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DEWEY
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ALFRED
P.
WORKING PAPER
SLOAN SCHOOL OF MANAGEMENT
Comparisons and Cooperative R&D
Ventures: The Double-Edged Sword of
Communication
Social
Christopher
Maureen
June 1994
Tucci
Lojo
L.
P.
WP
# 109-94
MASSACHUSETTS
INSTITUTE OF TECHNOLOGY
50 MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02139
The International Center for Research on the
Management of Technology
Comparisons and Cooperative R&D
Ventures: The Double-Edged Sword of
Communication
Social
Christopher
Maureen
Tucci
Lojo
L.
P.
WP
June 1994
Sloan
©
WP#
# 109-94
3699-94
1994 Massachusetts Institute of Technology
Sloan School of Management
Massachusetts Institute of Technology
38 Memorial Drive, E56-390
02139-4307
Cambridge,
MA
:.•;
A3SAC u vS?: ns U'isn tute
OF TECHNOLOGY
i
',
SEP 21
1994
LIBRARIES
Acknowledgments
The authors wish
to
acknowledge
Cusumano, Anthony
Frost,
the helpful
comments and suggestions of Michael A.
Varghese George, Michael Rappa, Maureen Scully, T.
Michael Toole, Mary Tripsas, Marcie Tyre, and four anonymous referees.
Abstract
In this paper,
we examine
the
communication-performance
link in the
R&D
laboratory,
with an eye toward the effects of task- and equity-related communications on the social
environment.
We
argue that social comparisons
between themselves and
their
(in
which employees make comparisons
coworkers) can have deleterious effects on performance
under certain conditions, possibly negating the positive effects of increased
communication.
We
performance
and then propose mechanisms
link,
discuss the theory and evidence behind the social comparisonto
comparisons, while minimizing the negative.
organization structure and
human
resource
promote the positive effects of
social
These mechanisms take the form of
management
policies.
The conclusion
is
that
while other factors, such as characteristics of the partners, technology, and market, are
important
in
structuring the cooperative
theory's consequences
Keywords:
social
may
R&D
venture, attention to social comparison
help the venture realize
its full
potential.
comparison theory, cooperative research and development.
1.
Introduction
R&D ventures (CRDVs) are becoming a popular complement to in-
Cooperative
house
R&D activities for many
For example, Hladik
firms.
1985) finds that the
(
R&D jumped from
in their book Cooperative R&D
percentage of joint ventures formed to collaborate on
&
between 1974 and 1982. Link
(1989,
p. 13),
Bauer,
find in a survey of executives and technology
managers
10%
in
that
to
20%
Manufacturing
perceived
R&D has risen dramatically in the 1980s.
Concomitant with this rising interest in cooperative R&D has come a profusion of
importance of cooperative
analyses of CRDVs, which have taken several analytical forms. The
through case studies
from them
(for
how
individual companies succeeded in forming
example, Hamel, Doz,
examines organizational incentives
to
& Prahalad
work on
returns to cooperative
1990; Friedman, Berg
&
Duncan
1979).
study, highlighting the differences
disadvantages (Katz
The
& Ordover
1989).
conduct joint
outcomes (see Katz 1986; Combs 1990; Sinha
empirical
first
CRDVs and
R&D in terms of the profitability of the
& Cusumano
The
1991).
third describes
R&D investments (for example. Link & Bauer
The
fourth approach
is
1990; Ouchi
& Bolton
the comparative case
their
advantages and
1985).'
number of important
factors that lead to the success
of CRDVs, including lack of competition between partners, complementarity of
between partners,
reciprocity,
profited
The second type of analysis
between current CRDVs and
studies cited above reveal a
of these shows
skills, trust
and lack of opportunistic behavior. Managers must take
these factors into account, along with history (e.g., previous relationships between
partners,
changing conditions of partners) and environmental concerns
characteristics, specific technology involved) in structuring the
market
CRDV.
R&D labs
from the communications studies pioneered by Allen (1977) and Pelz & Andrews
Another important stream of literature
emanates
(e.g.,
relating to
performance
in
(1978). In very general terms, ^ these and other authors found that increased
communication among researchers
related to higher "performance," including higher
quality technical results.
By
applying social psychological analysis to the study of technology strategy,
paper explores a little-examined
among themselves
the paper,
issue: the effects
("social comparisons")
we argue
that while
it
'These classifications are somewhat
is
of the comparisons researchers
on motivation and performance
in
this
make
CRDVs.
In
tempting to generalize the lessons of traditional
arbitrary',
since
some of
the papers
^Exceptions are discussed below.
