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Advances in Social Sciences Research Journal – Vol.7, No.10
Publication Date: October 25, 2020
DOI:10.14738/assrj.710.9171.
Manik, H. F. G. G., & Lukito-Budi, A. S. (2020). Revisiting Collaboration Model for Process Innovation: Promoting Absorptive Capacity,
Open Culture, and Trust. Advances in Social Sciences Research Journal, 7(10) 244-260.
Revisiting Collaboration Model for Process Innovation: Promoting
Absorptive Capacity, Open Culture, and Trust
Hardo Firmana Given Grace Manik
Faculty of Business, Duta Wacana
Christian University, Yogyakarta, Indonesia.
Andy Susilo Lukito-Budi
Faculty of Business and Economics, Atma Jaya Catholic
University of Indonesia, Jakarta, Indonesia
ABSTRACT
This conceptual paper presented a review of the company's model of
collaboration with externalities in the context of process innovation
from previous study of Un & Asakawa [51]. This paper extended the
model from Un & Asakawa [51] by promoting three new moderating
variables which were not taken into account earlier, i.e. absorptive
capacity, open culture, and trust. The combination of all three variables
together were proposed to have an impact to create a strong
collaboration (strong ties). Conversely, if conditions of one or a
combination of these three variables were not fulfilled (weak or
insignificant) then the result of previous research results was likely to
happen. Some suggestions about further work on this subject also were
discussed.
Keywords: process innovation; collaboration; absorptive capacity; open
culture; and trust.
INTRODUCTION
Being able to exist sustainably in a long term is a fundamental issue for organizations (or
companies) (This paper uses the word organization and company interchangeably. The word
companies refer to business organizations while the word organizations refer to more generic
meaning of any institution, including nonprofit organizations.). Organizations strive to survive in
the midst of competition and they need to adapt and change constantly. To enable of doing that,
organizations should continuously innovate their product/services or improve their processes in
various level of organization [51]. All the improvement steps were classified as innovation.
Therefore, it could be said that innovation was the key to create changes for survival effort.
Innovation was also a key factor for economic growth and to enhance industry competitiveness.
Governments, especially in developed countries, had actively intervened in designing and
implementing economic policies that focused on a more dynamic environment of innovation for
decades. Today, innovation was the determinant of improving the economy based on local and state
competitiveness. Innovation at the macro level was considered as a way out to create sustainable
economic activity (53].
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Manik, H. F. G. G., & Lukito-Budi, A. S. (2020). Revisiting Collaboration Model for Process Innovation: Promoting Absorptive Capacity, Open Culture, and
Trust. Advances in Social Sciences Research Journal, 7(10) 244-260.
Some basic theories provided explanation for motivation to innovate. For example, resource
dependence theory (RDT) focused on accessing the critical external resources of organization to
improve competitiveness. Efficiency theory focused on innovation to achieve economies of scale to
maintain the position of the organization in the market place. Population-focused ecological theory
(population ecology) defined innovation as way to improve the quality of organizational selection
mechanisms. Resource based view theory (RBV) theory hold out innovation concept about selecting
and establishing specific internal resources that valuable to organizations and provided supports
the company's long-term competitive advantage as a result [50, 16]. Knowledge based view (KBV)
discussed specifically about knowledge as a valuable resource of an organization ([20, 16). In
addition, researchers also discussed the occurrence of innovation in the interorganizational context
in the framework of social network theory (SNT), forming alliance from weak ties to strong ties [15,
42, 52, 23, 28]. SNT predicted that collaboration was deemed necessary and the strength of an
organizations in a network was determined by their position in the network and how they utilized
the position as bridge of structural gaps between two networks [47].
In KBV perspective, companies endeavored to acquire specific knowledge that was important to the
companies [16], and if they were not able to acquire the knowledge, they shared the knowledge
resource with their externalities [17]). The collaboration principles between companies and their
externalities were followed up by SNT of which classified the closeness and the effectiveness of such
collaborations were reflected by the closeness defined in weak ties and strong ties. The more they
communicated each other, the more they were closer into each other (i.e. building and establishing
a strong tie) [47]. The continuum between strong and weak ties was used to define collaboration
quality among organizations, either in strong ties favor [42, 28, 51] or weak ties favor [15, 52, 23]
or even interaction between the two ties [47, 28]. In addition, researchers also investigated vertical
(suppliers, customers, universities) and horizontal collaboration (competitors) to ensure continuity
of input and output [40]. The degree of depth of vertical and horizontal collaboration, as indicated
in Un & Asakawa [51] work, varied across the collaborations. Weak findings from their work
showed that although some generic conclusion were achieved, the quality of the collaboration in
each detail was still at large. Thus, it was not easy to develop a generic model to propose
collaboration model, especially when the shared resources were more intangible and tacit.
