University of Groningen Master’s Thesis
Tension in Industry-University alliances: Overcoming the
post-honeymoon blues.
MSc BA – Strategic Innovation Management
by
EVELINE C. TEN HOOR S2489090
June 25th, 2018
Word count: 15191 (excluding references and appendices) Supervisors: Dr. Pedro de Faria & Dr. Isabel Estrada Vaquero
TABLE OF CONTENT
ABSTRACT 3
1 INTRODUCTION 4
2 LITERATURE REVIEW 7
2.1 Industry-University Alliance Formation 7
2.2 Industry-University Alliance Barriers 9
2.3 Industry-University Alliance Governance 10
2.4 Research Gaps 12
3 METHODOLOGY 12
3.1 Research Design 13
3.2 Case Selection 13
3.3 Data Collection and Analysis 14
3.3 Research Quality 17
4 FINDINGS 17
4.1 ‘Wave Energy’ IU Alliance 18
4.2 ‘Power Network’ IU Alliance 23
4.3 Summary of Findings 29 5 DISCUSSION 31 5.1 Motivational Dissimilarities 31 5.2 Behavioral Dissimilarities 32 5.3 Administrative Dissimilarities 33 5.4 Personal Dissimilarities 33 5.5 Proposed Model 34 6 CONCLUDING REMARKS 35 6.1 Implications 36
6.2 Limitations and Further Research 37
ABSTRACT
Industry-University (IU) alliances are often subject to tensions caused by dissimilarities between industry and university partners. Interestingly, during the formation phase of IU alliances, these dissimilarities do not necessarily lead to tension, due to a honeymoon effect. However, shortly after the formation phase, the likelihood of tension rapidly increases. Early detection of barriers might be beneficial for IU alliances’ future success. Therefore, this paper explores how these tensions within IU alliances emerge, and how tensions are managed to prevent them from escalating in the future. In order to do so, a study of two complementary cases in the energy industry was conducted. The results indicate four types of dissimilarities (motivational, cultural, administrative, and personal) that lead to four types of barriers (orientation, routine, transaction, and distinctive), and are managed through four governance mechanisms (communication, flexibility, contracts, and hierarchy). The findings are presented in a model of IU alliance governance which can be used for empirical testing. This paper contributed to the integrated perspective on alliance governance, applied to the context of IU alliances. For managers, this model assists in identifying the barriers that arise in the alliance, and in deducing how related tensions can be effectively managed.
Keywords
1 INTRODUCTION
“Innovation is the commercialization of any new product, process, or idea, or the modification
and recombination of existing ones.” - Rothaermel (2013, p17)
As the above quotation indicates, innovation involves both the development of something new, and actually putting this into the market (Rothaermel, 2013). A common way for firms to achieve this is by the formation of alliances (Hamel, 1991). Alliances have become an increasingly used strategy for innovation, and the topic has been widely researched from several theoretical lenses. From a transaction cost perspective, alliances are regarded as beneficial to lowering the additional costs of developing new products or internalizing the processes that are needed to innovate (Parkhe, 1993). Looking at it from the resource-based view, alliances grant access to specific skills or knowledge that can be recombined with in-house knowledge, in order to create a new or improved product (Das & Teng, 2000a; Eisenhardt & Schoonhoven, 1996; Galunic & Rodan, 1998).
of including research institutions in innovation development is highlighted (European Commission, 2017).
A substantial part of research about IU alliances is based on the barriers to collaboration. For instance, Bruneel et al. (2010) argue that the different nature of the university and the industry may form a source for conflict. On the one hand, orientation-related barriers may occur, because universities and industry partners are argued to have differing ideas about the way knowledge should be created and appropriated. Furthermore, their attitude towards the alliance goal, reciprocal objectives, and the scope of the alliance might differ (Estrada, Faems, Cruz, & Santana, 2016). On the other hand,
transaction-related barriers appear when it is unclear to whom intellectual property belongs or when university
administration challenges the collaboration. Additionally, routine-based barriers are proposed to play a role in IU alliances (Estrada et al., 2016). These barriers are based on the assumption that universities and industry partners differ in their behavior towards communication, decision-making, and flexibility of tasks. To mitigate these barriers, solutions are pointed towards extensive collaboration, coordination, long-term investment in interactions, and face-to-face contact (Bruneel et al., 2010; Estrada et al., 2016). Other researchers highlight the importance of experienced technology transfer staff in IU interaction (DiGregorio & Shane, 2003; Lockett & Wright, 2005).
The scope of this research will be narrowed to the formation of IU alliances in the energy industry. Especially in sustainable industries, alliances are regarded as a valuable strategy to develop and diffuse new technologies (Hockerts & Wüstenhagen, 2010; Walsh, 2012). This view originates from the interplay between incumbents and startups. When a market receives an abundant amount of pressure to become more sustainable, new startups emerge (Hockerts & Wüstenhagen, 2010). However, as these startups do develop useful new technologies, they often fail to succeed in the broad market. Contrarily, large incumbents often fail to develop new technologies quickly, but do have the potential capacity to implement them on a large scale. Ways to restore this imbalance are the formation of joint ventures and alliances (Walsh, 2012). With this in mind, Hockerts & Wüstenhagen (2010) have suggested the energy industry as an interesting context to assess the interaction between diverse players. Incorporating university partners in this assessment is something that has not been done before. However, IU alliances in the energy industry provide an interesting opportunity for research, because the ongoing transition towards sustainable energy sources has expanded the Dutch research capacity for energy research to an annual budget of approximately €10 billion (McKinsey & Company, 2016).
In Groningen, the energy transition has manifested itself in the development of multiple energy transition platforms, partnerships, and alliances (New Energy Coalition, 2018). However, experts in the field admit that the energy coalition is still fragmented, and that a small amount of the alliances actually succeed (personal communication, January, 2018). This fragmentation may indicate dissimilarities between partners in energy alliances. This makes it an interesting context to research how these dissimilarities lead to tension. Furthermore, the fact that few alliances succeed in the energy industry allows to explore how new alliances try to prevent failure and manage tension through their governance decisions. In order to respond to the call to incorporate the university's perspective on alliances (e.g. Bishop et al., 2011) and the specific request of Du et al. (2014) to explore management strategies in open innovation projects, the following research questions will be answered in this paper:
How do partner dissimilarities in recently formed IU alliances lead to tension?
How does tension caused by partner dissimilarities in recently formed IU alliances affect decisions regarding alliance governance?
