Int. J. Management Concepts and Philosophy, Vol. 2, No.

1, 2006 31

Collaboration capability – a focal concept in

knowledge creation and collaborative innovation
in networks

Kirsimarja Blomqvist* and Juha Levy

Department of Business Administration and Technology
Business Research Centre
Lappeenranta University of Technology
P.O. Box 20, 53851 Lappeenranta, Finland
Fax: +358 5 621 6699
E-mail: kirsimarja.blomqvist@lut.fi
E-mail: juha.levy@lut.fi
*Corresponding author
Abstract: Sustainable competitive advantage is not possible in
knowledge-based competition without continuous innovation. Innovations,
by nature, emerge in social interaction in which diverse actors share
complementary knowledge. Collaboration capability is considered a
prerequisite for actors if they wish to leverage such knowledge. The concept
is analysed through a state-of-the-art review of earlier conceptual and empirical
research on network collaboration, and as a result we propose that collaboration
capability integrates the key elements in many closely related but semantically
diverse conceptualisations. As a concept, it underlines the relational perspective
and enables knowledge creation in a risky and uncertain environment. It can be
defined as ‘the actor’s capability to build and manage network relationships
based on mutual trust, communication and commitment’. Furthermore, it could
be considered an integrative and cross-level concept explaining much of the
knowledge creation and innovation in networks.

Keywords: collaboration capability; knowledge creation; innovation;

inter-organisational relationships; intra-organisational collaboration; networks.

Reference to this paper should be made as follows: Blomqvist, K. and Levy, J.

(2006) ‘Collaboration capability – a focal concept in knowledge creation and
collaborative innovation in networks’, Int. J. Management Concepts and
Philosophy, Vol. 2, No. 1, pp.31–48.

Biographical notes: Kirsimarja Blomqvist is a Professor in Knowledge

Management, Vice-Director of the Technology Business Research Center
at Lappeenranta University of Technology, and a Part-time Director of
TeliaSonera, Chief Technology Office. She has worked as a Corporate
Analyst in technology-based firms. Her research interests include trust and
social capital in knowledge creation and innovation, R&D and innovation
management, strategic alliances and intra-organisational collaboration. Her
PhD thesis ‘Partnering in the dynamic environment – the role of trust and
technology in asymmetric technology partnership formation’, which was
published in 2002, was given a special 85th anniversary award for its
managerial contribution by the Finnish Foundation for Business Education.
She has published in R&D Management, Technovation, The Scandinavian
Journal of Management, The Journal of Strategic Change and The Journal
of International Production Economics, and has contributed chapters to
several books.

Copyright © 2006 Inderscience Enterprises Ltd.

32 K. Blomqvist and J. Levy

Juha Levy is a Researcher in The Technology Business Research Center at

Lappeenranta University of Technology. His current research interests include
close collaborative network relationships in terms of knowledge transfer,
knowledge creation and innovativeness.

1 Introduction

Global competition has reduced the role of the traditional sources of competitive
advantage. Technological knowledge is critical, but no longer a source of sustainable
competitive advantage. A new, fundamental factor in wealth creation is continuous
knowledge creation and innovation in networks; complementary knowledge is needed in
breeding innovative ideas for products and services. Knowledge creation is social in
nature, and social exchange is an essential part of it. However, friction is always an
aspect of social organising (Brown and Duguid, 1998). Nonaka and Takeuchi (1995),
stressing the importance of common values, goals and strong relationships in knowledge
creation. Miles et al. (2000) consequently claim that mutual communication based on
trust is critical for knowledge creation and subsequent innovation, and further point out
that the ability to collaborate is a meta-capability in this context. Many practitioners
consider collaboration a critical issue in a network economy, and according to Nokia
CEO Pekka Ala-Pietilä, the only thing that discriminates really successful Nokia
managers is their capability to establish relationships both within Nokia and with external
parties (Ala-Pietilä, 2003).
In the following discussion, we consider and analyse the concept of collaboration
capability. It seems from earlier literature that relational factors, such as trust,
commitment and communication separate relation-oriented relationships from
transactional relationships (Sarkar et al., 2001; Pillai and Sharma, 2003; Heide and John,
1992; Morgan and Hunt, 1994). It is proposed here that they form a basis for the actor’s
collaboration capability. As in earlier research, this concept is analysed in different
contexts and on different levels – the individual, the team, the organisational and the
inter-organisational – and is subsequently categorised as an integrative and cross-level
concept explaining much of the knowledge creation and innovation in networks. Its role
in knowledge creation and innovation, as well as how it relates to performance, are
discussed. The paper concludes with some managerial implications and suggestions for
further research.