1
—
fail
into
more than one category.
communication studies of scientists and engineers
social
comparisons
made among
that are
indirect relevance to managerial decision
relevant case
that
is
CRDVs, those lessons may not hold
R&D venture as they do for the single
strongly for the cooperative
The
to
making
in setting
(HRM)
more
policies
thn
it
likely, indirectly-relevant case is that
may be modified
to take social
To develop an
CRDVs, we
we
would by evaluating according
first
may
is
directly-
lead to different partner
human
to the
once a venmre
both direct and
up a CRDV. The
an understanding of social comparisons
choice, location decisions, structures, staffing policies, or
firm's research labs.
may have
researchers
resource
management
above-mentioned
entered into, the
factors.
HRM
how
social
we
how and why
social
comparisons affect performance
in
Section
in
2,
in general.
reevaluate the connection between communications, social
comparisons, and performance
managers can use
policies
comparisons affect performance
review the communications-performance connection. Then,
Finally, in Section 3,
The
comparisons into consideration.
understanding of
discuss the theory of
as
to create
in light
of the theory, and propose mechanisms that
and modify CRDVs so they reach
Section 4
their full potential.
presents the conclusions of the paper.
1.1.
Evidence of the relationship between communication and performance
For
at least thirty years,
scholars have studied the relationship between
communication among researchers
the individual and project levels.
effective and efficient
(scientists
The
and engineers) and Rc&D productivity
literature suggests oral
communication
method of transferring information (March
Marquis 1969). One implication of
& Simon
is
at
both
a highly
1958;
Myers
&
research depends upon
this finding is that effective
information processing capability or information "flow" within a lab (Allen
& Cohen
1969).
Pelz
eleven
& Andrews (1976) studied the communication patterns of 1300 researchers in
R&D labs.
They asked questions about
number of colleagues
consulted.
performance for each
scientist (e.g.,
They
the frequency of
also gathered subjective and objective measures of
judgments of
publication frequency). Their analysis
communication and the
showed
scientific contribution, patents
that, at
researchers had higher scientific contribution the
an individual
more frequent
level,
and
PhD-level
their contact
with
colleagues. Similar relationships were found between communication and other
performance measures. Performance also increased with the number of close colleagues
within the same group (up to nine), and for the
group. In other words, Pelz
correlated with the
&
Andrews found
number of close colleagues
that scientists'
number of close colleagues with
outside the
performance was positively
whom they
consulted.
Whereas Pelz
& Andrews provide strong evidence
communications on performance
at the
extend the findings to the project
level.
scientists' oral
of an
individual level, other scholars have sought to
Tushman
communication and subjective
R&D laboratory employing 345
for the positive effect of
(1978), for example, collected data on
project-level performance rankings in a study
Distinguishing between tasks focused
researchers.
on research, development, and technical
service,
Tushman found
high-performing
that
research-oriented teams communicated significantly more within their
own
project
and
division of the lab than low-performing teams.
Allen (1977) found additional evidence confirming the Pelz
project-level performance. Technical solutions generated
& Andrews results for
by researchers
in
matched
pairs
of parallel projects were rated for quality, and the frequency and level of their oral
were recorded. Allen's analysis shows
communications within and outside
their projects
that the so-called "high-performers"
communicated
far
more with researchers within
project than "low-performers" did, even controlling for different levels of effort
the
(i.e.,
communications per hour of effort).
There
is
general agreement
correlation exists between
There
are,
all
of these studies that a strong positive
communication and performance
both the individual and group
level.
among
increase communication
among
R&D organization, at
This has led to recommendations for management to
technical staff in order to increase performance.
however, some inconsistencies
In addition to the findings cited above, Allen
external contacts (by
in the
in the
found
that
data that merit further examination.
more frequent communication with
which he means colleagues outside
the organization, not including
vendors and customers) was associated with poorer performing groups. Furthermore,
Tushman's data
indicate that high performance
less project-level
on technical service tasks
communication than low performance.
is
associated with
In the next section,
we
discuss a
potential explanation for these empirical puzzles.
1.2.
Two
types of information exchange
R&D is a highly complex endeavor that invariably involves the exchange of very
task-specific information
between researchers.
In addition to
communicating information
of a scientific or technical nature ("task-related" information), researchers also communicate
more general information about themselves and
their
coworkers
relative standing of individuals in terms of skill, pay, status, etc.
of information as "equity-related." The argument
assumption
that
communicating
it
is
increase performance in
We
in this
We
on
paper hinges on the
propose that task-specific information exchange does
R&D projects (as demonstrated by the studies cited above).
— —
3
the
will refer to this type
communicate one kind of information without
difficult to
the other.
made
that provides data
however
the
exchange of equity-related information may have either beneficial or
detrimental effects on performance, as illustrated in Figure
equity-related
communication can
potentially
1.