2 LITERATURE REVIEW
Nowadays, technological developments are moving more quickly than ever, and the expenses of research and development have increased in numerous technological industries (Mowery, 1998). Therefore, firms are increasingly looking for new sources to access and develop new knowledge quickly and inexpensively. One of the knowledge sources that has gained popularity in the past two decades is scientific research (Du et al., 2014; Bruneel et al., 2010). Universities are regarded as a relatively inexpensive source of in-depth knowledge. Nonetheless, many alliances fail (Ariño & Doz, 2000). An important cause for this phenomenon is the dissimilarity in expectations between the alliance partners. Other authors explain failure in IU alliances by the dissimilar perspective on knowledge between industry and university partners (Carayol, 2003). As discussed, industry players often engage in an alliance with strategic intentions: they strive to obtain a dominant competitive position through the integration, construction, and reconfiguration of internal and external competences (Teece, Pisano, & Shuen, 1997; Wernerfelt, 1984). In order to withhold the competition, knowledge is traditionally regarded as a resource that should be appropriated and protected. Contrarily, scientific research is generally aimed at the creation of reliable and public knowledge (Bruneel et al., 2010). Therefore, universities are regarded as unbiased, independent institutions providing access to knowledge (Du et al., 2014). This conflicts with the industry perspective, in which knowledge is protected. Because of this fundamental difference in perception towards knowledge, collaboration between industry and universities is often regarded as unnatural (Carayol, 2003; Dasgupta & David, 1994). Despite this, scholars have begun to acknowledge the benefits of IU alliances (Bishop et al., 2010; Chesbrough, 2003). In the following subsections, an overview of IU alliances literature is provided. First, the rationale and the process of IU alliance formation is described. Thereafter, literature about the dissimilarities between industry and university partners is discussed. Lastly, perspectives on alliance governance are highlighted.
2.1 Industry-University Alliance Formation
Eisenhardt and Schoonhoven (1996) argue that alliance formation is stimulated by strategic and social needs. From a strategic perspective, firms are proposed to engage in an alliance when the benefits of forming the alliance exceed the benefits of proceeding alone. From a social perspective, firms are argued to form an alliance when they know that the potential partner is a trustworthy and valuable companion. Similarly, prior experience with IU collaboration increases the likelihood that a company or university will engage in a collaboration with that partner again (D’Este & Patel, 2007; D’Este et al, 2012; Gulati, 1995). In IU alliances, both strategic and social needs are visible at the industry side. Strategically, universities can provide low-priced access to high-quality knowledge (Du et al. 2014). Socially, universities are regarded as trustworthy partners, because they are not in a competing position (Bruneel et al., 2010). However, little research has been performed on the rationale of universities to form IU alliances (Bishop et al., 2011; D’Este & Patel, 2007). Extant research has mainly pointed to governmental triggers stimulating universities to form partnerships (George et al., 2002). Furthermore, Du et al. (2014) have requested for a more detailed analysis of the nature and contributions of both types of partners.
According to Doz et al. (2000), the process of alliance formation can be emergent or engineered, depending on the environmental interdependence between the network partners. In the emergent path, environmental interdependence is high, and partners are driven by similar interests (Doz et al., 2000). In this situation, there is often a complication in the market by which all partners are affected. By joining forces, technological components can be combined to generate new innovation, or a shared standard can be created to stimulate a certain technology. In the engineered path, environmental interdependence is low, but alliance formation is driven by a triggering entity (Doz et al., 2000). In this case, an external institution or individual plays a substantial role in connecting the alliance partners. This triggering entity often has the lead in defining the alliance goals, partner contributions, and alliance governance. In IU alliances, the process of alliance formation can be more complex. On the one hand, pooling diverse sources of knowledge can be a valuable source of innovation, which stimulates the emergence of IU alliances (Chesbrough, 2003). On the other hand, environmental interdependence is generally low, because the partners do not necessarily depend on the success of the alliance (Carayol, 2003; Gulati, 1995). Because of this complexity, more research is needed about the emergence of IU alliances. Furthermore, Doz et al. (2000) have requested for further research on the path to alliance formation in different contexts.
alliance is argued to be affected by the initial assets available in the alliance (Fichman & Levinthal, 1991). These assets could include long-term relationships, geographical proximity, extensive interaction, and financial assets (Doz et al., 2000; D’Este, Guy, & Iammarino, 2013; Fichman & Levinthal, 1991; Mohr & Spekman, 1994). Nonetheless, early detection of these barriers might be beneficial for IU alliances’ future success (Bruneel et al., 2010). Extant research has defined several circumstances under which initial assets can form a barrier in the collaboration, which will be discussed in section 2.2 (Bruneel et al., 2010; Estrada et al., 2016). Moreover, scholars have requested for a more in-depth analysis of the mechanisms through which troubled alliances can be rescued or revitalized (Ariño & Doz, 2000; Faems, Janssens, Madhok, & Van Looy, 2008). This will be addressed in section 2.3.
2.2 Industry-University Alliance Barriers
Despite the fact that a more open perspective towards knowledge generation and innovation has become more popular in both literature and practice (Bishop et al., 2010; Chesbrough, 2003), interpartner dissimilarities between industry and universities remain an obstacle when it comes to collaboration (Bruneel et al., 2010). Scholars have reached a strong consensus about the essence and the risks of these dissimilarities (Bruneel et al., 2010; Carayol, 2003; Cyert & Goodman, 1997). The following types of barriers that result from these IU dissimilarities are described in IU literature:
First of all, differing goals and expectations can form a barrier in IU collaboration (Bruneel et al., 2010; Estrada et al., 2016). Scholars have defined this as orientation barriers (Bruneel et al., 2010) or orientation-based dissimilarities (Estrada et al., 2016). Dissimilar goals can mainly be explained through contrasting incentives for university and industry partners to engage in an alliance (Dasgupta & David, 1994). This is because the products delivered by both parties are substantially different (Cyert & Goodman, 1997). Universities aim to generate state of the art knowledge, find proof for theoretical concepts, and publish their findings in order to maintain a top research position (Carayol, 2003). Conversely, companies aim to access new knowledge to turn into innovation, and eventually increase their profits. When partners want to achieve different goals, this might form a barrier to collaboration and harm the outcome of the alliance. Furthermore, expectations can differ in terms of reciprocal obligations, alliance scope, and alliance horizon (Estrada et al., 2016). Orientation barriers increase the probability that conflicts or tensions arise in an IU alliance, and increase the likelihood for an IU alliance to fail, shortly after the formation phase (Bruneel et al., 2010; Estrada et al., 2016). Despite these findings, Estrada et al. (2016) highlight that an in-depth exploration of orientation barriers is advised to support their observations.
cognitive distance (Muscio & Pozzali, 2012). An example of this is when a specialized professor uses jargon to explain a studied phenomenon to a less specialized company representative. In this case, the company representative cannot understand the jargon and cannot reproduce it into knowledge. Furthermore, time perception differs, because companies are often oriented at short-term deadlines, whereas university research is often based on long-term investigations (Du et al., 2014; Muscio & Pozzali, 2012). Lastly, examples of behavioral dissimilarities are decision-making, task execution, and flexibility (Estrada et al., 2016). Assuming that no other barriers are present, these dissimilarities can lead to tension when the alliance partners put no coordination efforts into mitigating these dissimilarities (Estrada et al., 2016).
