in ways that provide improved understanding of knowledge and tasks. We theorize that mitigation of negative effects of equivocality on project performance is conditional on explorative or exploitative knowledge search mode. Exploitative search (increasing search depth) allows for rapid learning based on the partners’ existing knowledge, but it also limits a team’s ability to interpret and combine diverse knowledge. Explorative search (increasing search breadth), on the other hand, allows for novel combinations of diverse knowledge and thereby alleviates the negative effect of equivocality on performance. Based on quantitative data from 251 respondents in 52 heavy-engineering innovation projects in four multinational corporations based in Sweden and from their 29 collaborating partner firms worldwide, we find that equivocality reduces project performance, but that joint explorative search mitigates the negative effect of equivocality on project performance. However, we do not find support for the moderation effect of exploitative search on the relationship between equivocality and project performance. Theoretical and managerial contributions as well as limitations and suggestions for future research are presented.