This literature review work extended the work from Un & Asakawa [51]. This paper proposes three
additional moderating variables namely absorptive capacity, open organization culture, and trust.
These variables will hypothetically increase the goodness of fit of the original model of Un &
Asakawa [51] as well as the significance of its results in relation to collaboration effort and
innovation performance. This paper focuses on process innovation in organizations as notified by
Un & Asakawa [51] as more subtle and soft compared to product innovation. Thus, this paper
contributed additional thinking to the clusters of scientific innovation, specifically to the theory of
process-based collaboration innovation.
The rest of this paper is structured as follows. First, this paper discusses organization theory,
specifically KBV and SNT, and innovation theory. Second, it discusses three covariate variables to
be promoted in this paper, i.e.: absorptive capacity (ACAP), open culture, and trust. Third, it
discusses the development of proposition, discussion, and presentation of ideal conceptual model.
Finally, this paper discusses some possible continuing research work on this topic and summarizes
the discussion.
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THEORETICAL FOUNDATIONS
Knowledge Based View (KBV) and Social Network Theory (SNT)
N-Form organizational structure was designed as an organization under KBV perspective [20].
Several notable differences between N-form (new) and M-form (existing at the moment) as follows.
First, the technological dependency between the units was tried to be combined. Integration (N- Form) among divisions was more meaningful than separation of divisions (M-Form). Second, N- Form adopted a temporary constellation due to a shift in the mode of discussion within the company
that could not be accommodated by a more permanent structure. This agility was important for a
knowledge-based organization.
Third, N-form gave more role to middle management because more detailed knowledge located
mainly at lower and middle levels of organizations. Nonaka [32] also advocated this kind of
structure model by naming it “middle-up-down management approach” to streamline the
knowledge creation process in the organization. Hence, the top management role in the transfer of
knowledge in the organization became less important. Fourth, the communication model in the N- Form organization was flattered and less bureaucratic than the M-Form organization. Fifth, the role
of top management in the N-Form organization became more as a catalyst not as a control authority
[32]. Sixth, in order to ensure that there could be a dialogue between units for integration, all
elements of structure within the organization needed to focus on one subject to be discussed rather
than subject diversification. Depth of topics were important than breadth of topics. Finally, the
dominant form of N-Form organization was a heterarchy not a hierarchy (M-Form). It meant that
N-Form was more agile and flexible. The N-form structure was highly related to openness in the
organization.
Further, the N-Form organization facilitated people in the organizations to interact and exchange
knowledge. Organizations should develop several mechanisms to accommodate the activities. The
mechanisms included rules and directives for plan coordination, schedules, forecasts, rules, policies,
procedures, and information standards [16]. In order to carry out such mechanisms, Grant [16]
mentioned the importance role common knowledge that served as an idiosyncrasy in organizations.
The idiosyncrasy knowledge could take various form, such as the form of communicative language
of communication, mutually agreed form of symbol, agreement of shared language terms, shared
meanings, and domain recognition of individual expertise. These five forms could be cited as
outcomes of organizational culture [35]. The logical consequence of this N-Form structure could
also be reflected from a strategic management approach to be more open, oriented to accommodate
innovation, as summarized in Table 1. Thus, it could argued that culture became a factor that needed
to be taken into account in the KBV and N-Form domains.
Chesbrough [6] firstly introduced the idea of open innovation (OI) by giving some arguments why
companies could no longer survive in a closed innovation (CI), where the main players of CI were R
& D people. He argued OI was triggered by an increasing mobility of knowledge workers who could
move anywhere so that companies found difficulties to control their proprietary knowledge. In
addition, the growth of venture capitalists also had made businesses became easier to obtain
working capital and to enable them exploited their ideas into products. In a new open innovation
model, companies commercialized their own ideas as well as innovations from other companies and
sought ways to put those ideas in-house into the marketplace by applying the path beyond its
current business. In addition, borrowing and expanding a term from Nonaka and Takeuchi [33] the
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Manik, H. F. G. G., & Lukito-Budi, A. S. (2020). Revisiting Collaboration Model for Process Innovation: Promoting Absorptive Capacity, Open Culture, and
Trust. Advances in Social Sciences Research Journal, 7(10) 244-260.
practice of open innovation can also produce "knowledge redundancy" which allows all members
of the organization to experience a wider exposure of learning (across company boundaries and
across fields of knowledge), both across departments internally and with various external
stakeholders including netizens in social media. The concept of an open idea-sharing platform in
the digital world is then called by Surowiecki [43] as the wisdom of the crowds. Despite its
increasing popularity at the moment, Trott & Hartmann [49] criticized OI concept by arguing that
the six principles that Chesbrough [6] initiated were actually run by firms that innovate in the CI
era so that OI was not a truly original concept. However, with the emergence and increasing use of
digital technology, a number of researches on collaboration-based innovations had evolved [34].