Transaction barriers are partly related to orientation barriers, because they are often a result of the different orientations of universities and industry partners (Bruneel et al., 2010). However, transaction barriers are related to patent filing or other time-consuming, administrative procedures that are required in IU alliances. An illustrative example of a transaction barrier is the conflict concerning intellectual property (Bruneel et al., 2010). As the provider of knowledge, universities may expect that the property rights of this knowledge belong to them. On the contrary, companies claim their part of the property rights, based on their financial input in the project. In some cases, this barrier can be so strong that the IU alliance cannot be established (Hall, Link, & Scott, 2001). Furthermore, whereas universities aim to publish new findings, industry partners tend to protect it from leaking to the competition (Dasgupta & David, 1994). To prevent these conflicts from evolving, contracts are often developed by universities and technology transfer offices, which can lead to an amount of administration that in turn forms a new transaction barrier (Bruneel et al., 2010). Nonetheless, Bruneel et al. (2010) highlight that the relationship between the university coordination and transaction barriers should be further explored. 2.3 Industry-University Alliance Governance
Social exchange theory builds on the assumption that a person’s actions in a relationship are based on the expected rewarding reactions from their partner. Trust is a vital aspect of the relational perspective, because it can provide alliance partners with assurance about their partners’ competence and their intentions to collaborate (Dyer & Singh, 1998). Within these perspectives, different governance mechanisms can be deployed (Das & Teng, 1998):
Following the structural perspective, contractual safeguards are a common method to enforce control in an alliance (Parkhe, 1993). In particular, when transaction barriers are present in the IU alliance, contracts can be beneficial (Bruneel et al., 2010). For example, to prevent universities from publishing essential information, legal clauses are added in the collaboration agreement. Besides using contracts as an enforcement practice to reduce alliance risk, contracts can be used as a coordination mechanism by which tasks are divided and decision-making is simplified (Madhok, 1995; Reuer & Ariño, 2007). This can especially be beneficial in overcoming routine barriers, as these barriers are mitigated through close coordination (Estrada et al., 2016). Contracts, formal coordination, and planning are specifically important in the formation phase of the IU alliance, in order to align expectations (Morandi, 2013).
Another structural mechanism that is apparent in literature is hierarchy (Williamson, 1975). This mechanism is predominantly based on authority. Hierarchical control is manifested through the formal structure of the company (Das & Teng, 1998). In this case, there is an obvious line of authority from the specific project teams to the board of management, in which subordinates report to their supervisors. In IU alliances, this can be more complex. IU alliances often exist of multiple partners from different companies, reporting to different supervisors. Therefore, coordination is considered an important aspect in mitigating barriers (Estrada et al., 2016). This can be achieved through the assignment of a project manager or knowledge transfer staff in the IU alliance (DiGregorio & Shane, 2003; Lockett & Wright, 2005). These managers have the authority to enforce control through formal policies, procedures, and structures (Das & Teng, 1998).
& Teng, 1998). Klein Woolthuis, Hillebrand, and Nooteboom (2005) support this with empirical results in strategic alliances.
Another relational mechanisms that allows to build trust in the alliance, is communication (Das & Teng, 1998). On the one hand, communication is necessary to develop a relationship and to make sure that friction in the alliance is discussed and solved. On the other hand, communication is deployed to prevent information asymmetry. When partners openly share information, this can be perceived as an indication of trust (Creed & Miles, 1996). Furthermore, Mohr and Spekman (1994) define joint problem-solving as an effective mechanism to solve conflicts in alliances. They argue that this is an example of a constructive conflict resolution technique in which the outcome of the conflict is mutually satisfactory. In the process of joint problem-solving, communication is essential (Ariño & Doz, 2000). 2.4 Research Gaps
3 METHODOLOGY
As addressed in the literature review, there are several research gaps regarding the formation process of IU alliances and the way tensions are managed in this stage. Specifically, there is a lack of research on the university’s perspective on IU alliances, and on governance mechanisms in IU alliances. The following section elaborates on the research method that is deployed to address this gap and to answer the research questions.
3.1 Research Design
Given the infancy of IU alliances research, much is to be discovered about the underlying mechanisms of IU alliance formation and tensions (Bishop et al., 2011). Therefore, an exploratory research design is the most suitable. Therefore, I conducted an in-depth multiple case study (Eisenhardt, 1989; Yin, 1981). During this analysis, I performed a within-case analysis to become familiar with the cases and to deduct patterns that help shaping propositions (Eisenhardt, 1989). Rather than the sole purpose of comparing the cases, alliances were selected based on their complementary nature. One of the cases entails the pre-formation stage of IU alliances, whereas the other case entails the post-formation - or operational - stage of IU alliances, shortly after the alliance was formed. This allowed me to map the full stage of IU alliance formation. Having two complementary cases can provide richer data about the collaboration dynamics in the formation phase of IU alliances. The research consists of multiple phases. In the first phase, experts in the field of IU alliances and collaboration were interviewed to define the scope and to select a case. In the second phase, I interviewed all participants of the case and triangulated the data with complementary documents (Gibbert, Ruigrok, & Wicki, 2008). In the third phase, I analyzed the data using within-case and cross-case analyses, and developed propositions for theory. The latter will be elaborated in the discussion section.
3.2 Case Selection
Table 1: Description of Wave Energy and Power Network.
Wave Energy Power Network
Goal of the project Developing and commercializing technology to generate sustainable energy.
Developing technology to measure energy quality.
Initiator University of Groningen. Economic Board Groningen.
Phase Pre-formation. Post-formation.
Duration At least 4 years. At least 4 years.
Stage of development Technological validity in simulated environment.
Technological validity in simulated environment. Partners Few contracts signed, looking for
partners for funding.
Consortium of 8 partners.
