Relationships Between Universities and Enterprises: The Perspective of Small and Medium-Sized Firms

Relationships Between Universities and Enterprises: The Perspective of Small and Medium-Sized Firms

António Carrizo Moreira (University of Aveiro, Portugal) and Ana Carolina Vallejo (DEGEIT, Portugal)
DOI: 10.4018/978-1-5225-3012-1.ch016

Abstract

The university-enterprise (U-E) relationship is a topic that has gathered much interest in the academic world. Universities seek to offer services and technology that help firms to build and foster a harmonious U-E relationship, allowing firms to continually renew their involvement in the relationship. This chapter seeks to analyze the role played by various factors—satisfaction, commitment as perceived by firms, perceived commitment by universities, trust, and reputation—in encouraging firms to continuously renew their involvement in the university relationship. A questionnaire was produced drawing on a literature review looking at U-E relationships, the results of which were then analyzed using partial least squares – structural equation modelling (PLS-SEM). Afyer analyzing 80 responses from firms involved in U-E relationships, it was possible to conclude that commitment of firms, reputation, and the perceived commitment of the universities are very important in the continuous participation of firms in U-E relationships.
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Introduction

The competitiveness among firms has increased dramatically in recent decades in such a way that firms are looking for new technologies and innovations both internally and externally. Complementarily, universities also face new international competition with the increasing mobility of students and the demand for commercial applications for the technologies they develop. For business firms, pressures have included rapid technological change, shorter product life cycles and intense global competitiveness that have radically transformed the current competitive landscape (Bettis & Hitt, 1995; Wright, Clarysseb, Lockett, & Knockaert, 2008). On the other hand, universities are feeling the pressure of embracing new knowledge to keep abreast of breakthrough innovation deployed in the business sectors and the challenge of rising costs and funding problems that national governments go through. This is exerting enormous resource burdens on universities that now seek cooperative relationships with business firms to remain at the leading edge in all subject areas (Hagen, 2002).

The establishment of stable relationships between universities and business firms is not new: universities have traditionally tried to commercialize brand new technologies, while firms try to acquire the latest state of the art in basic research (Perkmann et al., 2013). As such, traditional marketing strategies are being replaced by relational ones in which all marketing activities are directed to the establishment, development and maintenance of successful marketing exchanges (Morgan & Hunt, 1994; Moreira & Silva, 2015).

Universities are institutions that are involved in research activities, in the development of new technologies and in the provision of services, which lead to the development of business relationships with their various business partners (Marzo-Navarro, Pedraja-Iglesias, & Rivera-Torres, 2009; Perkmann, Neely, & Walsh, 2011). As such, by turning indifferent customers into loyal clients, universities benefit from creating strong relationships with firms by creating value for their clients. This value creation occurs jointly between the organization and its stakeholders (Morgan & Hunt, 1994). This is not new as it involves inter-organizational activities and working in innovation-based relationships (Moreira & Carvalho, 2015; Schiele, 2006).

University-industry collaborations are a particular type of inter-organizational activities as they refer to the interaction between any parties of the higher educational system and industry aiming at encouraging knowledge and technology exchange (Bekkers & Bodas Freitas, 2008; Siegel, Waldman, & Link, 2003).

Intense global competition, rapid technological change and ever shorter product lifecycles have made the current environment highly competitive. Consequently, firms are under growing pressure to continuously improve their knowledge base and generate new technologies so as to ensure economic prosperity and long-term survival. As universities also face an environment where competition is growing, building stable relationships between universities and their customers (primarily firms) becomes essential for both sets of institutions (Marzo-Navarro et al., 2009).

Innovation and knowledge creation are bind together. One way of firms keeping abreast of technological knowledge is to establish relationships with universities, which are known as being knowledge repositories (Dantas & Moreira, 2011). Over time firms have realized that they must move from a closed innovation process – focusing on internal skills – to an open innovation process, establishing relationships that envisage common goals, risk and cost sharing and the ability to achieve valuable returns for both parties in the relationship (Carvalho & Moreira, 2015). As such, firms look for universities and other technology-oriented institutions to develop new knowledge and increase competitive advantage.

Key Terms in this Chapter

Small and Medium-sized Enterprises (SMEs): Although there are plenty of definitions across the world, the working definition used in this document is the one that was created by the European Commission to permit a coherent and effective access of SMEs to European community funds.

University-Enterprise Relationships: Business relationship in which one company is involved in a business relationship in the supply chain with a university, involving the transfer of technology, or the provision of products or services.

Trust: It is the belief that in an existing relationship, the actors/parties will act with the sole purpose of both parties having benefits with the relationship. In business exchange processes, it means that one party has confidence in the other party’s reliability and integrity.

Participation: Participation includes customer behaviors that indicate an active and responsible involvement in the strategic direction and development of a business and/or organization. Comapnies can participate actively with the universities, given that they are in a good position to supply relevant information.

Commitment: Commitment exists when both parties in a relationship believe that the other party will invest in the relationship aiming at maintaing and strengthening that relationship.

Reputation: Is the estimation in which a person or company is held, especially by the community or the public. It may be favorable, when the person, entity of company has managed to consistently develop a favorable and publicly recognized name over time.

Relationship Orientation: It is a concept that addresses how firms or entities seek to interrelate to each other. It involves the commitment of one party that believes that a relationship is worth working on to ensure that is endures throughout time. The relationship orientation is built on the foundation of mutual trust and commitment.

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