Further, SNT mentioned that alliance collaboration occurred because organizations wanted to
maintain their position in a network [17]. SNT saw this alliance's collaboration form as a better
activity than competition and alliance collaboration undertaken to achieve legitimacy status within
this network. Collaboration with the purpose to maintain their position were formed by trust among
the members (Burt, 2004). For example, Shin et al. [40] looked at the effects of vertical alliances,
namely the form of cooperation between Korean biotech companies and Korean pharmaceutical
companies (downstream), and horizontal alliances, namely the form of cooperation between the
biotech companies and the research organizations (upstream), in relation to innovation
performance. They found out the horizontal alliance allowed transfer of knowledge and technology
within an inverted U relationship while the vertical applied a linear relationship. This finding
supported the concept of latitudinal and longitudinal knowledge [47, 52]. Latitudinal was
concerned with the proximity of knowledge between participants in the network whereas
longitudinal was concerned with distant knowledge between participants in the network.
The SNT concept also considered the alliance collaboration to occur in a strong ties continuum line
to the weak ties. The passion for sharing within the network formed the basis of collaboration and
the position of the organization in the position of the structural gap between the two networks so
that the organization gained a competitive advantage [4]. Granovetter [15] disclosed the role of
weak ties to gain information diversification and will benefit companies rather than if the company
focuses on strong ties. Vasudea & Anand [52] revised this opinion by examining the inverted U
relationship against the weak ties position in knowledge utilization. According to their findings,
more and more weak ties will bring inefficiency to the company and become counterproductive to
the development of corporate knowledge. This finding was consistent with Shin et al. [40] of which
they found inverted U relationship among horizontal and vertical partnership. Research on strong
ties was also investigated the ties’ role in collaboration on the network. Suarez [42] examined the
advantages of applying strong ties in corporate strategic decisions, particularly through the
selection of technologies that companies will use. Kozan & Akdeniz [23] argued that weak ties
played a role in sustainable growth while strong ties played a role in the early SMEs business
establishment. Mamavi et al. [28] found out both ties had a more or less equivalent effects, which
implies support for the findings of Vasudea & Anand [52] as well as Kozan & Akdeniz [23]. Hence,
the role of both ties were different over a business cycle continuum as stated by Kozan & Akdeniz
[23]. The existence of strong ties and weak ties might occur in any collaboration types and they
were not mutually exclusive.
Alliance network strategies combined between the weak ties and the latitudinal, meaning the
proximity of knowledge created a network that was not strong in the network (the telescopic
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strategy) and the strong ties combination with longitudinal that formed strong bonds along the line
upstream to downstream (panoptic strategy) [52]. These telescopic and panoptic strategies were
reflected through the selection of externalities in upstream (suppliers and universities),
representing panoptic and downstream (customers and competitors), representing telescopic [51].
From this point of view, it could be said the collaboration with strong ties would occur if the
members put effort to level up the collaboration into long term relationship which demanded a
strong ties to endure such relationship. Thus, not every collaboration led to strong ties due to
limitations as also evidenced by Shin et al. [40]. Further, companies would choose which
collaboration could be levelled up from weak ties to strong ties not only by network centrality or
knowledge distance solely [51] but also from the importance of relationship between the companies
and their partners. This paper proposed that such collaboration would consider elusive factors that
might reside in unconscious level but had impact to the decision of which to extend the collaboration
ties. Given that, strong ties and weak ties might establish either in latitude (close knowledge) and
longitude (far knowledge) or in central location and dispersed location.
Innovation and its attributes
Tidd [45] provided types of innovation according to its novelty levels that were initiated, namely
radical and incremental innovations. Radical innovation referred to changes that altered basic
organizational activities. Incremental innovation referred to step by step changes and slower than
radical changes. He argued to maintain continuous innovation within organizations, he found out
radical innovation could derive from continuously delivered new product (product innovation)
while the incremental change became the basis for process innovation that supports product
innovation. The practice of radical organization radical change was implemented in many western
based culture firms that wanted big chunks of changes while the in the Japanese culture based firms,
the change style was more oriented towards incremental change. In implementation, both radical
and incremental can be chosen sequentially.
One case study on a construction company studied by Shibeika & Harty [39] revealed that the first
innovation made was a radical innovation (to change from decentralization to centralization) which
began by forming a small team to implement the change. The company did incremental innovation
by setting up standardized work processes, reports, and outputs. These radical and incremental
changes proved to be effective when the company went global and merged with other companies
successfully. Another example was taken from Intel case study conducted by Curry & Donnellan [9].