Wave Energy is an initiative from the University of Groningen. The project runs within research institute ENTEG. Wave Energy is an innovative platform which uses renewable energy technology and deploys it in deep ocean waters. The platform is expected to generate an average energy output that could supply approximately 70,000 households with power. Currently, the project is at an early development stage, but the partners are aiming develop a prototype soon. Furthermore, the Wave Energy project currently has six university network partners and six industry network partners. Nonetheless, they are recruiting new industry partners to expand their network. With this, they eventually want to reach the stage in which the actual product can be tested and launched.
Power Network is an initiative from the Economic Board Groningen, in collaboration with sustainable energy suppliers, network operators, and research institutes. The goal of the project is to use the 5G network to create a data platform that measures energy quality, and to monitor and control overloads in the sustainable energy network. Currently, Power Network is in the development phase of this technology, which is planned to finish this year. A substantial difference that should be noted, is the fact that the consortium of Power Network has been formed, so they are not recruiting new partners. This is an indication of the post-formation stage (Das & Teng, 2002).
3.3 Data Collection and Analysis
Phase 1: Defining the scope. In this phase, I reviewed research about IU alliances and compared it with the insights from professionals in the energy industry. These insights were generated by means of the expert interviews. The objective of the interviews was to develop a thorough understanding of the practical side of IU alliances in the energy industry. Furthermore, the interviews were used to find and select suitable cases for this study, and to develop initial questions for the case interviews. All expert interviews were conducted in Dutch: the native language of the respondents.
Table 2: Overview of data sources.
Interview nr. Firm Profession Details
1 Expert Professor of entrepreneurship & valorization.
Face to face, 01h22
2 Expert Knowledge valorization. Face to face, 00h54
3 Expert Senior advisor public private
cooperation.
Face to face, 01h02
4 Expert Professor of regulation of energy
markets.
Face to face, 00h41
5 Expert Dr.ir. Energy and management. Face to face, 01h19
6 Wave Energy Project leader, CTO. Face to face, 00h58
7 Wave Energy Assistant professor in advanced production engineering.
Face to face, 00h49
8 Wave Energy Associate professor in mechatronics and control of nonlinear systems.
Face to face, 00h29
9 Wave Energy Business development, investor. Face to face, 00h57
10 Wave Energy CEO. Face to face, 01h09
11 Power Network Dr.ir. Energy and management. Face to face, 00h50 12 Power Network Business development manager. Face to face, 00h47
13 Power Network Project manager. Skype call, 00h52
14 Power Network Technical specialist core network. Telephone call, 00h45
15 Power Network Project coordinator. Face to face, 00h51
Document nr. Firm Type Details
1 Wave Energy Private Business plan
Phase 2: Data collection. In the second phase, I conducted five semi-structured in-depth interviews at each case. The interview questions were based on both the findings from the literature review and from the results of the expert interviews. In order to retrieve rich and novel data, respondents were requested to provide examples and follow-up and ‘why’-questions were asked. Furthermore, similar questions were asked to different respondents to look for similarities. At the end of each interview, I asked the respondents for additional documents that might be useful for this research. This way, the results from the interviews could be triangulated with documents in order to prevent retrospective data collection biases (Yin, 1981). Eight of the interviews were conducted in Dutch: the native language of the respondents. As Dutch was not the native language of all interviewees, two interviews were conducted in English: the second language of the respondents. An overview of the data sources can be found in table 2.
Phase 3: Data analysis. In this phase, I coded the data and linked it to relevant concepts from the literature review (Miles & Huberman, 1984). First, I coded the expert interviews and connected this with quotes from academic articles. Based on this, I developed an initial codebook. I used this codebook to assign codes to the cases. As the analysis has been an iterative process, complementary, ‘open’ codes were assigned to the interview transcripts and the supplementary documents. For the analysis, I started with assigning codes to all the interviews. Thereafter, similar codes were combined. Codes that were irrelevant to answer the research questions were erased. These additional case-specific codes were again connected to the literature. An Excel-file of the codebook is available on request. During the coding process, I followed a structure similar to the interview questions, using the following themes: dissimilarities, tensions, and governance. In the questions about dissimilarities, I tried to explore the relationship between dissimilarities and tensions. In the questions about governance, I explored the relationship between tensions and governance decisions.
After the coding process, I started with examining the connections between the three themes, using quotes from the interviews. The connections between dissimilarities and tensions are used to address the first research question: How do partner dissimilarities in recently formed IU alliances lead
to tension? The connections between tensions and decisions regarding alliance management are used
to address the second research question: How does tension caused by partner dissimilarities in recently
formed IU alliances affect decisions regarding alliance governance? Eventually, four types of tension
3.3 Research Quality
4 FINDINGS
The aim of this section is to provide an overview of the results of both cases. The cases are discussed in two separate sections, divided by two subsections. The first subsection entails the findings regarding the relationship between dissimilarities and tensions. These are related to the first research question: How do partner dissimilarities in recently formed IU alliances lead to tension? The second subsection represents the findings about the relationship between these tensions and decisions regarding governance. These are related to the second research question: How does tension caused by partner
dissimilarities in recently formed IU alliances affect decisions regarding alliance governance? Lastly,
the findings from both cases are combined and compared to look for similarities. 4.1 ‘Wave Energy’ IU Alliance
Wave Energy was initiated in 2013 by a researcher from the University of Groningen. The main goal of the project is to conduct research on wave energy and to trigger the interest to turn this research into an actual product in the future. In order to do so, a spin-off company will be founded. This process has already been set in motion. Currently, the company structure has been set and a business plan has been developed. Additional activities, such as establishing a physical knowledge infrastructure, developing agreements for intellectual property, and perfecting the marketing strategy, are still under construction. When this foundation is built, the company will officially recruit financial and supply partners that can contribute in the development of a prototype and the eventual commercialization of the product in the market. A few partners have been approached, but no official contracts are signed yet.