2 On collaboration capability and related concepts in recent research

The discussion on collaboration capability and related ideas can be traced back to several
theoretical approaches. The literature is fragmented, and it is challenging to provide a
comprehensive view. In the following section, we review the contexts and levels of
analysis undertaken so far, and discuss the role and potential of collaboration capability
as a unifying and cross-level concept integrating key aspects of closely related concepts.
 Collaboration capability – a focal concept in knowledge creation 33

2.1 Research traditions, contexts and levels of analysis

The term collaboration capability, and closely connected concepts, have been discussed
at different levels of analysis in recent literature on inter- and intra-organisational
relationships, which include alliances, cross-functional teams, intra-firm coordination and
organisational innovation. The discussion in this section is on various levels: firm,
individual, team, intra-organisational, inter-organisational and network.
Theoretical approaches to collaboration capability are closely related to the
developing theory of the firm: the resource-based view (Wernerfelt, 1984; Barney, 1991),
the knowledge-based view (Nonaka and Takeuchi, 1995), the dynamic capability view
(Teece et al., 1997; Eisenhardt and Martin, 2000), and the competence-based view
(Prahalad and Hamel, 1990). All these approaches emphasise firm-specific and
firm-internal issues as bases for competitiveness. According to the resource-based view,
firm-specific resources establish a basis for competitiveness, while the knowledge-based
view promotes individually and organisationally held knowledge as a basis for firm-level
capabilities and a source of competitive advantage (Grant, 1996). Collaboration
capability could also be considered a subset of dynamic (Teece et al., 1997) and
combinative capabilities (Kogut and Zander, 1993). Different authors use the terms
differently and give specific meanings to certain ones. Prahalad and Hamel (1990) made
core competence known to a wider public. Teece et al. (1997) approached firm
performance through the dynamic capability view of the firm, but do not refer to
collaboration itself as a dynamic capability, even if a careful reader can pinpoint
such capabilities in the form of alliances, acquisitions, intra-organisational strategy
processes, and R&D as operations demanding strong collaboration (see e.g., Eisenhardt
and Martin, 2000).
The emerging theory on firm-specific capabilities is in a pre-paradigmatic phase in
the sense that there is no agreement on the conceptualisation and operationalisation of the
focal concepts. On the basis of our analysis, we propose that on the firm level,
collaboration capability could be seen as a generic meta-capability enabling leverage of
both internal and external knowledge bases in uncertain and complex environments.
On the individual level, Buckley et al. (2002), for example, draw attention to
managers’ partnering skills in cross-cultural joint ventures. In a similar context,
Storbacka et al. (1994) describe relationship quality as consisting of commitment,
communication, bonds and satisfaction, while Crosby et al. (1990) define it in terms of
dimensions of trust and satisfaction. Wieselquist et al. (1999) and Morgan and Hunt
(1994) suggest that trust and commitment lead to pro-relationship behaviours in
customer relationships and relationship marketing.
On the intra-organisational level, Kahn and Mentzer (1996; 1998) identified two
separate philosophies for managing inter-departmental interaction: transaction-based
interaction and collaboration. Inter-departmental integration as collaboration implies
common goals, shared values, mutual commitments, and collaborative behaviour. This
approach parallels relationship marketing, for example. According to transaction-based
philosophy, departments are considered to be independent entities competing for
company resources. Thus, as with inter-organisational relationships, the transactional and
relational approaches could also be adopted at the firm level.
34 K. Blomqvist and J. Levy

