relationship marketing and university-industry linkages: a conceptual framework

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Marketing Theory

DOI: 10.1177/1470593105058824 2005; 5; 433 Marketing Theory

Carolin Plewa, Pascale Quester and Thomas Baaken Relationship marketing and university-industry linkages: A conceptual framework

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Relationship marketing anduniversity–industry linkages: A conceptual framework

Carolin Plewa and Pascale QuesterUniversity of Adelaide, Australia

Thomas BaakenMuenster University of Applied Sciences, Germany

Abstract. Relationship marketing (RM) is a prolific area of current marketing theorydevelopment. While RM principles are relevant to a range of business-to-consumerand business-to-business contexts, their theoretical foundations have principallyemerged in reference to the private sector. By contrast, this exploratory study examines RM opportunities between entities operating in different sectors, namelyuniversity and industry in Australia. Using a qualitative approach, findings led to the development of a conceptual framework of university–industry relationships,integrating variables of organizational environment difference, relationship andvalue. Overall, this exploratory study broadens RM theory and application to relationships involving parties from fundamentally different organizational environ-ments and suggest opportunities for the implementation of RM in this context. Thearticle concludes with recommendations for academics and practitioners and providesseveral directions for future research. Key Words • organizational environment difference • relationship marketing • relationship variables • university–industrylinkages • value creation

Introduction

That business relationships are important is not new (Gummesson, 2002).Personal relationships with suppliers were part of general business practice longbefore industrialization led to a focus on markets rather than individuals. In the

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last 20 years, however, increased competition and technological innovation haveled to the exploration of new opportunities for success as well as to an emphasison strategic relationships (Donaldson and O’Toole, 2002). While the term relationship marketing (RM) was introduced by Berry (1983), the last decade sawthe phenomenon of RM achieve unprecedented recognition as a major trend inmarketing (Coviello et al., 2002). Today, RM has emerged as a dominant field inthe marketing area (Ballantyne et al., 2003). While relationships have enjoyed ahigh degree of attention in marketing research, further conceptual development isneeded in order to mature the RM discipline (Brodie et al., 2003). In particular,conceptualizing relationships beyond those between private sector organizations– the central focus of RM theory development – is necessary. For example, to date,RM theory has overlooked relationships between institutions from fundamentallydifferent organizational environments.

Meanwhile, a stream of research has developed over recent years arguing theimportance of linkages between universities and industry bodies for the survivalof both parties in the competitive marketplace and as an engine for economicgrowth (Siegel et al., 2004). Due to the sparse knowledge on university–industrylinkages (UILs) and their importance for today’s economies, this exploratory arti-cle conceptualizes relationships between entities exhibiting great organizationalenvironment differences (OED). This study, therefore, contributes to RM andtechnology transfer (TT) theory by developing a conceptual framework of UILs to(1) improve the understanding and successful practice of these relationships, and(2) to conceptualize a framework of relationships involving parties operating inessentially different environments.

Literature review

RM is one of the most prolific areas in current marketing theory and practice,with a large number of articles and dedicated journal issues, as well as specificjournal titles published in this area. Several authors agree that RM has become anintegrated part or sub-field of the marketing literature (Hennig-Thurau et al.,2002). Furthermore, the American Marketing Association’s (AMA) has recentlyacknowledged relationships as a cornerstone of marketing theory in their new definition of marketing: ‘Marketing is an organizational function and a set ofprocesses for creating, communicating, and delivering value to customers and formanaging customer relationships in ways that benefit the organization and itsstakeholders’ (AMA website, 2004). This prominence of RM theory is based onthe belief that the building and maintenance of relationships is beneficial for anorganization and more efficient than the traditional marketing mix approach intoday’s marketplace (Palmer, 2002).

Different views exist regarding the scope of RM (Sheth and Parvatiyar, 2002),possibly because it has evolved from various and diverse approaches, perspectivesand themes (Parvatiyar and Sheth, 2000). The micro-level perspective embracesthose studies focusing on relationships between an organization and one or few

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customers or partners, defining RM as ‘. . . the understanding, explanation andmanagement of ongoing collaborative business relationship between suppliersand customers’ (Sheth, 1994 in Gummesson, 1994: 7). Research of the IndustrialMarketing and Purchasing (IMP) Group developed the interaction approach,analysing dyadic relationships between two actively engaged business partners(Ford, 1997), followed by a focus on networks. The network approach is based onthe recognition that no organization or relationship exists in isolation (Anderson,1994). Rather, each organization is part of a network of relationships, making RMan ‘interaction in networks of commercial relationships’ (Gummesson, 2003:168). Despite the fact that both universities and firms are embedded in networks,this study concentrates on the dyadic relationships they may establish. A lack ofknowledge on individual UILs justifies our focus on dyadic relationships, the‘building blocks of networks’ (Auster, 1990: 69), to provide the foundation forfuture research on more complex networks.

Closely related to RM is the area of strategic alliances, described by someauthors as one form of RM (Hunt et al., 2002; Morgan and Hunt, 1994). The definition of strategic alliances as ‘collaborative efforts between two or more firmsthat pool their resources in an effort to achieve mutually compatible goals that they could not achieve easily alone’ (Hunt et al., 2002: 18) demonstrates thecloseness of RM and alliance research, as both research areas are concerned withrelationships between two or more parties aimed at creating bilateral value.However, while RM integrates a range of relationship types, strategic allianceresearch deals with a specific form of relationships, characterized by the creationof a separate entity based on a long-term strategic plan (Webster, 1992), oftenrelated to exclusivity and non-imitability (Varadarajan and Cunningham, 2000).In terms of UILs, this generally involves the funding of whole research areas ordepartments (Bell, 1993). Due to the inclusion of a large range of relationshiptypes, the article draws on both areas of research. Considering the four per-spectives on strategic alliances and their success factors (Hunt et al., 2002), it concentrates on the relational factors view, arguing that successful alliances arecharacterized by trust, commitment and communication.