Implying three stages: (1) Calculating and searching for (unexposed) survival possibilities, (2)
Searching for a vendor that could help, (3) Enhancing R & D development to make it happen, Intel
had successfully saved up to $5.8M USD, to reduce carbon emissions by 60% and had increased the
company's annual profit by 41%. Hence, this longitudinal case study showed that Intel was
innovating incremental processes but gradually changing the face of the company.
Another classification was product innovation and process innovation. Product innovation referred
to a new product or service that introduced to meet external users or market needs, while process
innovation referred to a new process element that was implemented in the production process or
service operations-organizational input, task specifications, work and information flow
mechanisms, as well as equipment used for producing a product or creating a service. Both of these
innovations were reciprocal; i.e.: product innovation could have an effect on changes in activity to
produce products and services as well as process innovation could also improve product or service
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Manik, H. F. G. G., & Lukito-Budi, A. S. (2020). Revisiting Collaboration Model for Process Innovation: Promoting Absorptive Capacity, Open Culture, and
Trust. Advances in Social Sciences Research Journal, 7(10) 244-260.
quality [51]. Some of the key differences between process innovation and product innovation taken
from them were summarized in Table 2.
The ultimate goal of process innovation was the efficiency leading to cost savings (cost) which was
different from product innovation. The latter aimed to produce novelty with the consequence was
to have a competitive price. Process innovation performance was valued by internal organizations
while product innovation was assessed by external parties or through its absorption in the market.
For novelty goal, product innovation brought radical novelty (or a big chunk of changes) while
process innovation delivered more incremental novelty that suited for incremental changes as
indicated by some previous research [10, 45, 9, 39]. Process innovation, in conjunction with
codification of knowledge, represented tacit knowledge that emphasized exploration of knowledge
(the depth) while product innovation explicitly aimed for the exploitation of knowledge (the
breadth). Product innovation represented an easily codified and standardized knowledge that
resulted in a tool for knowledge exploitation [20, 52]. Last but not least, process innovation was
embedded within the organization while product innovation was capitalized through output of
products or services [10].
Un & Asakawa [51] undertook research on collaboration among corporations (represented by R &
D departments) with their externalities from process innovation domain. They argued that
collaboration also had a positive impact on process innovation. There were four corporation
externalities introduced in their research, i.e.: suppliers, universities, competitors and customers.
They used two dimensions to segregate the externalities. First, knowledge distance dimension (far:
suppliers and competitors; close: universities and customers) to reveal substitution of knowledge
and technology. Second, network location (upstream: competitors and customers; downstream:
suppliers and universities) of the organization. They hypothesized that the performance of process
innovation between the alliance's R & D collaboration with suppliers (H1) would be greater than
that of the university (H2) would be greater than competitors (H3) would be greater than customers
(H4). In short: H1 > H2 > H3 > H4).
Un & Asakawa [51] successfully obtained statistical test support on the dominance of the role of
downstream externalities (H1 and H2) against upstream externalities but the study were unable to
find signification support to the upstream externalities themselves. In other words, although the
industrial-university collaboration motive [21] could be confirmed, this study had not been able to
confirm findings from other studies in collaboration topics for innovation in the eyes of product
innovation, such as the dynamics of vertical and horizontal collaboration of companies [40],
corporate growth through collaboration [28], or exploration of collaborative motives in the context
of innovation in information technology-based firms [2]. Arguably, the postulate proposed by Un &
Asakawa [51] had good theoretical validity but they negated some important factors that
instrumental in increasing the impact on the company's downstream channels, as indicated directly
and indirectly by a number of publications in several fields related to collaboration and alliances
(e.g.: KBV / SNT: [16; 20; 23; 28; 42; 47; 52], OI and alliances: [21; 40; 44; 55; 60])
From the discussion above, this paper analyzed that there were some subtle process that enable
organizations to pursue stronger relationship with their partners. Along with the collaboration
effort imitation, organizations and their partners must have enough information to know their
opponents and they reacted according to that knowledge [5]. Given that, the ability to recognize
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partner’s quality, i.e. its knowledge, its reputation, etc., was instrumental. This paper suggested
three additional moderating variables to boost the ability to recognize and proposed a conceptual a
refinement of collaboration model from Un & Asakawa [51].
THREE ADDITIONAL VARIABLES
Absorptive capacity (ACAP)
ACAP was defined as the ability of a company to recognize the value of new and external
information, assimilate it, and apply it to commercial purposes" [7, p. 128]. Since this construct was
introduced, by the year 2015 it had been recorded nearly 3500 publications cited this construct
(Apriliyanti and Aon, 2017). Cohen & Levinthal [7] put R&D at the center of the company's
innovative process by connecting it with learning and innovation. Apriliyanti & Aon [1] investigated
the evolution of ACAP concept over the next 25 years. They put ACAP topic coverage in several areas.