Researchers focusing on the intra-organisational level approach collaboration

capability from the perspective of inter-departmental integration (Kahn and Mentzer,
1996; 1998; Ellinger et al., 2000), and as cross-functional integration (Swink, 1999).
Ellinger et al. (2000, p.2) distinguish collaborative interaction from transactional or
hierarchical interaction, and define collaboration as working informally together, sharing
ideas, information and resources, and working together as a team. Hausman et al. (2002,
p.241) discuss inter-functional interfaces or inter-functional harmony, referring to the
department’s capability of crossing departmental borders. Kahn and Mentzer (1996,
pp.9–10) defined inter-departmental collaboration as “the willingness of departments to
work together, which emphasizes working together, having mutual understanding, having
a common vision, sharing resources, and achieving collective goals”. Collaboration is
further characterised as the attitudinal aspect of inter-departmental relationships,
representing an affective, volitional, mutual/shared process (Kahn and Mentzer, 1996,
pp.9–10). Inter-departmental integration has also been characterised and operationally
defined as information sharing and involvement (Gupta et al., 1986 in Kahn and Mentzer,
1998). According to Tyler (2001), collaborative capabilities consist of information
processing, communication, knowledge transfer and control, the management of
intra- and inter-unit coordination, trustworthiness or the ability to engender trust, and
negotiation skills.
Studies on intra-organisational collaboration seem to underline the informal aspect,
and especially the role of informal communication as opposed to formal reporting and
consulting. Literature on cross-functional integration covers functions from logistics and
marketing or production (Kahn and Mentzer, 1996; 1998, Ellinger et al., 2000) to
new-product development and manufacturability (Ellinger et al., 2000). On the team
level, collaboration is referred to as team integration (Swink, 1999), cross-functional
cooperation (Pinto et al., 1993), or collaborative cross-functional integration (Ellinger,
2000). Järvenpää and Leidner (1999) consider trust and communication to be team
success factors, while according to Vartiainen et al. (2003), the team’s collective
competence consists of trust, commitment, communication and joint problem solving.
On the inter-organisational level, relationships are seen to generate more value and
competitive advantage if they become more relational rather than transactional and
market-based (Dyer and Singh, 1998). Relational rents are seen to rise from investments
in relationship-specific assets, knowledge exchange and learning, and complementary
capabilities. Consequently, to be able and be willing to develop relationship-specific
assets, invest in knowledge exchange and learning, and lower transaction costs, firms
need strong collaboration capabilities.
In the context of alliances and dyadic partnerships, Lambe et al. (2002, p.143) discuss
alliance competence in terms of the “organisational ability to find, develop and manage
relationships”. Svahn (2004) and Möller and Svahn (2003) discuss the managerial
capabilities and skills needed to manage strategic nets. Kale et al. (2002, p.750)
introduced the term alliance capability, which means, on the organisational level,
“specific systems to capture, codify, communicate and create alliance management
lessons and insights associated with their alliance experience”. According to Heimeriks
and Duysters (2003, p.9), alliance capabilities are “the mechanisms that help firms
engage in a stable and repetitive activity pattern to capture, share, disseminate and apply
alliance management knowledge (or know-how and know-why)”. They add an
‘application’ element, introduced by Makadok (2001), to Kale et al.’s (2002) definition,
meaning concrete micro-level mechanisms such as databases or alliance departments that
 Collaboration capability – a focal concept in knowledge creation 35

systematically capture and share alliance experience. It seems that authors discussing
alliance capability stress the ability to learn from individual past experiences and to
become better alliance partners. They clearly have an organisational-learning perspective,
and use the concept of alliance capability on the organisational level.
Sivadas and Dwyer (2000, p.33) discuss cooperative competency and define it
as “the ability of the partners to trust, communicate, and coordinate”. Niemelä’s
(2003) multi-dimensional conceptualisation of cooperation capability consists of the
“components of social ‘networking’ capabilities, management capabilities and learning
capabilities, which together with trust and commitment, are seen as the key capabilities in
the networking process of family firms” (Niemelä, 2003, p.9).
Ritter et al. (2002) developed the concept of network competence to explain the role
of network management in innovation success. They define it as “the degree of network
management task execution and the degree of network management qualification
possessed by the people handling a company’s relationships” (Ritter et al., 2002, p.120).
Their two-dimensional construct of network competence (Ritter et al., 2002; Ritter and
Gemunden, 2003) stresses the qualifications dimension and collaborative aspects, and
incorporates social qualifications, such as ease of communication and reliability.
On the network level, both the actors’ position and the structure of the network
are significant (Gulati et al., 2000): actors gain information and complementary
competencies through networks. Following the IMP tradition, Ford (2002), for example,
proposed that the relevant unit of analysis should be the network, and not the single firm.
Only a few researchers, such as Duysters et al. (2003) and Möller and Halinen (1999),
have distinguished the firm, alliance and network levels in research on alliances,
endeavouring to understand inter-organisational relationships on the network level
through the theory of social capital. By definition, this approach emphasises the
relationship perspective and considers trust, norms and relationships as critical
components of social capital (Putnam, 1993). The authors refer to Gulati et al. (2000),
according to whom, firms could be seen as architects designing networks.