The negative
effects of
outweigh the benefits of exchanging task-
related information.
Performance
Task-Related
Information
+ /-
C oramu nic alio n
Equity-Related
Information
Social
Comparisons
Figure
Effects of two kinds of information on performance
1.
Allen's and Tushman's findings
the theory that
,
in
some
communication and performance
instances apparently inconsistent with
are positively correlated,
can be
reinterpreted in light of social comparison theory. Social comparison theory
provides an appropriate vocabulary and framework for analyzing outcomes
level
(Wood
1989)
at the individual
between researchers having extensive contact with associates who may be different on
various dimensions
—
ladders, for example.
more or
less
competent, or subject to different pay scales and career
Such comparisons,
if
not
managed
properly,
may
lead to conflict,
decreased motivation, and poor performance.
What happens when we
more firms by necessity? Such ventures provide an
interactions
and comparisons between researchers.
actually be detrimental to project performance,
can be a particularly challenging task
2.
R&D venture that involves two or
consider the cooperative
in
institutional structure for
If
ongoing
more frequent communication may
managing
the interaction
making a venture
between partners
successful.
Social comparison theory
People have a strong tendency
to
organizations are no exception. Theories
comparisons were developed
in the
compare themselves with
others,
and
scientists in
conceming how and why people make
1950s by Festinger
—4—
(
1954),
among
others. Early social
comparison theory held as
its
basic tenets that people
make comparisons
objective information about themselves, in an environment that
since been extended to include goals
beyond
in order to collect
The theory has
neutral.
is
the collection of objective information
address the influence of potentially active social environments
(Wood
and
to
1989).
Here we use the term "social comparison theory" as a general theory describing
why
people compare themselves with others. 3 In
compare themscives with
to
we
discuss
first
the dimensions along
we show how
the effects of the comparisons. Finally,
why
whom they
by the choice of people with
others, followed
compare themselves. Then we examine
made and
this section,
people
select
which comparisons
empirical
work
are
is
consistent with the theory.
2. 1.
Reasons for social comparisons
Wood discusses
three principal motivations individuals have for
comparing
themselves with others: (1) self-evaluation, (2) self-improvement, and (3)
enhancement. Self-evaluation refers
to
self-
people seeking accurate and unbiased estimates of
their
own
may
not always receive accurate and unbiased estimates. In social settings, individuals'
abilities.
only estimates
may
This was the basis for Festinger's original theory. In
be derived from comparing themselves with others
—
people
reality,
a clearly
inaccurate and biased estimate, but perhaps the only one readily available. People in
research organizations
may be
especially prone to
compare themselves
to others for the
purpose of self-evaluation because the uniqueness and complexity of their tasks makes
determine
difficult to
how
they are performing.
Self-enhancement refers to people using comparisons to protect their egos or
esteem and
it
In this case, individuals
to build feelings of self-worth.
unbiased estimates of their
abilities.
With
this goal,
may
self-
not even want
people tend to ignore evidence
detrimental to their egos and accept evidence that bolsters them. This effect has found
broad empirical support
(1985) find that almost
in the literature.
all
As an example, Wood,
breast cancer patients interviewed
Taylor, and Lichtman
compared themselves
spontaneously to less fortunate patients and not to healthy people.
To
place this in the context of a research organization, scientific communities can be
highly competitive (for resources, recognition,
in
etc.),
and researchers
may
find themselves
conditions that promote comparisons of this type. Self-enhancement, however,
generally not regarded as a constructive goal; thus, research managers
discourage such comparisons
if
^For a more detailed discussion, refer
may want
to
they possibly can.
to
Masters
&
Smith (1987) and Nagata
& Crosby
(1991).
is
fe^imeroyenM refers
ut,l,zes self-evaluation
to .he
over utne (with
evaluation) and combtnes
it
companson of oneself ,o chers
all
with learning
,o better oneself
of the biases and inaccuracies
inherent in such
antJ
supenor ability. As an example. Nosanchuk
who wanted
rat
to
improve
deriving insp.ratton from
people with
& Enckson (1985) show that bridge players
almost always chose to look
er than equal or infenor
players' strategies.
self-tmprovement
2.2.
thetr gan,e
is
clearly the
I,
From
most destrable goal of
at better players'
strateg.es
a research
social
managers point of v,ew
compansons.
Dimensions of social comparisons
Social
compadsons
as a
targe. ^ along
these
,s
are
made between
the individual
"dimens.ons" of imponance
to the tndividu^.
the
dimension under consideratton, which
.nd,v,dual is most concented.