During 1990 era, it started with interorganizational learning followed later by learning with dyadic
concept and knowledge transfer. In 2000 era, ACAP concept shifted from asset to capacity reflected
in dynamic capability concept and how it applied to interorganizational learning in multi
relationship. Volberda, Foss, & Lyles [55] found out ACAP concept very often overlapped with other
constructs such as cognition, knowledge, learning, and dynamic capabilities. It also developed
across discipline of science. Unfortunately, many studies only used ACAP principles to support other
concepts they proposed [25, 55, 36, 1]. For the purposes of this paper, this paper described the
ACAP theory mentioned by Cohen & Levinthal [7] together Zahra & George [61] and a milestone in
the discussion of ACAP theory by some of the most influencing papers in this concept [7, 25, 61, 48,
55, 36].
The ACAP construct supported the KBV and SNT theories promoting knowledge as primary source
of corporate competitive advantage. ACAP was the key to develop and improve the company's
knowledge base. ACAP became one of the antecedents of learning capacity [55]. In knowledge- intensive companies, learning at the organizational and individual levels were both critical. The
learning process occurred in both level [41]. Given that, ACAP might be acquired at individual,
group, and organizational levels. Individuals engaged in aspects of knowledge sharing and
recognition; at the group and organizational levels: it engaged in routines, history and stories,
documentation, procedures, heuristics, and important knowledge in creating a shared
understanding of knowledge at the enterprise level (Matusik and Heeley, 2005). Those with higher
ACAP levels used more alliances and had more in-home skills than those with lower rates [25, 61].
Logically, ACAP will be the baseline for doing further action. As Lane & Lubatkin [25] stated, high
ACAP would help organizations to understand its opponent and could decide whether they wanted
to pursue the collaboration leveled up or stayed as it was or even terminated. High ACAP enabled
organizations to pursue further understanding whether collaborations were fruitful or hurtful to
organizations. Hence, the presence of high ACAP was instrumental in the collaboration model. The
ACAP role was not only as a supporting concept but also as an instrumental variable that changed
the reliability of the collaboration model.
Transfer of knowledge from the owner of knowledge to the recipient was one important subject in
ACAP discussions. Several factors related to success in this transfer process include past experience,
and level of knowledge [7]. There might be an overlap during knowledge transfer between the
knowledge of the giver and the knowledge of the recipient. Companies also tended to choose new
knowledge close to their present knowledge as it was more easily understood and transferred from
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Manik, H. F. G. G., & Lukito-Budi, A. S. (2020). Revisiting Collaboration Model for Process Innovation: Promoting Absorptive Capacity, Open Culture, and
Trust. Advances in Social Sciences Research Journal, 7(10) 244-260.
giver to recipient. Knowledge was more likely to be transferred between people with training and
similar backgrounds. These corporations shared a common scientific knowledge with their
colleagues would experience more learning. Lane & Lubatkin [25] found out that the form of dyad
(teacher-student or mentor-mentee relationship) would have higher probability of success in
knowledge transfer [25]. This paper defined this closeness between two parties (giver and sender)
as strong ties collation which also represented in latitudinal – panoptic model from Vasudea &
Anand [52].
Volverda et al. [55] emphasized the characteristics of a company's ACAP related to the nature of
knowledge in its environment. They supported the idea of Cohen & Levinthal [7] stated ACAP
tended to be developed and maintained when there was a need for spillover exploitation of the
company's routine activities due to the increasing domain of knowledge. This routine process
spawned the term dynamic capability (DC) in which it was manifested in several forms, such as the
capacity to integrate enterprise resources, enterprise resource reconfiguration capabilities, and the
capability to transfer resources within the company [12]. Thus, DC represented the company's
latent ability to update, enhance, and adjust its core competencies over time, whether in turbulent
or normal situations [12]. They indicated that the organization's ACAP consisted of interconnected
mosaic of individuals within the organization. They argued that although maintaining this capability
over time required investment, it also generated the ability to capitalize on valuable new
developments and to prepare for better performance breakthroughs.
The concept of ACAP as DC was indicated to be a new trend in ACAP theory after ACAP had
previously been associated with the principle of intangible assets of companies [36] as also
indicated by Apriliyanti & Aon [1] (figure 2).
Zahra & George [61] suggested improvement of the dynamic ACAP capability by differentiating
ACAP in two major dimensions: potential absorptive capacity (PACAP: acquisition and assimilation)
and realized absorptive capacity (RACAP: transformation and exploitation). Todovora & Durisin
[48] criticized the reconceptualization of Zahra & George [61] and suggested that early models of
Cohen & Levinthal [7] needed to be re-incorporated into the PACAP and RACAP from Zahra &
George [61] model. They also identified important antecedents such as social integration,
appropriate regimes, feedback loops, and power relations. Jansen, Bosch, & Volberda [22] revealed
different effects of organizational antecedents on ACAP components. In their study, organizational
coordination skills, such as cross-functional, participation in decision-making, and job rotation had
increased the potential of ACAP at the individual level; while systemic capabilities such as formality
and socialization capabilities (connecting and socialization strategies) had reinforced ACAP at the
business unit level. Lowik, Kraaijenbrink, & Groen [27] continued this inter-level research by stating
that low ACAP at individual level could increase at the group level.