[Trust is important,] because we are in the development stage, in which we need to showcase that the principle will work. If a partner cannot be trusted, that means that either they cannot deliver what they are promising, or they probably sell the technology to other parties. (University partner)
The tough part about partners is that they would like to collaborate, but in order to actually invest, they need to gain something from it and currently, that is uncertain. (University partner)
Another barrier that has emerged at Wave Energy resides in the different work ethic of entrepreneurs and employees of the university. One of the advisors at Wave Energy describes that there is a fundamental cultural difference between being an entrepreneur and being a university researcher:
Most scientists who aspire to become an entrepreneur fail. [...] Scientists are used to work from nine to five with regular breaks. As an entrepreneur, you have to be committed and be willing to start at seven in the morning and go home at ten in the evening, so to speak. It’s an entirely different game. Therefore, I always advise to bring someone in from outside the company. (Industry partner)
In order to bridge the gap between the working styles of the university and the startup, an external CEO was hired in 2017. The CEO has experience in both academics and business, creating a connection between both worlds. However, this does not imply that the difference in working styles has disappeared. According to the CEO, the complex knowledge structure at the university forms a large barrier. He mentions that the knowledge and information required to found a startup is available at the university. However, this knowledge is widely dispersed and it is challenging to find the right person to obtain a certain piece of information. Therefore, the process of founding the spin-off company is time-consuming and inefficient. Furthermore, it becomes evident that there is a difference in the way work is prioritized at the university. This does not align with the strict planning that is desirable at the startup:
The entire institution is built around research and education, but now you are basically doing something else. [...] You just notice that the spin-off company does not have the highest priority and therefore you need to adjust your activities to the pace of the university. (CEO)
[A reason to terminate a collaboration with the university is] when the progress is taking too long. (Industry partner)
construction is favored, because it will prevent the patents from dissipating when the spin-off company goes bankrupt. In case the company succeeds, the patents will eventually be acquired by the spin-off company. However, the university will stay closely connected to Wave Energy, as fundamental research is performed to improve the product and test its propositions. Furthermore, the project offers opportunities for students to write their thesis on an innovative topic. Nonetheless, since the publication of research might intervene with the patents, the CEO regards this as a large barrier:
In previous collaborations, I have experienced that universities have the tendency to publish everything quickly and open everything up, whereas companies have the tendency to keep everything inside. As a company, nothing is more dreadful than having critical company knowledge made available to the competition. (CEO)
Half a year ago, we had an idea about energy storage. We did not have a patent, so we had to stay quiet. If we would have published it, we could never apply for a patent, because the idea would already be out in the open. So, you have to be careful and make sure that certain pieces of technology are not researched by students or published by academics. (University partner)
In order to found the spin-off company, investors are needed. However, because Wave Energy has been operated solely by university researchers in the past years, a large barrier is the lack of experience in founding a company and working with industry partners, instead of with the university. When looking for financing partners, this might put Wave Energy in a disadvantageous position, relative to more experienced entrepreneurs. One of the university partners described that he does have the specialist knowledge about the device, but he would have difficulty in explaining it to a potential partner:
There’s also the disconnection that, if you would ask me to pitch the device, I would have trouble making things up about the cost effectiveness, for example. (University partner)
Furthermore, the university’s knowledge base is highly dissimilar to that of potential industry partners. Many investors have extensive experience with working with entrepreneurs, and they are trained in selecting high-potential projects. Because the partners at Wave Energy have little experience with entrepreneurship and they might have difficulty selling the product to partners, creating partnerships might form a barrier for now. In this respect, Wave Energy’s business development advisor, who is also a potential investor, described the following situation:
It’s like an adventure. I don’t have experience with [founding a company], so I don’t know what the best way to run it is. I just think that as a team, we all have to agree on the decisions we make and the direction we take. (University partner)
Tensions and governance decisions. In the formation of the spin-off company, recruitment of new partners is primarily based on mutual trust. In order achieve this, respondents indicate that they attend networking events to establish relationships with potential partners, and to create a network. Furthermore, Wave Energy is developing a prototype with which they can demonstrate that the concept works. The recruitment of new partners is mainly focused on receiving funding, but the selection of partners is a deliberate process. An important criterion for the investing partners is that they have a positive attitude towards the idea and are prepared to take a risk. Furthermore, the respondents highlight that a personal connection with the potential partner plays an important role, since the collaboration is long-term. Once partners become involved in the spin-off, the relationship will become more formal.
At this stage, it is especially important that there’s mutual trust and simply a connection with a potential partner. (University partner)
If the company is looking for a low risk activity or it is not open towards innovation, it is already a clear indication that they’re not really a good match. (University partner)
Furthermore, respondents stated that there is a difference in work ethic between the university and the industry. Therefore, flexibility is an important aspect in managing the alliance. Differences in time perception are managed by adapting the speed of the spin-off to the speed of the university. As long as no industry partners are actively involved, there is still time to do this:
[The timing difference] is not a big problem, but you just have to know that your project does not have the highest priority, so the throughput time of the project will be adapted to the speed of the university. [...] For now, there is time to do so. (CEO)
However, when industry partners become more involved in the spin-off, it is very important to make sure the project is able to make profits in the future. In order to achieve this, flexibility is essential. The long-term goals of the project are clear, but this does not imply that all steps in between are fixed. In order to increase the chance of success, there is still the possibility that some parts of the product will be put aside in order to be successful. Furthermore, the partners are positive towards the creation of a joint venture if that is necessary to continue developing the product.
It’s a modular product, so eventually, we look at the parts that generate the most value for the company. Whether that is the storage part or an entirely different technology, that doesn’t matter. Either way, there will be enough research opportunities for the university. (CEO)
In order to prevent unintended knowledge spillovers due to the publication of competitive research, research and business will become two separate entities. The research entity will stay connected to the university, and will serve as a provider of research and development to the spin-off. Furthermore, the university will still focus on research projects for students, as long as it does not publish information that might harm the competitive position of the spin-off. The spin-off company will focus on the commercialization of the concept. This separation will prevent conflicting stakes and interest from entangling. Further conflicts between patenting and publishing are formally prevented through contracts.
Actually, there are two parallel paths: one is on the research side, one is on the business side. (University partner)
To become less dependent on the university, we keep research at the university, but try to separate it from the development of the company. That has some advantages for the company: you can apply for different types of funding and attract different types of investors. [...] Furthermore, it allows the company to grow in value. So, you can keep all intellectual property within the firm. (University partner)
Lastly, in order to compensate for the lack of entrepreneurial experience at Wave Energy, an external CEO was hired. Accordingly, they reinforce the management team and will be more convincing when they pitch the concept in front of potential investors. The respondents highlight the importance of having someone in a leading position at the company. To illustrate, all knowledge about founding a company is available at the university, but accessing this knowledge is a demanding process. Hiring a CEO can ease the process of founding a company. Furthermore, the CEO can make sure that deadlines are met, agreements are followed, and responsibilities are clear. Nonetheless, the CEO stresses the need for formal guidelines at the university, in order to ease the process of alliance formation and setting up a company.