At the same time,
ocustng on a "related" dtmenston.
dimensions and
how difficult
and one or more people chosen
is
The most impotrant of
the dimension about
which
the
the individu^ must choose
the target
In this section,
we
discuss both of these
by
Wnds of
they are to assess.
According to theoty, social comparisons
are made along dimensions
that are
relevant to the self-esteem of the comparer.
Esteem-relevance .s based on how
similar the
arget (or companson-other")
is, and how imponant
the dimension under
consideration is
to the subject. Examples
of possible dimensions of
interest for researchers may
be
technical skill and knowledge,
recognition from peers, autonomy
in setting
research
agendae. and perceived value to
the organization. The
grea.er ,he esteem-relevance
of,he
d,mens,on. the stronger the
effects of the social comparison
mil be
Related or surrounding dimensions
determine
how similar the comparer is
of the comparison. Examples
of related dimensions are
age, educational
background, organizational tenure,
and other demographic
characteristics These
target
characteristics are usually apparent
to individuals
even numbered
their identification
,o the
working together Some companies
have
badges by hire date, producing
the unintended result of
announcing an individu^'s
organizational tenure. Related
dimensions may be predictive of
performance on the dimension of
interest, or may simply
indicate that the comparer and
comparison-other are similar in some
way. For example, gender
does not predict skill but
women nught tend to compare themselves
with other women on the
dimension of slall
because they view other women
as similar to themselves.
Related dimens.ons an> no,
esteem-relevant, at least not in
relation to the
companson being made. 77,. ,...,.. the
stmtlanty of,he comparison-other.
the stronger the effects
of the social comparison .ill be
'Targets are discussed
in the
next section.
—6
Information on comparison-others' standing on the primary dimension of interest
is
not always readily available. For example, scientists do not have access to complete data
on
their peers.
collect; the
Even public information, such
more closely guarded
which formal measures
dimension of
facts
may
such as salary
be
the
all
more
may
costly to
In cases in
so.
are unavailable, people will generally use informal
In the case of salary this
interest.
number of publications, may be
as
measures of the
involve seeing what neighborhood
they live in or what kind of car they drive.
Performance along dimensions of
others' performance
interest are generally
on the same dimension. Although
measurable on absolute scales, the absolute value
relative deprivation has consistently
is
meaningful only relative
somewhat
& Watts
unhappy and
who were making more money
resentful
be
literature
on
found that beyond a very low stipend, people almost
1983; Crosby 1976). For example, Messe
with ten years' tenure
The
irrelevant.
exclusively care about their salaries only relative to what others
Messe
may
salaries, skill, etc.
to
when confronted
make (Olson
1986;
et al.
& Watts found that executives
became
than they had ever anticipated
with the circumstance of a newly-hired employee
with a higher salary.
2.3.
Targets of social comparisons
According
to social
comparison-other, with
comparison theory, an individual
whom to make
a comparison. This target will vary
the goal of the comparison, as discussed in Section
make comparisons with
others
who
selects a target, or
2.
1
The theory
.
some way. For
are similar in
motive, the theory would predict selection of comparison-others
in
some
related dimension. Individuals can then
dimension of
interest relative to the comparison-other.
motive, the target will probably be someone
dimension of
will be
interest,
someone who
Another
in
an
gauge
who
is
their
depending on
calls for individuals to
the self-evaluation
who
presumed similar
are
own performance on
In the case of the
presumed superior
the
self-improvement
in
terms of the
and can therefore serve as a model. For self-enhancement, the
is
assumed
scientist or
to be
worse off or inferior on the dimension of
manager of similar
responsibility
R&D lab, since responsibility is highly observable.
of reporting employees, and
total
is
target
interest.
a likely comparison target
number
Position in the hierarchy,
number of employees under a manager
are readily
apparent in an organization. Likewise, the relative authority of individuals to
make
capital
acquisitions or decide on research directions, and even their personal influence, are well-
known among members
of an organization.
7
—
2.4. Effects
of social comparisons
Majorat
(1991) examine the conditions under which social comparisons have
al.
positive and negative effects on individuals in terms of self-esteem, motivation, stress, and
satisfaction.
The authors
and downward.
dimension of
distinguish between
An upward
interest,
i.e.,
downward comparison
is
comparison
the
one
is
comparison
in
which
two basic types of comparisons
one
is
which the
in
target
is
the target
is
inferior,
downward comparisons have
will
be in the future. Perceived control
feeling of the stability of the dimension as a measure and
to
is
The
is
potential
critical
how manipulable
perceived control, the subject's perception of
outcome has been and
the
and thus the comparison
effects that are either positive or negative, as illustrated in Figure 2.
is
on
unfavorable for the comparer. Similarly, a
favorable for the comparer. Both upward and
determining factor
suf)erior
— upward
the
based on the general
on the subject's perceived
ability
maintain or change the relative standing.