2.2 Towards an integrative and cross-level concept of collaboration capability

Duysters et al. (2003) propose that firms need to focus on different levels in order to
manage alliances in an optimal way. Cross-level analysis is not usual, however.
According to our state-of-the-art review, very few researchers have approached network
interaction and related collaboration in a holistic way, although Weiss (1993, p.278), for
example, argues: “In complex social phenomena, actors exist on more than one level
(simultaneously), act differently as units and influence each other across levels”. In a
similar vein, Rousseau et al. (1998) call for multiple levels of analysis to promote
understanding of organisational and inter-organisational phenomena, such as trust.
Tyler (2001) saw cooperative capabilities in multi-dimensional terms, as
complementing and even substituting for technological capabilities. Her definition refers
to cooperation itself as any “process by which individuals, groups, and organisations
come together, interact, and form psychological relationships for mutual gain or benefit”
(Tyler, 2001, p.4; originally from Smith et al., 1995, p.10). She further stresses the
multi- and cross-level character of cooperative capabilities, which reside in individuals
and not just in organisational systems or routines. Hillebrand and Biemans (2003, p.737)
also argue that linkages between different levels of collaboration are critical to an
36 K. Blomqvist and J. Levy

understanding of the systemic nature of network collaboration. As an example, he

suggests that intra-organisational collaboration capability is a necessary antecedent of
successful inter-organisational collaboration (see e.g., Hillebrand and Biemans, 2004).
As with learning and innovation (see Kanter, 1988), and trust (Rousseau et al., 1998),
collaboration capability could also be best understood within the context of multiple
levels of analysis, and could consequently be considered a multi- and cross-level concept
(see Tyler, 2001, Rousseau, 1985; Rousseau et al., 1998). It is a critical issue on all
levels, and the same concept may be useful for understanding and analysis on different
levels (Figure 1).

Figure 1 Collaboration capability as a multi- and cross-level concept

Individual
collaboration
Function Alpha’s capability
collaboration
capability
Individual Team B’s Individual
collaboration collaboration collaboration
capability capability
capability
Inter-
Individual
collaboration Individual organisational
capability collaboration collaboration
capability
capability
Individual Team A’s Individual
collaboration collaboration collaboration
capability capability capability

Individual
collaboration Individual
capability collaboration
capability

Individual Team C’s Individual

Function Beta’s collaboration collaboration collaboration
collaboration capability capability capability
capability
Individual
collaboration
capability

The different levels of analysis could be seen as part of the fractal ranging from
collaboration among individuals and between firms to network collaboration among
firms. On the other hand, the different parts of the system have an impact on the others,
and the system’s collaboration capability is augmented by the capabilities of its parts. It is
proposed that collaboration capability is a useful cross-level concept for both
understanding and analysing relational interaction on different levels: individual, team,
intra-organisational, organisational and inter-organisational.

2.3 Collaboration capability

The focus in this paper is on collaboration capability based on relational orientation
as opposed to transactional orientation (Dyer and Singh, 1998). Relational orientation
is associated with high levels of trust and communication which, together with
commitment, are identified by many researchers interested in collaboration as its ‘soft’
components. The literature appears to be consistent in this sense (see Table 1).
 Table 1
Unit of analysis Interpersonal Inter-organisational

Relationship Success determinants of Relationship Characteristics of Relationship Cooperative Relationship

Term quality long-term relationship quality partnership success success factors competence capital