I think the entire process would have lasted much longer if I (CEO) would not be involved. You have to find a balance between your speed and the velocity of the university. [...] However, it would be useful if you would make a general guideline for university startups or a first draft that explains how you would organize it and share information. (CEO)
personal. This has led to tension based on lack of trust, because university partners need to be able to trust their investors not to exploit their idea with the wrong intentions. Therefore, governance is primarily informal in this context, as university partners try to establish a relationship with potential investors. Second, the work ethic between the industry and university differs. This has presented itself in a dissimilar time perspective. Whereas the CEO prefers to work with strict deadlines, the development of the startup does not have a high priority at the university. The CEO has tried to solve this through flexibility in deadlines and adapting processes to the speed of the university. Third, the tendency of the spin-off to protect intellectual property conflicts with the university’s objective of publishing fundamental research. In order to avoid conflicts, Wave Energy decided to formally separate research from business. Eventually, they will be connected, but function as two separate entities. Fourth and last, experience has formed a barrier. Because the involved university partners have little experience with founding a company, the entire process to formation progresses slowly. Furthermore, the university partners are familiar with selling products to potential investors. Contrarily, investors are experts in assessing startups. Therefore, the partners decided to hire an experienced CEO to connect the dissimilarities between industry and university.
4.2 ‘Power Network’ IU Alliance
Power Network is a project initiated in 2017 as one of the pilots within a larger project that examines the commercial application of a new wireless network technology: 5G. This new technology will be developed externally. 5G is likely to be at least ten times faster than its predecessor, 4G, and has a connection density of 1 million devices per square kilometer. Therefore, the technology has great potential to be deployed for novel products and services. In order to explore these applications, Economic Board Groningen has approached several partners to hand in their ideas. Once there was enough enthusiasm for an idea, a pilot could start. Power Network is one of the pilots within the energy domain. The main motivation for Economic Board Groningen to develop these pilots is to stimulate the local economy by involving small and medium enterprises in the development of new products and services. Furthermore, when the project succeeds, the concept can be widely integrated in the province and possibly the entire country. Power Network is a consortium consisting of eight partners. The eventual objective of the project is to develop a service in which energy can be traded. This goal and the responsibilities of each partners are clearly laid out in a project plan. Although the consortium is formed, the project is in an early stage of development.
solving questions from practice, proposed by the industry partners. Currently, three students have finished a project at Power Network, and three new students have recently been recruited. Students are involved for a period of five months. Conversely, industry partners are mainly motivated by exploration opportunities to improve their business. When 5G enters the market, the industry partners of Power Network are among the first to have a novel commercial application for it. Therefore, in this case, first-mover advantages are an important motivation:
First, we want to discover the market potential of these new network applications. [...] Second, we can test our new services. [...] Third, it improves our brand and image to work on innovation projects. (Industry partner)
We have many outdated medium voltage stations that all need to be supplied with communication. Currently, we use 4G to achieve this. With this project, we want to see if 5G is an option to supply the stations with communication. (Industry partner)
Because of the different motives of the Hanze and industry partners, some tension was observed. One of the industry partners described an example in which the students of the Hanze worked on a project. The students were involved for only a short period of time and they did not have a thorough understanding of what had to be researched. The industry partner described that there had not been enough feedback moments with the industry partners to keep the students on the right track. Eventually, the results of their project turned out to be of less value for Power Network:
Universities are just looking for research. That’s is okay, because as a university, you don’t have to make profits. I think it’s good to involve students in innovation projects. However, I wonder how reliable the results of the students are. [...] I saw the presentation of the students, but decided not to use the results, because the data were unreliable and the students had not completely understood the line of questioning. (Industry partner)
thinks it is more effective to focus on the first phase of the project, before continuing with the next phase:
What I find difficult in this type of innovation projects is that some partners focus mainly on pursuing their own interest. [...] The scope is clear for now, so we need to focus on that first, before we continue with the next phase. (Industry partner)
Because the consortium consists of eight partners, there are various interests and stakes that should be managed. Interestingly, some tension emerged because of the lengthy administrative procedures of the funding application. For the Hanze and the small business partners, funding is essential. These partners do not have the budgets to invest in this type of projects. Therefore, they are willing to go through the long procedures of subsidy application.
I am in this situation in which I have the time to work with students on these projects. If I had to arrange budgets within the Hanze, this would not have been possible. (University partners)
Moreover, one of the larger industry partners highlighted that he did not want to be involved in the lengthy process of subsidy application. In the beginning of this project, this partner had a leading position as formal owner of the project. However, according to him, the time and effort needed for the application process outweigh the benefits of receiving the funding:
I have plenty experience with subsidy projects, and I told my co-worker that this is something you should not want. It costs way too much time and effort, especially in a consortium with eight parties. (Industry partner)
We noticed that during the formation, [a large industry partner] started to distance itself from the collective goals and focus on their own goals. [...] Eventually, we discovered that they did not like the extra responsibilities of being a project owner. (Project leader)
There are several parties who do not actually contribute to the project. Is that necessary? I wouldn’t know. I think we could have achieved the same with four partners, we don’t need all eight of them. (Industry partner)
At this stage, some partners show little commitment, because they do not have a clear role yet. But once we have finished the first stage, they will have a larger role in the project and we will step down. (Industry partner)
The project leader at Power Network explains that a part of the dissimilar commitment results from the extent to which the partners depend on the outcome of the project. For university partners, the project is considered as a suitable addition to their current research and an opportunity for education. It would be in their interest if the project succeeds, but they do not financially or strategically depend on its continuity. In case the project fails, another project will come up. Contrarily, the industry partners do depend on each other. Because all the tasks are interrelated and each partner has a specific responsibility, the outcome of one of the tasks will affect the entire project. Moreover, the industry partners have a practical problem to solve, whereupon they are involved in the alliance. Whether the alliance succeeds or fails, it will affect their position in the market. Therefore, dependence is higher for the industry partners than for the university partners:
In the technical infrastructure, all partners are structured in a certain order. One partner has knowledge about the hardware, the other about the connections, and another about the physical energy infrastructure. These are complementary skills and knowledge. [...] Eventually, we are all working towards the same goal. (Project leader)
From the perspective of the Hanze, they just say: “We have to work on this type of projects, but whether it is this project or another, that doesn’t really matter.” It is more about finding the right people who enjoy working on a project and who can make it happen. (University partner)
Tensions and governance decisions. As previously described, there has been tension between university and industry partners, because their motivation to collaborate differs. In pursuing their own goal of delivering an acceptable paper to the Hanze, the students lost track of what was actually asked by the industry partners. Therefore, the results of their paper had little value to the overall project. According to the industry partner, this could have been solved through communication and supervision of the students:
Furthermore, one of the university partners describes the importance of involving the human aspect of a collaboration. He describes collaboration as a social process and though each party has a different culture, in the beginning they actually have to enjoy working together:
It’s a human job and I think, in such a problem, you have to keep the human factor in mind. It starts with the individual enjoying working on such a project and collaborating with other people. [...] I think in a project such as this one, we work on clear, tangible goals, which contributes to the group atmosphere. I think that a lot of people in the Netherlands look at collaboration in a systematic way, but all in all, it’s the people who are doing it. (University partner)
An issue that is clarified in the interviews, is that partners have a distinct working style within the project. University partners have the tendency to take on a long-term approach, whereas the larger industry partners tend to focus on the short-term deadlines. This has especially led to frustration with one of the industry partners. In order to solve the problem and ease his frustration, he decided that an informal approach was the best solution:
I made clear that we have defined the scope of the project and that it is important for me that we stick with that for now. The other plans are nice, but I want to focus on the first phase first. So right now, the rest will take that into account and we’ll see how it turns out. (Industry partner)
Additionally, the project leader highlighted that the people in the alliance normally do not collaborate. Therefore, they have to familiarize with the different cultures and routines they encounter. In managing these differences, he highlights the importance of being flexible in addressing the different needs of each partner:
An important aspect is to bring matters to the surface. When there is friction between parties, and sometimes this can be invisible, I make sure we talk about it and just ask questions such as: “What is actually going on?”, “Why is this so important to you?” and “How does this intervene with the goals of the project?” And in general, the answers to these questions are already half of your solution. (Project leader)
guideline, but the content is flexible. Since the start of the project, the project plan has been adapted three times. Moreover, depending on the outcome of the first phase, the project plan can still change.