High Morale
Favorable
Stress or
Complacency
Social
Comparisons
Competitiveness
Unfavorable
Low
Figure
In the
first
2.
Positive
and negative
effects of social
case, individuals feel that they
compare favorably
self-relevani dimensions. If they feel that their relative standing
control, they experience satisfaction and
believe that their superior standing
they
may
feel
is
is
Morale
comparisons
to similar others
stable
and under
enhanced self-esteem. Alternatively,
if
on
their
they
subject to change, and they have httle control over
vulnerable and experience symptoms of stress or depression. Another
possible effect not addressed by Major et
al. is
complacency.
If relative
standing
is
it,
perceived to be stable, but not a direct consequence of personal
respond by reducing effort and resting on their undeserved
In the
second case, individuals
on self-relevant dimensions.
If
their control, increased striving
and competitiveness
compare unfavorably
will result.
change regardless of
may
laurels.
they believe their relative standing
feel that their standing is unlikely to
dissatisfaction, depression,
feel that they
effort, individuals
is
to similar others
changeable and under
However,
if
individuals
their efforts, they will experience
and jealousy of those with higher
relative standing.
Empirical support
2.5.
Empirical research on social comparison theory has largely confirmed the effects of
interpersonal comparisons on motivation and morale. In this section,
the
major studies showing the comparison-performance
we examine some
link.
A classic example of the deleterious effects of interpersonal comparisons
provided by Stouffer
et al. (1949),
who examined
respect to their pay and promotions.
policemen,
who were
the satisfaction of
They described
of
a situation in
Army
is
units with
which military
almost never promoted, were far more satisfied with their promotion
system than servicemen
in the "air corps," in
which advancement was often
rapid.
The
authors argued that since individuals in the air corps compared themselves to their friends
whom
they saw promoted,^ such comparisons led to low morale. In contrast, military
policemen were almost never promoted, so there were no negative comparisons to be
made. Paradoxically, even though the
comparisons hurt
More
air
corps was absolutely better
off, social
their morale.
recent studies of the effect of social comparisons on motivation and
performance manipulated both the goals of completing a task and the perceived
subjects in an experimental setting (Elliott
& Dweck
positive evaluation of performance, subjects with
1988).
When
low perceived
the goal
ability
was
of
to receive a
ability^ exhibited
"helpless" behavior by avoiding challenges and not persisting with solutions. This can be
interpreted as a comparison
avoid negative feedback.
high
(i.e.,
on an esteem-relevant dimension, because the goal was
On
subjects initially
the other hand,
when
the manipulated perceived ability
was
learning
(i.e.,
was
compared favorably with comparison-others), subjects
exhibited "mastery-oriented" behavior with high motivation and persistence.
goal
to
When
the
lower esteem-relevance), the performance of subjects with both
high and low perceived ability was not significantly affected.
^Even though promotion in general was rapid compared to the MPs, at any given time only
number of people were promoted, leaving the majority dissatisfied.
^Perceived ability was manipulated by assigning the subjects a bogus score on a pretest.
—9
a small
Ames
(1984) shows markedly similar
compared with
significant increase in helpless behavior
"individualistic"
(i.e.,
less
?
esteem-
& Leggett (1988) report a series of quasi-experiments
Dweck
relevant) environments.
"competitive" environments lead to
results:
that
confirm previous studies: performance goals and comparisons are associated positively
with avoiding challenges, perceptions of low
negative attitudes, and low motivation
ability,
and persistence.
Although the works cited above assume
performance,
it
that
comparisons affect motivation and
also true that performance affects comparisons, thus forming a feedback
is
loop. Farris (1969) noted that performance codetermines
environment, and actually precedes some aspects of
and performance
strictly
one-way? Even though
it.
Farris
many
aspects of the social
Is the link
found
between comparisons
that "contact"
(communication) was an antecedent of performance and not a consequent, social
comparison theory provides some reasons why performance may also drive comparisons
a feedback loop.
From
two ways: through
the
perception that there
Figure
2,
we can
see that performance
outcomes can play a
in
role in
development of a similar comparison-other and through the
is little
control over the outcome.
Through performance, a formerly
dissimilar comparison-other
may
be developed.
For example, a successful employee may be promoted into a position of higher
responsibility or salary, thereby bringing that person into the sphere of similarity to other
managers. Likewise, an underperforming employee
may be
held back from responsibility,
thereby becoming more similar to a cohort with lower organizational tenure.
