From Subcontracted R&D To Joint Collaboration: The Role Of Trust In Facilitating This Process

High-technology companies operate in a dynamic and unstable environment due to rapidly changing technologies and consumer tastes. An increasing number of companies are engaging in joint R&D projects to subvent the constraints to competitiveness in this turbulent environment. Collaborative R&D activity has been studied from the perspectives of strategic management [Dodgson (1992)], organizational behavior [Powellet al.(1996)], operations management [Nooteboomet al.(2000)] and business-to-business marketing [Turnbullet al.(1996)]. Within the literature, trust has been identified as highly significant to alliance effectiveness, governance and the development of a long-term mutually beneficial relationship. [Perryet al.(2002); Ramaseshan and Loo (1998); Morgan and Hunt (1994); Ganesan (1994); Nooteboomet al.(2000)].This paper describes a collaborative R&D project between two high-tech companies to trace the development of trust between the partners. It specifically considers the role of trust in facilitating the progression of their relationship from subcontracting to joint collaboration. Reaffirming existing theories, the findings of the paper identify partner compatibility and an effective selection process as well as openness and honesty as the foundations for trust. Moreover, sound management practices were found to foster high levels of co-operation and commitment to the relationship. The main contribution of the paper is the identification of opportunistic behavior as a possible positive phenomenon. This provides new insight to existing literature which traditionally assumes a negative relationship between trust and exploitative behavior.