Well, formally there is a project agreement, but it is not even signed yet. So actually, it is inferior to the informal process. (Project leader)
We were not satisfied with the plan, so [the project leader] has completely rewritten the plan. [...] I do believe that if we would have understood each other from the beginning, it was not necessary to rewrite it three times. (Industry partner)
Regarding the administrative procedures, concerning the application of funding, some tension did arise. In the beginning of this project, one of the industry partners had a leading position as formal owner of the project. However, according to him, the time and effort that are needed for the application process are outweighing the benefits of receiving the funding. Therefore, this partner decided to take a step down in the project and become a project partner instead. Consequently, one of the smaller industry partners formally took over the role as project owner. Thus, in this case a change in the formal structure of the alliance was deployed to solve the problem.
[As a project owner], you have to apply for funding, there are all kinds of agreements and things you have to do. So we decided that the project plan was rewritten with [our company] as a regular partner instead of a project owner. (Industry partner)
We noticed that [one of the industry partners] became distant from the collective goal and started to focus on their own goals. First, we tried to convince them to stay, up until the board level and through conversations with deputies from the province. That did not work. Therefore, we chose the road around and involved another industry partner to become project leader. This way, the problem was solved quickly and [the industry partner] found a suitable role in the project. (Project leader)
Having someone in a managing position is important. [...] The people collaborating in the project normally don’t work together, that relationship needs a little glue. (Project leader) [In order to restore commitment], the personal aspect is step one, second is building urgency and alert people about their responsibilities. The third and last step is the formal route. If you start with the formal route, there is no trust to begin with. (Project leader)
Summary. Four main findings can be inferred from the abovementioned subsections. First, at Power Network, industry partners have strategic intentions, whereas the university partners are involved to exploit opportunities for education. Although the goals of the alliance are clearly laid out in the project plan, goals of the individual partners were not well aligned. This has led to tension. In order to solve this problem, solutions were pointed towards closer supervision of students and communication. Second, tension emerged because of the different time perspectives of industry and university partners. One of the industry partners wants to finish the first phase before continuing with the next phase, whereas the university benefits from continuity of the project. In order to align this, flexibility in contracts has been an important aspect to governance. Third, funding has led to tension. For large industry partners, the process of subsidy application is inefficient and time-consuming. On the other hand, for university partners, funding is essential to be able to participate in the project. In order to prevent this issue from escalating, they changed the formal structure of the consortium. Fourth and last, commitment has been an issue at Power Network. On the one hand, for industry partners, the outcome of the project may have a large impact. However, for university partners it does not necessarily matter whether they participate in this project or another. Therefore, dissimilar commitment has led to some tension. In order to restore this lack of commitment, the project leader plays a significant role. As an objective outsider, he can make more impact on the involved partners, and he has the authority to approach their superiors when necessary.
4.3 Summary of Findings
tension became apparent. At Wave Energy, the knowledge base and level of experience differ between industry and university partners. Furthermore, at Power Network, commitment is an issue. In the discussion section, these findings will be connected to literature.
Table 3: Summary of findings
Dissimilarities
Industry University
Tensions Decisions
Wave Energy
Motivation
Strategic intent. Personal interest. Lack of trust. Carefully choose partners. Power Network Motivation Focus on strategic outcome. Focus on education. Misalignment of individual goals. Supervision, focus on ‘human aspect’. Wave Energy Work ethic
Strict deadlines. No driver to be quick. Different working styles. Flexibility. Power Network Timing Focus on short- term goals. Focus on long- term goals. Different time perspective. Adaptable contracts. Wave Energy Patenting
Protect patents. Publish findings. Conflict over IP. Split research and business. Power Network Funding Avoid unnecessary procedures. Funding is essential. Conflict over administration. Formal agreements. Wave Energy Experience Highly experienced.
Little experience. Lack of experience.
Hire new CEO.
5 DISCUSSION
Until now, research about IU alliances has predominantly been focused on the barriers to collaboration (Bruneel et al., 2010; DiGregorio & Shane, 2003; Estrada et al., 2016; Lockett & Wright, 2005). IU alliances are often subject to tensions caused by dissimilarities between industry and university partners. These tensions can emerge during the entire alliance lifecycle. However, in the formation phase of IU alliances, these dissimilarities do not necessarily lead to tension (Estrada et al., 2016; Fichman & Levinthal, 1991). Shortly after the formation phase, the likelihood of tension rapidly increases. Researchers have attributed this phenomenon to a honeymoon effect in young alliances, in which mistakes are more likely to be attributed to external factors (Ariño & Doz, 2000). Early detection of potential barriers might positively affect the outcome of the alliance (Bruneel et al., 2010). Nonetheless, no empirical research has been performed specifically on tensions in the formation phase of IU alliances. Therefore, this paper has addressed the following research questions:
How do partner dissimilarities in recently formed IU alliances lead to tension?
How does tension caused by partner dissimilarities in recently formed IU alliances affect decisions regarding alliance governance?