A good understanding of interfirm relationships has developed over the last 20years. For example, some factors are increasingly recognized as at the heart of RM,such as trust (Morgan and Hunt, 1994), commitment (Hennig-Thurau et al.,2002) and the creation of bilateral value (Parvatiyar and Sheth, 2000). However,RM and its theoretical foundations have to a large extent been developed in rela-tion to private sector enterprises. In their paper on the domain and conceptualfoundations of RM, Parvatiyar and Sheth (2000) describe the importance of con-ceptual foundations and diverse perspectives for the development of a growingarea, a point also stressed by Brodie et al. (2003). Hence, an examination of RMbeyond private enterprise and consumer markets may contribute to our under-standing of, and further theoretical development in, this area. Particularly, a conceptualization of relationships between parties from fundamentally differentcorporate environments and cultures is still missing in the literature. Are theserelationships characterized by the same factors identified in previous research?

Relationship marketing and university–industry linkageCarolin Plewa et al.

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RM theory has so far largely ignored the existence and potential effect of OED,despite some studies on organizational or goal compatibility (Bucklin andSengupta, 1993; Smith and Barclay, 1997) as well as a call for research on organi-zational culture differences in buyer–supplier dyads (Hewett et al., 2002). Theoversight of OED in RM research may be due to the aforementioned focus on private-sector relationships. While it is generally understood that organizationsdiffer in their social atmosphere or culture (Reynolds, 1986), these differencesmay not be so extensive as to play a major part in relationship management. Theliterature on TT, on the other hand, stresses the effect of organizational cultureimbalance between private and public sector institutions on relationships. Whilehistorically only few academics have engaged in UILs (Harman, 2001), their number has grown over the last few years. Based on limited cooperation and different roles in the society, distinct organizational cultures have developed inuniversities and commercial enterprises (Cyert and Goodman, 1997), and theseare likely to clash when brought in close proximity.

Rapid change in competition and the speed of innovation around the worldhave promoted the creation of linkages between research communities and com-mercial enterprises. Universities, forced to find new ways of generating incomedue to increased competition and cuts in government funding (Baaken, 2003), areincreasingly commercializing their skills and research. Between 2000 and 2001,consultancy and contract research contributed AU$467 million or 21 per cent tothe total revenues of 25 Australian universities, while technology licensing contributed a further AU$14.6 million or 0.7 per cent (KCA, 2003). Companiesalso face increased pressure to advance knowledge and create new products andtechnologies to be successful in today’s marketplace (Gupta and Wilemon, 1996;Santoro and Chakrabarti, 2002). Furthermore, innovation and combiningresearch efforts of private- and public-sector institutions also has become a keydriver of economic performance (OECD, 2001), with science and industrylabelled the pillars supporting a country’s innovation system (UniversitätDortmund, 2003).

Despite the increase in relevance and numbers of UILs, a research stream dedi-cated to them is still missing. While a growing body of literature has developedaround TT and commercialization (e.g. Siegel et al., 2004; Thursby et al., 2001),no framework exists on antecedents and consequences of UILs (George et al.,2002) and research analysing the value created by such relationships for theinvolved parties is still scarce (Mora-Valentín et al., 2002). Surprisingly, fewauthors have considered the potential benefit of incorporating marketing principles and TT (Baaken, 2003; Baaken and Plewa, 2004; Hoppe, 2001) or thepotential relevance of the RM approach in this context. Since research has become a marketable offering, the disconnection of TT and marketing thought issurprising and TT should be treated as a new context of marketing theory andapplication. Hence, this article conceptualizes UILs by incorporating the RM aswell as the UIL, TT and commercialization literatures (referred to in the reminderof the article as UIL area). It uses a qualitative methodology to: (1) identify key variables of relationships with strong OED; (2) improve the understanding of


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current UIL practices; (3) analyse the value created; and (4) develop a conceptualframework of UILs. After describing the data collection process, key findings aredescribed and subsequently synthesized in a proposed framework of industry–university relationships. We conclude the article with managerial implicationsand directions for future research.

Methodology

The research in, and introduction of, RM in the field of UILs is a new phenome-non. Qualitative research methods are particularly valuable for the exploration ofnew concepts and their interrelationships, and to gain an in-depth understandingof situations, behaviours or activities (Flint et al., 2002). Based on a thoroughreview of the RM and UIL literature, data was therefore gathered in three qualita-tive steps, namely a discussion forum, telephone interviews and in-depth face-to-face interviews.

An inductive discussion forum was conducted to develop an understanding ofthe research problem, stimulate the creative process and generate relevant topics.The researchers held a two-hour workshop with students enrolled in a Masters ofTechnology Transfer and Management degree. After a brief introduction, par-ticipants were divided into three groups and were given the task of identifyingparties’ characteristics and their effect on a relationship, discussing the impor-tance of relational constructs, and developing a comprehensive portfolio of out-comes. A presentation and discussion followed. Based on this initial discussionforum, a series of telephone interviews was carried out with research clients ofAustralian universities. Experience in dealing with research institutions was set asa prerequisite to ensure the reliability and relevance of participants’ contribu-tions.1 The key focus of this second phase was to determine UIL practices in termsof structure and interaction, as well as list those factors perceived by researchclients as highly relevant and valuable in UILs. The findings of these interviewswere then used as a basis for the next step.

