Investigating self-selection mechanisms induced by selective revealing

Problem statement Search for collaboration partners is difficult. Potential partners can be in technological fields that are outside the domain of the focal firm. As firms’ search often remains within their domain, they... [ view full abstract ]

Problem statement
Search for collaboration partners is difficult. Potential partners can be in technological fields that are outside the domain of the focal firm. As firms’ search often remains within their domain, they might neither be aware of, nor consider these potential partners. Yet, partners that are from other technological fields can be valuable, because within a collaboration both the focal firm together with the partner can combine their potentially different knowledges. (Afuah & Tucci, 2012; Cowan, Jonard, & Zimmermann, 2007)
Recently, Alexy, George and Salter (2013) suggested selective revealing as a mechanism to identify potential collaboration partners. Selective revealing is “the voluntary, purposeful, and irrevocable disclosure of specifically selected resources, usually knowledge based, which the firm could have otherwise kept proprietary, so that they become available to a large share or even all of the general public, including competitors.” (Alexy et al., 2013, p. 272)
When firms search for potential collaboration partners, they share knowledge with a wider audience and subsequently potential partners might contact the focal firm. However, potential partners need to find the solution-related knowledge and recognize its usefulness for their own problem. This requires that the focal firm formulate its selectively revealed knowledge to make it accessible for these actors and to attain the benefits of revealing its solution-related knowledge (von Krogh et al., 2012 quoted in Alexy et al., 2013; Baer, Dirks, & Nickerson, 2013). In short, potential collaboration partners might identify themselves to the focal firm, they self-select.
Prior research on collaboration (Dodgson, 1993) as well as open innovation (Chesbrough, 2003; von Hippel, 2005) and selective revealing (Alexy et al., 2013) could inform us about the self-selection process.
Research on collaborations has found that collaborations enable firms to jointly develop new ideas (Hargadon & Sutton, 1997) and in industries with complex, expanding and multiple knowledge bases, the locus of innovation is between collaborating firms rather than within firms (Powell, Koput, & Smith-Doerr, 1996). Then, how can firms identify collaboration partners that span technological boundaries (Rosenkopf & Almeida, 2003; Rosenkopf & Nerkar, 2001)? From a theoretical point of view, this question seems highly relevant, yet this early phase of collaboration has not received much focus. Other issues with regard to collaboration received more scholarly attention, for example variables influencing partner choice (Gulati, 1995; Mowery, Oxley, & Silverman, 1998) or structure and governance in alliances (for an overview see Contractor & Reuer, 2014). Some, like Tyler and Steensma (1995), are investigating managerial cognition when evaluating technological collaboration opportunities.
As regards open innovation and selective revealing, empirical studies investigated the benefits firms perceive as they engage in selective revealing (Henkel, 2006) and how their commitment and openness changes over time (Henkel, Schöberl, & Alexy, 2014). Conceptual work developed propositions regarding the benefits influencing a firm’s decision to reveal solution-related knowledge (Alexy et al., 2013; Harhoff, Henkel, & von Hippel, 2003). When firms reveal problems instead of solutions, self-selection seems to work and can identify distant problem solvers (Afuah & Tucci, 2012; Jeppesen & Lakhani, 2010). Interestingly, firms usually formulate their problems with an intermediary before posting the problem to problem-solvers (Jeppesen & Lakhani, 2010, p. 1021). Also in this context, there is a lack of evidence regarding the effect of problem formulation and its influence on the number and diversity of problem-solvers.
We approach the issue of formulation with regard to self-selection mechanisms induced by selective revealing from a communications perspective. The revealing firm (sender) formulates solutions (signals). Potential collaboration partners (receivers) can come from different knowledge domains. Due to different knowledge bases, receivers can process the solutions differently. This is problematic both for the sender and for the receivers. On the one hand, the sender needs to decide on how to formulate the signal for an a priori unknown mass. On the other hand, receivers that come from different knowledge domains need the cognitive ability to decipher the signal. Indeed, it becomes essential to formulate signals in such a way that they enable the sender and possible receivers to connect (Alexy et al., 2013; Baer et al., 2013).
Research questions
Thus, we formulate the research questions:
• How do solutions need to be formulated by the revealing firm to be perceived useful by actors that vary in their distance to the revealing firm with respect to their knowledge?
• Which characteristics of the receiver enable them to recognize the usefulness of the revealed knowledge?
Relevance
We consider these questions important, because they address a fundamental mechanism. When we investigate the self-selection of potential partners of different distance, we might better understand the proposed benefits of selective revealing (Alexy et al., 2013).
With regard to collaboration, we will look at the early phase of their development. When potential partners are distant or unknown, giving away knowledge could be beneficial for attracting such partners.
For managers, we show that there exist benefits to sharing knowledge, which could enable them to identify potentially valuable collaboration partners. With regard to the receivers that might look to profit from shared solutions, we should be able to determine factors that influence their ability to recognize potentially useful information.

Methods
We plan to investigate the phenomenon in a laboratory experiment. This allows observing different formulations of solution-related knowledge and their effect on an a priori unknown mass of receivers.
By combining the experiment with a survey of the participants, individual characteristics help us to control for knowledge distance and other factors related to the receivers of the solution-related knowledge, for example, creativity (Amabile, 1998) or lead-userness (von Hippel, 1986; Franke, Poetz & Schreier, 2014).
Expected progress by 1 August 2016
Until August, progress will be made with respect to the theoretical framework, hypotheses and the experimental design.