The change
rapidly advancing
due
in status
employee
(or
to
group of employees)
may
lead others to believe that there
no chance of competing well along a certain dimension, leading
We can
performance.
see, therefore, that the potential for a
to
and so on. The
and consequences could snowball
performance
differentials,
to
poor motivation and
feedback loop
which may lead
comparisons may lead
effects
A
performance may also affect perceived control.
to
to
exists.
Social
more comparisons,
unforeseen sizes
if
not
anticipated and planned for in advance.
2.6.
Summary
Thus, as illustrated
in
Figure
3,
theory and empirical evidence suggest that highly
esteem-relevant comparisons combine with low perceived control to produce negative
effects, regardless of
apparent
when
the subject
that the subject will
the subject
is
whether the comparison
is
remain
is
worse-off than the
inferior.
favorable or unfavorable. This
target, since
However, perhaps
is
more
low perceived control means
surprisingly,
it
is
also true
when
superior to the target, since the subject will either feel unable to maintain
superiority, or will expect to remain superior effortlessly.
— 10
is
Similarity of
Comparison-Other
EsteemRelevance
Importance
of Dimension
Strength
of Effect
Behavior
Positive or
Negative Effect
Stability of
Measure
Perceived
Control
Ability to Change
Relative Standing
Figure
3.
Summary
of important factors in the effects of social
comparisons
In
what form do the
effects take the
effects of social
form of actions and
comparisons manifest themselves? Negative
feelings regarding the self ("self-directed"), the
dimension ("dimension-directed"), and the
target ("comparison-other-directed").
Self-
directed responses include lower self-esteem, depression, stress, and dissatisfaction, while
dimension-directed responses include decreased motivation, playing
down
the importance
of the dimension, and claims of other more relevant dimensions. Comparison-otherdirected responses include jealousy, avoidance, envy, derogation, and, occasionally, even
violence (Salovey 1991). Such behavior in the workplace would obviously not be
conducive
Do
to high levels of productivity.
dissatisfaction
performance
because
at
many
the
and lack of motivation
at the individual level translate into
group level? The case of CRDVs
is
backed by the evidence cited above,
of the comparisons are group-based; that
is,
the comparisons are
precisely by employees of different groups and have similar effects on
group.
The
bipolar nature of two distinct cultures interacting in the
consider social comparisons' effect on performance
—
11
poor
at the
group
all
CRDV
level.
made
members of the
allows us to
3.
Influencing social comparisons
now examine
Let us
Employees of two
more
or
the relevance of this theory to structuring the
CRDV.
working together may be subject
distinct organizations
to
different policies regarding compensation, mcentives, career advancement, research
autonomy, and so on. They
will naturally tend to
these dimensions and will experience
some
compare themselves with each other on
of the effects described above. Will these
set
be constructive or destructive to the overall mission of the
CRDV? How can
mitigate the negative effects and create an organization that
effects? Recent
work
invite or force social
important
— and
in social
comparison theory holds
is
n.anagers
conducive to the positive
may
that the social enviroimient
comparisons (Wood 1989). In other words, the social environment
the individual's perceptions and actions are affected by
assumption of this paper holds
that
it.
is
A major
managers can and do have some influence on the social
environment through various mechanisms.
In light of social
comparison theory, CRDVs require
attention to interpersonal
CRDVs may be
communication among
structured in such a
way
comparisons, and performance. While
manipulate organization structure and
in
CRDVs, these
own
in
Even
if
the
problems before they
social
we
human
resource policies^ (Nelson
While
the partners in a
CRDV
CRDV
& Winter
1982),
are each internally
up
their
cannot be freely structured, however, an
may
help focus management's attention on
fully develop.
We
first
show how
the structure of the
CRDV
kinds of comparisons that can be important for a venture's success.
some human resource management
we
ability to
discuss various options or mechanisms that affect the level of
comparisons made.
environment. Finally,
special
particular,
most cases, history constrains a firm's
understanding of social comparison theory
In this section,
and engineers. In
histories, they are generally less constrained in setting
joint research endeavors.
potential
management pay
as to optimize the effects of communication, social
are subject to negotiation.
constrained by their
scientists
that
policies
and
their influence
We
influences the
then examine
on the comparison
provide recommendations for minimizing negative social
comparisons and maximizing positive ones.
3.1.
Organization structure
Crt^Vs can take many organizational forms. For example, partners can take an
equity stake in an entirely
new
enterprise or
form a general partnership; partners can be
competitors, suppliers, or customers; partners can be from different countries or the
^We
are calling the judicious planning and implementation of the three
supposed
to be different
from "organization
structure,"
which
—
12
is
same
mechanisms "structuring." This
one of the mechanisms.
is
country; the term of the cooperation can be limited or unlimited in duration; panners can
share a lab or perform research solo; and so on.