A series of in-depth face-to-face interviews was subsequently conducted withkey informants involved in UILs in Australia, including four interviewees from anindustry (I#1 to I#4) and ten from a university (U#1 to U#10) background.Potential interview partners were identified using three methods, namely a searchof ARC grants publications, websites and snowball sampling. Snowball samplingutilizes referrals of identified members of the target population to identify addi-tional participating members. While implying a high likelihood of bias regardingthe respondents’ social integration, education and income level, it enables studiesdealing with dispersed target populations and those being restricted in terms offinancial or time resources (Welch, 1975). As no database of the overall targetpopulation was available, snowball sampling was utilized. To keep bias to a minimum, however, interviewees were chosen to represent a broad range of indi-viduals (see the Appendix, Table A1) in several research areas, institutions andAustralian states. Certain features of the interview sample need to be considered


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in the data analysis. First, as formal organizations do not contain a single organi-zational culture (Leisen et al., 2002), interviews focused on the organizational culture of the research group and business unit. Second, three university and twoindustry interviewees had previously worked in the other environment. Peopleexperienced in both environments are believed to have a greater understanding ofthe environments involved. This, however, was not deemed to affect their abilityto identify characteristics of their current respective organizational environment.

Interviews followed an interview protocol (see the Appendix, Table A2) devel-oped after a thorough literature review updated after step one and two. Thisallowed a systematic approach to a series of interviews without limiting the opportunity to uncover and explore new issues. Interviews were continued until aconsensus was reached. While notes were taken during the interview on emergingissues and ideas, the interview protocol remained the same to allow the identifi-cation of similarity or difference of views. For each research step, data wasanalysed both during and after data collection. The analysis of in-depth interviewswas conducted using QSR Nudist N6. Based on the literature review and the previous two data collection phases, nodes were developed as a starting point forthe analysis. Moving back and forth between the in-depth interview data, data ofphase one and two and the literature, the structure and analysis of findings waschanged until a thorough understanding of UILs, as represented in the data, wasdeveloped. This approach offered not only the opportunity to follow up onemerging topics from one data collection phase to the next, but also during theinterview phases. Identified issues were then used to conceptualize UILs based onRM principles.

Findings

The data collection process yielded a range of variables and enabled the researchersto narrow these down to the most relevant issues in the final step of the researchprocess. The presentation of findings thus focuses on the final data collection stage.Individual statements are given throughout the discussion to describe currentpractices. Due to the preliminary and exploratory nature of the research, however,these examples do not claim to empirically validate, but rather to assist in con-ceptualizing marketing theory in the specific context of this study. The findings arecategorized as follows. First, value creation is discussed in the context of UILs, followed by a discussion of variables characterizing and influencing relationalpractices in this context. Finally, a conceptual framework of UILs is proposed.

Value creation in industry–university relationships

The creation of bilateral value has been labelled the purpose of RM (Parvatiyarand Sheth, 2000). Given its central role in RM theory, a thorough understandingof the concept of value is required in the context of enquiry (Almquist et al.,2003). Our data reflected the multi-faceted nature of value in UILs: all interviews


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revealed that both parties perceived different relationship outcomes as value creating. While previous research indicated differences in perceptions of valuebetween relationship partners, the extent of differences appears more extensivefor UILs. For example, U#10 described the different types of value derived by rela-tionship partners:

Industry is very much focused mainly on their production line . . . bottom line is that industryexist to make profit: if there is no profit no industry. The academic culture is very different, academic culture . . . is not driven always by dollars, they are driven . . . by the eagerness, by thepassion to work on certain things.

Value-creating factors Several types of value were identified in the data.Customer retention, an integral part of RM theory and practice, emerged as ahighly relevant value-creating factor for universities. U#8, for example, namedretention, understood as the intention to stay in the relationship and renew thecurrent contract, as the single most important outcome for universities. Such relational, long-term oriented focus was apparent in comments such as ‘I guessthe most satisfying thing is knowing that you are going to be able to continuedoing more work with the company. It’s ongoing’ (U#2). Others, however, dis-agreed: ‘I don’t care if I don’t see them again as long as they are happy and they’vemade use of the technology that we’ve developed, that is the most satisfying thing’(U#5). In this case, value was seen to lie in the development and use of intellectualproperty, suggesting a focus on the transaction rather than on the relationship.

Other interviewees described financial aspects as an important outcome of aUIL, given current government pressure on universities for gaining additionalfunds (e.g. U#9). Financial gain is consistently reported in the UIL literature asadding value, including additional funds for research (Santoro and Chakrabarti,2002) and financial support for students (Harman, 2001). Conversely, U#3 criti-cized such focus on money as a core of value, describing instead strategic positioning as the central value-creating factor, likely to reflect the respondent’sfocus towards strategic alliances as the most valuable type of UILs:

All universities tend to have different agendas and the agenda will vary depending on whomyou talk to within the university and at what level. The most crass reason, which will come fromlower levels within academia and from middle management, is money . . . and that really is anonsense . . . From the upper echelons . . . we’ve always viewed industry relationships as beingan absolute . . . core cultural value for our being as a university . . . For the university it’s part of strategic positioning . . . as a partner with the community and industry both locally andglobally . . . So, one is looking to develop strategic linkages, strategic partnerships. (U#3)

Perceived value may differ between hierarchy levels. Besides strategic benefits,including strategic positioning, image and word-of-mouth (e.g. U#1, U#5, U#6),other non-economic value-creating factors emerged from the data. For example,while relationship value has been highlighted in the RM literature in terms ofsecurity, credibility and safety (Grönroos, 2004), the strong feeling of togethernessemerged as another facet of relationship value, especially in relationships charac-terized by strong OED:


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. . . when you’ve been in a team that trusts and respects each other and . . . you . . . die for eachother on the field of battle . . . that’s a feeling of great accomplishment . . . It’s a feeling of satisfaction which is a lot of the reward . . . and that is more than probably the economic driver that they’ve actually found something new. (U#7)