Authors
Storbacka Crosby Mohr and Spekman, Morgan and Sivadas and Sarkar
Concept et al., 1994 Ganesan, 1994 et al., 1990 1994 Hunt, 1994 Dwyer, 2000 et al., 2001

Trust* a a a a a a

Commitment* a a a a

Communication* a a a

Coordination a a
Concepts and dimensions related to collaboration capability

Joint problem
solving a
Collaboration capability – a focal concept in knowledge creation

Dependence a

Satisfaction a a
37
 38
Unit of analysis Team level Firm level Net level Multi-level
Table 1

Network Cooperation Alliance Cooperative

Term Collective competence competence Integration capability success factors capabilities

Authors
Järvenpää and Ritter and Kahn and Mentzer, Duyster
Concept Leidner, 1999 Vartianen et al., 2003 Gemunden, 2003 1998 Niemelä, 2003 et al., 2003 Tyler, 2001

Trust* a a a a a a
K. Blomqvist and J. Levy

Commitment* a a a a

Communication* a a a a a a

Coordination a

Joint problem
solving

Dependence
Concepts and dimensions related to collaboration capability (continued)

Satisfaction

Note: *Components in our conceptualisation of collaboration capability

 Collaboration capability – a focal concept in knowledge creation 39

It is clear from Table 1 that various authors agree on the critical role of trust, commitment
and communication in collaboration, although the conceptualisations vary, from
collective competence (team level, Vartiainen et al., 2003) to cooperation capability (firm
level, Niemelä, 2003) and network competence (Ritter and Gemunden, 2003). In line
with other authors who have used a similar conceptualisation, we propose that trust,
communication and commitment differentiate relationally oriented relationships from
transactional relationships mainly in terms of economic logic and short-term benefits.
The more traditional factors of inter-organisational relationships, such as coordination,
transaction costs and enabling technologies are also important, but not sufficient
for collaborative innovation characterised by high risks and uncertainty. The role of
collaboration capability is accentuated under conditions of high uncertainty (Tyler, 2001;
Amit and Schoemaker, 1993; Miller and Shamsie, 1996), and the relational approach is
suggested to be both economically viable and necessary in knowledge creation and
collaborative innovation, demanding high investments in human capital.
Trust, commitment and communication are closely related to and affect each
other. Trust has been identified as a threshold condition for partnerships (Dibben,
2000, Blomqvist, 2002), although communication is needed for trust to emerge,
and communication itself may further enhance the level of trust. Like trust and
communication, trust and commitment are also recursively linked.
Trust is based on beliefs about what an actor can do and how he or she will behave in
future-oriented relationships containing risk. It is a multi-dimensional phenomenon (on
components of trust, see e.g., Blomqvist, 1997; 2002; Castaldo, 2003), and is thought to
contain rational and calculative, as well as emotional and affect-based elements (e.g.,
Kramer, 1999; Moorman et al., 1993; Cullen et al., 2000; Blomqvist, 2002; Seppänen
et al., 2004).
The rational element of trust embodies the actor’s analytical attempt to evaluate
the other party’s competence for the specific task and context. Parties often evaluate
future-oriented capabilities such as technological or substance knowledge and business
capabilities and, especially in dynamic and uncertain environments, collaboration
capability (Blomqvist, 2002). It is a question of whether or not an actor can really fulfil a
promise. Does he or she have the knowledge, know-how and resources needed for the
relationship? This rational or calculative element of trust stems from the economic
perspective, when the actor attempts to predict or calculate the potential benefits of the
other party’s capabilities and collaboration (Seppänen et al., 2004).
Beyond the calculative or rational element lies the question of whether or not
the parties are willing to use their knowledge and resources in collaboration activities
and operations (Cullen et al., 2000; Blomqvist, 2002). This goodwill, or benevolent
trust, involves the belief that alliance partners take into account mutual interests and
not only their own interests (Johnson et al., 1996; Cullen et al., 2000, Blomqvist, 2002).
This implies collaborative orientation rather than opportunism, and may also include
affect-based trust, when parties become personally involved and build a mutual binding
tie based on personal liking (Blomqvist, 2002).
Commitment is the second component of the collaborative relationship. The majority
of researchers seem to go along with the traditional dichotomy of attitudinal and
behavioural commitment. They also see commitment as a multi-dimensional concept,
or as consisting of multiple commitments (e.g., Reichers, 1985; Nummela, 2003). The
source of commitment in collaborative relationships is two-fold: evaluations and
40 K. Blomqvist and J. Levy