The subsequent discussion
concentrate on those aspects of organization structure that
most
partners in the
and collocation. Internationalization
CRDV
most interesting and
find
comparisons: employee motivation, and organizational incentives:
critical to social
internationalization
we
will
refers to the degree to
which
the
are based in different countries. Collocation refers to whether the
collaborative research
conducted jointly
is
same
in the
laboratory.
Internationalization
Mowery
(1992) identifies four types of collaboration most amenable to intemational
partners:^ (1) research alone; (2) exchanging proven technologies across a single product
line; (3) joint
functions
shows
development of one or more products; and
(e.g.,
(4) collaboration across different
marketing and research). Using examples from these four types,
the conditions under
which
international collaboration
direct foreign investment (DFI). Intemational collaboration
the technology in question
is
preferred
efficient scale,
when
preferred to licensing or
is
preferred to licensing
when
complex, new, or has weak patent protection. Intemational
alliances are preferred to DFI in cases with
minimum
is
Mowery
and high
weak
appropriability,
weak
control, large
site-specific learning. Intemational collaboration
contracts are limited or difficult to enforce, and
when
it
is difficult
is
also
to
ascertain the value of participants' contribution.
Comparing intemational and domestic CRDVs, Tucci (1994) proposes
three
main
differences between them: (1) the level of competition (degree of substitutability of
products) between firms in an international collaboration can often be lower than between
domestic partners; (2)
it
is
more
intemational CRDV; and (3)
results in
it
is
difficult to coordinate
more
and transfer
difficult for firms outside
an intemational collaboration. The competition effect
three, with the benefits
results in an
of the
is
the
CRDV
to obtain the
most important of the
of lower competition often outweighing the costs of linguistic and
cultural differences.
Given
the above,
how
does the internationalization of the venture affect the social
comparison environment? The intemational CRDV provides
by working through esteem-relevance
in
Figure
3.
far
fewer social comparisons
The intemational venture makes
the
comparison-others less similar because language and cultural differences are barriers
development of a shared
identity.
Internationalization also
makes
comparable. For example, using pay as a comparison yardstick
^Although structuring the
firm
is
CRDV
often occurs after the partner
searching for a partner with
whom
is
to cooperate.
13
—
is
the
measures
to the
less
a problem in the
chosen, there are occasions wherein the
international case since buying
power can be
pay differentials
rates fluctuate. Therefore
different in different countries
CRDV
in the international
and exchange
are less likely to
generate dissatisfaction than they would in the domestic case.^
Collocation
To
decide whether or not to collocate researchers
incentives for truth-telling and coordination
/
promising results are lower than they would be
scientists often "trade
own
if
tell
the research
not just an organization-level
is
between
On
When
the other participants about
were conducted jointly
phenomenon, since individual
knowledge" and withhold recent information
firm (von Hippel 1987; Schrader 1991).
the tradeoff
administration must be understood.
performing research separately, the incentives for parties to
(Ciborra 199 1).'^ This
CRDV,
in a
that
would
hurt their
the other hand, joint research involves
higher setup and administrative costs, such as procuring property
at
a "neutral" location and
monitoring the venture to ensure that results are transferred back to the participating
companies.
It is
clear that joint research provides a greater opportunity for interaction,
communication, development of a shared
maximizing communication would lead
identity,
to joint
within the venture would call for separate
and social comparisons. While
R&D,
highly unequal treatment of groups
R&D due to negative social comparison effects.
Social comparison theory cannot and should not be considered in isolation, but putting
diverse researchers in the
same room may negate some of the
communication, particularly
there
if
comparison and/or individuals'
3.2.
Human
beneficial effects of frequent
low perceived control over the dimensions of
is
relative standings
on
it.
resource policies
If partners in
CRDVs have
different organizational policies concerning esteem-
relevant dimensions, social comparisons between researchers associated with the different
companies have the potential
to create negative effects
on motivation and performance.
Compensation, resources, autonomy, and control of research
results are four areas that are
highly esteem-relevant for researchers.
Compensation
.
Although wages may be
difficult to
compare across national
boundaries, as discussed above, other forms of compensation are readily comparable.
Benefits, holidays, vacation, and expected
have lower esteem-relevance than wages
working hours are examples. While these may
in
domestic CRDVs, differences can nonetheless
"Of course, these very factors that preclude social comparisons also make oral communication an
and somewhat expensive medium (March & Simon 1958; Katz & Kahn 1966).