Consistent with the UIL literature, our data showed a focus on the acquisition ofknowledge and technologies as key to value creation for industry (George et al.,2002). In addition, the distinct offer by universities in comparison to otherresearch institutes is easier access to talent and facilities as well as public awarenessand image (Santoro and Chakrabarti, 2002). While a general consensus existedabout these features of value, their importance for industry entities appeared todiffer. For example, I#4 placed the highest priority on the research outcomes,describing ‘obtained technical information’ and ‘knowledge’ as the purpose of aUIL. This focus on technical value types may relate to organizational demo-graphics, this company being small in size but highly science-intensive.2 I#2 andU#8 constantly described the employment and transfer of graduates and staff atall skill and education levels as a central reason for UILs. Rather than opposehuman capital with knowledge and technology gain, it should be noted that thetransfer of skilled staff is indeed a form of knowledge transfer (U#7).

In addition, some industry interviewees cited the importance of future rela-tionship potential and other indirect or future value-creating factors, such asaccess to new networks:

. . . when you have these relationships, you think you give them yours, but they give you theirsas well. So those networks are very important. Non-economic benefits, that’s very importantbut that again comes with trust . . . when you work well through a project that is what you endup doing. (I#2)

Value-creation by sharing networks in developed relationships is related to trustand reciprocity, central constructs to RM theory and to the relational factors viewof strategic alliance literature (Dwyer and Oh, 1987; Sin et al., 2002). The sharingof networks as an outcome of UIL formation has not been directly discussed in theliterature. However, in their study on the influence of UILs on a firm’s innovativeoutput and financial performance, George et al. (2002) found firms with uni-versity links to be involved with a greater number of alliances. This may beexplained by an increased sharing of networks in a trusting relationship and isconsistent with our observations.

Having identified the main sources of value in UIL, summarized in Table 1, wenow turn to identifying those variables potentially influencing UILs.

Key variables influencing the university–industry relationship

Our data was analysed to identify key variables characterizing and influencingrelational operations in UILs. Practices described by the interviewees weregrouped and related to existing RM and UIL literature. Three central, intertwinedcategories of variables emerged form the data, namely: (1) interaction mecha-nisms; (2) linkage mechanisms; and (3) OED.


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Interaction mechanisms Interaction mechanisms are defined in this article as the means by which two organizations connect during a transaction or series oftransactions. This definition relates to bridging ties; a concept based on socio-logical theory. Research on bridging ties focused primarily on strength and redun-dancy of ties, and their effect on information dissemination, idea generation andcompetitive capabilities (Burt, 2004; Granovetter, 1973; McEvily and Zaheer,1999). While the following discussion will integrate this school of thought, ourfocus will be on dimensions of interaction mechanisms emerging from our data,namely the structure of the connection, communication and integration.

Regarding structure, our data showed that UILs do not differ to a great extent.All telephone interview respondents indicated that they agreed on tasks and/orgoals at the beginning of a project, predominantly set in a contract, but also in amemorandum of understanding or milestone determination. In-depth interviewssupported the use of similarly formal contracts and agreements.

Our interviewees described communication, the ‘formal as well as informalsharing of meaningful and timely information between firms’ (Anderson andNarus, 1990: 44), as one of the most important relationship characteristics. I#4used the analogy of marriage when discussing its importance, indicating a rela-tional, long-term approach: ‘ it’s like a marriage . . . the more information goesbetween the two organizations the more productive the outcome is likely to be’(I#4). While this quote links communication, in terms of a bilateral exchange ofinformation, positively to productive outcomes, U#8 described its effect on otherrelationship components: ‘And the other things sort of come from that . . . trust


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Table 1

Types of value

Value type University Industry

Retention U#1, U#2, U#3, U#4, I#1, I#2, I#3, I#4U#7, U#8, U#9, U#10

Strategic aspects U#1, U#2, U#3, U#4, U#6,U#7, U#9, U#10U#8 (in regards to students)

Knowledge advancement/gain U#1, U#2, U#3, U#5, I#1, I#2, I#3, I#4U#6, U#7, U#9, U#10U#4, U#8 (in regards to students)

Additional funding U#1, U#2, U#5, U#6, U#7, U#9U#8 (in regards to students)

‘Togetherness’ U#7 I#2Technology gain I#1, I#2, I#3, I#4Human capital gain I#1, I#2, I#3Contacts / access to networks I#2, I#3, I#4



comes from communication, conflict comes from communication failure’ (U#8).These associations are consistent with previous research, which found communi-cation to impact on commitment and trust (Morgan and Hunt, 1994; Sharma and Patterson, 1999). The management of communication, however, appearedproblematic due to the different organizational environments. While communi-cation processes appear structured in the industry environment, including formalmeetings for organizational levels and projects (I#4), U#3 mentioned the diffi-culty of controlling and planning contacts in the university environment. Thismay stem from the individualistic nature of academics, described as very inde-pendent and unwilling to take the line or focus given by their university (U#9). In addition, confidentiality concerns often prohibit organizations from freelysharing information with university staff (U#2) due to the risk of opportunisticbehavior (Das and Teng, 1998; Jordan, 2004). Confidentiality ensures a firm’scompetitiveness and survival in the marketplace, whereas ‘[Scientists] just lovetalking about their science . . . they think everybody’s trustworthy’ (U#6).Therefore, while the importance of communication is consistent with previousresearch, its management appears more problematic between organizations fromdifferent organizational environments.