expectations about the future economic potential lead to rationally based instrumental
commitment. The rational side could also be called calculative commitment (Cullen
et al., 2000).
A distinction has been drawn between instrumental and emotional commitment
(Becker, 1960; Mowday et al., 1982; Cullen et al., 2000; Nummela, 2003). The
emotional dimension in a close collaborative relationship implies internalisation by the
partners involved. The relationship provides status and meaning, and enhances the actors’
willingness to nurture and care for it. Psychological identification with the relationship
leads to pride of association with the collaboration. Commitment is also measurable in
terms of concrete actions and material investments in the relationship (Nummela, 2003;
Cullen et al., 2000).
Communication is the third major component of collaborative relationships.
Collaborative communication (Mohr et al., 1996; 1999) signals partners’ collaborative
intentions towards each other, promotes collaborative processes, smoothes relationship
building, and facilitates the creation of a supportive and respectful atmosphere between
the collaborating parties (Morgan and Hunt, 1994).
Given the above review of the literature on collaboration at different levels
of analysis, we base our definition on the critical factors inherent in collaboration
performance, and especially on the relational attributes rather than on purely
transactional factors. We also provided some examples of the cross-level character
of collaboration, and claim that our conceptualisation applies across levels and contexts.
It is multi-dimensional, and incorporates trust, communication and commitment.
Collaboration capability is defined as the actor’s capability to build and manage network
relationships based on mutual trust, communication and commitment.

3 Collaboration capability in knowledge creation and

collaborative innovation

Collaboration capability is especially important in dynamic and uncertain environments

in which unusual situations demand coordinated action (Tyler, 2001; Amit and
Shoemaker, 1993; Miller and Shamsie, 1996). Hence, knowing how to collaborate helps
the firm to create and transfer knowledge in pursuit of innovation and better performance.
Miles et al. (2000) illustrated the role of collaboration in the innovation process as
follows (Figure 2).

Figure 2 The role of collaboration in the innovation process

Time, Broad
trust and entrepreneurial
territory empowerment

Knowledge Product and

Collaboration creation service Commercial
and transfer innovation application

Source: Miles et al. (2000)

 Collaboration capability – a focal concept in knowledge creation 41

The model depicts in a simple and logical way the critical and interlinked role of
collaboration in knowledge creation, for which time, trust and a shared mental territory
are considered prerequisites. Collaboration is a necessary antecedent of knowledge
creation and transfer. The former is always social action, and innovations emerge as a
synthesis of complementary knowledge among asymmetric actors. Knowledge creation
and utilisation, in turn, may lead to innovation. Miles et al. (2000, p.300) explicitly refer
to collaboration as a meta-capability, and emphasise the voluntary aspect of innovation:
“innovation cannot be managed hierarchically because it depends on knowledge being
offered voluntarily rather than on command”. This is equally important in firm-internal
and inter-firm collaboration, since without voice and empowerment, actors with diverse
knowledge and ideas are not heard, and only some of the potential knowledge is used.
Collaboration on the meta-level emphasises capability and the quality of the collaborative
relationships with internal and external stakeholders (Miles et al., 2000). Thus, we
propose that collaboration as a capability consists of the actor’s ability to build and
manage network relationships based on mutual trust, communication and commitment.
The role of collaboration capability, in other words, the ability to build and manage
relationships with other parties on individual, team, departmental and organisational
levels, is paramount in the search for continuous innovation. Innovative firms
such as Corning, 3M and Toyota are known for their ability to harness cooperative
competencies, i.e., human and organisational collaboration competencies in both
intra- and inter-organisational networks (Tyler, 2001; Miles et al., 2000). Irwin et al.
(1998) also emphasise the need to develop better relational competence as a critical
aspect of innovation strategy. Collaboration capability in itself facilitates the updating of
old capabilities, and the internal or external development or acquisition of new ones. It
could also be seen as part of the firm’s transformational capacity (Garud and Nayar,
1994), that is, its capacity to continually redefine its product portfolio on the basis of the
technological opportunities created within it (Tyler, 2001, p.8).

