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1. Introduction
In the practice of new product development (NPD) both researchers and practitioners have pointed to the potential benefits of inter-organizational, collaborative research and development (R&D) projects. As firms cannot be experts in every technology, they increasingly collaborate with other organizations, for instance, suppliers, in their product development. By involving suppliers in NPD projects, buying firms are likely to obtain better designs, especially in high-tech industries, as no single firm possesses expertise in all potentially relevant technologies. The possibility of using specialization and tapping into the knowledge held by competent suppliers supposedly leads to more informed decisions regarding technology and thereby better designs (Ragatz et al., 1997).
At the same time, not only does collaborative R&D impose uncertainty with regard to supplier selection (Hoegl and Wagner, 2005; Melander and Tell, 2014) but also collaborative R&D exposes the collaborating firms to two coordination challenges in terms of intra- and inter-organizational coordination. Moreover, we argue that these two coordination challenges are interrelated. The underlying cause for coordination can be found in specialization. Both internally and externally, firms need to find learning economies from specialization (Levinthal and March, 1993). At the same time, such specialization creates knowledge boundaries of different kinds (Tell, 2017). For instance, internal specialization often emanates in departmentalization and domain-specific boundaries between functions such as sales, marketing, purchasing, manufacturing, assembly, R&D and after-sales. In this study, we focus on the coordination mechanisms used between purchasing and R&D, as these are the two departments most often involved in external R&D collaborations with suppliers. In such external R&D collaborations, inter-organizational specialization advantages are sought after, but there are also implications for coordination as both task-oriented and spatial knowledge boundaries may be prevailing between the organizations involved (Tell, 2017). In addition, conflicts of interests between parties may be an aggravating factor, as both buyer and supplier are competing for resources, profit margins and potential future strategic opportunities resulting from the outcomes of the R&D collaboration. One particular cause for the inter-organizational governance problems focused in this paper is the conflicting interests between the buying firm and the supplier in NPD, creating problems regarding whom to collaborate with and how to coordinate. Such conflicting interests influence decisions regarding with which potential partner to collaborate, how to...