Despite a general consensus about the existence of both formal and informalcommunication, different perceptions regarding the benefits of formalityemerged. I#4, for example, described formal one-way communication by way ofmonthly reports as necessary to develop a comprehensive understanding and to offer a presentation basis for third parties. By contrast, I#2 stressed constantinformal two-way communication and an active engagement in a dialogue asmost important, linking formality with bi-directionality. Research has shown thata relationship approach is characterized by a dialogue between parties (Farrelly etal., 2003), such that partners are actively engaged in a two-way communicationprocess that allows the building of a common knowledge platform (Grönroos,2000). The constant exchange of information ensures a mutual understanding ofevents (I#2), which was described by U#5 as making a relationship satisfactory.The need for mutual understanding has been stressed in the research and develop-ment (R&D) literature (Gupta et al., 1986), possibly because of the difficultiesexperienced by research clients in using all features of a transferred technologydue to the complex nature of research (Athaide et al., 1996). The total perceivedquality model, developed by the Nordic School of Services, may illustrate this concept usefully. According to this model, customer-perceived quality is com-posed of the evaluation of the technical quality (the actual outcome) and of thefunctional quality (the way in which technical quality was received) (Grönroos,1984). In a transactional approach, universities concentrate on creating valueregarding the outcome, leaving industry with a result that may have high techni-cal value only if they were able to use it. In a relational setting, in contrast, functional quality is favoured, determining the quality of the process throughoutthe relationship (Grönroos, 1997).

The role of integration in the creation of functional quality was clearly visible inour data, as interviewees described communication as extremely important, but


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often not interactive enough to successfully bridge involved parties. U#7, forexample, described the need for integrative mechanisms to foster knowledge diffusion between involved parties:

. . . if you’re given a brief by a company and then you go away and deliver on that brief thenthe brief has to be very, very, very tightly scoped and specked and the market can’t change inthe meantime for that type of approach to be successful . . . if a company is actively involved inworking to develop the new widget, process, product, development, whatever, that may be thenas their concepts and understanding of the technology [or] the market changes they can drivethe project the way they see it. (U#7)

Hence, integration can lead to a high functional quality for the customer, as wasconfirmed by all industry interviewees. In addition, knowledge required to utilizethe outcome is directly transferred to the customer, thus increasing the perceivedtechnical quality. Finally, integration enables university staff to increase the tech-nical quality, as the technology can be adjusted to a firm’s needs. Integration maythus be required for the creation of value in relationships crossing fundamentallydifferent organizational environments.

The suggested benefits of strong interaction mechanisms reflect the proprietarynature of outcomes generated within UILs. According to social network theory,weak bridging ties, and thus a low level of emotional intensity, intimacy and reciprocal services, fosters the dissemination of information to a broad audience(Granovetter, 1973). Such dissemination, however, may be destructive for a UILaiming to protect the intellectual property created.

Linkage mechanisms The two linkage mechanisms, trust and commitment, tieeach party to the other and to the relationship.

Trust is one of the most acknowledged constructs in the RM literature (Morganand Hunt, 1994) and is ‘considered one of the core features of a relationship’(Perry et al., 2002: 75). In consensus with other authors, it can be defined as ‘con-fidence in an exchange partner’s reliability and integrity’ (Morgan and Hunt,1994: 23). Trust certainly emerged as an essential element of UILs, with all inter-viewees describing its critical role for relationship success. U#7 illustrated thisusing the metaphor of a competitive sport team: ‘Trust is a fundamental aspect ofany successful relationship . . . business is no different to competitive sport or personal relationships, if you cannot trust your partners . . . do not even bother’(U#7).

The alliance literature suggests that people are more likely to trust a partnerwith expertise or reputation in a specific area (Anderson and Weitz, 1989; Smithand Barclay, 1997). This is also apparent for UILs, since an academics’ expertise islikely to have a major effect on research outcomes. However, our data showed thatthe university’s ability to work with industry and to accept, and go along with, thepartner’s values and aims is even more relevant for the development of trust thanprofessional expertise. In the words of U#10:

Very big issue, very big issue, sometimes even you do not [have] the biggest . . . expertise in theproblem area. But . . . industries . . . want to come back to you . . . to take that project becausethey trust you and also because once you start understanding their culture, that this is another


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culture, industrial culture and all that sort of thing they feel more comfortable to work withyou. (U#10)

In particular, the reputation of an academic regarding previous or current rela-tionships emerged as a starting point for trust building. Such competence, alsodescribed as interfirm partnering competence (Johnson and Sohi, 2003), impliesan understanding of the differing drivers and preferred outcomes of both sides(U#2, U#8), a concept more relevant to the development of trust in relationshipscharacterized by OED than in other relationships. In a UIL context, partneringcompetence also includes the understanding of different attitudes towards the handling of information (U#2, U#6, I#4) and respecting the importance of thesecrecy of information for industry. In addition, different environments increasethe importance of trust, as do high uncertainty and risk inherent to research-oriented UILs. As Grönroos (1997: 327) stated, ‘if there is no vulnerability anduncertainty, trust is unnecessary’. Research is inherently uncertain and unpre-dictable, implying a high risk for organizations. The building of close, trustingrelationships may partly alleviate this risk (Bendapudi and Berry, 1997).

Commitment, another construct central to RM (Morgan and Hunt, 1994), isclosely related to trust (Farrelly and Quester, 2003a). It has been defined in uni-formity with other authors (e.g. Dwyer and Oh, 1987) as ‘an enduring desire tomaintain a valued relationship’ (Moorman et al., 1992: 316). In consensus with the RM and alliance literature, interviewees described commitment as closely associated with value creation: ‘What I can say of commitment is you need it for it to succeed. So, if you want that link between the university and theorganization to succeed, both parties need to be committed’ (U#4).

