Boundary Spanning in a For-Profit Research Lab: An Exploration of the Interface Between Commerce and Academe

by Christopher C. Liu & Toby E. Stuart

Overview — In science-based industries, innovation requires bridging the boundary between universities and companies. As entrepreneurial faculty venture into the world of commerce by building relationships and reputations in industry, company researchers and dealmakers seek access to the distributed knowledge base that resides within the community of scholars. But what happens within organizations when scientists venture deeply into the world of academe? In this look at one influential life sciences company, Christopher C. Liu of the Rotman School of Management and Toby E. Stuart of Harvard Business School find important connections between publishing, the allocation of rewards within the company, and the structure of the communication network inside and beyond the borders of the organization. Key concepts include:

  • Researchers who publish successfully were rewarded by the company with an increased bonus.
  • These publishers not only received more remuneration, they also attracted more of their managers' attention than did non-publishers.
  • Publishers had significantly more correspondents in universities than do non-publishers. E-mail data provide direct evidence that publishing correlated with a company's access to the informal networks of the broader scientific community.
  • However, publishers made a potentially negative tradeoff: As they spanned boundaries with the academic community, their importance in their company's communication network was weakened.
  • Employees who are the best networked beyond the firm's boundaries should be precisely those people who would ideally occupy central positions within the firm. Yet in the study, these same individuals seemed to shift the locus of their interaction toward communities away from the firm.

Author Abstract

In innovative industries, private-sector companies increasingly are participants in open communities of science and technology. To participate in the system of exchange in such communities, firms often publicly disclose what would otherwise remain private discoveries. In a quantitative case study of one firm in the biopharmaceutical sector, we explore the consequences of scientific publication-an instance of public disclosure-for a core set of activities within the firm. Specifically, we link publications to human capital management practices, showing that scientists' bonuses and the allocation of managerial attention are tied to individuals' publications. Using a unique electronic mail dataset, we find that researchers within the firm who author publications are much better connected to external (to the company) members of the scientific community. This result directly links publishing to current understandings of absorptive capacity. In an unanticipated finding, however, our analysis raises the possibility that the company's most prolific publishers begin to migrate to the periphery of the intra-firm social network, which may occur because these individuals' strong external relationships induce them to reorient their focus to a community of scientists beyond the firm's boundary. 42 pages

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