The cause for concern is that research and development (R&D) is a stimulator of an economy. In order to gain the competitive edge in technology continuous R&D needs to be done (South Africa, 2001). In an attempt to stimulate the biotechnology sector the government has implemented the National Biotechnology Strategy (Mange, 2004). However, despite their efforts and investments in the placement of the biotechnology industry “the system continues to suffer from poor interaction and networking between institutions and between producers (the performers of research) and users of knowledge (industry and Government)” (South Africa, 2001). In short the supply-chain relationship is failing.
In order to gain a deeper understanding of the current situation this study will be focusing on the interplay of commitment and power in relationships and their impact on relationship success. Although existing research has looked at the various facets of commitment, power ND relationship success (Chadwick et al, 1990; Cook and Wall, 1980; Harridan, 1988; Mohr & Spokesman, 1994; Wilson, 1995) this study will follow the work of Brown, Lush, Nicholson (1995). However it must be noted that Brown et all’s (1995) study of power and commitment was conducted on a marketing channel. Thus their study will need to be adapted for the biotechnology sector. Brown et al (1995) found that power and commitment take on different forms.
Brown et al (1995) found that the use of different forms of power (formal and personal) by one entity can either enhance or diminish the different commitment types instrumental and normative) of another entity. The effect that power has on commitment is also subject to the (a)symmetry of power within the relationship which in turn can determine the relationship’s success (Brown et al, 1995). This study will be guided by the following question: What is the interplay between commitment and power in business relationships and what is its impact on relationship success in the biotechnology industry? The study has two objectives: 1. To determine the interplay between commitment and power and its impact on relationship success. 2. To determine how the (a)symmetry of power affects the interplay between power and commitment.
Ultimately the study aims to provide a deeper understanding of the role of commitment and power in the biotechnology supply-chain in the hope of contributing to the improvement of the current relationships between researchers and industry. The paper has six parts. First the relevant literature regarding the biotechnology industry, relationship success, commitment and power is discussed. Following this, the research question and objectives are presented. Then the proposed research methodology is presented. Lastly, a timeline for the study is shown and a projected budget is given. LITERATURE REVIEW 2. 1 The Biotechnology Industry in South Africa In line with the rest of the world the South African Government has identified the benefits of having a biotechnology industry.
To support the development of such an industry they have initiated the National Biotechnology Strategy (Mange, 2004). The purpose of the strategy is in the creation of Biotechnology Regional Innovation Centers (BRICKS) (Department of Science and Technology, 2010). These BRICKS act as hubs for the development of biotechnology platforms, from which “businesses offering new products and services can be developed” (South Africa, 2001). Four BRICKS have been established they are Pooped, Lifeline, Plant Biotechnology Innovation Centre and Cape Biotech (Materialistically. Com, 2010). All this was done in an effort to build a successful biotechnology industry in South Africa. However, this has yet to be achieved.
Despite the efforts and government investment that has gone into the development of the biotechnology industry “the system continues to suffer from poor interaction and networking between institutions and between producers (the performers of research) and users of knowledge (industry and Government). ” (South Africa, 2001). In an effort to gain greater insights into the relationship between researchers and government this study will be investigating the relationship between Cape Biotech and researchers in the Western Cape Biotechnology sector. More specifically it will focus on the interplay between power and commitment and its impact on relationship success. 2. 2 Relationship Success Relationship success has in the past been viewed as a function of continuation (Harridan, 1988). This definition has not captured the fact that many successful relationships have been purposively ended after a period of time (Hammed, Doze, & Parallax, 1989).
In an attempt to define relationship success more substantially Mohr and Spokesman (1994) used two indicators of partnership success: an objective indicator (sales volume of sales between partners) and an affective indicator (satisfaction of one entity with the other). For the purpose of the study, relationship success will be defined in terms of the affective indicator: satisfaction. Anderson and Nards (1984) defined satisfaction as “a positive affective state resulting from the appraisal of all aspects of a firm’s working relationship with another firm. ” This definition of satisfaction is not restricted to the attainment of mutual goals and benefit. For example, if a relationship fails to attain its goals but the firms attribute the failure to an outside factor they can still be satisfied with their relationship (Kelley, 1972).
It seems that performance of each partner in their respective roles in more important than the outcome in determining relational satisfaction It is therefore posited that role performance is a good measure of satisfaction. If both partners in a relationship are positively satisfied with how the other partner performed in their role (capacity) then the 2 relationship can be termed successful. Brown et al (1995) identified that the interplay between commitment and power has an impact on role performance (which is ultimately an indicator of relationship success). 2. 3 Commitment and Power The commitment level of one entity can be profoundly affected by the use of power by the other entity. This affect can be positive or negative and is moderated by the balance of power with the relationship (Brown et al, 1995). 2. 3. Commitment Wilson (1995) and Farman et al (2000) say that commitment can be defined in terms of the importance of the relationship and the individuals desire to continue the relationship. This implies that the greater value an individual attaches to a relationship, the stronger will be the person’s desire for it to continue. However, this definition of commitment is very broad. One needs to distinguish as to what is the motivating factor behind the commitment. Commitment motivated by external factors – economic rewards or the avoidance of punishment (Brown et al, 1995) has been termed as instrumental commitment (Gangland, Carol & Mentor, 1995).