. . . I had another person take [the project] over, and some of the problems that we have sortof run in to is that that person probably lacks the commitment that I might have brought to ithad I been running it as my own project. (U#9)

The latter quote reflects the strong relationship between commitment, alsolabelled ‘engagement and ownership’, and individuals, described by several inter-viewees. Another example was provided by U#8: Students involved in the relationship were not chosen by the university, but screened for their academicrecord and then selected by the industry partner. The industry partner’s responsi-bility for the selection of students increased their commitment and in turn rela-tionship success. No substantial difference was found regarding the importance ofcommitment in UILs in comparison to other relationships.

Organizational environment difference

In the previous discussion, many findings were related to differences in the organizational environments and cultures between university and industry, thespecific characteristic of relationships examined in this study. While organiza-tional culture imbalance was integrated into the interview protocol, interviewsprojected the need to broaden this theme into environmental differences, asdimensions exceeded the boundaries of the concept of organizational culture. Our


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respondents agreed that OED exist between universities and industry partners.Only one interviewee did not experience OED in the current relationship (I#1),but noted that these differences are quite likely to exist in other UILs. Duringresearch-step three, four OED dimensions emerged, namely (1) motivations, (2)time orientation, (3) market orientation, and (4) organizational bureaucracy andflexibility.

First, all interviewees described different motivations in the university andindustry environment. I#1, for example, described:

. . . the thing that motivates them is different . . . As a private business, which doesn’t receivefunding from outside sources, we are totally dependent on commercial activities to survive . . .So at the end of the day the things that we do have got to be commercially profitable, whereasinstitutes are traditionally seats of learning or seats of teaching. (I#1)

This ‘commercial’ versus ‘knowledge creation’ view can also be described as anoutcome- versus process-oriented view. In a UIL, an organization is mainly inter-ested in research outcomes that solve its problems or needs, which, however, areonly a start for further research by academia (I#3). In line with previous quotes,U#9 pointed to the relevance of performance evaluation criteria for the motiva-tion of staff at both university and industry side. The misalignment of goals andreward systems (Smith and Barclay, 1997) reflects motivational differences. Whileacademic promotion is based on research performance and publications, industrystaff is judged on ‘the result in the crude sense’ (U#9). Performance evaluationand reward systems are related to the corporate environment, as they reflect theoperationalization of cultural values and understandings (Desphandé andWebster, 1989). This dimension of motivational differences is specific to relation-ships with strong OED, although it may also be relevant, to a lesser degree, inindustrial relationships.

Time orientation emerged from the data as another important OED dimension,comprising two components. First, time-frames appeared shorter in the industryin comparison to the university environment (e.g. U#7). A product’s ‘time tomarket’ is a key factor for success, and organizations often take a short-term perspective on R&D activities. Universities, on the other hand, have longer-termtime-frames (Cyert and Goodman, 1997), determined by the three-year time-cycles of PhDs and most research grants. A second component is the adherence todeadlines. Simply stated: ‘Industry works to deadlines, academics don’t . . . apartfrom presenting papers at conferences’ (U#2). Academics’ failure to meet dead-lines may be due to their variety of tasks and the fact that they seldom have theauthority to prioritize these tasks (I#3). An interesting aspect of time orientationis the high employee turnover in industry (U#8). Especially in large organizations,middle and senior managers are expected to gain experience in different areas,and frequent rotation is common business practice (I#2). This has the effect offocusing staff on accomplishing short-term goals within their tenure in a specificposition. In brief, time orientation emerged as a concern for relationships com-bining two contrasting environments.

Third, universities have often been criticized by industry for their lack of


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market orientation, an established construct in the industry environment(Desphandé et al., 1993). In a behavioural and cultural perspective it can bedefined as ‘the culture that 1-places the highest priority on the profitable creationand maintenance of superior customer value; and 2-provides norms for behaviorregarding the organizational development of and responsiveness to market orientation’ (Slater and Narver, 1995: 67). The central component of market orientation is the creation of superior customer value, highlighting its fundamen-tal relevance to RM. Opinions regarding market orientation were mixed amongour interviewees. Many university interviewees described the necessity of actingtowards industry partners’ needs, for example: ‘. . . cultural difference is reallyabout whether the universities do want . . . [to] take on board where [companies]are trying to go and any sort of problems that they’re really trying to address’(U#8).

However, industry interviewees, for the main part, did not perceive universitiesto be market oriented. For example, I#4 described a resistance to engage in service activities and I#2 noted that universities lack strategic market orientation.Most university interviewees did not associate the term ‘market orientation’ withindustry partners nor did they appear to see firms as their customers. As marketorientation requires the prioritization of value creation for customers, failure to consider industry entities as customers may indeed be symptomatic of the universities’ lack of market orientation. Based on the different organizationalenvironments, the concept of market orientation and its understanding and practice appear to differ, outlining a situation specific to relationships crossingsectors.

Fourth and finally, organizational bureaucracy and flexibility emerged as anOED dimension, suggested by interviewees as central to the discontinuation ofrelationships. Bureaucracy appeared to be linked to the control of lawyers or otherthird parties on the negotiation and relationship process, found to have a detri-mental effect on a relationship. Also, bureaucracy appeared to result from thefunctional organizational structure often prevalent in universities. RM literaturehas emphasized the relevance of a process-oriented instead of a functional corpo-rate structure for relationship success (Gordon, 1998). A functional corporatestructure is likely to build barriers, restricting an organization-wide focus towardsrelationship building. In addition, the university environment does not requirethe same degree of flexibility or change that is necessary for a firm’s survival in thecompetitive marketplace (U#6). While non-compatible structures have beenlinked with a lack of fit between private-sector alliance partners (Jordan, 2004), aneven higher distinctiveness appears to exist for relationships characterized byOED.