4 Collaboration capability and performance

Unsuccessful alliances and coalitions often fail for a very simple reason – they are not
created or utilised collaboratively (Miles et al., 2000). It therefore follows that continuous
value creation and innovation in a dynamic environment are possible only in relationships
with higher-order relational qualities such as trust, communication and commitment.
These factors are also considered key characteristics of successful inter-organisational
collaboration (Blomqvist, 2002; Medlin et al., 2002; Mohr and Spekman, 1994) and
subsequent performance (Heimeriks, 2002).
According to Heimeriks (2002), alliance performance is influenced by alliance
capability and relationship quality, which comprise both economic and social factors.
Resource configuration, partner compatibility and coordination could be considered
economic factors; while trust, commitment and communication would be relational
factors. The authors do not define collaboration capability, but it would be logical to
assume that alliance capability would include the ability to manage the dimensions of
relationship quality.
42 K. Blomqvist and J. Levy

Figure 3 Alliance capability and relationship quality as sources of alliance performance

alliance relationship alliance

capability quality performance

Source: Heimeriks (2002)

We suggest that Heimeriks’ (2002) model could be generalised to cover different levels
of network interaction, and that terms, such as collaboration capability, collaboration
quality and collaboration performance, could thus be used interchangeably with the ones
in the model.
Relational factors, i.e., trust, communication and commitment, may also be critical in
intra-firm collaboration, in which informal collaboration in the form of communication
and coordination, for example, has been shown to increase organisational performance
through better interdepartmental coordination (see also Ellinger et al., 2000). The results
of Kahn and Mentzer’s (1996; 1998) research on interdepartmental integration
showed a significant positive relationship between the collaborative approach and
performance, while inter-departmental interaction without collaboration had a zero or
even negative impact on performance. Ellinger et al. (2000, p.2) also found that
interpersonal communication strategies predicted almost 10% of firm performance.
However, increasing formal information exchange, through reports, memorandums and
consultation in the form of committees for example, did not improve performance.
The role of collaboration is accentuated in situations of high market or technological
uncertainty and technological or organisational complexity, and in the resulting high need
for information and knowledge creation (see also Tyler, 2001). Its effect on performance
is suggested to be higher when products and services are complex (Kahn and Mentzer,
1996; 1998), or in uncertain and changing economic periods (Miller and Shamsie, 1996).
We suggest that, under these conditions, collaboration capability is essential in a network
economy in which competitiveness is based on knowledge and continuous innovation.
Collaboration capability could thus be seen as a source of competitive advantage, as it
is valuable, difficult to imitate, rare and socially complex (Barney, 1991). Ritter et al.
(2002, p.119) argue that network competence – “the ability of a firm to develop and
manage relations with key suppliers, customers and other organizations and to deal
effectively with the interactions among these relations” – is a core competence, which has
a direct bearing on the firm’s competitive strength and performance. Tyler (2001)
suggests that collaboration capabilities may even compensate for average or potentially
below-average technological know-how when firms seek to innovate technologically. If
they are considered complementary to technological capabilities (Tyler, 2001), and as a
meta-capability enabling the continuous development of dynamic capabilities (Miles
et al., 2000; Blomqvist, 2002; Blomqvist and Seppänen, 2003), they have a critical
role in a firm’s competitiveness, and may even become a source of sustainable
competitive advantage.
 Collaboration capability – a focal concept in knowledge creation 43