Due to the nature of it, instrumental commitment often results in a fleeting commitment and lasts until the rewards sought are gained (Brown, et al 1995). However, commitment an also be motivated internally. Commitment that is motivated by non-economic or internal factors such as identification with and internationalist of the values of an organization has been termed normative commitment (Chadwick et al, 1990). Normative commitment has been defined as “the strength of an individual’s identification with and involvement in a particular organization” (Porter, Steers, Monday & Billion, 1974). This definition is supported by Cook and Wall (1980).
Identifying that both types, instrumental and normative commitment, play a role in relationship commitment, our definition of commitment will be that of attitudinal ointment (Monday, Steers & Porter, 1979) which “may be predicted on three independent foundations: (1) compliance or instrumental involvement for specific, extrinsic rewards; (2) identification or involvement based on a desire for affiliation; and (3) internationalist or involvement predicated on congruence between individual and organization values” (Reilly & Chatham, 1986) Thus, following from the above definition the researcher’s commitment to the Cape Biotech-Researcher relationship will be measured using the three factors of attitudinal commitment. The compliance factor will be used to measure the degree of instrumental commitment. The identification and internationalist factors will be used to measure the degree of normative commitment. It must be noted that all three factors are based on an individual’s acceptance to another’s influence (Kalmia, 1958).
In the context of our study, the three factors of the researchers’ commitment to the Cape 3 Biotech-Researcher relationship can be influenced by their acceptance of the power exerted by Cape Biotech in the Cape Biotech-Researcher relationship. 2. 3. 2 power One of the most widely acknowledged definitions of power in literature is by Dahl 1957) who defined power as the “ability of one individual or group to prompt another unit to do what it would not have otherwise done”. Emerson (1962) extended this concept by defining power as “resistance which can be overcome, without restricting it to any one domain of action”. However, both Dahl and Emerson approaches to power have been criticizes on a number of levels.
Lakes (1974) noted that defining power in this manner is somewhat limiting as it fails to take into account the fact that A can exercise power by instilling in B desires that result in B actively pursuing ends that are in As interest. Other critics, Baccarat and Berate (1963) state that although power is often seen as obvious attempts to directly change another’s behavior this approach fails to take into account the fact that “power may be, and often is, exercised by confining the scope of decision-making to relatively safe issues. ” In the context of marketing channel member performance, Brown et al (1995) define power as “the ability of one channel member to control the decision variables in the marketing strategy of another member at a different level of distribution. ” Based on this definition and the above discussion, this study will define power in the
Biotechnology industry as the capacity that one unit (Cape Biotech) has to influence the decision variables of another unit (Academic researchers). Another aspect of power that has had extensive literature devoted to it is the question of how power can be achieved and used. Dahl (1957) identified that that power can be achieved over another through use of a base of power. For example, the resources A can use to influence B. How power is used has been identified by Dahl (1957) as the means of power I. E. The specific actions by which A can make use of these resources. French and Raven (1959) identified five bases of power, namely, Expert, Reverent, Legitimate, Reward and Coercive. These five bases have been formed into two groups, namely, (1) Formal and (2) personal. 1.
Formal Power: will be measured by the following bases of power: a. Legitimate power – This is power that flows from a person’s formal position of authority within an organization. B. Coercive power: Compiles from fear of the negative results c. Reward power: Compiles due to the desire for positive benefits. 2. Personal power – will be measured by the following bases of power: a. Expert power: Influence wielded as a result of expertise, special skill or knowledge. . Reverent power: Based on identification of a person who has dirigible resources or personal traits. The admiration endowed on such a person gives that person an opportunity for interpersonal influence. The final aspect of power that needs to be considered is the distribution of power between two entities. Distribution of power is generally measured by the level of interdependence between the two entities. (Cancels & Silverman, 2007; Emerson 1962) According to Emerson, when power is balanced it does not neutralize the effect of power as each party may still exert profound control over the other. For the purpose of this study the balance of power will be viewed as the degree to which one entity (Cape Biotech) holds substantially more, roughly equal, or substantially less power than the other entity (Researchers) (Brown et al, 1995; Gangland & Caudate, 1994). 2. 3. The interplay between commitment and power From the above literature it can be deducted that power and commitment fall into two groups: (1) Those concerned with extrinsic factors and (2) those concerned with internal factors. In terms of group one it is proposed that the use of formal power will encourage instrumental commitment. Through the use of rewards, punishments and legal action, [Cape Biotech] provides the external motivation for [the researcher’s] commitment to the relationship (Brown et al, 1995). It must also be noted that it has been found that more powerful firms tend towards the use of formal power (Dwyer & Walker, 1981; Gangland & Caudate, 1994).
Thus it is further proposed that if Cape Biotech has relatively more power than the researchers they will be inclined towards the use of formal power. In terms of group two it is proposed that the use of personal power by Cape Biotech will encourage greater normative commitment by the searchers as they will have a greater sense of belonging and their expected behavior will be in line with their existing values. (Caulis & Spokesman, 1980; Kalmia, 1961). It is proposed, in line with Brown et al (1995), that if Cape Biotech being more powerful use personal power it will have a greater effect in fostering normative commitment within the less powerful researchers than when there is an equal balance of power; as the use of personal power will be unexpected.