'^Ouchi (1984) points out that
this
problem
is
especially acute
14
—
among American
firms.
inefficient
produce
friction
among
researchers, especially in international ventures, in
which they may
be the most salient points of reference.
Resources
office
and engineers require a great deal of resources: equipment,
Scientists
.
and laboratory space, support
well-funded
likely to
CRDVs have
budgets to attend conferences,
be an esteem-related dimension of comparison.
.
freedom
ability to
defines two kinds of autonomy: strategic
to define the direction of one's
choose how
to
own
research; of)erational
pursue research directions.
First,
natural for
seems
employees
that strategic
to
compare
autonomy
is
this level
is less
fairly rare that,
publish and
publish
is
some
The opportunity
the
project.
in fact,
it
is
it
to other
to publish
for) maturity or organizational trust.
seems
within the same research organization,
are not," but
is
observable, but not invisible to employees. Both
at first
glance to be an
unlikely dimension of comparison because most companies either allow
It is
is
some subset of a
of responsibility allowed, and,
forms of autonomy can be seen as a sign of (or reward
.
autonomy
one of the most easily observed variables available
employees. Operational autonomy
Control of results
autonomy
employees desire the
responsibility to determine the course of the research project, or
It is
Even
etc.
resource constraints; thus, these items are highly prized and are
Autonomv Bailyn (1984)
the
staff, travel
some people
it
are allowed to
CRDV.
certainly a possibility within a
or they do not.
Ability to
also highly observable, and so can be viewed as a potential dimension of
comparison. Approval
to present results at technical
conferences
similar to the opportunity to publish. Patent ownership
is
another example quite
a third possibility related to
is
control over research results and can be a powerful motivator, especially
if royalties
are
involved.
3.3.
Recommendations
What
while
at the
actions can managers take to minimize negative effects of social comparisons
same time maximizing
managers should consider the
the positive ones? In choosing partners for
effects of internationalization
on
the
CRDVs,
comparison
environment. Researchers from different countries will view each other as less similar than
partners in domestic ventures, and so the strength of both positive and negative effects will
be diminished. Furthermore, some of the measures used
stable in international
Once
In general,
in social
CRDVs, thereby lowering perceived
comparisons will be
control.
a partner has been chosen, managers can address the structure of the
we recommend creating
in
CRDV.
a shared identity to the greatest extent possible, by
collocating the collaborating researchers and standardizing the policies concerning
'This does occur, for example,
less
defense-related aerospace companies.
— 15
human
resource management. Although this will increase the similarity of the researchers, and
thus the strength of the effects of social comparisons between them, taking actions to
improve perceived control
will favor the desirable positive effects,
and discourage negative
effects.
Human
Many
resource
management
policies are critical for
enhancing perceived control.
of the comparison dimensions reflect the organization's values and priorities. These
can be conveyed through chosen methods of performance evaluation and managerial
acknowledgments of individual
effort.
If
employees have significant input
into these
choices, they will feel greater control over them. Furthermore, perceived control over
on the dimensions of
relative standings
interest
can be increased by providing
organizational resources for self-improvement efforts. For example, allocating time and
financial support for additional training or attendance at technical meetings should increase
individuals' ability to increase their standing
on dimensions
that will
gready benefit the
organization, as well as the employees' self-esteem and morale.
4.
Conclusions
In this paper,
we examined
the
communication-performance link
laboratory, with an eye toward the effects of task- and equity-related
the social environment.
We
argued
that in
cooperative
R&D
in the
communications on
R&D ventures, social comparisons
can have effects on performance, possibly negating the positive effects of increased
communication.
performance
We discussed the theory and evidence behind the social comparison-
link,
and then proposed mechanisms
to
promote the positive effects of social
comparisons, while minimizing the negative.
This conceptual paper has also provided a base from which future research can
spring. In particular,
one could seek empirical support
for the effect of social
on performance both within individual laboratories and CRDVs.
In addition, empirical tests
could be performed on the effect of organization structure, staffing, and
social
comparisons
HRM
policies
comparisons and overall communication patterns. Finally, further work
development could center on how unique aspects of different groups, such as
engineers,
In
may
in theory
scientists
and
require unique organization structures and policies.
summary, managers responsible
cooperative
on
for deciding
upon the structure of the
R&D venture should take into consideration many factors, including
characteristics of the partners
communications
and the environment.
effects of organizational structure
should be considered.
If the partner
In addition, both the direct
and indirect
and human resource policy mechanisms
has been decided, the manager should concentrate on
the structure of the venture. If the structure has been decided, the
—
16
manager should pay
careful attention to
to social
human
resource
comparisons allows the
management mechanisms. Thus
CRDV
to reach its full potential.
— 17 —
it
may be
that attention
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