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A framework of university–industry relationships based on RMtheory

Figure 1 conceptualizes UILs based on our exploratory findings, presenting theareas of OED, relationship characteristics and value. ‘Relationship characteristics’integrate interaction and linkage mechanisms, as their variables reflect compo-nents discussed in the RM literature. Following the previous discussion, relation-ships crossing fundamentally different environments appear to differ from previous research not only by their strong OED but also in the substantially differing perceptions of value between the relationship parties. Notably, despitethese differences in UILs, the positive effect of relationship characteristics on value creation established in previous research was confirmed in this context.

As indicated throughout the discussion, parts of the framework are presentedas influencing each other in certain ways. First, OED should negatively influencea UIL. This suggestion is based on findings that most interviewees linked OED orone of its dimensions to sacrifices and problems. Interviewees described OED as‘a real problem’ (U#5, U#9) and ‘a frustration’ (U#9, I#3). Negative effects includedilemmas in interaction, ‘. . . you’ve got to work so hard just to be bringing it toground, that’s going to slow the progress . . .’ (I#2), and value-creation: ‘. . . there’s


447

Organizational environment difference• Motivations and drivers• Time orientation• Market orientation• Organizational bureaucracy

and flexibility

Relationship characteristics• Interaction mechanisms

– Structure– Communication– Integration

• Linkage mechanisms– Trust– Commitment

Value (university)• Retention• Strategic aspects• Knowledge

advancement• Additional funding

Value (industry)• Technology gain• Knowledge gain• Human capital gain• Retention• Contacts or

networks

Figure 1

A conceptual framework of university–industry relationships



a cost of delay, there’s a value of getting a rapid response, [but] the universitiestypically haven’t been set up around those dimensions’ (I#3). While experiencereports described differing cultures to cause problems in mergers (Maron andVanBremen, 1999), this effect has not yet been studied in RM or alliance research.

Our data also suggested that a high level of interaction and linkage mechanismsmay mediate OED effects on the creation of value in the relationship. While link-age mechanisms emerged from the data as essential to bridge the environmentsand allow access to the other parties’ competencies, U#3 explained the importanceof interaction mechanisms stating that ‘. . . the differences between university culture and corporate culture are the very reasons why the two blocks need to talk,communicate and work together, because what you have got is mutually benefi-cial strengths’ (U#3). Strong relationship characteristics may allow the utilizationof specific, and mutually beneficial, skills and strengths. As U#2 noted: ‘There istension. That’s what makes things work, and if there wasn’t then you wouldn’tknow why you are bothering’ (U#2). Notably, relationship characteristics asshown in the framework emerged as promoting the potential advantages of OED,seldom mentioned in the literature. Exceptions are Hewett et al. (2002: 235), whoproposed that ‘firms with different corporate cultures might be better suited interms of their ability to contribute to relationship outcomes’, and Fisher et al.(1997), who indicated that differences between functions are required to generate‘the creative tension’, so vital for R&D success.

On balance, therefore, we propose that a high level of interaction and linkagemechanisms may help overcome the negative effects of OED and may allow theuse of complementary skills and processes to create bilateral value despite exten-sive differences in perceptions of value. From a social networks point of view, byestablishing ties between different groups, individuals are exposed to informationas well as ways of thinking and behaving previously restricted to the other group.This crossing of ‘structural holes’ offers them a great potential to gain information and generate ideas (Burt, 2004). In a UIL context, interaction mechanisms maythus foster research and discovery by connecting heterogeneous groups, in turnpositively affecting the creation of value in a relationship.

Managerial implications

So far, few managerial guidelines assist academics and managers at university andindustry side in enhancing UIL success. While our managerial implications maybe relatively limited for marketers in relationships between enterprises in similarorganizational environments, they will enhance UILs and other relationshipscharacterized by strong OED. Successful UILs involve a high level of interactionand linkage mechanisms, which were suggested in this study to not only have apositive effect on research outcome or technical quality, but also on knowledgetransfer and satisfaction with the functional quality.

Communication was described as the most relevant interaction variable, sup-ported by integration, to ensure the creation of mutual value in a UIL. Hence,


448



interaction mechanisms must be managed to enable the development of a common knowledge platform, which should be developed by two-way informalcommunication and the integration of industry staff in the research process.Informal communication should be fostered, along with staff exchange or mixedteam building. Due to potential prejudices between the environments, both sidesare likely to require an extensive amount of time, training and reward to over-come interaction barriers. The difficulties of managing communication at univer-sities add to this challenge.

Trust was identified as the central linkage dimension for value creation in UILs.While the importance of trust is not new in the RM literature, OED appeared toemphasize this importance due to high risk inherent in these relationships. In this context, partnering competence was described as a higher priority for firmschoosing and trusting university partners than scientific excellence. From a managerial point of view, universities may choose to position themselves bymeans of UIL experience and success stories. While research groups can exhibit anunderstanding of, and acting towards, industry partners’ needs, interviewees consistently emphasized the relevance of individuals in this context (Varey et al.,2005). Hence, universities and industry wishing to collaborate should hire indi-viduals with drive towards, and experience in, the other environment (U#3).Finally, in consensus with the RM and service literature, the need to overcomebureaucracy and inflexibility highlighted the importance of senior management’ssupport for relationship building (Almquist et al., 2003) and the merit of employee empowerment (Bendapudi and Leone, 2002).