In the following subsections, the findings of this paper are compared with elements from the literature review. The findings can be categorized into four categories, based on the origin of the dissimilarity: motivation, behavior, administration, or personal. This structure is used to present the findings and relate them to the literature. Based on this comparison, propositions are developed. Finally, a model about tensions in the formation phase of IU alliances is proposed.
5.1 Motivational Dissimilarities
At Wave Energy, these different goals and expectations have led to a situation in which recruitment of industry partners is predominantly based on trust. In order to do so, they join network events and try to establish a personal connection with potential partners. At Power Network, the different goals and expectations have actually led to tension. Misalignment of the goals that were not specifically laid out in the project plan has led to misunderstanding. In governing this type of barriers, respondents at both cases state that close communication and informal management are the right approach. One respondent claims that the “human aspect of collaboration” is something that is substantial in this case. Communication as a governance mechanism to build trust is also apparent in the literature (Das & Teng, 1998). Communication is seen as a method to avoid information asymmetry to lead to tension (Das & Teng, 1998). Moreover, communication is a vital element in joint problem-solving (Ariño & Doz, 2000; Mohr & Spekman, 1994). This paper builds on these propositions and extends it with the context in which communication is an appropriate mechanism in IU alliances. This leads to the following proposition:
Proposition 1: Communication is an effective governance mechanism in IU alliances in a situation in which orientation barriers are apparent.
5.2 Behavioral Dissimilarities
Respondents at both alliances experienced differences in work ethic and the time orientation of the university and the industry. Whereas industry partners are focused on strict deadlines and short-term goals, university partners did not appear to have the same driver to work quickly. Moreover, university partners were focused on long-term goals. This is in line with literature, stating that universities consider the short-term orientation of firms a disadvantage of collaboration (Carayol, 2003). Furthermore, one of the respondents emphasizes the difference in work ethic between a university partner and an entrepreneur, for instance. Whereas university employees often work from nine to five with regular breaks, the entrepreneurial mindset is more flexible, timewise. Tension due to difference in behavior is in line with literature about routine barriers. Estrada et al. (2016) describe that routine barriers occur because of differences in behavior, such as communication, decision making, and flexibility of tasks.
owner to normal business partner. Furthermore, the project plan has been developed, but it is not formally signed. This allows for contractual flexibility and indicates interpartner trust (Das & Teng, 1998). This is in line with theory about relational governance (e.g. Barney & Hansen, 1994), stating that trust is a vital aspect of collaboration. In this case, flexibility is used as a mechanism to constitute trust in the alliance (Das & Teng, 1998). The findings of both alliances extend this view with a particular context in which this mechanism can be effective. This leads to the following proposition:
Proposition 2: Flexibility is an effective governance mechanism in IU alliances in a situation in which routine barriers are apparent.
5.3 Administrative Dissimilarities
All respondents mentioned the disconnection that universities are focused on education and publishing articles, whereas the industry prefers to protect new technologies. This is an issue that is often mentioned by scholars (Dasgupta & David, 1994; Carayol, 2003). In the literature, this problem is described as a transaction barrier: barriers related to conflicts over intellectual property and university administration (Bruneel et al., 2010). However, in neither of the alliances, an actual conflict has arisen because of this phenomenon. In fact, one of the experts described that this disconnection is often an imaginary problem. At Power Network, no patents have been filed. At Wave Energy, patents have been filed, but it has not yet led to tension. Therefore, one could say that the main barrier lies in the partners’ perception of possible conflict regarding intellectual property, rather than it actually being a barrier that leads to tension. Nevertheless, in both alliances, formal clauses and contractual safeguards are used to prevent this from forming tension. This aligns with the structural perspective on governance, in which scholars argue that conflicts should be prevented through formal contracts (Parkhe, 1993; Morandi, 2013). Furthermore, the development of formal structures is considered as an effective mechanism to create a successful alliance (Doz et al., 2000). At Wave Energy, the formal structure is used to prevent the publication of scientific articles from conflicting with the patents. The spin-off company will formally be divided into two separate entities: one focusing on the research side, and one focusing on the business aspect. The division will be formalized in a contract. This will prevent unwanted knowledge leakages, even internally. The examples from the alliances provide a context for IU alliances in which contracts are an effective governance mechanism. This leads to the following proposition:
Proposition 3: Contracts are an effective governance mechanism in IU alliances in a situation in which transaction barriers are apparent.
5.4 Personal Dissimilarities
establishment of the startup. This aligns with theory about alliance formation, stating that experience increases the probability of alliance success (e.g. D’Este & Patel, 2007). Moreover, at Power Network, lack of commitment formed a large barrier. Respondents explain that this is because the interdependence of some of the partners is low, and therefore they have less incentive to be committed to the alliance. This aligns with alliance formation literature, stating that when interdependence is low, the alliance often follows an engineered path with assistance from a triggering entity (Doz et al., 2000). Because these dissimilarities were not found in either of the alliances, they can be considered case-specific. Therefore, I created a fourth category of barriers: distinctive barriers. These can be defined as the barriers that (i) are related to dissimilarities between industry and university partners in the alliance, but (ii) are not specifically apparent in IU alliances in general.
A similarity was found between the approaches to managing this type of dissimilarities. At Wave Energy, lack of experience is compensated by hiring a CEO externally. This person has experience in both the business world and the academic world, making it a suitable partner at Wave Energy. At Power Network, commitment has been a distinctive barrier. Respondents at Power Network highlight that in order to increase commitment, the role of the project leader is essential. This person is considered as an objective outsider with the ability to connect the different partners and to motivate partners to stay involved in the projects. This can be on a personal level, but he also has the ability to approach their superiors, if necessary. The appearance of an external party aligns with literature about alliance formation, stating that when interdependence is low, a triggering entity is necessary to connect partners (Doz et al., 2000). Furthermore, Das and Teng (1998) describe that hierarchical control can be an effective governance mechanism in alliances. Estrada et al. (2016) support this with empirical findings, stating that coordination can be effective in mitigating routine barriers. Interestingly, I did not find that coordination and hierarchy are an effective mechanism in routine barriers. However, I found that hierarchy is used to handle more unusual, case-specific barriers. This way, control can be enforced while having a pragmatic approach to governance. This leads to the following proposition:
Proposition 4: Hierarchy is an effective governance mechanism in IU alliances in a situation in which distinctive barriers are apparent.
5.5 Proposed Model
In conclusion, this paper has addressed two research questions: How do partner dissimilarities
in recently formed IU alliances lead to tension? and How does tension caused by partner dissimilarities in recently formed IU alliances affect decisions regarding alliance governance? The first question can