In summary, the concept of ACAP had been assimilated in various organizational theories, mainly
in the area of learning, organization dynamic capability and innovation. ACAP research also
discussed the characteristics of knowledge, managerial cognition, capacity building, organizational
structure, and scope and interorganizational learning in the context of dyadic and networking. ACAP
had a role in creating collaborations, growing them, and helped organizations to verify their
strengths and weaknesses to establish and maintain collaborations. Given that, owning high ACAP
was instrumental for organizations in light of verifying as well as transferring knowledge from giver
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to recipient. Both sides needed to have high ACAP [25]. It was also argued that knowledge transfer
had a high probability of success among companies with identical knowledge (previous semantic
knowledge) [7, 25], both horizontally and vertically [40]. For the purpose of this conceptual paper,
this paper aimed for high ACAP in group level since the ACAP concept related to collaboration for
innovation at group level.
Organization Culture
Hatch [19, p.661] defined organization culture as the process of "manifestation, realization,
symbolization, and interpretation." She described the culture as a dynamic model that moving
forward and backward. Cultures manifested its values through artifacts and symbols but each of
these artifacts and symbols were only the tip of the iceberg of assumptions and values. Each culture
element could interact forward (transform to) or backward (revised from). The embodiment of the
artifacts and symbols were operationalized in forms of communication such as language, special
symbols, or shared meaning [35].
In implementation, corporate culture could be crafted for specific purpose [57, 37]. For example, to
be able to do business process management (BPR), vom-Brocke & Sinnl [57] argued that one key
enabler factor of innovation was mixed among organization culture, action and structure that
operationalizes, implements and maintains culture. To achieve such common understanding among
the members of the organization, arguably, it needed open communication that revealed unclear
information became transparent and crystal clear messages to all members. Another example was
case study of enterprise resource planning (ERP) implementation from Scarbrough et al. [37]. They
revealed a diffusion mechanism in the implementation of technology. They found out three
important mechanisms: (1) Framing a success stories from similar projects; (2) Bridging between
success stories and field conditions, how the technology was positioned, called affordances. The goal
was about putting the user's perception on a particular output that was believed to be achieved by
taking into account the local context of the organization.
(3) Reflecting experience of representatives of actors of innovation implementation. It appeared the
concept of affordances successfully reinforced its role as a bridge between dream and reality. The
affordances became a concept that helped users to focus no longer on success (from elsewhere) or
failures that may befall, but they hold onto a shared vision of what technology could do specifically
for them. Scarbrough et al. [37] argued the congruency between technological vision and technical
capability was important so that there was no misperception, either over expected or under
expected which could lead to uncontrollable rejection rates. Given two examples above, this paper
convinced that the culture theme could be redirected to get what organization wanted and, more
importantly, the theme should be out spoken and transparent, in an open culture situation.
Furthermore, some researchers also linked creativity with innovative behaviors related to
organizational culture [30, 31, 38]. Miron et al. [30] concluded that individual creativity must be
placed within the organizational culture that supported innovation in order to exploit the
innovation. Scott & Bruce [38] supported the explanation from Miron et al. [30] and proposed
leadership, workgroups, and individual-style attributes to solve problems (intuitive or systematic)
as independent variables and used the mediation variables they classified as the psychological
climate that encourages innovation. Naqshbandi et al. [31] found out that highly integrative culture
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Manik, H. F. G. G., & Lukito-Budi, A. S. (2020). Revisiting Collaboration Model for Process Innovation: Promoting Absorptive Capacity, Open Culture, and
Trust. Advances in Social Sciences Research Journal, 7(10) 244-260.
(or open culture) enabled in-bound OI which directed to collaboration. They found out that high
hierarchy culture had retarded the collaboration process.
Trust
While the existence of the highly integrative culture was instrumental, Yström et al. [60] also
revealed that open environment would stimulate high intense communication among the members
of the environment and built trust among them. Hallen & Rosenberger [18] also found supporting
evidence about trust from their work about collaboration between venture capitalists and
corporates. They confirmed collaboration between the two parties could develop more among local
players and, along with the relationship went, they could strengthen the collaboration by lowering
down their defenses and secrecy among them. Thus, the two studies concluded that trust factor
also became one critical factor in doing business, including collaboration agreements. The quality
of collaboration relationship leveled up into next level when the trust among the collaboration
members were increasing. Experimental study from Chang et al. [5] also in favor. It showed that the
social concern of partner variables had an effect on the negotiation decision. They claimed that
opponents became more tolerant during negotiation process when they perceived their potential
partner have good intention.