Limitations and directions for future research

In this exploratory study, a framework of UILs was developed based on a discus-sion of current practices and RM theory. This framework contributes to TT andRM theory by (1) improving the understanding and successful practice of theserelationships, and (2) conceptualizing the relationships characterized by partiesoperating in fundamentally different environments. Despite differences to previ-ous research in terms of OED and substantially differing value perceptions, theimportance of interaction and linkage mechanisms was confirmed. Our studyserves as an exploratory platform for further research in this area and should beinterpreted in view of its limitations. First, the scope of findings reported here islimited. The research was based on three consecutive qualitative steps to identifya broad range of potential practices in the chosen field and sequentially distin-guishing the most relevant areas. Second, our sample included individuals fromdifferent industry and research backgrounds. While the integration of peoplefrom different backgrounds was perceived as valuable for the development of apreliminary framework, industry-specific research is required to identify vari-ances between those relationships. Also, during the interviews, a range of issuesand quotes were based on an overall understanding of the interviewee rather thanany one relationship. While this approach allowed us to conceptualize UILs based


449



on a large range of relationships with a restricted number of interviewees, futureresearch should test our findings by focusing each interviewee on a specific relationship (e.g. Farrelly and Quester, 2003b) to increase our understanding ofassociations between the dimensions identified in this study.

Further research is clearly required to model and test the preliminary findingsreported here. The growing importance of UILs worldwide, and the high propor-tion of such linkages failing, justify further research in this area. As a next step, theauthors suggest developing a model of UILs and a set of formal propositionsgrounded on the conceptual framework. The model should then be empiricallytested to allow some generalization of the findings. Further studies are also needed to explore the development and maintenance of UILs. The extension of arelationship after a project or the period supported by a grant would be of especially significant interest. While RM and alliance literature acknowledges differences in partners’ value perceptions and this article identified value-creatingfactors for UILs, more research is required to analyse success factors of relation-ships with strong differences in value perceptions. In addition, due to the embedded nature of institutions in networks, research should study UILs in theirnetwork context, for example, including other relationships, cooperative researchcentres and government. Much is yet to be done to understand UILs, especiallyfrom a RM perspective. Furthermore, consideration of OED may not only be relevant to UILs, but also for other relationships, such as those including a non-profit organization. Future research is needed to examine this suggestion.

As with most discovery-oriented and theory-building research, more questionsthan answers were raised by this study. Our findings support the suggested valueand pertinence of RM and identify clear opportunities for its implementation in the emerging context of UILs. Further research is now required to confirm,contrast and develop our understanding of research-oriented UILs as well as otherrelationships with a strong OED.

Notes

1 Respondents for this phase were identified by several means. First, a list of potentialrespondents was developed based on publications of ARC linkage grants awarded in 2001, 2002 and 2003. As linkage grants are awarded for research conducted in collaboration between university and industry entities, companies listed in thosepublications were likely to fit the requirements of this study. In addition, respondentsin this and the following step were screened to ensure that they currently were, or hadpreviously been, in contact with a research organization and that they had initiatedand/or decided on the assignment of research tasks to external research institutions.

2 If the organization is able to hold its current employee base and no staff increase isplanned, a high focus on science may increase the importance of scientific outcomesrather than human capital to be gained from UILs. However, due to the high degreeof science-intensiveness in that organization, a large number of employees from thatorganization had previously worked in academia. The human capital aspect is thuslikely to also be important in this case.


450



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Table A1

Respondent characteristics

Experience Employment in Academic in UILs other environment Position title

U#1 Extensive No Director Research Center ProfessorU#2 Extensive overseas, No Research Fellow PhD

some in AUS U#3 Extensive Yes Chairman CRC Board ProfessorU#4 Some No Researcher NoU#5 Extensive No Head of School ProfessorU#6 Extensive No Director, Research Center A/ProfessorU#7 Extensive Yes Business Manager, No

Industrial Research Institute U#8 Extensive Yes Associate Dean Faculty ProfessorU#9 Extensive No Head of School and Professor

Director Research Center U#10 Extensive No Leader, Industrial No

Research Group I#1 Some No CEO NoI#2 Extensive No Management NoI#3 Extensive Yes Member CRC Board NoI#4 Extensive Yes Chief Scientific Officer PhD

Table A2

Interview protocol themes

Clusters Individual criteria

General Details of respondentDemographics of research group/business unitDetails of relationships

Performance criteria General outcomesSatisfactionRetention and loyaltyRecommendation and word of mouthGain and the usage of research


455continues



Table A2 (cont.)

Interview protocol themes

Clusters Individual criteria

Relationship characteristics DefinitionCommunication and its characteristicsIntegrationRelationship durationFunctional conflictTrust and commitment

Organizational culture imbalance Existence/differences in organizational culturesInstitutional cultures and functionsImbalance in expertiseMarket orientation imbalanceLanguage dissimilaritiesTime orientation differences

Others Existence of championThird parties

Carolin Plewa is a PhD candidate at the University of Adelaide. She previously com-pleted a German Diploma in Business Administration at the Muenster University ofApplied Sciences, Germany. Her main research interest lies in the areas of relationships,business-to-business and science marketing. Her doctoral research deals with uni-versity–industry relationships, their characteristics and success factors. Address: TheUniversity of Adelaide, School of Commerce, Adelaide, SA 5005, Australia. [email: [email protected]]

Pascale Quester, Phd, is the Inaugural Professor of Marketing at the School of Com-merce of the University of Adelaide. The author of over 100 refereed journal articles andconference papers, her work has appeared in the Journal of Advertising Research, Journalof Business Research, Industrial Marketing Management, Psychology and Marketing,European Journal of Marketing and many others. Address: The University of Adelaide,School of Commerce, Adelaide, SA 5005, Australia. [email: [email protected]]

Thomas Baaken, PhD, MBA, BaEng, has been a Professor of Marketing at the MuensterUniversity of Applied Sciences since 1991 and held the position ‘Deputy ViceChancellor Research’ between 1998–2003. His research interest lies in the areas ofindustrial and technology marketing. He has run the government funded ‘ScienceMarketing’ research team since 2003. Address: Muenster University of AppliedSciences, Department of Business Administration, Corrensstrasse 25, 48149 Muenster,Germany. [email: [email protected]]


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relationship marketing and university-industry linkages: a conceptual framework

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