5 Discussion and conclusion

We propose in this paper that collaboration capability is a focal concept in the context
of knowledge creation and collaborative innovation. It allows for the integration
of the relational elements in many closely related but semantically diversified
conceptualisations: alliance capability, collective competence, cooperation competence,
collaboration as a meta-capability, cooperative capabilities, and collaborative know-how,
for example. It emphasises the relational perspective and facilitates knowledge creation in
risky and uncertain environments.
We also propose that collaboration and innovation could be considered cross-level
concepts emerging in social interaction, such that they cannot be discerned only on a
certain level (see e.g., Rosseau et al., 1998; Weiss, 1993; Kanter, 1988). Both Miles
et al.’s (2000) and Heimerik’s (2002) models are useful in that they are not dependent on
the level of analysis – of the team, department or firm, for example.
As Miles et al. (2005) conclude, collaboration should be given a distinct meaning,
and they emphasise the differences among cooperation, collaboration, co-opetition and
competition (Miles et al., 2000; 2005). In their view, the term is specific, and should be
reserved for collaboration based on voluntary interaction, trust and commitment rather
than on cooperation based on purely external motivators, such as money. Cooperation in
the form of coordinated action based only on extrinsic motivation and economic rationale
is not sufficient in the knowledge-based global competition that prevails today: the
parties involved need to instigate higher-order interaction in order to cope with complex
tasks and high uncertainty. As Blomqvist (2002) suggested when she introduced the
concept of fast trust, role-based narrow interaction is not enough to connect asymmetric
actors in conditions of uncertainty: both fast trust and collaboration capability are based
on mutual care and affect. The extrinsic motivation is present in both, but they both
also incorporate the intrinsic motivation that comes from knowledge of the job, the joy
of working, learning, and the satisfaction of accomplishing tasks together. These
higher-order concepts describing deeper interaction in networks are useful for identifying
and understanding the critical factors that are prerequisites for continuous innovation and
sustainable competitive advantage in the dynamic and uncertain network economy.
The emerging body of literature on alliance capabilities, their nature and potential
in terms of developing firm-specific capabilities, is taking a very concrete and
managerial turn in terms of defining different organisational structures, mechanisms and
micro-processes as a source of alliance capability. Duysters et al. (2003), in particular,
refer to corporate-level mechanisms enhancing organisational learning and capabilities, in
the form of alliance departments and databases, and partner-selection programmes, for
example. The micro-mechanisms they describe are seen as tools for implementing
collaboration capability in practice. They can and should be used on different levels
of analysis, not only on the alliance level but also on the individual, team,
intra-organisational, and ultimately on the network levels. This stream of research
is concrete enough to carry strong promise in terms of managerial implications
and guidance. However, at present, the relational aspects emphasised in our
conceptualisation of collaborative capability are given less attention. Future research on
alliance capabilities might also usefully emphasise collaboration capability, and it
would be fruitful to incorporate the concepts of organisational learning and
44 K. Blomqvist and J. Levy

knowledge management. The present research on alliance capabilities does not take into
account the critical issue of how to transfer tacit knowledge between different
collaborative relationships.
As a result of our analysis, we propose that collaboration capability is an integrating
concept enabling and explaining much of the success in knowledge creation and
collaborative innovation. It has a distinct meaning, and emphasises the relational aspects.
It is clearly multi-dimensional. On the basis of our survey of the literature, we propose
that its dimensions – trust, communication and commitment – are the key factors
distinguishing relational exchange from transactional exchange, and essential for
knowledge creation and collaborative innovation in networks. Collaboration capability is
thus defined as the actor’s capability to build and manage network relationships based on
mutual trust, communication and commitment.
We also suggest that collaboration capability could be considered a cross-level
concept. It is useful for understanding network activities on all levels of analysis, but
there has been very little research in which different levels are combined. A more
holistic approach is needed if we are to understand the systemic nature of networks,
as the different levels of collaboration capability (individual, team, departmental,
organisational, dyadic) affect each other and the performance of the network.
Researchers investigating business-to-business relationships need to validate the role
and nature of focal concepts. For most managers it is the corporate metrics that guide
their actions at the end of the day. We have been developing a pilot measurement
instrument for collaboration capability as a separate project. A global machine
manufacturer attempting to develop its supplier relationships in a relational direction will
pilot this instrument. This will enable its suitability as a cross-level measurement
instrument to be assessed by incorporating other levels of analysis.
Collaboration is always a ‘two-way-street’ on which one’s own collaboration
capability has a very strong impact on both the relationship quality and the subsequent
mutual performance. Universal metrics for team-level, intra-firm and inter-firm
collaboration would make it easier for individuals to understand, as similar metrics and
language would be used both internally and externally. A universal and cross-level
framework of collaboration capability would emphasise the relational perspective on all
levels. For managers, emphasis on one focal concept and the related metrics on different
levels would help in what is often very challenging change management by focusing on
relational attitudes and behaviour.

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