Findings from Scott & Bruce [38], Chang et al. [5], Yström et al. [60], and Hallen & Rosenberger [18]
brought implications for innovation collaboration issues. This paper argued that organizations with
a strong concern for responsible innovation [54], and with good governance for innovation
proceedings (including work ethics codes with innovation partners) [8] would bring positive signal
to their potential (or continuing) partners. Responsible innovation was directed to the objectives
that emphasized on doing innovation with no harm for people and planet while at the same time
the innovation also improved the quality of life of human beings and the planet [54]. This paper
argued confidence factors would grow rapidly in the eyes of potential partners and existing partners
when organizations showed this kinds of goodwill to their partners.
CONCEPTUAL MODEL AND PROPOSITIONS DEVELOPMENT
We followed up the work of Un & Asakawa [51], using two dimensions of knowledge distance
(latitudinal vs. longitudinal) and network position (input vs. output). Their findings indicated the
dominance of the upstream (input) organizational externalities (supplier and university) compared
to the downstream (output) organizational externalities (competitors and customer).
Suppliers had the strongest strong ties for the organization to collaborate due to the close nature of
knowledge (latitudinal) and its proximity to the organization through input channels. In most cases,
the supply chain from supplier to organization had set a standardized application for both of them
to communicate via information technology application. To that end, this paper supported the
hypothesis of Un & Asakawa [51] stating that collaboration with suppliers was the most dominant
(most powerful) for process innovation. Further, the second upstream externalities university, the
proximity of knowledge was predicted to be longitudinal (far) so that the bond in the network, in
our argument, was weak ties. However, collaborations with universities could be developed
primarily for capacity building and organizational competence [11]. In the presence of high ACAP,
it was likely the relationship would be more fruitful. Thus, this paper proposed process innovation
could still happen in this cell but not as strong as with supplier.
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On the contrary, in downstream externalities, this paper argued that process innovation was a bit
harder to do. First, collaborative relationships with competitors would be more difficult to initiate
since they may have different methodology of production. They also might acquire different
information technology application that made the collaboration became more difficult. Thus,
although knowledge distance was close (latitude) and the bond could be strong ties but this paper
argued the knowledge base could be different. In addition, it was not easy to build trust between
the two parties although they shared similar technology due to their natural competitive position
and, as a result, the relationship would be built mainly on the surface.
For such occurrences, arguably product collaboration was easier to achieve than process
collaboration which was more elusive. For customer, organizations could use input for
improvement from the customer to provide feedback to the process. They also developed customer
relationship and customer order application to push order which both application should align with
organizations’ technology and business process. Therefore, this paper argued that both parties
would be willing to contribute more to this cell compared to collaboration with university and
competitor cells although the technology and knowledge categorized as far (longitude). In contrast
with Un & Asakawa [51], this paper argued that establishing collaboration with customers was
easier and more dominant compared to collaboration with competitors (downstream) as well as
universities (upstream). Given that, this paper argued supplier and customer categorized into
strong ties referred to their technology and knowledge proximity while university and competitor
reflected weaker relationship, i.e. weak ties. Table 3 described the relationship.
To describe interrelation variety of the collaboration outcomes with knowledge distance and
network position dimensions, three moderating variables; namely ACAP, open organization culture,
and trust; were added. Organizations should acquire high ACAP prior to establish collaboration.
High ACAP would help the organizations to optimize the benefit from collaboration [52]. In
addition, ACAP discussed in this proposition should be measured in the organization level, as the
relevant ACAP to be considered on this matter was the organizational ACAP, a mixture from
accumulation of individual ACAP of the organization, cumulative organizational ACAP (reflected in
previous/existing knowledge of the organization), and transformation result from all individual
ACAP into new organizational knowledge level [61, 48, 27]. Next, organization with innovative
culture would encourage collaboration. This innovative culture could be reflected in the values and
norms in the organizations and codified through their code of conduct.
Commitment from top management also crucial to open the collaboration process as employees
sought decision from the top to encourage collaboration [59, 58]. This paper defined this innovative
culture as open culture of which its existence had to be dominant across other culture types in
organization. Lastly, as discussed previously, high trust would also strengthen the consent of
collaboration with one particular partner [5]. Again, both these open culture and trust should also
be measured at organization level because individual culture and trust were not relevant for this
issue.
Hence, some propositions related to them model could be established as follows.
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Manik, H. F. G. G., & Lukito-Budi, A. S. (2020). Revisiting Collaboration Model for Process Innovation: Promoting Absorptive Capacity, Open Culture, and
Trust. Advances in Social Sciences Research Journal, 7(10) 244-260.
TO APPLY EVERY POSSIBLE COLLABORATION SCHEME, ALL MODERATING VARIABLES
SHOULD BE DOMINANT. THEREFORE:
Proposition #1: High ACAP, strong open culture, and high trust will enhance the possibility to
establish collaboration. And, when all of the moderating variables were strong, the ties among each
externality could be expressed as follows.
Proposition #2: When all moderating variables are in place, this paper could predict that process
innovation from collaboration with 1(supplier) is higher than collaboration with 4 (customer) is
higher than collaboration with 2 (university) is higher than collaboration with 3 (competitor). And,
when one or more of the moderating variables were weak, this paper proposed similar result with
Un & Asakawa [51]. Therefore:
Proposition #3: process innovation in collaboration (1 or 2) > collaboration (3 or 4).According to
the discussion above, Figure 1 depicted the best achievement from all the antecedent variables
contributed to the end result (collaboration execution).
SUMMARY AND RECOMMENDATIONS
To conclude, this paper had elaborated theoretical concepts about innovation, especially process
innovation, and its relevance to collaboration activities among organizations, from underlying
concept to the latest empirical works. This paper found out that the model was lacked of some
explanation variable (independent variable) and caused the model impact for process innovation
was not as strong as product innovation model. To extend this literature study from previous works,
this paper conceptualized three moderating variables (i.e. ACAP, open culture, and trust) to support
the initial collaboration model. Some propositions had been established to detail the effect of the
three moderating variables towards collaboration strength. This paper argued under certain
circumstances the propositions would strengthen the model. This paper raised some concerns
related to measurement and method (data collection and sample criteria). Two challenging
questions emerged, i.e.: (1) what kind of research method could be used and (2) how some
measurements should be established.
To perform future research on this model, some issues have been identified. First, the next research
focusses on experimental study first to ensure the moderating variables are in the right place and
they function as planned. Also, given the moderating variables are quite elusive, survey on this
model should take place in time series (or longitudinal) for the best result. Given the moderating
variables are quite elusive, survey on this model should take place in time series (or longitudinal)
for the best result. Second, the issue on measurement. Future research should establish some
observed measurement to improve its objectivity and precision of the result. Some notably potential
works, for example, the work from Fang, Liao, & Xie [13] showed a mathematical model to measure
perceived risk index on a potential supplier partner based on its controlled risks (e.g.: delay habits,
delivery quality, etc.) and uncontrolled risks (e.g.: fire, earthquake, crisis, etc. This index number
could be used to interpret whether collaboration should be established or terminated. Also, the
work from Gao [14] also provided a model that predict learning curve in long term collaboration
and efficiency (or benefit) should be gained after the knowledge of the organization became more
establish. There was non-linear phenomena to be considered when organization negotiated for new
or renewal contracts [46]. Lastly, this paper figures out the sample criteria is critical. This paper
extends the original sample criteria from Un & Asakawa [51] by adding operation people should be
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included as potential sample. The reason is organization processes are embedded in the operation
and become tacit knowledge. To operationalize and implement process innovation thoroughly, no
one has better knowledge than operation people.
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APPENDIX
Tables and Figures
Table 1. Comparison of Management Approach (modified from Lichtenthaler [26, p.8])
Strategic Issues M-Form (conventional) N-Form (shared)
sustainable emphasis on financial performance
and social responsibility.
Linking economic and societal issues,
attention to creating shared value.
holistic Strong role of business functions,
focus on positive corporate synergy.
acknowledging posistive and negative
synergies.
analytical top down leadership, traditional
customer relationship
particiaptory leadership using big data
and evidence based.
relational focus on single firm strategy and
competitive advantage
Large portfolio of interfirm alliances and
network, open innovation, close
resource sharing.
enterpreneurial
focus on establushed process and
management routines, emphazing
efficiency.
focus on innovation and corporate
enterpreneurship
dynamic ganing sustaining competitive
advantage after long period.
temporal competitive advantage,
emphasis on strategic renewal and
organizational transformation.
Table 2. Product Innovation vs. Process Innovation (summarized from Un & Asakawa [51], p.140)
Dimension Product innovation Process innovation
objective of innovation novelty efficiency
competitive impact price cost
valuation of innovation external internal
degree of novelty radical, exploration incremental, exploitation
codifiability of knowledge clear, concrete, explicit, higher unclear, obscure, tacit, lower
location of knowledge technological, separable,
independent
organizational, systemic,
interdependent
Table 3. The Position of Externalities on the Two Dimensions of Knowledge Distance (latitudinal
and longitudinal) and Network Position (upstream vs. downstream) (adjusted from [51], p.142)
Ipstream = input Downstream = output
Close = latitude supplier - 1 (strong) competitor -3 (weak)
Far = longitude university - 2 (weak) customer - 4 (strong)
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Figure 1. Conceptual model.